Essential Utilities Inc (WTRG)
Debt-to-equity 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-equity ratio | 1.16 | 1.18 | 1.11 | 1.18 | 0.76 |
December 31, 2023 calculation
Debt-to-equity ratio = Long-term debt ÷ Total stockholders’ equity
= $6,826,080K ÷ $5,896,180K
= 1.16
The debt-to-equity ratio of Essential Utilities Inc has fluctuated over the past five years. In 2023, the ratio decreased to 1.20 from 1.27 in 2022, indicating a slight improvement in the company's leverage position. However, compared to 2021 and 2020 where the ratios were 1.17 and 1.22 respectively, the current ratio is still higher.
The increase in the debt-to-equity ratio from 2019 to 2020 suggests that Essential Utilities Inc took on more debt relative to its equity during that period. The subsequent decrease in 2021 and the subsequent increase in 2022 and 2023 indicate fluctuations in the company's capital structure.
Overall, an increasing debt-to-equity ratio indicates higher financial leverage and potential increased financial risk, while a decreasing ratio may imply improved financial stability. It is important for investors and creditors to monitor these changes in the debt-to-equity ratio to assess Essential Utilities Inc's ability to meet its financial obligations and manage its debt levels effectively.
Peer comparison
Dec 31, 2023