Targa Resources Inc (TRGP)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 20,671,800 | 19,560,000 | 15,208,200 | 15,875,700 | 18,815,100 |
| Total stockholders’ equity | US$ in thousands | 2,739,700 | 2,665,700 | 2,011,800 | 2,653,900 | 4,920,800 |
| Financial leverage ratio | 7.55 | 7.34 | 7.56 | 5.98 | 3.82 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $20,671,800K ÷ $2,739,700K
= 7.55
The financial leverage ratio of Targa Resources Corp has been showing an increasing trend over the past five years, indicating a higher level of financial leverage or debt utilization by the company. The ratio has increased from 3.62 in 2019 to 7.55 in 2023. This suggests that the company has been relying more on debt to finance its operations and growth.
A higher financial leverage ratio can magnify returns for shareholders in good times but can also increase the company's financial risk, especially during economic downturns or unfavorable market conditions. It is important for investors and stakeholders to monitor the company's ability to service and repay its debt obligations as indicated by this trend in financial leverage ratios.
Overall, the increasing trend in Targa Resources Corp's financial leverage ratio reflects its evolving capital structure and the impact of debt on its financial position and performance over the years.
Peer comparison
Dec 31, 2023