PNM Resources Inc (PNM)

Financial leverage ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Total assets	US$ in thousands	10,252,600	9,257,380	8,666,880	7,939,850	7,298,770
Total stockholders’ equity	US$ in thousands	2,349,090	2,191,930	2,167,520	2,049,460	1,678,700
Financial leverage ratio		4.36	4.22	4.00	3.87	4.35

December 31, 2023 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $10,252,600K ÷ $2,349,090K
= 4.36

The financial leverage ratio of PNM Resources Inc has fluctuated over the past five years, ranging from 3.85 in 2020 to 4.34 in 2023. This ratio indicates the proportion of the company's total assets financed by debt compared to equity.

The increasing trend in the financial leverage ratio from 2020 to 2023 suggests that the company has been relying more on debt to fund its operations and investments relative to equity. A higher financial leverage ratio indicates a higher level of financial risk, as the company has a larger proportion of debt in its capital structure.

It is essential for investors and stakeholders to monitor the financial leverage ratio of PNM Resources Inc closely, as a high ratio could indicate potential difficulties in meeting debt obligations, especially in times of economic uncertainty or interest rate hikes. Additionally, a high financial leverage ratio may limit the company's financial flexibility and ability to invest in growth opportunities.