Essential Utilities Inc (WTRG)

Financial leverage 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
Total assets	US$ in thousands	16,841,500	16,432,800	16,101,900	15,818,300	15,719,100	15,279,800	15,046,200	14,877,000	14,658,300	14,236,500	13,934,000	13,821,900	13,705,300	13,399,500	13,028,400	12,929,000	9,361,980	9,340,970	9,180,350	7,080,950
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
Financial leverage ratio		2.86	2.77	2.87	2.87	2.92	2.86	2.82	2.83	2.83	2.78	2.88	2.87	2.93	2.89	2.81	2.80	2.41	2.42	2.40	3.55

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 exhibited some fluctuation over the past eight quarters. The ratio ranged from a low of 2.77 in Q3 2023 to a high of 2.92 in Q4 2022, with an average of approximately 2.85 over this period.

A financial leverage ratio of above 1 indicates that the company relies more on debt financing than equity. Essential Utilities Inc has consistently maintained a financial leverage ratio above 2, indicating a higher level of debt utilization in its capital structure.

The stability of the financial leverage ratio around the 2.85 mark suggests that the company has been able to maintain a relatively consistent level of debt relative to equity in its capital structure. However, the slight fluctuations observed may indicate changes in the company's debt management or capital allocation strategies.

Overall, a financial leverage ratio of around 2.85 indicates that Essential Utilities Inc has been operating with a moderate level of financial leverage, balancing the benefits of debt financing with the associated risks. It is essential for the company to continue monitoring and managing its leverage ratio to ensure its financial stability and sustainability over the long term.