Williams Companies Inc (WMB)
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 | 52,627,000 | 50,788,000 | 49,025,000 | 48,936,000 | 48,433,000 | 48,672,000 | 47,555,000 | 46,049,000 | 47,612,000 | 45,985,000 | 45,507,000 | 45,262,000 | 44,165,000 | 44,320,000 | 45,343,000 | 44,629,000 | 46,040,000 | 46,281,000 | 46,509,000 | 45,970,000 |
| Total stockholders’ equity | US$ in thousands | 12,402,000 | 11,845,000 | 11,679,000 | 11,785,000 | 11,485,000 | 11,319,000 | 11,226,000 | 11,316,000 | 11,423,000 | 11,198,000 | 11,512,000 | 11,702,000 | 11,769,000 | 12,065,000 | 12,212,000 | 12,354,000 | 13,363,000 | 13,621,000 | 13,848,000 | 14,406,000 |
| Financial leverage ratio | 4.24 | 4.29 | 4.20 | 4.15 | 4.22 | 4.30 | 4.24 | 4.07 | 4.17 | 4.11 | 3.95 | 3.87 | 3.75 | 3.67 | 3.71 | 3.61 | 3.45 | 3.40 | 3.36 | 3.19 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $52,627,000K ÷ $12,402,000K
= 4.24
The financial leverage ratio of Williams Cos Inc has been relatively stable over the past eight quarters, ranging from 4.07 to 4.30. This ratio indicates that the company relies heavily on debt financing in its capital structure, with an average leverage ratio of approximately 4.23 during this period.
A high financial leverage ratio suggests that a significant portion of the company's assets is financed through debt rather than equity. While debt can provide tax advantages and allow for leverage to amplify returns, it also increases financial risk due to interest payments and potential insolvency issues.
Williams Cos Inc's consistent leverage ratio above 4 indicates a consistently high level of financial risk and a reliance on debt to fund its operations and investments. It is important for the company to carefully manage its debt levels to ensure liquidity and solvency in the long term, especially in periods of economic uncertainty or rising interest rates.
Peer comparison
Dec 31, 2023