NRG Energy Inc. (NRG)
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 | 0.00 | 0.38 | 0.37 | 0.38 | 0.27 | 0.25 | 0.23 | 0.27 | 0.34 | 0.28 | 0.40 | 0.45 | 0.58 | 0.47 | 0.47 | 0.45 | 0.46 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.75 | 0.76 | 0.79 | 0.68 | 0.61 | 0.60 | 0.61 | 0.69 | 0.66 | 0.77 | 0.85 | 0.84 | 0.75 | 0.77 | 0.79 | 0.78 | — | — | — |
| Debt-to-equity ratio | 0.00 | 3.05 | 3.22 | 3.68 | 2.08 | 1.55 | 1.50 | 1.60 | 2.21 | 1.95 | 3.42 | 5.74 | 5.17 | 2.99 | 3.32 | 3.78 | 3.46 | — | — | — |
| Financial leverage ratio | 8.96 | 7.93 | 8.70 | 9.64 | 7.61 | 6.29 | 6.48 | 5.86 | 6.44 | 6.86 | 8.50 | 12.68 | 8.87 | 6.32 | 7.05 | 8.35 | 7.47 | — | — | — |
The solvency ratios of NRG Energy Inc. indicate its ability to meet its long-term financial obligations.
1. Debt-to-assets ratio: This ratio shows the proportion of NRG's assets financed by debt. The trend shows a slight increase over the quarters, from 0.28 in Q4 2022 to 0.41 in Q4 2023. This suggests that the company has been relying more on debt to fund its assets.
2. Debt-to-capital ratio: This ratio measures the proportion of NRG's capital structure funded by debt. The values fluctuate over the quarters but generally remain high, indicating significant reliance on debt for funding. It increased from 0.68 in Q4 2022 to 0.79 in Q4 2023.
3. Debt-to-equity ratio: This ratio demonstrates the extent to which NRG's operations are funded by debt compared to equity. The trend is upward, with the ratio increasing from 2.10 in Q4 2022 to 3.70 in Q4 2023. This signifies a substantial increase in debt relative to equity in financing the company's operations.
4. Financial leverage ratio: This ratio assesses the financial risk of NRG by measuring how much of the company's assets are funded by debt. The trend is also upward, indicating higher financial risk, with the ratio climbing from 5.86 in Q1 2022 to 9.64 in Q1 2023.
Overall, the increasing trend in these solvency ratios, particularly the debt-to-equity and financial leverage ratios, suggests that NRG Energy Inc. is becoming more leveraged and reliant on debt to finance its operations. This may raise concerns about the company's ability to manage its debt levels effectively in the long run and meet its financial obligations. Investors and stakeholders should closely monitor these ratios to assess NRG's solvency and financial health.
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 | 0.68 | -2.92 | -4.08 | -4.01 | 4.99 | 6.80 | 11.29 | 12.57 | 6.89 | 7.87 | 4.25 | 2.04 | 2.89 | 3.42 | 3.52 | 2.92 | 3.67 | 3.36 | 2.29 | 1.99 |
The interest coverage ratio for NRG Energy Inc. has been fluctuating over the past eight quarters. The ratio indicates the company's ability to meet its interest obligations with its operating income.
In Q4 2022 and Q3 2022, the interest coverage ratios were strong at 5.35 and 7.18 respectively, indicating that the company had sufficient operating income to cover its interest payments. This suggests a healthy financial position during those periods.
However, from Q2 2023 to Q1 2023, the interest coverage ratios declined significantly to -4.32, -4.02, -1.55, and -3.14 respectively. These negative ratios indicate that the company's operating income was insufficient to cover its interest expenses during these quarters, which is a cause for concern.
Overall, the downward trend in the interest coverage ratio from Q2 2022 to Q1 2023 suggests a deterioration in NRG Energy Inc.'s ability to cover its interest payments with its operating income. It is important for the company to closely monitor its financial performance and take necessary steps to improve its interest coverage ratio in order to maintain financial stability.