APA Corporation (APA)
Solvency ratios
| 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | — | — | — | — | — | — | — | — | — |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | — | — | — | — | — | — | — | — | — |
| Financial leverage ratio | 3.67 | 3.79 | 3.72 | 5.74 | 5.74 | 12.56 | 18.68 | 29.76 | 31.08 | 22.72 | 22.13 | — | — | — | — | — | — | — | — | — |
Based on the solvency ratios provided for APA Corporation, we can see the following trends:
1. Debt-to-assets ratio: The debt-to-assets ratio has consistently been reported as 0.00% across all periods from March 31, 2020, to December 31, 2024. This indicates that APA Corporation has not utilized debt to finance its assets during this period, reflecting a strong financial position in terms of solvency.
2. Debt-to-capital ratio: The debt-to-capital ratio was not reported for the periods up to December 31, 2021. However, from June 30, 2022, to December 31, 2024, the ratio ranges from 0.00% to 0.00%. This suggests that APA Corporation has maintained a conservative approach to financing its operations and investments with debt.
3. Debt-to-equity ratio: Similar to the debt-to-capital ratio, the debt-to-equity ratio was also not available for the periods up to December 31, 2021. From June 30, 2022, to December 31, 2024, the ratios are consistently reported as 0.00%. This implies that APA Corporation relies more on equity financing rather than debt, which is a positive sign for solvency.
4. Financial leverage ratio: The financial leverage ratio shows a declining trend from 22.13% on June 30, 2022, to 3.67% on December 31, 2024. This indicates a decreasing reliance on debt to finance the company's assets and operations over the analyzed periods, which signifies an improving solvency position.
Overall, the solvency ratios for APA Corporation demonstrate a strong financial position with minimal debt usage, a conservative capital structure, and decreasing financial leverage over time, indicating stability and robustness in meeting its long-term financial obligations.
Coverage ratios
| 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | 5.54 | 5.82 | 9.47 | 9.24 | 9.90 | 10.75 | 12.02 | 14.85 | 19.02 | 17.72 | 13.68 | 10.04 | 5.59 | 3.84 | 3.65 | 1.61 | -10.34 | -17.78 | -18.47 | -18.31 |
Interest coverage is a key financial ratio that measures a company's ability to pay interest expenses on its outstanding debt. APA Corporation has shown a fluctuating trend in its interest coverage ratio over the past few years based on the provided data.
From March 2020 to December 2020, the interest coverage ratio was negative, indicating that the company's operating income was insufficient to cover its interest expenses, which is a concerning sign for creditors and investors. However, starting from March 2021, the company's interest coverage ratio turned positive, indicating an improvement in its ability to meet interest obligations.
The interest coverage ratio continued to improve steadily from March 2021 to December 2024, reaching a peak at 19.02 in December 2022. This increasing trend suggests that APA Corporation's operating income was increasing sufficiently to cover its interest payments comfortably.
However, there was a slight decrease in the interest coverage ratio towards the end of 2024, dropping to 5.54 in December 2024. While this decrease might raise some concerns, APA Corporation still maintains a positive interest coverage ratio, indicating that it remains capable of meeting its interest obligations despite the slight decline.
Overall, APA Corporation has shown a positive trend in its interest coverage ratio from negative to positive values, reflecting an improvement in its ability to handle interest expenses and suggesting a more stable financial position. Investors and creditors may view this trend positively as it indicates the company's ability to manage debt obligations effectively.