Analysis of Solvency Ratios
Quarterly Data
Solvency ratios also known as long-term debt ratios measure a company ability to meet long-term obligations.
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- Income Statement
- Common-Size Income Statement
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- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Short-term (Operating) Activity Ratios
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- Enterprise Value to FCFF (EV/FCFF)
- Capital Asset Pricing Model (CAPM)
- Net Profit Margin since 2005
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Solvency Ratios (Summary)
ConocoPhillips, solvency ratios (quarterly data)
Based on: 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31).
The financial ratios exhibit discernible trends over the observed periods, reflecting changes in leverage and earnings capacity relative to interest obligations.
- Debt to Equity
- This ratio decreased steadily from 0.48 in March 2020 to a low point of 0.34 in June 2022, indicating a reduction in the company's reliance on debt financing relative to shareholders' equity. Following this, the ratio experienced slight fluctuations, increasing to 0.4 by September 2023 before trending downwards again to 0.36 by March 2025. Overall, the company's leverage measured by debt to equity appears to have lessened compared to the early phase of the period.
- Debt to Capital
- The debt to capital ratio followed a declining trajectory from 0.32 in March 2020 to 0.25 in June 2022, indicating a gradually reduced proportion of debt in the total capital structure. Post mid-2022, the ratio showed minor increases, peaking at 0.29 in September 2023 but generally stabilized around 0.27 approaching March 2025. The data suggests a consistency in capital structure with relatively low leverage in the latter periods.
- Debt to Assets
- This ratio dropped from 0.23 at the start of the period to 0.18 by mid-2022, signifying a decrease in debt relative to total assets. After mid-2022, the ratio modestly increased to 0.20 by September 2023 and thereafter remained stable near 0.19 through March 2025. The trend suggests a conservative use of debt against asset base over the observed timeframe.
- Financial Leverage
- Financial leverage, as represented by this ratio, demonstrated an overall decline from 2.08 in March 2020 to around 1.87 in mid-2022, denoting reduced use of debt compared to equity in the capital structure. Thereafter, it fluctuated mildly between 1.89 and 1.96, indicating relative stability in leverage post-2022 with marginal increases and decreases.
- Interest Coverage
- The interest coverage ratio was negative in late 2020 (-2.9), suggesting an inability to cover interest expenses from earnings at that time. From March 2021 onwards, there was a substantial and sustained improvement, rising sharply to above 15 by end of 2021 and continuing an upward trend to peak at 36.07 by December 2022. After this, the ratio declined gradually but remained strong, ending at 19.3 by March 2025. This improvement reflects enhanced profitability and robust earnings capacity relative to interest costs over the period.
Debt Ratios
Coverage Ratios
Debt to Equity
ConocoPhillips, debt to equity calculation (quarterly data)
| Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||||||
| Short-term debt | ||||||||||||||||||||||||||||
| Long-term debt | ||||||||||||||||||||||||||||
| Total debt | ||||||||||||||||||||||||||||
| Common stockholders’ equity | ||||||||||||||||||||||||||||
| Solvency Ratio | ||||||||||||||||||||||||||||
| Debt to equity1 | ||||||||||||||||||||||||||||
| Benchmarks | ||||||||||||||||||||||||||||
| Debt to Equity, Competitors2 | ||||||||||||||||||||||||||||
| Chevron Corp. | ||||||||||||||||||||||||||||
| Exxon Mobil Corp. | ||||||||||||||||||||||||||||
| Occidental Petroleum Corp. | ||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31).
1 Q1 2025 Calculation
Debt to equity = Total debt ÷ Common stockholders’ equity
= ÷ =
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals several notable trends in the company’s capital structure over the observed periods.
- Total Debt
- There is an initial increase in total debt from March 2020 to March 2021, rising from approximately $14.97 billion to over $20 billion. This level remains relatively stable through December 2021 before experiencing a gradual decline through the end of 2022, reaching around $16.6 billion. However, from early 2023 onwards, total debt initially remains steady, then increases significantly towards the end of the projection period, peaking near $24.3 billion by March 2025.
- Common Stockholders’ Equity
- Equity shows a declining trend in 2020, dropping from about $31.3 billion in March to below $30 billion by December 2020. Beginning in early 2021, equity improves markedly, growing to approximately $45.4 billion by December 2021. This positive momentum continues through 2022 but sees a slight dip in the latter part of the year. From 2023 onwards, equity remains relatively stable with minor fluctuations before rising sharply again, reaching over $64.7 billion by March 2025.
