Sempra Energy (SRE)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 87,181,000 | 78,574,000 | 72,045,000 | 66,623,000 | 65,665,000 |
| Total stockholders’ equity | US$ in thousands | 28,675,000 | 27,115,000 | 25,981,000 | 23,373,000 | 19,929,000 |
| Financial leverage ratio | 3.04 | 2.90 | 2.77 | 2.85 | 3.29 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $87,181,000K ÷ $28,675,000K
= 3.04
The financial leverage ratio measures the extent to which a company relies on debt to finance its operations. A higher financial leverage ratio indicates a higher proportion of debt in relation to equity, which can increase the company's financial risk.
From the data provided, Sempra's financial leverage ratio has fluctuated over the past five years, ranging from 2.77 to 3.29. In 2023, the financial leverage ratio increased to 3.04 from 2.90 in 2022. This indicates that Sempra's reliance on debt to finance its operations increased in 2023 compared to the previous year.
Overall, Sempra's financial leverage ratio has shown some volatility, potentially signaling shifts in the company's capital structure and financial strategy. It would be important to further analyze the reasons behind these fluctuations and assess the implications for Sempra's financial stability and risk profile.
Peer comparison
Dec 31, 2023