Northwest Natural Gas Co (NWN)

Financial leverage ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Total assets	US$ in thousands	4,867,090	4,748,330	4,064,600	3,756,380	3,428,450
Total stockholders’ equity	US$ in thousands	1,283,840	1,175,440	935,146	888,733	865,999
Financial leverage ratio		3.79	4.04	4.35	4.23	3.96

December 31, 2023 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $4,867,090K ÷ $1,283,840K
= 3.79

The financial leverage ratio of Northwest Natural Holding Co has displayed some fluctuation over the past five years. The ratio decreased from 3.96 in 2019 to 3.79 in 2023, then increased to 4.04 in 2022, further increased to 4.35 in 2021, and decreased slightly to 4.23 in 2020.

A higher financial leverage ratio indicates a higher level of financial leverage or debt utilization by the company to support its operations and growth. On the other hand, a lower ratio signifies lower debt reliance and potentially lower financial risk.

Northwest Natural Holding Co's increasing trend in the financial leverage ratio from 2019 to 2021 suggests a greater reliance on debt financing during those years, which may have been undertaken for various reasons such as expansion, acquisitions, or other investment activities. However, the slight decrease in the ratio in 2023 indicates a potential reduction in leverage or debt use relative to the company's equity.

It would be important to further analyze the company's overall financial health, profitability, and debt repayment capabilities in conjunction with its financial leverage ratio to gain a comprehensive understanding of its financial position and risk profile.