Sempra Energy (SRE)

Based on the provided data for Sempra Energy, the solvency ratios indicate the company's ability to meet its long-term financial obligations. Here is a detailed analysis of the solvency ratios for Sempra Energy:

1. Debt-to-Assets Ratio:
- The debt-to-assets ratio for Sempra Energy has shown a slight increase over the years, from 0.00 in 2020 to 0.32 in 2023 before decreasing to 0.00 in 2024. This ratio indicates the percentage of the company's assets financed by debt. A lower ratio is typically favorable as it suggests lower financial risk.

2. Debt-to-Capital Ratio:
- The debt-to-capital ratio has also increased steadily over the years, from 0.00 in 2020 to 0.49 in 2023 before dropping back to 0.00 in 2024. This ratio shows the proportion of a company's capital that is debt. A higher ratio may indicate higher financial leverage and risk.

3. Debt-to-Equity Ratio:
- The debt-to-equity ratio for Sempra Energy has experienced a consistent increase, rising from 0.00 in 2020 to 0.97 in 2023 before returning to 0.00 in 2024. This ratio compares a company's total debt to its shareholders' equity. A higher ratio suggests higher financial risk and reliance on debt financing.

4. Financial Leverage Ratio:
- The financial leverage ratio, which measures the extent to which a company uses debt to finance its assets, has shown a generally increasing trend over the years, reaching 3.08 in 2024. This indicates that the company relies more on debt financing compared to equity financing.

Overall, the solvency ratios of Sempra Energy demonstrate fluctuations in the company's debt structure and financial leverage over the years. It is essential for investors and stakeholders to monitor these ratios to assess the company's ability to meet its long-term financial obligations and manage its financial risk effectively.

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Coverage ratios

To analyze Sempra Energy's interest coverage over the past five years, we can see a fluctuating trend in the ratio.

1. As of December 31, 2020, Sempra Energy's interest coverage stood at 4.71, indicating that the company's operating income was able to cover its interest expenses nearly five times over.

2. However, by the end of 2021, the interest coverage ratio decreased to 2.18, signaling a decline in the company's ability to cover its interest payments with operating income.

3. In 2022, the interest coverage improved to 3.56, showing a partial recovery from the downturn in the previous year.

4. By December 31, 2023, the interest coverage ratio was recorded at 3.72, suggesting a slight improvement from the previous year.

5. The most recent data point as of December 31, 2024, shows a notable increase in the interest coverage ratio to 5.90, pointing towards a significant enhancement in Sempra Energy's ability to cover its interest obligations from its operating income.

Overall, the trend in Sempra Energy's interest coverage ratio indicates some variability over the years, with fluctuations in the company's ability to cover its interest expenses. It is essential for stakeholders to closely monitor this ratio to assess the company's financial health and debt servicing capabilities.