PG&E Corp (PCG)

The solvency ratios of PG&E Corp. provide insights into the company's financial stability and ability to meet its debt obligations.

The Debt-to-assets ratio has increased slightly over the years, indicating that the company has been gradually increasing its reliance on debt to finance its operations and investments. As of Dec 31, 2023, the ratio stands at 0.45, implying that 45% of PG&E's assets are financed by debt.

The Debt-to-capital ratio has also shown a gradually increasing trend, reaching 0.70 in 2023. This ratio indicates that 70% of the company's capital structure is funded by debt, reflecting a higher level of leverage.

The Debt-to-equity ratio has been consistently high, with a significant increase from 2019 to 2023. The ratio stood at 2.28 at the end of 2023, showing that PG&E has more than doubled its debt relative to equity over the period. This high ratio signals a relatively high level of financial risk and implies that the company has a substantial amount of debt compared to its shareholders' equity.

The Financial leverage ratio, which measures the proportion of total assets financed by debt relative to equity, has shown a fluctuating trend but remains relatively high. As of Dec 31, 2023, the ratio stands at 5.02, indicating that PG&E's assets are leveraged approximately five times more than its equity.

Overall, the solvency ratios of PG&E Corp. suggest that the company has been increasing its reliance on debt to finance its operations and investments, leading to higher levels of leverage and potentially heightened financial risk. Investors and stakeholders should closely monitor these ratios to assess the company's ability to manage its debt levels and meet its financial obligations in the long run.

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Coverage ratios

The interest coverage ratio of PG&E Corp., a measure of the company's ability to meet its interest obligations, has shown some fluctuations over the past five years.

In 2023, the interest coverage ratio improved to 1.78 from 1.53 in 2022, indicating that PG&E Corp. was better able to cover its interest expenses with its operating earnings that year. This improvement suggests a more favorable financial position for the company in terms of its ability to service its debt.

Looking back at 2021 and 2020, the interest coverage ratio was 1.35 and 1.64 respectively. In these years, PG&E Corp. faced a slightly weaker position in terms of covering its interest payments compared to 2023. However, the ratio for 2020 was still higher than that of 2021, indicating some fluctuations in the company's ability to cover interest expenses during these years.

In 2019, the interest coverage ratio was 1.57, showing a slight decline compared to 2020 but still indicating that PG&E Corp. had sufficient operating earnings to cover its interest payments.

Overall, the trend in PG&E Corp.'s interest coverage ratio shows some variations over the five-year period, with improvements in some years and slight declines in others. This ratio is important for creditors and investors as it highlights the company's ability to meet its interest obligations and manage its debt effectively.