MGE Energy Inc (MGEE)

Based on the provided data, MGE Energy Inc's solvency ratios demonstrate a consistent but somewhat fluctuating trend over the years. The Debt-to-assets ratio has remained relatively stable, ranging from 0.23 to 0.27, indicating that around 23% to 27% of the company's total assets are funded by debt.

The Debt-to-capital ratio shows a similar pattern, hovering between 0.35 and 0.39. This ratio suggests that MGE Energy Inc finances approximately 35% to 39% of its capital structure through debt.

In terms of the Debt-to-equity ratio, there is a gradual increase from 0.53 in 2020 to 0.62 in 2024. This indicates that the proportion of debt to equity in the company's capital structure has been rising, reaching 62% by the end of 2024.

The Financial leverage ratio has shown some minor fluctuations, with a range of 2.30 to 2.35 over the years. This ratio implies that for every dollar of equity, MGE Energy Inc has approximately $2.30 to $2.35 of total assets.

Overall, MGE Energy Inc's solvency ratios suggest a stable financial position with a manageable level of debt relative to its assets, capital, equity, and leverage. However, the increasing trend in the Debt-to-equity ratio indicates a potential shift towards a higher reliance on debt financing in the company's capital structure.

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Coverage ratios

The interest coverage ratio for MGE Energy Inc has shown a consistent increase over the years, indicating a strong ability to meet its interest obligations.

As of December 31, 2020, the interest coverage ratio stood at a healthy 140.30, reflecting the company's robust earnings relative to its interest expense. This ratio improved further to 152.13 by the end of December 31, 2021, reinforcing the company's solid financial position.

By December 31, 2022, the interest coverage ratio continued to strengthen, reaching a significant 183.17, demonstrating MGE Energy Inc's enhanced capacity to cover its interest payments comfortably. This trend of improvement persisted into December 31, 2023, with a notable ratio of 263.28, indicating a substantial increase in earnings relative to interest costs.

However, there was a sharp decline in the interest coverage ratio by December 31, 2024, dropping to 4.44. This substantial decrease raises concerns about the company's ability to cover its interest expenses effectively, highlighting a potential strain on financial resources in that period.

Overall, the trend in MGE Energy Inc's interest coverage ratio reflects a generally strong financial position, with fluctuations observed in the most recent period, suggesting the need for further monitoring and analysis to understand the underlying reasons for the decline.