SM Energy Co (SM)

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	6,379,980	6,078,570	5,992,630	5,870,160	5,716,040	5,651,510	5,339,120	5,395,780	5,233,980	5,061,960	5,053,000	5,015,640	4,976,430	5,122,280	5,267,630	5,615,020	6,292,230	6,453,080	6,391,940	6,286,620
Total stockholders’ equity	US$ in thousands	3,615,850	3,404,290	3,298,470	3,229,800	3,085,460	2,867,660	2,444,900	2,115,110	2,063,130	1,636,900	1,552,510	1,769,670	2,016,160	2,185,110	2,280,830	2,341,720	2,748,990	2,843,750	2,801,840	2,743,220
Financial leverage ratio		1.76	1.79	1.82	1.82	1.85	1.97	2.18	2.55	2.54	3.09	3.25	2.83	2.47	2.34	2.31	2.40	2.29	2.27	2.28	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 a decreasing trend over the past eight quarters. Starting at 2.55 in Q1 2022, the ratio steadily declined to 1.76 in Q4 2023. This indicates that the company has been able to reduce its reliance on debt to finance its operations and investments. A lower financial leverage ratio generally suggests a lower level of financial risk, as the company has less debt in comparison to its equity. However, it is important to note that a very low leverage ratio might also indicate underutilization of debt, which can impact the company's overall return on equity. Going forward, monitoring the trend of the financial leverage ratio will be crucial to assess the company's capital structure and risk profile.