H2O America (HTO)
Financial leverage ratio
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 4,658,310 | 4,345,070 | 3,755,060 | 3,492,400 | 3,311,460 |
| Total stockholders’ equity | US$ in thousands | 1,366,970 | 1,233,400 | 1,110,870 | 1,034,520 | 917,160 |
| Financial leverage ratio | 3.41 | 3.52 | 3.38 | 3.38 | 3.61 |
December 31, 2024 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $4,658,310K ÷ $1,366,970K
= 3.41
The financial leverage ratio of H2O America demonstrates a relatively stable pattern over the analyzed period from December 31, 2020, to December 31, 2024. At the end of 2020, the ratio stood at 3.61, indicating that the firm utilized a considerable level of debt relative to its equity, which is typical of companies in capital-intensive industries such as water infrastructure and utilities.
In 2021, the ratio declined slightly to 3.38, suggesting a modest reduction in leverage and possibly reflecting efforts to de-leverage or a decrease in debt levels relative to equity. The ratio remained unchanged at 3.38 through 2022, indicating a period of stability in the company's capital structure with no significant shifts in debt or equity.
By the end of 2023, the leverage ratio experienced a marginal increase to 3.52, implying a slight uptick in leverage. This could be associated with increased borrowing to finance expansion, infrastructural investments, or refinancing activities, though the change remains modest, indicating controlled leverage levels.
In 2024, the ratio slightly decreased again to 3.41, bringing the leverage ratio close to the levels observed in the earlier part of the period. This small fluctuation suggests that H2O America maintains a relatively consistent approach to financing, balancing its debt and equity levels without significant swings.
Overall, the company's financial leverage ratio exhibits minor fluctuations within a narrow range around approximately 3.4 to 3.6, reflecting a relatively steady leverage position. This stability could point to prudent financial management, with the company maintaining a moderate to highly leveraged capital structure suitable for its industry and operational requirements.
Peer comparison
Dec 31, 2024