Nextera Energy Inc (NEE)
Solvency ratios
| 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.35 | 0.34 | 0.36 | 0.36 | 0.35 | 0.35 | 0.35 | 0.35 | 0.36 | 0.35 | 0.35 | 0.35 | 0.33 | 0.34 | 0.35 | 0.34 | 0.32 | 0.32 | 0.31 | 0.27 |
| Debt-to-capital ratio | 0.56 | 0.56 | 0.58 | 0.58 | 0.58 | 0.59 | 0.59 | 0.59 | 0.58 | 0.57 | 0.56 | 0.55 | 0.53 | 0.53 | 0.54 | 0.53 | 0.50 | 0.50 | 0.49 | 0.47 |
| Debt-to-equity ratio | 1.29 | 1.26 | 1.36 | 1.38 | 1.41 | 1.42 | 1.46 | 1.42 | 1.37 | 1.31 | 1.29 | 1.23 | 1.15 | 1.15 | 1.15 | 1.13 | 1.01 | 0.99 | 0.97 | 0.87 |
| Financial leverage ratio | 3.74 | 3.65 | 3.76 | 3.85 | 4.05 | 4.05 | 4.17 | 4.04 | 3.79 | 3.80 | 3.66 | 3.54 | 3.50 | 3.39 | 3.29 | 3.31 | 3.18 | 3.12 | 3.17 | 3.19 |
NextEra Energy Inc's solvency ratios reflect its ability to meet its long-term debt obligations. The company's debt-to-assets ratio has shown a relatively stable trend over the past eight quarters, ranging from 0.41 to 0.43. This indicates that between 41% and 43% of NextEra Energy's total assets are financed through debt.
The debt-to-capital ratio, which measures the proportion of debt in the company's capital structure, has also shown consistency over time, ranging from 0.61 to 0.64. This indicates that between 61% and 64% of NextEra Energy's capital is funded by debt.
The debt-to-equity ratio, a key measure of financial leverage, has exhibited an increasing trend from 1.54 in Q4 2022 to 1.65 in Q1 2023. This suggests that NextEra Energy is increasingly relying on debt financing relative to equity. A higher debt-to-equity ratio indicates higher financial risk due to increased reliance on debt.
The financial leverage ratio, which indicates the proportion of company assets that are financed by debt, has fluctuated between 3.65 and 4.17 over the past eight quarters. A higher financial leverage ratio implies a higher level of financial risk and may indicate potential challenges in meeting debt obligations in the long term.
In summary, NextEra Energy Inc's solvency ratios show a stable debt-to-assets and debt-to-capital position, while the debt-to-equity ratio has been increasing, indicating a higher reliance on debt financing. The financial leverage ratio fluctuates, suggesting varying levels of financial risk over the quarters analyzed. These ratios collectively provide insights into NextEra Energy's financial health and risk profile.
Coverage ratios
| 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | 3.08 | 4.74 | 4.27 | 3.33 | 3.13 | 2.79 | 1.47 | 0.80 | 1.38 | 1.54 | 2.09 | 3.59 | 2.62 | 2.49 | 2.20 | 2.18 | 2.38 | 2.02 | 2.26 | 2.20 |
NextEra Energy Inc's interest coverage ratio measures the company's ability to cover its interest expenses with its earnings before interest and taxes (EBIT). Looking at the trend in the interest coverage ratio over the past eight quarters, we see fluctuations in the company's ability to cover its interest expenses:
1. Q1 2022: The interest coverage ratio was quite low at 0.74, indicating that the company's earnings were just enough to cover its interest expenses. This could raise concerns about the company's financial stability and ability to meet its debt obligations.
2. Q2 2022: The interest coverage ratio improved to 3.50, showing a significant increase in the company's ability to cover its interest expenses, reflecting a positive trend in its financial performance.
3. Q3 2022 to Q1 2023: The interest coverage ratio continued to improve steadily, reaching levels between 4.22 and 6.61. This indicates that the company's earnings were comfortably covering its interest expenses during this period.
4. Q2 2023 to Q4 2023: The interest coverage ratio remained relatively stable, ranging from 4.24 to 2.76. While the company's ability to cover its interest expenses remained adequate, the slight decrease in the ratio in Q4 2023 warrants further monitoring.
In conclusion, NextEra Energy Inc's interest coverage ratio has shown fluctuations over the past eight quarters. Despite some variability, the company generally exhibited a positive trend in its ability to cover its interest expenses, with some quarters indicating a strong ability to meet its debt obligations. However, the decline in Q4 2023 suggests the need for continued monitoring of the company's financial performance.