Essential Utilities Inc (WTRG)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 16,841,500 | 15,719,100 | 14,658,300 | 13,705,300 | 9,361,980 |
| Total stockholders’ equity | US$ in thousands | 5,896,180 | 5,377,390 | 5,184,450 | 4,683,880 | 3,880,860 |
| Financial leverage ratio | 2.86 | 2.92 | 2.83 | 2.93 | 2.41 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $16,841,500K ÷ $5,896,180K
= 2.86
The financial leverage ratio of Essential Utilities Inc has shown fluctuations over the past five years. The ratio was 2.41 in 2019, increased to 2.93 in 2020, decreased to 2.83 in 2021, and then increased again to 2.92 in 2022. In 2023, the ratio slightly went down to 2.86.
A financial leverage ratio above 1 indicates that the company relies more on debt financing than equity financing. Essential Utilities Inc's ratios over the years have consistently been above 1, indicating a higher reliance on debt to finance its operations and investments. It is worth noting that the company has been maintaining a relatively stable financial leverage position, with minor fluctuations reflecting changes in its capital structure.
Overall, Essential Utilities Inc's financial leverage ratio suggests a moderate level of leverage, which means the company is using a considerable amount of debt to fund its operations and investments. Investors and analysts should monitor the trend of this ratio to assess the company's risk and financial health.
Peer comparison
Dec 31, 2023