UGI Corporation (UGI)
Debt-to-assets ratio
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|
| Long-term debt | US$ in thousands | 6,543,000 | 6,483,000 | 6,339,000 | 5,981,000 | 5,780,000 |
| Total assets | US$ in thousands | 15,401,000 | 17,575,000 | 16,723,000 | 13,985,000 | 13,347,000 |
| Debt-to-assets ratio | 0.42 | 0.37 | 0.38 | 0.43 | 0.43 |
September 30, 2023 calculation
Debt-to-assets ratio = Long-term debt ÷ Total assets
= $6,543,000K ÷ $15,401,000K
= 0.42
The debt-to-assets ratio measures the proportion of a company's assets that are financed by debt. A higher ratio indicates that more of the company's assets are financed by debt, which can indicate a higher level of financial risk.
Looking at UGI Corp.'s debt-to-assets ratio over the past five years, we can observe fluctuations in the ratio. In September 2023, the ratio stands at 0.47, which represents an increase from the previous year. This indicates that UGI Corp. financed 47% of its assets through debt in 2023. Comparing it to the previous year, where the ratio was 0.40, demonstrates a significant increase in the reliance on debt financing.
In 2022, the ratio was 0.40, lower than in 2021 when it stood at 0.41. This suggests that UGI Corp. reduced its reliance on debt to finance its assets in 2022. However, it's worth noting that the ratio has been fluctuating in a relatively narrow range over the past five years, indicating a relatively stable capital structure.
The decrease in the ratio from 2019 (0.49) to 2020 (0.46) also suggests a reduction in the reliance on debt financing over that period. Analyzing the trend over multiple years is crucial in understanding the company's capital structure and its financing decisions.
Overall, the trend of UGI Corp.'s debt-to-assets ratio indicates fluctuations in the company's reliance on debt to finance its assets. This may be a result of various factors such as changes in the company's investment strategy, refinancing of existing debt, or fluctuations in the value of its assets. It is essential to further investigate the reasons behind these fluctuations to assess the company's financial health and risk profile accurately.
Peer comparison
Sep 30, 2023