Kinder Morgan Inc (KMI)

Financial leverage ratio

		Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Total assets	US$ in thousands	71,020,000	68,862,000	69,073,000	68,931,000	70,078,000	69,992,000	69,390,000	69,135,000	70,416,000	69,640,000	70,175,000	71,208,000	71,973,000	71,821,000	71,784,000	73,530,000	74,157,000	76,931,000	76,695,000	76,292,000
Total stockholders’ equity	US$ in thousands	30,306,000	30,258,000	30,569,000	30,757,000	30,742,000	30,756,000	30,545,000	30,618,000	30,823,000	30,552,000	30,711,000	32,187,000	31,436,000	31,559,000	31,753,000	33,106,000	33,742,000	33,633,000	33,638,000	33,612,000
Financial leverage ratio		2.34	2.28	2.26	2.24	2.28	2.28	2.27	2.26	2.28	2.28	2.29	2.21	2.29	2.28	2.26	2.22	2.20	2.29	2.28	2.27

December 31, 2023 calculation

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

The financial leverage ratio for Kinder Morgan Inc has been relatively stable over the past eight quarters, ranging from 2.24 to 2.34. This ratio indicates that the company relies on debt financing to a significant extent in its capital structure. A financial leverage ratio of 2.34 in Q4 2023 suggests that for every $1 of equity, the company has $2.34 of debt.

While a higher financial leverage ratio can amplify returns on equity, it also increases the risk of financial distress, especially during economic downturns or adverse market conditions. Investors and creditors closely monitor changes in the financial leverage ratio as it can impact the company's ability to meet its debt obligations and influence its overall financial health.

Overall, a consistent financial leverage ratio for Kinder Morgan Inc indicates a steady reliance on debt to support its operations and growth, highlighting the importance of effectively managing debt levels to maintain financial stability and sustainability in the long term.