Essential Utilities Inc (WTRG)

Debt-to-capital 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
Long-term debt US$ in thousands 6,826,080 6,456,040 6,615,520 6,484,520 6,371,060 6,173,630 6,087,740 5,871,960 5,779,500 5,598,710 5,648,230 5,547,940 5,507,740 5,152,970 5,174,600 4,729,030 2,943,330 2,898,300 2,749,200 2,462,860
Total stockholders’ equity US$ in thousands 5,896,180 5,922,560 5,614,700 5,515,940 5,377,390 5,343,100 5,342,030 5,255,100 5,184,450 5,127,860 4,836,820 4,810,340 4,683,880 4,635,750 4,635,530 4,613,160 3,880,860 3,862,560 3,824,770 1,992,580
Debt-to-capital ratio 0.54 0.52 0.54 0.54 0.54 0.54 0.53 0.53 0.53 0.52 0.54 0.54 0.54 0.53 0.53 0.51 0.43 0.43 0.42 0.55

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 for Essential Utilities Inc has been relatively stable over the past eight quarters, ranging between 0.54 and 0.56. This ratio indicates that, on average, approximately 55% of the company's capital structure is funded by debt, with the remaining 45% funded by equity.

A consistent debt-to-capital ratio suggests that Essential Utilities Inc has been maintaining a balanced mix of debt and equity in its capital structure. This could indicate a prudent approach to managing its financial leverage, ensuring that the company does not become overly burdened by debt obligations while still harnessing the benefits of financial leverage.

It is worth noting that a debt-to-capital ratio of around 0.55 indicates that Essential Utilities Inc relies more on debt financing than equity financing to support its operations and investments. This level of leverage may be appropriate for the company based on its capital requirements, cash flow generation, and risk tolerance. However, investors and stakeholders should continue to monitor this ratio to ensure that the company's debt level remains sustainable and in line with its overall financial strategy.