Debt-to-Equity Ratio

The debt-to-equity ratio compares a company’s total debt to shareholders’ equity — a ratio of 7.01x means AES has $7.01 of debt for every $1 of equity, indicating heavy reliance on borrowing.

Among sector peers, the median utility has a ratio of 1.39x, placing AES at the 100th percentile — higher debt than every other company in its peer group. The metric is stable, with year-over-year and quarter-over-quarter changes both at +0.0%, showing no movement in leverage over the past eight quarters. A very high ratio that is flat rather than declining suggests persistent elevated financial risk with no deleveraging underway, limiting the opportunity for equity holders if interest costs rise. This combination of extreme debt levels and a static trend supports the overall CAUTIOUS verdict, as the capital structure leaves little margin for error.

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