Portland General Electric Co (POR)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 11,208,000 | 10,459,000 | 9,494,000 | 9,069,000 | 8,394,000 |
| Total stockholders’ equity | US$ in thousands | 3,319,000 | 2,779,000 | 2,707,000 | 2,613,000 | 2,591,000 |
| Financial leverage ratio | 3.38 | 3.76 | 3.51 | 3.47 | 3.24 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $11,208,000K ÷ $3,319,000K
= 3.38
The financial leverage ratio for Portland General Electric Co has shown fluctuations over the past five years. The ratio decreased from 3.24 in 2019 to 3.47 in 2020 before declining further to 3.51 in 2021. However, there was an increase in the ratio to 3.76 in 2022, followed by a decrease to 3.38 in 2023.
A financial leverage ratio of more than 1 indicates that the company relies more on debt to finance its assets than equity. Portland General Electric Co's ratio values ranging from 3.24 to 3.76 suggest a relatively high level of financial leverage, indicating that the company has been employing a significant amount of debt in its capital structure over the years.
The decreasing trend observed from 2021 to 2023 may indicate a strategic effort to reduce reliance on debt financing or potentially an increase in equity investment. However, it is essential to assess the company's overall financial health, debt repayment capacity, and interest coverage ratio to fully evaluate the impact of its financial leverage on its operations and performance.
Peer comparison
Dec 31, 2023