SM Energy Co (SM)

Financial leverage ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Total assets	US$ in thousands	6,379,980	5,716,040	5,233,980	4,976,430	6,292,230
Total stockholders’ equity	US$ in thousands	3,615,850	3,085,460	2,063,130	2,016,160	2,748,990
Financial leverage ratio		1.76	1.85	2.54	2.47	2.29

December 31, 2023 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $6,379,980K ÷ $3,615,850K
= 1.76

The financial leverage ratio of SM Energy Co has shown fluctuations over the past five years. The ratio decreased from 2.29 in 2019 to 1.76 in 2023, indicating a reduction in the company's reliance on debt to finance its operations. This suggests that SM Energy Co has improved its financial structure by reducing debt levels and increasing equity financing. However, it is important to note that the ratio increased in 2021 to 2.54 before gradually declining in the following years. Overall, the trend in the financial leverage ratio suggests that SM Energy Co has been actively managing its debt levels to achieve a healthier balance between debt and equity in its capital structure.