OGE Energy Corporation (OGE)

The solvency ratios of OGE Energy Corporation, as reflected in the provided data, show the company's ability to meet its long-term financial obligations and the extent of its leverage:

1. Debt-to-assets ratio: This ratio helps assess the proportion of the company's assets financed by debt. OGE Energy Corporation's debt-to-assets ratio has been relatively consistent over the years, ranging from 0.28 to 0.37. A lower ratio indicates a lower dependency on debt for asset financing.

2. Debt-to-capital ratio: This ratio reflects the proportion of the company's capital structure that is funded by debt. OGE Energy Corporation's debt-to-capital ratio has also shown consistency over the years, varying between 0.45 and 0.53. A lower ratio signifies a lower reliance on debt financing for overall capital.

3. Debt-to-equity ratio: The debt-to-equity ratio indicates the extent to which debt is used to finance the company's operations compared to equity. OGE Energy Corporation's debt-to-equity ratio fluctuated between 0.80 and 1.11, potentially indicating shifts in the capital structure and financial risk profile over time.

4. Financial leverage ratio: This ratio provides insights into the company's overall financial leverage and risk. OGE Energy Corporation's financial leverage ratio has remained relatively stable around 2.84 to 3.11 over the years, implying a moderate level of financial leverage.

Overall, the solvency ratios suggest that OGE Energy Corporation has maintained a moderate level of debt utilization and financial leverage to support its operations and investments while managing its solvency effectively. It is essential for stakeholders to monitor these ratios to assess the company's financial health and risk profile accurately.

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Coverage ratios

To analyze OGE Energy Corporation's interest coverage, we observe the trend over the past five years as follows:

- As of December 31, 2020, the interest coverage ratio was 3.29, indicating that the company generated 3.29 times the operating income necessary to cover its interest expenses for that period.
- By December 31, 2021, the interest coverage ratio improved slightly to 3.44, suggesting a slight increase in the company's ability to meet its interest obligations.
- The trend continued positively as of December 31, 2022, with the interest coverage ratio rising to 3.91, reflecting a stronger cushion for the company to handle its interest payments.
- However, there was a slight decline in the interest coverage by December 31, 2023, as the ratio decreased to 3.14. This might indicate a decrease in the company's ability to cover its interest expenses compared to the previous year.
- By December 31, 2024, the interest coverage ratio further decreased to 3.05, raising some concerns about the company's ability to comfortably meet its interest obligations.

Overall, while OGE Energy Corporation maintained a relatively stable interest coverage ratio over the five-year period, the downward trend in the last two years suggests a potential strain on the company's ability to cover its interest expenses. Monitoring this ratio closely will be crucial to assess the company's financial health and its ability to manage debt obligations effectively.