Marathon Petroleum Corp. (NYSE:MPC)

Debt to Equity Ratio

The debt to equity ratio exhibited an overall fluctuating pattern over the observed periods. Initially, it increased from 1.31 to a peak of 1.5 in the first quarter of 2021, indicating rising leverage relative to equity. Subsequently, there was a notable decrease to below 1.0 during mid-2021 through the end of 2022, suggesting a reduction in reliance on debt or an increase in equity. Starting in early 2023, the ratio began trending upward again, reaching 1.49 by the third quarter of 2024, indicating a gradual increase in financial leverage.

Debt to Equity Ratio (Including Operating Lease Liability)

This ratio followed a similar trend as the debt to equity ratio but exhibited slightly higher values throughout the periods due to the inclusion of operating lease liabilities. It peaked at 1.57 in March 2021, then decreased to around 1.01 by December 2022, reflecting reduced overall leverage including lease obligations. From 2023 onwards, this ratio also trended upward, reaching 1.55 by September 2024, paralleling the movement in the standard debt to equity ratio.

Debt to Capital Ratio

The debt to capital ratio demonstrated a decline from 0.57 in March 2020 to a low of approximately 0.49 in mid to late 2021, indicating a reduced proportion of debt in the capital structure. After this period, it remained relatively stable around 0.49 to 0.51 through 2022 and early 2023 before gradually increasing to 0.60 by September 2024, indicating a gradual rise in debt relative to total capital base.

Debt to Capital Ratio (Including Operating Lease Liability)

Including operating lease liabilities, the debt to capital ratio showed a similar trend but slightly higher levels throughout the timeline. It declined from 0.59 in early 2020 to about 0.50 in late 2022. Subsequently, the ratio increased steadily from early 2023 to 0.61 by the third quarter of 2024, indicating rising financial obligations relative to the company’s capital, when accounting for lease liabilities.

Debt to Assets Ratio

The debt to assets ratio declined from 0.37 in the first quarter of 2020 to a low of around 0.28 in mid-2022, reflecting a decreasing portion of debt financing relative to total assets. Post mid-2022, the ratio showed some volatility but generally moved upward, reaching 0.35 by September 2024, indicating a modest increase in debt as a share of assets over the latter period.

Debt to Assets Ratio (Including Operating Lease Liability)

When operating lease liabilities were included, the debt to assets ratio also declined from 0.40 in early 2020 to about 0.29 by mid-2022. It then gradually increased to 0.37 by the third quarter of 2024. This trend highlights a similar pattern as the standard debt to assets ratio, albeit accounting for additional lease-related obligations and suggesting gradual growth in total debt-related claims on assets.

Financial Leverage

Financial leverage, representing the ratio of total assets to equity, generally demonstrated a rise throughout the period. Starting at 3.58 in March 2020, the measure initially decreased during mid-2021 to a low of 3.16 but resumed an upward trajectory afterward. By September 2024, financial leverage had increased to 4.22, indicating a rising degree of asset financing through debt relative to equity.

In summary, the financial ratios suggest a period of deleveraging roughly between mid-2021 and late 2022 with reductions in debt levels relative to equity, capital, and assets, including lease liabilities. Since early 2023, there is an observable trend toward increased leverage, as reflected in all debt-related ratios and financial leverage measures. This may indicate strategic decisions to increase debt financing or changes in equity levels. Overall, the company appears to maintain a moderate to moderately high leverage position, with debt constituting roughly half or slightly more of capital and rising financial leverage over time.

Total Debt

The total debt level exhibited fluctuations over the observed periods, beginning at approximately $31.6 billion in the first quarter of 2020. It experienced a gradual decline through late 2021, reaching a low near $25.5 billion by the end of 2021. Subsequently, total debt stabilized somewhat around $26.7 billion throughout 2022 and early 2023, before slightly increasing again toward the end of the observed periods, culminating at roughly $28.2 billion in the third quarter of 2024. Overall, the trend shows moderate volatility with a peak reduction phase during 2021 followed by stabilization and a modest uptick more recently.

Total Stockholders’ Equity

The stockholders’ equity demonstrated significant variability, commencing near $24.1 billion in early 2020 and declining steadily to a trough close to $21.6 billion by the first quarter of 2021. This was followed by a notable increase, reaching a peak above $28.9 billion in mid-2021. Thereafter, equity fluctuated downward with intermittent rises but generally trended lower through 2022 and 2023, falling to approximately $18.9 billion by the third quarter of 2024. This indicates periods of equity recovery interspersed with sustained declines over the longer term.

