Kinder Morgan Inc (KMI)
Solvency ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.42 | 0.40 | 0.41 | 0.44 | 0.45 |
| Debt-to-capital ratio | 0.49 | 0.48 | 0.48 | 0.50 | 0.51 |
| Debt-to-equity ratio | 0.98 | 0.93 | 0.92 | 1.00 | 1.02 |
| Financial leverage ratio | 2.34 | 2.34 | 2.28 | 2.28 | 2.29 |
The solvency ratios of Kinder Morgan Inc, specifically the Debt-to-assets ratio, Debt-to-capital ratio, Debt-to-equity ratio, and Financial leverage ratio, have shown consistency over the past five years. The Debt-to-assets ratio has gradually decreased from 0.45 in 2020 to 0.42 in 2024, indicating that the company's total debt as a proportion of its total assets has slightly declined. Similarly, the Debt-to-capital ratio has seen a slight decrease from 0.51 in 2020 to 0.49 in 2024, suggesting a relative decrease in the company's total debt compared to its total capital.
The Debt-to-equity ratio reflects the company's total debt relative to its equity, and Kinder Morgan Inc has demonstrated a decreasing trend from 1.02 in 2020 to 0.98 in 2024, indicating a strengthening financial structure with less reliance on debt financing compared to equity. Moreover, the Financial leverage ratio, which shows the extent to which the company is using debt to finance its operations, has remained relatively stable around 2.3 over the years, implying a consistent level of financial leverage.
Overall, Kinder Morgan Inc's solvency ratios highlight a prudent management of debt and capital structure, with a gradual reduction in debt levels compared to assets, capital, and equity, thereby indicating a healthy and sustainable financial position in the analyzed period.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | — | 2.36 | 2.70 | 1.95 | 0.98 |
Based on the data provided for Kinder Morgan Inc's interest coverage ratios, we observe fluctuations over the years. As of December 31, 2020, the interest coverage ratio was 0.98, indicating that the company's operating income was not sufficient to cover its interest expenses, raising concerns about its ability to meet debt obligations.
However, there was an improvement in the interest coverage ratio over the following years. By December 31, 2021, the ratio increased to 1.95, suggesting that the company's operating income was almost twice the amount needed to cover its interest expenses. This improvement signified a better financial position compared to the previous year.
The positive trend continued in the subsequent years, with the interest coverage ratio reaching 2.70 by December 31, 2022. This increase indicates a further enhancement in the company's ability to service its interest payments comfortably using its operating income.
However, there was a slight decline in the interest coverage ratio to 2.36 by December 31, 2023. While still above 1 (indicating coverage of interest expenses), this reduction could indicate a potential weakening in the company's ability to cover interest costs effectively compared to the previous year.
The data for December 31, 2024, is not available (indicated by a dash), making it challenging to assess the most recent financial performance of the company in terms of interest coverage.
In conclusion, Kinder Morgan Inc has shown improvements in its interest coverage ratio over the years, indicating a strengthening ability to meet its interest payment obligations. However, fluctuations in the ratio highlight the need for continuous monitoring of the company's financial performance to ensure sustainable debt management practices.