Chesapeake Energy Corp (CHK)
Solvency ratios
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.14 | 0.14 | 0.14 | 0.14 | 0.20 | 0.19 | 0.22 | 0.21 | 0.21 | 0.17 | 0.18 | 0.18 | 0.00 | 0.00 | 0.00 | 1.17 | 0.56 | 0.55 | 0.59 | 0.55 |
| Debt-to-capital ratio | 0.16 | 0.17 | 0.16 | 0.17 | 0.25 | 0.30 | 0.34 | 0.34 | 0.29 | 0.29 | 0.27 | 0.25 | — | — | — | 1.76 | 0.68 | 0.66 | 0.70 | 0.69 |
| Debt-to-equity ratio | 0.19 | 0.20 | 0.20 | 0.20 | 0.34 | 0.43 | 0.52 | 0.52 | 0.40 | 0.41 | 0.37 | 0.33 | — | — | — | — | 2.08 | 1.94 | 2.31 | 2.24 |
| Financial leverage ratio | 1.34 | 1.39 | 1.39 | 1.42 | 1.70 | 2.22 | 2.39 | 2.47 | 1.94 | 2.41 | 2.05 | 1.78 | — | — | — | — | 3.71 | 3.53 | 3.95 | 4.06 |
Chesapeake Energy Corp's solvency ratios provide insights into the company's ability to meet its financial obligations in both the short and long term.
The debt-to-assets ratio has remained relatively stable around 0.14 in recent quarters, suggesting that the company's level of debt relative to its total assets is low and indicates a strong ability to cover its debt obligations with its assets.
The debt-to-capital ratio also shows consistency around 0.16 to 0.17 in the latest quarters, indicating that a moderate portion of Chesapeake Energy's capital structure is funded by debt. This ratio has been decreasing from higher levels seen in the past, which could reflect improved financial stability.
The debt-to-equity ratio has fluctuated but generally trended downwards in the recent quarters, indicating a decreasing reliance on debt financing compared to equity. However, the ratio remains relatively high, suggesting that the company still carries a significant amount of debt relative to its equity.
The financial leverage ratio has shown a significant improvement from very high levels in previous years but remains relatively elevated around 1.34 to 1.42 recently. This indicates that Chesapeake Energy's financial leverage, while reduced, still poses a risk as it indicates a high proportion of debt in the company's capital structure.
Overall, Chesapeake Energy Corp's solvency ratios suggest a gradual improvement in its financial health and reduced reliance on debt financing, but ongoing monitoring is recommended to ensure sustainable financial stability.
Coverage ratios
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | 30.97 | 38.48 | 37.15 | 38.90 | 23.82 | 20.56 | 14.91 | -1.25 | 13.27 | -11.97 | -15.59 | -4.80 | -28.47 | -20.73 | -14.06 | -12.57 | 0.02 | 1.46 | 1.34 | 0.78 |
The interest coverage ratio measures a company's ability to meet its interest obligations on outstanding debt. It is derived by dividing the earnings before interest and taxes (EBIT) by the interest expense. A higher interest coverage ratio indicates that the company is more capable of meeting its interest payments.
Analyzing Chesapeake Energy Corp's interest coverage ratio over the past few quarters, we observe fluctuations in the company's ability to cover its interest expenses. From December 2019 to September 2022, the interest coverage ratio generally trended downward, indicating a potential strain on the company's ability to meet its interest obligations.
However, there was a significant improvement in the interest coverage ratio in the recent quarters from June 2022 to December 2023. The ratio increased substantially, indicating an enhanced ability to cover interest payments. This positive trend suggests that Chesapeake Energy Corp's financial position may be improving, allowing the company to better manage its debt obligations.
It is essential for investors and stakeholders to closely monitor Chesapeake Energy Corp's interest coverage ratio going forward to assess the company's financial health and sustainability in meeting its debt obligations.