Debt to Equity Ratio

The debt to equity ratio reflected the underlying movements in both debt and equity. Starting at 1.31 in early 2020, the ratio increased to a peak of 1.50 by the first quarter of 2021, corresponding with lower equity levels. Following this peak, the ratio declined significantly to below 1.0 during most of 2021, indicating a stronger equity position relative to debt. However, from 2022 onward, the ratio gradually increased again, moving from 1.11 at the beginning of 2022 to 1.49 by the third quarter of 2024. The rising ratio in recent periods suggests a relative increase in leverage, driven by either an increase in debt or a decrease in equity, or a combination thereof.

Summary

The overall financial leverage pattern shows a cyclical nature of debt reduction and equity fluctuation, with a phase of deleveraging during 2021 followed by incremental increases in leverage leading up to 2024. The decrease in total equity over the later periods combined with slightly rising debt has exerted upward pressure on the debt to equity ratio, which may warrant attention regarding financial risk. The data suggests an environment of cautious debt management with fluctuating equity strength impacting the capital structure dynamics.

Total Debt (including operating lease liability)

Over the observed period, total debt levels exhibited moderate fluctuations. Initially, there was a gradual decline from approximately $34.2 billion in March 2020 to about $26.9 billion by December 2021, indicating a reduction in leverage. This downward trend was followed by a period of relative stability around $28 billion through 2022 and early 2023. However, starting in mid-2023, total debt began to increase again, reaching around $30.1 billion in mid-2024 before slightly declining to nearly $29.4 billion by the third quarter of 2024.

Total Stockholders’ Equity

Stockholders’ equity demonstrated variability throughout the timeframe. From March 2020 until the end of 2020, equity decreased from roughly $24.1 billion to approximately $22.2 billion, showing a modest contraction. A significant surge occurred in the first half of 2021, where equity increased sharply to nearly $28.9 billion by June 2021. Following this peak, equity generally trended downward with some fluctuations, decreasing consistently from this high point to approximately $18.9 billion by the third quarter of 2024, indicating erosion in shareholders’ equity over the latter periods.

Debt to Equity Ratio (including operating lease liability)

The debt to equity ratio reflects changes both from shifts in debt levels and equity. Early in the period, the ratio modestly increased from about 1.42 in March 2020 to 1.57 by March 2021, indicating rising leverage relative to equity. From mid-2021 through 2022, the ratio decreased significantly to near 1.01 by December 2022, driven primarily by the peak in equity and relatively stable debt. Starting in 2023, the debt to equity ratio began to climb again steadily, reaching 1.55 by the third quarter of 2024, suggesting an increase in financial leverage and a relative reduction in equity compared to debt.

Overall Financial Leverage and Capital Structure Trends

The company experienced a dynamic capital structure over the examined quarters. The initial phase was characterized by a reduction in debt and a modest decrease in equity, resulting in slightly increased leverage. The middle phase saw a strong improvement in equity, leading to a notable reduction in leverage. However, the most recent periods exhibit rising debt accompanied by declining equity, thus increasing leverage substantially. This shift could point to potential concerns regarding financial stability and increased risk exposure if the trend continues.

The analysis of the financial leverage and capital structure reveals notable trends and fluctuations over the observed periods.

Total Debt

Total debt initially shows a gradual increase from approximately $31.6 billion at the end of Q1 2020, peaking near $32.5 billion by Q2 2021. Following this peak, total debt declines steadily to around $25.5 billion by Q4 2021. From Q1 2022 onwards, the debt level stabilizes hovering in the range of approximately $26.7 billion to $27.3 billion, before a modest uptick is observed in mid-2024, nearing $28.9 billion, and then a slight decrease thereafter.

Total Capital

Total capital displays a mild decline starting from about $55.7 billion in early 2020 to roughly $51.7 billion by the end of 2021. After this period, the capital amount fluctuates around $ Fifty Billion, showing some inconsistency but remaining within a narrower range between approximately $47.2 billion and $54.4 billion. The downward trend in the latter periods suggests some contraction in capital investment or valuation.

Debt to Capital Ratio

The debt to capital ratio starts near 0.57 in Q1 2020 and rises slightly to approximately 0.60 by Q1 2021, demonstrating increased leverage. A significant improvement occurs in mid-2021 when the ratio drops to around 0.49, indicating a reduction in debt relative to capital. This lower leverage level sustains through 2021 and most of 2022. However, beginning in late 2022 and through 2023 into mid-2024, the ratio trends upward again, reaching 0.60 by Q3 2024, which shows increasing reliance on debt financing relative to the overall capital structure.

