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.