National Grid plc (NGG) Balance Sheet

The consistent upward trajectory in net PPE suggests that management is successfully converting capital expenditure into regulated assets that form the foundation for future revenue. However, the rapid pace of this expansion warrants monitoring, as the lag between asset commissioning and full regulatory recovery may temporarily suppress return on invested capital.

The fluctuation in leverage ratios, particularly when compared to periods where debt was not explicitly reported, suggests a reliance on active capital structure management to navigate the RIIO regulatory framework. Investors should consider whether current leverage levels provide sufficient headroom for the remaining phases of the multi-year investment plan.

The reliance on external equity to support the balance sheet may indicate that the company is prioritizing the maintenance of its regulatory capital structure over the avoidance of shareholder dilution. This approach appears necessary to sustain the dividend policy while simultaneously funding the massive capital requirements of the energy transition.

The decline in the current ratio from 1.35 in 2025Q4 suggests that the company is increasingly reliant on revolving credit facilities or other financing mechanisms to manage its immediate obligations. This liquidity profile warrants close observation, as it leaves little margin for error should regulatory recovery timelines experience unexpected delays.