In summary, the company exhibits a pattern of deleveraging from mid-2021 through most of 2022, with debt levels reduced relative to capital. This was followed by a period of stabilization and then a gradual return to higher leverage ratios in recent quarters. The general downward trend in total capital coupled with the late rise in the debt to capital ratio may signal shifts in the company’s financing strategy or changes in market conditions affecting capital structure decisions.

Total Debt (Including Operating Lease Liability)

The total debt exhibited a general decline from early 2020 through late 2021, decreasing from approximately $34.2 billion to around $26.9 billion. This suggests a deleveraging trend in the initial period. However, from early 2022, the debt levels stabilized in the range of about $27.9 billion to $28.6 billion, before slightly rising again in mid-2024 to just above $30 billion. This reflects a moderate increase in borrowing or lease obligations towards the most recent periods, though the fluctuations remain within a relatively narrow band compared to the initial decline.

Total Capital (Including Operating Lease Liability)

Total capital started near $58.3 billion in early 2020 and experienced a downward trend through 2021, reaching closer to $53.1 billion. This decline continued into 2024, with total capital falling gradually to approximately $48.3 billion by the third quarter of 2024. The steady decrease over the years indicates a reduction in the aggregate of debt and equity financing, potentially reflecting asset disposals, share repurchases, or dividend payments exceeding new capital raises.

Debt to Capital Ratio (Including Operating Lease Liability)

The debt to capital ratio was near 0.59 to 0.60 at the start of 2020 and remained elevated through early 2021, peaking at 0.61. It then decreased notably to a low range of approximately 0.50 to 0.51 during the middle of 2021 through 2022, indicating an improved capital structure with relatively less reliance on debt financing at that time. However, from early 2023 onwards, the ratio gradually increased again, reaching 0.61 by the third quarter of 2024. This resurgence in leverage suggests a shift back towards greater debt dependency relative to total capital in the more recent quarters.

Overall Trends and Insights

Over the analyzed timeframe, the company demonstrated an initial focus on reducing debt levels and improving its leverage position, as evidenced by the decreasing debt to capital ratio and total debt reduction up to late 2021. However, the more recent periods reveal a reversal of this trend, with both total debt and leverage ratio rising, accompanied by a continuing decline in total capital. This combination indicates a potential increase in financial risk or a strategic choice to leverage financial structure more heavily. The reduction in total capital alongside rising debt levels may warrant closer examination into equity fluctuations or asset base changes driving these dynamics.

The analysis of the quarterly financial data reveals several notable trends concerning the company's leverage and asset base over the observed periods.

Total Debt

The total debt exhibited a fluctuating pattern with initial values around 31.6 billion US dollars in early 2020, peaking slightly in the first quarter of 2021 at approximately 32.5 billion. Subsequently, there was a general downward trend reaching a low near 25.5 billion by the end of 2021. However, from early 2022 onwards, total debt stabilized around the 26.7 to 27.3 billion range until the end of 2023, after which it saw a modest increase, rising to near 28.9 billion by mid-2024 before decreasing slightly again.

Total Assets

Total assets showed variability but remained within a range between approximately 79.8 billion and 96.7 billion US dollars. After a decline from 86.3 billion in the first quarter of 2020 to around 84.0 billion by late 2020, assets increased notably through mid-2021 to a peak near 94.3 billion. Following this, the asset base decreased with some fluctuations, reaching closer to 79.8 billion by the third quarter of 2024. This indicates a general downward adjustment in asset holdings or valuation over the longer term, despite interim growth phases.

Debt to Assets Ratio

The leverage ratio, measured as debt to assets, decreased from about 0.37 to 0.38 in early 2020 and 2021 to a lower point near 0.28 in mid-2022, reflecting improved asset coverage relative to debt during that period. However, the ratio trended upwards from late 2022 onward, reaching approximately 0.35 by the third quarter of 2024. This suggests a rising proportion of debt relative to assets in recent quarters, potentially signaling increased leverage risk or reduced asset base relative to debt levels.

Overall, the data indicates that while the company managed to reduce its total debt from 2020 through 2021, there was a partial reversal of this trend starting in 2022. Concurrently, total assets experienced growth mid-way through the period but declined towards mid-2024. The debt to asset ratio's recent increase implies a cautious observation point for leverage, as the company appears to have increased its debt burden in relation to its asset base over the latest quarters.

