Southwest Gas Holdings Inc (SWX)
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 | 11,869,900 | 11,836,300 | 11,950,900 | 11,810,200 | 13,196,600 | 13,102,600 | 12,923,000 | 13,249,500 | 12,765,300 | 10,369,600 | 9,039,020 | 8,928,640 | 8,735,850 | 8,429,660 | 8,426,040 | 8,093,220 | 8,170,050 | 7,840,210 | 7,666,880 | 7,569,430 |
| Total stockholders’ equity | US$ in thousands | 3,310,040 | 3,238,740 | 3,262,830 | 3,296,160 | 3,058,760 | 3,412,920 | 3,458,850 | 3,489,080 | 2,953,820 | 2,909,820 | 2,846,880 | 2,773,720 | 2,674,950 | 2,619,240 | 2,611,300 | 2,547,900 | 2,505,910 | 2,423,710 | 2,419,360 | 2,347,000 |
| Financial leverage ratio | 3.59 | 3.65 | 3.66 | 3.58 | 4.31 | 3.84 | 3.74 | 3.80 | 4.32 | 3.56 | 3.18 | 3.22 | 3.27 | 3.22 | 3.23 | 3.18 | 3.26 | 3.23 | 3.17 | 3.23 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $11,869,900K ÷ $3,310,040K
= 3.59
Southwest Gas Holdings Inc's financial leverage ratio has shown fluctuations over the past eight quarters. The ratio was highest in Q4 2022 at 4.31, indicating a higher level of financial leverage at that time. Since Q4 2022, there has been a declining trend in the financial leverage ratio, reaching a low of 3.58 in Q1 2023 before slightly increasing to 3.59 in Q4 2023.
The downward trend in the financial leverage ratio suggests that Southwest Gas Holdings Inc has been reducing its reliance on debt to finance its operations and investments. A lower financial leverage ratio indicates a lower level of debt relative to equity, which can be viewed positively as it reduces the company's financial risk and vulnerability to economic downturns.
However, it is essential to note that while a decreasing trend in the financial leverage ratio can indicate a healthier financial position, a very low ratio may also signify underutilization of debt in optimizing capital structure for growth. It is crucial for Southwest Gas Holdings Inc to strike a balance between debt and equity to maximize shareholder value and support sustainable growth.
Peer comparison
Dec 31, 2023