Kinder Morgan Inc (KMI)

Financial leverage ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Total assets	US$ in thousands	71,020,000	70,078,000	70,416,000	71,973,000	74,157,000
Total stockholders’ equity	US$ in thousands	30,306,000	30,742,000	30,823,000	31,436,000	33,742,000
Financial leverage ratio		2.34	2.28	2.28	2.29	2.20

December 31, 2023 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $71,020,000K ÷ $30,306,000K
= 2.34

The financial leverage ratio of Kinder Morgan Inc has shown a slight increasing trend over the past five years, ranging from 2.20 in 2019 to 2.34 in 2023. This indicates that the company has been gradually increasing its financial leverage, which implies a higher proportion of debt financing compared to equity in its capital structure.

A financial leverage ratio of 2.34 in 2023 suggests that for every dollar of equity, the company has $2.34 of debt. This level of leverage indicates that Kinder Morgan Inc relies significantly on debt to fund its operations and investments. While higher leverage can amplify returns in favorable economic conditions, it also increases financial risk, as the company will have higher interest payments to make, potentially leading to solvency issues during economic downturns.

Overall, Kinder Morgan Inc's increasing financial leverage ratio signals a growing reliance on debt to finance its operations, which can impact the company's financial stability and flexibility in the long run. Investors and stakeholders should closely monitor the company's debt levels and management strategies to assess the associated risks.