Total Debt (including operating lease liability)

The total debt level showed a gradual decline from early 2020 through 2021, falling from approximately $34.2 billion at March 31, 2020 to around $26.9 billion by December 31, 2021. This indicates a deliberate reduction in leverage during this period. However, starting in 2022, the debt level stabilized around the $27.9 billion to $28.5 billion range, demonstrating less volatility. Entering 2024, there is a moderate increase in debt, reaching nearly $30.1 billion in June 2024 before slightly declining to about $29.4 billion by September 2024. This pattern suggests a cautious approach to debt management with some willingness to increase borrowings in the most recent quarters.

Total Assets

Total assets fluctuated within a range of approximately $84.0 billion to $94.3 billion over the period analyzed. There was an initial dip from $86.3 billion at March 31, 2020, down to a low near $84.0 billion in September 2020, followed by a notable increase in mid-2021, peaking at around $94.3 billion by June 30, 2021. After this peak, total assets decreased again, falling to roughly $85.4 billion at December 31, 2021. The trend continued with some volatility, showing a cyclical nature but remaining overall steady, before ending at about $79.8 billion by September 30, 2024. This points to periods of asset expansion followed by contraction, possibly reflecting operational adjustments or asset revaluation.

Debt to Assets Ratio (including operating lease liability)

The debt to assets ratio began at 0.40 at the end of Q1 2020 and experienced a steady decline throughout 2020 and early 2021, hitting a low near 0.29 by June 30, 2022. This decline aligns with the observed debt reduction and asset growth during that time, indicating a strengthening balance sheet with reduced leverage risk. From late 2022 onward, the ratio inverted its trend and began a gradual ascent, rising back to 0.37 by September 30, 2024. This increase reflects the recent rise in debt levels combined with the marginal contraction of total assets, signaling a relative rise in financial leverage and, potentially, increased financial risk.

Total Assets

The total assets showed moderate fluctuation over the observed periods. Initially, assets slightly decreased from approximately $86.3 billion at the end of the first quarter of 2020 to around $84 billion by September 2020, followed by a minor rebound to about $85.9 billion by year-end 2020. In 2021, total assets experienced an upward trend, peaking near $94.3 billion in mid-year before declining towards the end of the year and early 2022. Throughout 2022 and early 2023, assets remained somewhat stable with slight variability before trending downward again in the final quarters under review, falling to roughly $79.8 billion by the third quarter of 2024. Overall, the asset base exhibits cyclical movements but suggests a general decline in the most recent periods.

Total Stockholders’ Equity

Stockholders’ equity displayed notable volatility across the quarters. It began just above $24 billion in early 2020 but experienced a downward trajectory through most of 2020 and into early 2021, reaching a low near $21.6 billion by March 2021. Subsequently, equity rose significantly in the middle quarters of 2021, achieving a peak of nearly $29 billion in June 2021. However, after this peak, equity declined gradually with intermittent fluctuations, edging down to around $26.8 billion by the end of 2022 and further decreasing through 2023 and 2024. By the third quarter of 2024, stockholders’ equity decreased to approximately $18.9 billion. This pattern indicates intermittent improvements but an overall weakening in shareholder equity towards the end of the period.

Financial Leverage

The financial leverage ratio experienced significant variation throughout the periods. Starting relatively high at about 3.58 in early 2020, it increased to a peak of 4.01 in March 2021, indicating rising reliance on debt relative to equity. Subsequently, leverage declined sharply to values near 3.16 in the third quarter of 2021, reflecting either a reduction in debt or an increase in equity. From late 2021 through 2022, the ratio fluctuated between approximately 3.24 and 3.79, showing some stabilization. However, beginning in 2023 and continuing into 2024, the ratio rose steadily, reaching the highest level observed — 4.22 by September 2024. This upward trend in financial leverage toward the latter periods suggests increasing financial risk with greater debt exposure relative to equity.

Overall Observations

The data reveals that while total assets have faced periods of growth and decline, the recent downward trend may pose concerns regarding asset base stability. Stockholders’ equity has experienced pronounced fluctuations and a general decrease over time, implying potential pressures on shareholder value and capital structure. Concurrently, the increasing financial leverage in the latest quarters emphasizes a shift toward higher indebtedness, which may elevate financial risk. The interplay between declining equity and rising leverage warrants careful attention in evaluating the company's long-term financial health and capital management strategies.