Chesapeake Energy Corp (CHK)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 14,376,000 | 15,468,000 | 11,009,000 | 6,584,000 | 16,193,000 |
| Total stockholders’ equity | US$ in thousands | 10,729,000 | 9,124,000 | 5,671,000 | -5,341,000 | 4,364,000 |
| Financial leverage ratio | 1.34 | 1.70 | 1.94 | — | 3.71 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $14,376,000K ÷ $10,729,000K
= 1.34
The financial leverage ratio of Chesapeake Energy Corp has exhibited fluctuations over the past five years. In 2019, the ratio was at a high of 3.71, indicating a significant level of financial leverage. However, in 2020, the data is unavailable, so it is not possible to gauge the trend for that year. In subsequent years, there was a declining trend in the financial leverage ratio, with the figures standing at 1.94 in 2021, 1.70 in 2022, and 1.34 in 2023.
This downward trend in the financial leverage ratio suggests that the company has been reducing its reliance on debt financing and moving towards a more balanced capital structure. A lower financial leverage ratio could indicate improved financial stability and reduced financial risk, as the company may be relying less on debt to finance its operations. However, it's essential to dig deeper into the company's overall financial health and performance to gain a comprehensive understanding of the effects of these changes in leverage on its operations and profitability.
Peer comparison
Dec 31, 2023