Public Service Enterprise Group Inc (PEG)

Public Service Enterprise Group Inc's solvency ratios indicate its ability to meet long-term obligations and manage financial risks.

1. Debt-to-assets ratio: This ratio shows the proportion of the company's assets financed by debt. The trend shows a slight increase from 0.29 in 2020 to 0.35 in 2024, indicating a rising reliance on debt to finance its assets.

2. Debt-to-capital ratio: This ratio measures the extent of financial leverage used by the company. The ratio has increased from 0.49 in 2020 to 0.56 in 2024, suggesting a higher proportion of debt in the company's capital structure over the years.

3. Debt-to-equity ratio: This ratio indicates the company's financial leverage and risk exposure. Public Service Enterprise Group Inc's debt-to-equity ratio has fluctuated between 0.96 in 2020 and 1.29 in 2024, indicating varying levels of debt relative to shareholders' equity.

4. Financial leverage ratio: This ratio provides insight into the company's total debt relative to its assets. The trend shows fluctuations, with a peak at 3.94 in 2022 and a slight decrease to 3.71 in 2024, indicating changes in the company's leverage position and risk exposure over the years.

Overall, the increasing trends in debt ratios suggest that Public Service Enterprise Group Inc has been gradually increasing its reliance on debt financing, which may raise concerns about its long-term financial sustainability and ability to manage debt effectively. It is important for the company to monitor and manage its debt levels to maintain a healthy balance between debt and equity in its capital structure.

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Coverage ratios

Interest coverage ratio measures a company's ability to meet its interest obligations with its earnings before interest and taxes (EBIT). In the case of Public Service Enterprise Group Inc, the interest coverage ratio trend shows some fluctuations.

As of December 31, 2020, the interest coverage ratio stood at a healthy 4.84, indicating that the company's earnings were sufficient to cover its interest expenses almost five times over. However, by December 31, 2021, the ratio dropped significantly to -0.91, implying that the company's earnings were not enough to cover its interest expenses, leading to a negative coverage. This may raise concerns about the company's financial health and ability to meet its debt obligations.

The situation improved in the subsequent years, with the interest coverage ratio increasing to 2.60 by December 31, 2022, suggesting a partial recovery in the company's ability to cover its interest expenses. By December 31, 2023, the ratio further improved to 5.12, indicating a strong ability to meet interest payments with earnings.

However, by December 31, 2024, the interest coverage ratio slightly decreased to 3.07. While still above 1, showing the company's ability to meet interest payments, the decrease may warrant monitoring to ensure the company continues to generate enough earnings to cover its interest obligations comfortably.

Overall, the fluctuating trend in Public Service Enterprise Group Inc's interest coverage ratio indicates varying levels of financial stability and highlights the importance of continuous monitoring of the company's ability to meet its debt obligations.