Essential Utilities Inc (WTRG)
Debt-to-capital ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Long-term debt | US$ in thousands | 6,826,080 | 6,371,060 | 5,779,500 | 5,507,740 | 2,943,330 |
| Total stockholders’ equity | US$ in thousands | 5,896,180 | 5,377,390 | 5,184,450 | 4,683,880 | 3,880,860 |
| Debt-to-capital ratio | 0.54 | 0.54 | 0.53 | 0.54 | 0.43 |
December 31, 2023 calculation
Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $6,826,080K ÷ ($6,826,080K + $5,896,180K)
= 0.54
The debt-to-capital ratio of Essential Utilities Inc has been relatively stable over the past five years, ranging from 0.44 to 0.56. This ratio indicates the proportion of the company's capital that is financed by debt. A higher ratio suggests a higher level of debt relative to total capital, which may indicate increased financial risk and leverage. Conversely, a lower ratio implies a more conservative capital structure with a lower reliance on debt financing.
Essential Utilities Inc's debt-to-capital ratio has hovered around the 0.55 mark in recent years, indicating a moderate level of debt compared to its capital base. This suggests that the company has maintained a balanced approach to financing its operations, neither overly reliant on debt nor excessively conservative in its capital structure.
Overall, the stability of Essential Utilities Inc's debt-to-capital ratio over the analyzed period indicates a consistent approach to managing its capital structure and financial risk. It is essential for stakeholders to monitor this ratio in conjunction with other financial metrics to assess the company's overall financial health and sustainability.
Peer comparison
Dec 31, 2023