NewJersey Resources Corporation (NJR)

The solvency ratios of New Jersey Resources Corporation provide insight into the company's ability to meet its long-term financial obligations.

The debt-to-assets ratio has remained relatively stable over the past five years, ranging from 0.36 in 2019 to 0.48 in 2023. This ratio indicates that, on average, approximately 48% of the company's total assets are financed by debt.

The debt-to-capital ratio demonstrates the proportion of the company's capital that is financed by debt. It has shown a gradual increase from 0.51 in 2019 to 0.62 in 2022 and 2023, indicating a higher reliance on debt for financing the company's operations.

The debt-to-equity ratio measures the extent to which the company is using debt to finance its operations as opposed to equity. The ratio has also shown an increasing trend from 1.02 in 2019 to 1.58 in 2023, which suggests a higher level of financial leverage.

The financial leverage ratio, which provides an indication of the company's reliance on debt, has steadily increased from 2.82 in 2019 to 3.28 in 2023, indicating a higher level of leverage and potential financial risk.

Overall, the solvency ratios indicate that New Jersey Resources Corporation has been increasingly reliant on debt to finance its operations and has become more leveraged over the past five years. This trend highlights the importance of closely monitoring the company's ability to service its debt obligations in the long term.

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Coverage ratios

The interest coverage ratio measures a company's ability to meet its interest payment obligations with its operating income. Looking at the trend for New Jersey Resources Corporation, we observe some fluctuation in the interest coverage ratio over the past five years. In 2023, the interest coverage ratio was 3.34, indicating that the company's operating income was able to cover its interest expenses 3.34 times over. This represents a decrease from the previous year's ratio of 4.83. While the coverage ratio has shown variability, it is important to note that the company's ability to meet its interest obligations remains relatively stable over the period, as indicated by the consistently positive ratios. However, it would be beneficial to assess the company's overall debt level and the trend in its operating income to better understand the implications of the fluctuations in the interest coverage ratio.