Southwestern Energy Company (SWN)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 11,991,000 | 12,926,000 | 11,848,000 | 5,160,000 | 6,717,000 |
| Total stockholders’ equity | US$ in thousands | 5,888,000 | 4,324,000 | 2,547,000 | 497,000 | 3,246,000 |
| Financial leverage ratio | 2.04 | 2.99 | 4.65 | 10.38 | 2.07 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $11,991,000K ÷ $5,888,000K
= 2.04
Southwestern Energy Company's financial leverage ratio has fluctuated over the past five years, indicating varying levels of debt utilization. The ratio stood at 2.04 in 2023, reflecting a decrease from the prior year. This suggests that the company relied less on debt financing relative to its equity in 2023. In contrast, the ratio was significantly higher at 10.38 in 2020, indicating a substantial reliance on debt to finance its operations at that time.
The trend in the financial leverage ratio indicates that Southwestern Energy Company has made efforts to reduce its leverage over the years, potentially aiming to lower its financial risk profile and enhance its financial health. However, the ratio remains above 2 in recent years, indicating that the company still maintains a significant level of debt relative to its equity.
Overall, a lower financial leverage ratio signifies a more conservative capital structure, while a higher ratio indicates a higher degree of financial risk due to increased debt obligations. It is essential for stakeholders to monitor this ratio closely to assess the company's ability to meet its financial obligations and sustain its operations in the long run.
Peer comparison
Dec 31, 2023