Essential Utilities Inc (WTRG)

Essential Utilities Inc shows consistently low solvency ratios across the board based on the provided data.

1. Debt-to-assets ratio has been stable at 0.00 from 2020 to 2024, indicating that the company has not utilized debt significantly to finance its assets. This suggests that Essential Utilities Inc has a strong ability to cover its liabilities with its assets.

2. Debt-to-capital ratio has also remained at 0.00 throughout the five-year period, further reinforcing the company's minimal reliance on debt to fund its operations or investments.

3. Debt-to-equity ratio, similar to the other solvency ratios, has been consistently at 0.00 over the years, underscoring the fact that the company's capital structure is mostly equity-financed, thereby reducing financial risk.

4. The financial leverage ratio, which reflects the proportion of debt in the company's capital structure, shows values around 2.9 over the period. While this ratio is modest, it indicates that the company has a moderate level of financial leverage, which may pose a slight risk due to the use of debt in its capital structure.

In summary, Essential Utilities Inc demonstrates a conservative approach to solvency management, as evidenced by its low debt ratios and overall stable financial leverage ratio over the years.

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Coverage ratios

Essential Utilities Inc's interest coverage ratio has shown a generally stable trend over the past five years. The company's ability to cover its interest expenses improved from 2.44 in December 31, 2020, to 2.94 in December 31, 2021, indicating a stronger ability to meet its interest obligations. However, there was a slight dip in the ratio to 2.81 in December 31, 2022, followed by a further decrease to 2.52 in December 31, 2023. By the end of December 31, 2024, the interest coverage ratio slightly recovered to 2.90.

This trend suggests that while Essential Utilities Inc has generally been able to comfortably cover its interest expenses, there was a dip in the coverage in 2023, which could indicate potential challenges in meeting interest obligations. It is essential for the company to closely monitor its interest coverage ratio to ensure it remains at a healthy level to support its financial stability and growth.