Middlesex Water Company (MSEX)

Financial leverage ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Total assets	US$ in thousands	1,236,050	1,074,450	1,020,020	976,470	909,878
Total stockholders’ equity	US$ in thousands	422,991	400,328	367,726	348,292	325,876
Financial leverage ratio		2.92	2.68	2.77	2.80	2.79

December 31, 2023 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $1,236,050K ÷ $422,991K
= 2.92

The financial leverage ratio of Middlesex Water Co. has shown a fluctuating trend over the past five years. In 2023, the financial leverage ratio increased to 2.91 from 2.67 in 2022. This suggests that the company increased its reliance on debt to finance its operations or investments compared to the previous year.

Although the ratio has been somewhat volatile, it has generally stayed within a relatively narrow range between 2.67 and 2.91 during the period from 2019 to 2023. This indicates that the company has maintained a consistent level of financial leverage relative to its equity over the years.

It is important for stakeholders to closely monitor changes in the financial leverage ratio, as a significant increase in this ratio could indicate higher financial risk for the company due to increased debt obligations. Conversely, a decreasing ratio may signal a more conservative capital structure.

Overall, the trend in Middlesex Water Co.'s financial leverage ratio highlights the importance of carefully managing the balance between debt and equity to ensure sustainable financial health and growth.