MGE Energy Inc (MGEE)

Solvency ratios

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 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
Debt-to-assets ratio 0.27 0.26 0.26 0.27 0.27 0.27 0.25 0.26 0.23 0.23 0.24 0.26 0.26 0.26 0.24 0.23 0.23 0.24 0.24 0.25
Debt-to-capital ratio 0.38 0.37 0.38 0.38 0.39 0.38 0.37 0.37 0.35 0.34 0.36 0.37 0.37 0.37 0.36 0.34 0.35 0.35 0.35 0.38
Debt-to-equity ratio 0.62 0.60 0.61 0.62 0.63 0.61 0.59 0.59 0.54 0.52 0.56 0.58 0.60 0.60 0.55 0.52 0.53 0.53 0.55 0.60
Financial leverage ratio 2.30 2.30 2.33 2.31 2.35 2.28 2.30 2.30 2.33 2.29 2.31 2.27 2.31 2.31 2.29 2.28 2.31 2.26 2.27 2.38

The solvency ratios of MGE Energy Inc provide insights into the company's ability to meet its long-term financial obligations.

1. Debt-to-assets ratio: This ratio indicates the proportion of the company's assets that are financed by debt. MGE Energy Inc's debt-to-assets ratio has been relatively stable around 0.25 to 0.27 over the past few years, suggesting that the company relies moderately on debt to finance its assets.

2. Debt-to-capital ratio: This ratio measures the proportion of the company's capital that is financed by debt. MGE Energy Inc's debt-to-capital ratio has fluctuated between 0.34 and 0.39, indicating that debt constitutes around 34% to 39% of the company's capital structure.

3. Debt-to-equity ratio: This ratio compares the company's total debt to its shareholders' equity. MGE Energy Inc's debt-to-equity ratio has shown a slight increasing trend from 0.53 to 0.62, indicating that the company's level of debt in relation to equity has been gradually rising.

4. Financial leverage ratio: This ratio reflects the company's financial risk and measures the extent to which the company utilizes debt financing. MGE Energy Inc's financial leverage ratio has varied between 2.26 and 2.38, showing that the company maintains a moderate level of financial leverage.

Overall, MGE Energy Inc's solvency ratios demonstrate a balanced approach to debt financing, with a relatively stable debt structure over the analyzed periods. However, the slight increase in the debt-to-equity ratio may indicate a higher level of financial risk that investors and stakeholders should monitor closely.

Coverage ratios

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 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
Interest coverage 4.44 4.43 4.39 4.75 4.81 5.03 5.16 4.93 5.17 4.85 4.77 4.82 4.86 5.08 5.18 5.07 4.68 6.31 9.18 9.16

The interest coverage ratio for MGE Energy Inc has shown some fluctuations over the period from March 31, 2020, to December 31, 2024. The interest coverage ratio measures the company's ability to cover its interest expenses with its operating income.

At the beginning of the period in March 31, 2020, the interest coverage ratio was 9.16, indicating that the company's operating income was more than sufficient to cover its interest expenses. This ratio remained relatively stable around 9 in the subsequent quarter, June 30, 2020.

However, from September 30, 2020, to March 31, 2024, the interest coverage ratio experienced a decreasing trend, dropping to 4.75 by the end of March 31, 2024. This downward trend suggests that the company's operating income might be facing challenges in covering its interest expenses adequately.

Despite some fluctuations, the interest coverage ratio generally remained above 4 during the entire period, indicating that MGE Energy Inc has managed to meet its interest obligations through its operating income. However, the decreasing trend in the ratio warrants further monitoring to ensure the company's financial health and ability to service its debt in the long term.