PG&E Corp (PCG)
Solvency ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.40 | 0.41 | 0.40 | 0.37 | 0.38 |
| Debt-to-capital ratio | 0.64 | 0.67 | 0.68 | 0.65 | 0.64 |
| Debt-to-equity ratio | 1.78 | 2.04 | 2.09 | 1.82 | 1.78 |
| Financial leverage ratio | 4.43 | 5.02 | 5.20 | 4.93 | 4.66 |
The solvency ratios of PG&E Corp indicate the company's ability to meet its long-term financial obligations.
1. Debt-to-assets ratio: PG&E Corp's debt-to-assets ratio has been relatively stable over the years, ranging from 0.37 to 0.41. This ratio shows that, on average, 37% to 41% of the company's assets are financed by debt.
2. Debt-to-capital ratio: The debt-to-capital ratio of PG&E Corp has been fluctuating between 0.64 and 0.68. This ratio signifies that, on average, 64% to 68% of the company's capital structure is funded through debt.
3. Debt-to-equity ratio: PG&E Corp's debt-to-equity ratio saw some variation during the period, ranging from 1.78 to 2.09. This ratio indicates that, on average, the company has around 1.78 to 2.09 times more debt than equity in its capital structure.
4. Financial leverage ratio: PG&E Corp's financial leverage ratio also displayed variability, oscillating between 4.43 and 5.20. This ratio suggests that, on average, the company's financial leverage ranged from 4.43 to 5.20 times over the years.
Overall, these solvency ratios indicate PG&E Corp's ongoing reliance on debt financing to support its operations and investments, while also highlighting the need for the company to maintain a balance between debt and equity in its capital structure to ensure long-term financial stability.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 1.46 | 0.94 | 0.96 | 1.18 | 1.39 |
Interest coverage, also known as times interest earned, is a financial metric used to measure a company's ability to meet its interest payments on outstanding debt.
Based on the data provided for PG&E Corp, the interest coverage ratio has been declining over the years. In December 31, 2020, the interest coverage ratio was 1.39, indicating that PG&E Corp generated 1.39 times the amount of earnings needed to cover its interest payments. However, by December 31, 2024, the interest coverage ratio improved to 1.46.
The declining trend in the interest coverage ratio from 2020 to 2024 suggests that PG&E Corp may be facing challenges in meeting its interest obligations with its operating income. A lower interest coverage ratio could indicate heightened financial risk and potential difficulty in servicing debt.
It is important for investors and creditors to closely monitor PG&E Corp's interest coverage ratio to assess its financial health and ability to meet its debt obligations in the future.