PNM Resources Inc (PNM)

Financial leverage ratio

		Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Total assets	US$ in thousands	10,252,600	10,050,800	9,626,970	9,353,140	9,257,380	9,028,890	8,911,100	8,727,690	8,666,880	8,256,070	8,120,470	7,943,310	7,939,850	7,742,110	7,574,470	7,375,120	7,298,770	7,200,930	7,048,670	7,250,760
Total stockholders’ equity	US$ in thousands	2,349,090	2,235,210	2,262,240	2,212,190	2,191,930	2,201,880	2,131,520	2,115,530	2,167,520	2,144,950	2,088,230	2,030,970	2,049,460	1,773,320	1,696,500	1,627,220	1,678,700	1,670,910	1,612,150	1,684,680
Financial leverage ratio		4.36	4.50	4.26	4.23	4.22	4.10	4.18	4.13	4.00	3.85	3.89	3.91	3.87	4.37	4.46	4.53	4.35	4.31	4.37	4.30

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 shown some fluctuations over the past eight quarters. The ratio ranged from 4.08 to 4.47 during this period, with Q3 2023 recording the highest ratio of 4.47, indicating higher financial leverage. However, the ratio decreased in Q4 2023 to 4.34.

Generally, a higher financial leverage ratio indicates that a company is relying more on debt to finance its operations, which can lead to higher financial risk. On the other hand, a lower ratio suggests a more conservative capital structure with less reliance on debt.

PNM Resources Inc's financial leverage ratio fluctuated within a relatively narrow range between 4.08 and 4.47, indicating a consistent level of leverage over the past two years. It is important for the company to carefully manage its debt levels to ensure long-term financial stability and sustainability. Further analysis of the company's overall financial health and risk management strategies would provide more insight into the implications of these ratios.