Otter Tail Corporation (OTTR)

Debt-to-assets ratio

		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
Long-term debt	US$ in thousands	824,059	823,998	823,941	823,882	823,821	823,760	823,699	734,074	734,014	594,619	624,540	624,485	624,432	764,274	724,389	724,318	689,581	590,015	590,063	590,022
Total assets	US$ in thousands	3,242,570	3,187,470	3,093,990	2,987,410	2,901,660	2,897,900	2,875,500	2,791,740	2,754,830	2,713,150	2,671,590	2,618,540	2,578,350	2,534,510	2,389,240	2,306,000	2,273,600	2,180,190	2,114,940	2,104,550
Debt-to-assets ratio		0.25	0.26	0.27	0.28	0.28	0.28	0.29	0.26	0.27	0.22	0.23	0.24	0.24	0.30	0.30	0.31	0.30	0.27	0.28	0.28

December 31, 2023 calculation

Debt-to-assets ratio = Long-term debt ÷ Total assets
= $824,059K ÷ $3,242,570K
= 0.25

The debt-to-assets ratio for Otter Tail Corporation has remained relatively stable over the past eight quarters, ranging from 0.27 to 0.31. This ratio indicates that the company finances around 27% to 31% of its assets through debt, with the remaining portion funded by equity.

Having a lower debt-to-assets ratio suggests that Otter Tail Corporation has a lower level of financial leverage, which can be viewed positively as it lowers the company's credit risk and increases its financial stability. However, it's important to note that too low a ratio may indicate underutilization of debt financing, potentially missing out on the benefits of leverage.

Overall, the consistency of the debt-to-assets ratio in the range of 0.27 to 0.31 reflects a balanced approach to capital structure management by Otter Tail Corporation, which likely aims to maintain a prudent level of debt while optimizing its capital efficiency.