PNM Resources Inc (PNM)

Debt-to-equity ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Long-term debt	US$ in thousands	4,241,640	3,892,590	3,519,580	2,719,630	2,517,450
Total stockholders’ equity	US$ in thousands	2,349,090	2,191,930	2,167,520	2,049,460	1,678,700
Debt-to-equity ratio		1.81	1.78	1.62	1.33	1.50

December 31, 2023 calculation

Debt-to-equity ratio = Long-term debt ÷ Total stockholders’ equity
= $4,241,640K ÷ $2,349,090K
= 1.81

The debt-to-equity ratio of PNM Resources Inc has shown an increasing trend over the five-year period from 2019 to 2023. The ratio increased from 1.89 in 2019 to 2.03 in 2023, indicating a higher proportion of debt relative to equity in the company's capital structure. This suggests that PNM Resources Inc has been relying more on debt financing over the years as compared to equity financing.

A debt-to-equity ratio of above 1.0 typically indicates that a company is relying more on debt to finance its operations and growth, which can potentially increase financial risk due to higher interest payments and debt obligations.

The continual increase in the debt-to-equity ratio should be carefully monitored as it may indicate a higher level of financial leveraging in the company, which could make it more vulnerable to economic downturns or changes in interest rates. Investors and creditors may scrutinize this trend closely to assess the company's ability to manage its debt levels effectively and maintain financial stability.