- Debt to Equity Ratio
- This ratio steadily decreased from 0.48 in March 2020 to its lowest point of approximately 0.34-0.35 during mid to late 2022, indicating a reduction in leverage relative to equity. Thereafter, the ratio trends slightly upwards, reaching around 0.4 by late 2023, before stabilizing near 0.36 by the end of the projection period in March 2025. Overall, despite some volatility, the debt to equity ratio remains within a moderate range consistent with controlled leverage.
In summary, the data depicts an initial increase in leverage during 2020, followed by a phase of deleveraging through 2022 driven primarily by growth in equity and reduction in debt. However, starting in 2023, the company appears to have resumed higher debt levels, offset partially by substantial equity gains, resulting in a moderate overall leverage ratio. This pattern suggests strategic management of the capital structure with observable shifts responding to changing financial conditions over time.
Debt to Capital
ConocoPhillips, debt to capital calculation (quarterly data)
| Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||||||
| Short-term debt | ||||||||||||||||||||||||||||
| Long-term debt | ||||||||||||||||||||||||||||
| Total debt | ||||||||||||||||||||||||||||
| Common stockholders’ equity | ||||||||||||||||||||||||||||
| Total capital | ||||||||||||||||||||||||||||
| Solvency Ratio | ||||||||||||||||||||||||||||
| Debt to capital1 | ||||||||||||||||||||||||||||
| Benchmarks | ||||||||||||||||||||||||||||
| Debt to Capital, Competitors2 | ||||||||||||||||||||||||||||
| Chevron Corp. | ||||||||||||||||||||||||||||
| Exxon Mobil Corp. | ||||||||||||||||||||||||||||
| Occidental Petroleum Corp. | ||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31).
1 Q1 2025 Calculation
Debt to capital = Total debt ÷ Total capital
= ÷ =
2 Click competitor name to see calculations.
The financial data indicates that total debt exhibited fluctuations over the observed periods, initially remaining relatively stable during 2020, with values around $15 billion to $15.4 billion. In 2021, total debt increased to a peak of approximately $20 billion in the first half and then slightly decreased by the end of the year. Throughout 2022, total debt demonstrated a downward trend, declining steadily from about $18.7 billion in the first quarter to $16.6 billion by year-end. In the first half of 2023, debt continued a modest reduction but saw an increase towards the latter part of the year, reaching approximately $19 billion by the last quarter. The debt level remained fairly consistent around this figure into early 2024 but then sharply increased, culminating in nearly $24 billion by the first quarter of 2025.
Total capital followed a generally upward trend during the period examined. It started at approximately $46.3 billion in early 2020 and experienced some growth through the end of 2021, reaching over $65 billion. A slight dip was then observed in 2022, with capital decreasing to around $64.6 billion by December. Throughout 2023, total capital fluctuated minimally but maintained a range near $64 to $68 billion. Beginning 2024, there was a significant upward shift, with total capital rising to approximately $89 billion by the first quarter of 2025, marking a substantial increase compared to previous years.
The debt to capital ratio, an important leverage metric, showed a moderate decline from early 2020 through 2022, decreasing from around 0.32-0.34 to approximately 0.26 by late 2022. This indicates a relative decrease in debt levels compared to the capital base over this timeframe. The ratio remained stable at around 0.26 during much of 2023 but edged upward to roughly 0.29 at the end of that year. Early 2024 saw the ratio stabilize at about 0.27, maintaining this level into early 2025, despite the absolute increase in total debt and capital. This consistency suggests that increases in debt were generally accompanied by proportional increases in capital, demonstrating a balanced capital structure management.
- Total Debt
- Relatively stable in 2020 around $15 billion, peaks in early 2021 near $20 billion, then decreases through 2022 to mid-2023, followed by a rise to nearly $24 billion by early 2025.
- Total Capital
- Steady growth from about $46 billion in 2020 to over $65 billion by late 2021, slight decline in 2022, stable through 2023, then a significant increase to nearly $89 billion by early 2025.
- Debt to Capital Ratio
- Decreases from about 0.32-0.34 in 2020 to 0.26 by late 2022, remains stable around 0.26 during 2023, and then slightly increases to 0.27 into early 2025, indicating balanced leverage management despite rising absolute debt.
