Southwest Gas Holdings Inc (SWX)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.39 | 0.33 | 0.32 | 0.31 | 0.28 |
| Debt-to-capital ratio | 0.58 | 0.59 | 0.58 | 0.51 | 0.48 |
| Debt-to-equity ratio | 1.39 | 1.44 | 1.39 | 1.02 | 0.92 |
| Financial leverage ratio | 3.59 | 4.31 | 4.32 | 3.27 | 3.26 |
The solvency ratios of Southwest Gas Holdings Inc indicate the company's ability to meet its long-term financial obligations. The trends observed in the ratios over the past five years show the following:
1. Debt-to-assets ratio: The ratio has fluctuated over the years, ranging from 0.33 to 0.50, and currently stands at 0.44 as of December 31, 2023. This ratio indicates that 44% of the company's assets are financed by debt.
2. Debt-to-capital ratio: This ratio has also shown variability, with values ranging from 0.52 to 0.68. As of December 31, 2023, the ratio is at 0.61, implying that 61% of the company's capital is derived from debt sources.
3. Debt-to-equity ratio: Southwest Gas Holdings Inc has experienced fluctuations in this ratio, with values ranging from 1.07 to 2.14. Currently, the ratio stands at 1.60 as of December 31, 2023, indicating that the company has $1.60 in debt for every dollar of equity.
4. Financial leverage ratio: This ratio has also varied over the years, with values between 3.26 and 4.32. As of December 31, 2023, the financial leverage ratio is 3.59, reflecting the extent to which the company is using debt to finance its operations.
In general, while there have been fluctuations in Southwest Gas Holdings Inc's solvency ratios over the years, the current ratios indicate a moderate level of debt relative to assets, capital, equity, and leverage. Investors and stakeholders should continue monitoring these ratios to assess the company's long-term financial health and ability to meet its obligations.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 1.66 | -0.15 | 3.02 | 3.67 | 3.47 |
Southwest Gas Holdings Inc's interest coverage ratio has shown variability over the past five years. The ratio was 2.03 in 2023, indicating that the company generated operating income 2.03 times larger than its interest expenses for that year. This represents a slight improvement from 2022 when the ratio was 1.91. In 2021, the interest coverage ratio was relatively high at 3.24, showing that the company had a comfortable cushion to cover its interest obligations. The ratios for 2020 and 2019 were 3.94 and 3.62 respectively, also indicating strong coverage of interest expenses.
Overall, the trend in Southwest Gas Holdings Inc's interest coverage ratio has been somewhat mixed, with fluctuations in recent years. While the company generally maintained an adequate ability to cover its interest payments, the decrease in the ratio in 2023 compared to 2022 warrants further attention to ensure the company's financial health and ability to meet its debt obligations.