Rgc Resources(Rgco) Financials: Financial Leverage Compared To Industry Average, Plus Other Key Ratios
Solvency Trend (Last 5 Years)
Solvency - financial leverage
This chart shows the historical trend of financial leverage for RGCO compared to its industry average over the recent years.
Ratio Definition and Interpretation
Name: Financial Leverage
Definition: Financial leverage tells you how much borrowed money the company uses to boost its size and profits. Using leverage can help a business grow faster, but it also increases pressure if sales slow down. Moderate leverage is common and often healthy. Excessive leverage can be dangerous, especially during tough economic times.
Interpretation:
• In '2021', RGCO's financial leverage was 3.11, indicating how much debt is used to finance assets. Industry average for Oil & Gas Production in '2021' stood at 2.26.
• In '2022', RGCO's financial leverage was 3.11, indicating how much debt is used to finance assets. The increase compared to '2021' may signal growing financial pressure. Industry average for Oil & Gas Production in '2022' stood at 2.30. Industry average increased by 0.04 compared to previous year.
• In '2023', RGCO's financial leverage was 3.06, indicating how much debt is used to finance assets. The decrease since '2022' reflects improving financial health. Industry average for Oil & Gas Production in '2023' stood at 2.14. Industry average declined by 0.16 from previous year.
• In '2024', RGCO's financial leverage was 2.99, indicating how much debt is used to finance assets. The decrease since '2023' reflects improving financial health. Industry average for Oil & Gas Production in '2024' stood at 1.90. Industry average declined by 0.24 from previous year.
Overall, RGCO's financial leverage has consistently declined during the past 4 years.
Formula: Financial Leverage = Average Total Assets / Average Shareholders' Equity
Good Range: 1 to 3 common; above 3 may indicate high leverage risk.