Debt to Assets
ConocoPhillips, debt to assets calculation (quarterly data)
| Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||||||
| Short-term debt | ||||||||||||||||||||||||||||
| Long-term debt | ||||||||||||||||||||||||||||
| Total debt | ||||||||||||||||||||||||||||
| Total assets | ||||||||||||||||||||||||||||
| Solvency Ratio | ||||||||||||||||||||||||||||
| Debt to assets1 | ||||||||||||||||||||||||||||
| Benchmarks | ||||||||||||||||||||||||||||
| Debt to Assets, Competitors2 | ||||||||||||||||||||||||||||
| Chevron Corp. | ||||||||||||||||||||||||||||
| Exxon Mobil Corp. | ||||||||||||||||||||||||||||
| Occidental Petroleum Corp. | ||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31).
1 Q1 2025 Calculation
Debt to assets = Total debt ÷ Total assets
= ÷ =
2 Click competitor name to see calculations.
- Total Debt
- Total debt exhibited an overall upward trend from March 2020 through March 2025, with some fluctuations. Starting at approximately $14.97 billion in March 2020, debt levels rose sharply in the first quarter of 2021, peaking around $20 billion. Following this peak, a general downward movement is noted through 2022 and early 2023, reaching a low near $16.4 billion by June 2023. However, from the third quarter of 2023 onwards, total debt increased again, culminating in a significant rise to nearly $24 billion by March 2025. The pattern suggests periods of debt reduction interrupted by intervals of increased leverage toward the end of the forecast period.
- Total Assets
- Total assets consistently increased over the entire period, beginning at approximately $65 billion in March 2020 and expanding steadily to over $124 billion by March 2025. The asset base grew most rapidly after June 2021, maintaining upward momentum with minor variations. This growth in assets outpaced the growth in debt, reflecting an expansion in the asset portfolio alongside financial adjustments. This trend indicates a strategic increase in the company's asset holdings over the observed timeline.
- Debt to Assets Ratio
- The debt to assets ratio showed a declining trend from 0.23 in March 2020 to a low of approximately 0.18 during most of 2022 and early 2023. This decline reflects a relative reduction in leverage as asset growth outstripped debt increases for this period. Starting in late 2023, the leverage ratio increased slightly, stabilizing near 0.19 to 0.20 through to March 2025. Despite the recent uptick, the ratio remains below the early 2020 levels, indicating a generally stronger balance sheet position with moderate leverage relative to total assets.
Financial Leverage
ConocoPhillips, financial leverage calculation (quarterly data)
| Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||||||
| Total assets | ||||||||||||||||||||||||||||
| Common stockholders’ equity | ||||||||||||||||||||||||||||
| Solvency Ratio | ||||||||||||||||||||||||||||
| Financial leverage1 | ||||||||||||||||||||||||||||
| Benchmarks | ||||||||||||||||||||||||||||
| Financial Leverage, Competitors2 | ||||||||||||||||||||||||||||
| Chevron Corp. | ||||||||||||||||||||||||||||
| Exxon Mobil Corp. | ||||||||||||||||||||||||||||
| Occidental Petroleum Corp. | ||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31).
1 Q1 2025 Calculation
Financial leverage = Total assets ÷ Common stockholders’ equity
= ÷ =
2 Click competitor name to see calculations.
- Total Assets
-
Total assets exhibited an initial decline from March 2020 (US$65,033 million) through December 2020 (US$62,618 million), reflecting a downward trend likely influenced by external economic factors during that period.
From early 2021 onwards, total assets increased significantly, peaking at US$93,829 million in December 2022. This upward trajectory indicates a period of asset growth spanning nearly two years, potentially signaling expansion or reinvestment activities.
Following this peak, total assets experienced fluctuation without a clear long-term trend, decreasing somewhat in early 2023 before rising once again by March 2024, reaching US$122,780 million by March 2025, representing a substantial increase over the five-year horizon.
- Common Stockholders’ Equity
-
Common stockholders’ equity followed a somewhat similar pattern to total assets, starting around US$31,315 million in March 2020 and decreasing to US$29,849 million by December 2020. This suggests that shareholders' equity contracted during the initial period, potentially due to losses or dividends exceeding earnings.
From March 2021, equity improved markedly, rising steadily to a peak near US$49,218 million at the end of March 2022, reflecting enhanced retained earnings or new equity injections during this time.
However, equity levels displayed some volatility through 2023 and early 2024, with minor declines and recoveries around the US$47,500 to US$49,000 million range, before jumping considerably to US$64,796 million by March 2025. This marked increase reflects a significant strengthening of the company's equity base in the latest period.
