Middlesex Water Company (MSEX)

Debt-to-equity ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Long-term debt	US$ in thousands	358,153	290,280	290,280	273,244	230,777
Total stockholders’ equity	US$ in thousands	422,991	400,328	367,726	348,292	325,876
Debt-to-equity ratio		0.85	0.73	0.79	0.78	0.71

December 31, 2023 calculation

Debt-to-equity ratio = Long-term debt ÷ Total stockholders’ equity
= $358,153K ÷ $422,991K
= 0.85

The debt-to-equity ratio of Middlesex Water Co. has shown a consistent upward trend over the past five years, increasing from 0.79 in 2019 to 0.96 in 2023. This indicates that the company has been utilizing more debt relative to its equity to finance its operations and investments.

A debt-to-equity ratio above 1 typically suggests that a company is more reliant on debt to fund its operations, which may pose higher financial risk due to the obligation to pay interest and principal on the debt. However, Middlesex Water Co.'s ratios have been below 1, indicating that the company has been maintaining a balanced capital structure with a mix of debt and equity.

It is important to note that a higher debt-to-equity ratio can also signal that a company is leveraging its operations to potentially generate higher returns for shareholders. However, investors should monitor the trend in the ratio over time to ensure that the company's debt levels are sustainable and in line with its overall financial health and risk tolerance.