SJW Corporation (SJW)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 4,345,070 | 3,755,060 | 3,492,400 | 3,311,460 | 3,132,470 |
| Total stockholders’ equity | US$ in thousands | 1,233,400 | 1,110,870 | 1,034,520 | 917,160 | 889,984 |
| Financial leverage ratio | 3.52 | 3.38 | 3.38 | 3.61 | 3.52 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $4,345,070K ÷ $1,233,400K
= 3.52
The financial leverage ratio of SJW Group has fluctuated over the past five years, ranging from 3.27 in 2022 to 3.61 in 2020. The ratio indicates that, on average, the company's assets are financed by a multiple of approximately 3.4 to 3.6 times its equity. In 2023, the financial leverage ratio increased to 3.52 from the previous year.
A higher financial leverage ratio suggests that the company relies more on debt to finance its operations and investments, which can increase the risk of financial distress during economic downturns. Conversely, a lower ratio may indicate a more conservative capital structure with less reliance on debt financing.
Overall, monitoring changes in the financial leverage ratio can provide insights into the company's capital structure and its ability to meet financial obligations. It is important for management and investors to consider the implications of the financial leverage ratio in assessing the company's financial health and risk profile.
Peer comparison
Dec 31, 2023