- Financial Leverage
-
Financial leverage ratios indicate changes in the company’s capital structure with respect to debt and equity. The ratio started at 2.08 in March 2020, followed by a modest decline through mid-2021 reaching lows around 1.93 to 1.94, suggesting a slight reduction in leverage over that timeframe.
Leverage remained relatively stable and near this lower range through 2022 and into 2023, fluctuating narrowly between approximately 1.89 and 1.96, indicating that the company maintained a consistent balance between debt and equity financing.
By the end of the period, leverage remained near historic lows, recorded at 1.90 in March 2025. This stability in financial leverage, coupled with growing total assets and equity, suggests a prudent approach to financing and risk management.
Interest Coverage
ConocoPhillips, interest coverage calculation (quarterly data)
| Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||||||
| Net income (loss) attributable to ConocoPhillips | ||||||||||||||||||||||||||||
| Add: Net income attributable to noncontrolling interest | ||||||||||||||||||||||||||||
| Add: Income tax expense | ||||||||||||||||||||||||||||
| Add: Interest and debt expense | ||||||||||||||||||||||||||||
| Earnings before interest and tax (EBIT) | ||||||||||||||||||||||||||||
| Solvency Ratio | ||||||||||||||||||||||||||||
| Interest coverage1 | ||||||||||||||||||||||||||||
| Benchmarks | ||||||||||||||||||||||||||||
| Interest Coverage, Competitors2 | ||||||||||||||||||||||||||||
| Chevron Corp. | ||||||||||||||||||||||||||||
| Exxon Mobil Corp. | ||||||||||||||||||||||||||||
| Occidental Petroleum Corp. | ||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31).
1 Q1 2025 Calculation
Interest coverage
= (EBITQ1 2025
+ EBITQ4 2024
+ EBITQ3 2024
+ EBITQ2 2024)
÷ (Interest expenseQ1 2025
+ Interest expenseQ4 2024
+ Interest expenseQ3 2024
+ Interest expenseQ2 2024)
= ( + + + )
÷ ( + + + )
=
2 Click competitor name to see calculations.
The financial data reveals several notable trends in earnings before interest and tax (EBIT), interest and debt expenses, and interest coverage ratios over the analyzed periods.
- Earnings Before Interest and Tax (EBIT)
- From March 31, 2020, to December 31, 2020, EBIT showed high volatility with negative values in three of the four quarters, reaching a low of -1,361 million USD initially, before exhibiting a recovery and fluctuation throughout 2020. Starting in the first quarter of 2021, EBIT transitioned to consistently positive figures, demonstrating a strong upward trend, peaking at 8,115 million USD by March 31, 2022. Following this peak, EBIT experienced a gradual decline through 2022 and 2023, with values dropping from 7,866 million USD in June 2022 to 3,541 million USD by June 2023. However, a mild recovery is noticeable in the latter half of 2023, with EBIT increasing to 4,483 million USD by December 31, 2023. Moving into 2024, EBIT again trends downward to 3,161 million USD by March 31, 2025, signaling some instability after prior gains.
- Interest and Debt Expense
- Interest and debt expenses remained relatively stable across the entire period, with minimal fluctuations around a range of approximately 178 to 226 million USD. The largest expense occurred in early 2021 at 226 million USD, then trended slightly downward to 178 million USD by December 31, 2022. After that, a moderate increase resumed, with expenses fluctuating between 189 and 219 million USD through March 31, 2025. The relative constancy of this expense line suggests steady debt obligations without significant new borrowing or repayment.
- Interest Coverage Ratio
- The interest coverage ratio, which reflects the firm’s ability to cover interest expenses with EBIT, showed considerable improvement over time. It was negative or unavailable in early 2020, reflecting earnings vulnerability. By the end of 2020, the ratio improved to 1.17, signaling a turning point toward stronger earnings relative to interest costs. This upward trajectory continued sharply through 2021, reaching a peak coverage of 36.07 by December 31, 2022, indicating a very strong capacity to meet interest obligations. Despite a subsequent gradual decrease in the ratio through 2023 and early 2024, it remained high, ending at 19.3 by March 31, 2025, well above levels indicating risk in meeting interest expenses.
Overall, the data suggests a recovery and strengthening of operating profitability beginning in 2021 after losses in early 2020. The steady interest expense combined with rising EBIT improved the company’s financial robustness, as seen in escalating interest coverage ratios. However, the decline in EBIT in recent periods warrants attention for potential impacts on profitability and debt service in the near term.