Public Service Enterprise Group Inc (PEG)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 50,741,000 | 48,718,000 | 48,999,000 | 50,050,000 | 47,730,000 |
| Total stockholders’ equity | US$ in thousands | 14,098,000 | 12,352,000 | 13,542,000 | 15,123,000 | 14,258,000 |
| Financial leverage ratio | 3.60 | 3.94 | 3.62 | 3.31 | 3.35 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $50,741,000K ÷ $14,098,000K
= 3.60
The financial leverage ratio of Public Service Enterprise Group Inc. has fluctuated over the past five years, ranging from 3.13 to 3.55. This ratio measures the company's use of debt financing relative to its equity. A higher ratio indicates a higher proportion of debt in the company's capital structure, potentially increasing financial risk.
In this case, the downward trend in the financial leverage ratio from 3.55 in 2022 to 3.28 in 2023 suggests a decreasing reliance on debt financing compared to equity. This trend may indicate a shift towards a more conservative capital structure, reducing the company's financial risk and potential vulnerabilities to economic downturns or interest rate fluctuations.
However, it is essential to consider the industry norms and the company's specific financial strategy when evaluating the significance of these changes in the financial leverage ratio. Overall, the decreasing trend signifies a potential improvement in the company's financial stability and risk management practices.
Peer comparison
Dec 31, 2023