ConocoPhillips (COP)
Solvency ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 86.83 | 1.95 | 1.95 | 2.00 | 2.10 |
ConocoPhillips demonstrates strong solvency ratios, as indicated by its consistently low debt-to-assets, debt-to-capital, and debt-to-equity ratios of 0.00 over the years 2020 to 2024. This suggests that the company has minimal reliance on debt to finance its assets and operations, enhancing its financial stability and flexibility.
Moreover, the financial leverage ratio, which measures the proportion of a company's assets that are financed by debt, decreased from 2.10 in 2020 to 1.95 in 2022 and remained stable at this level through 2023. However, there was a significant spike to 86.83 in 2024, indicating a substantial increase in the use of debt to fund operations or investments that year.
Overall, the data suggests that ConocoPhillips has maintained a prudent approach to managing its debt levels, with a strong balance sheet and minimal financial risk in the years leading up to 2024. However, the notable increase in the financial leverage ratio in 2024 may warrant further examination to assess the reasons behind this sharp deviation from the previous trend.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 18.88 | 16.32 | 27.76 | 12.29 | -1.97 |
Interest coverage is a financial ratio that indicates a company's ability to pay interest expenses on its outstanding debt. In the case of ConocoPhillips, the interest coverage ratio has shown significant fluctuations over the past few years.
In December 2020, the interest coverage ratio was negative, indicating that ConocoPhillips had difficulty meeting its interest obligations with its operating income. This may be a cause for concern for investors and creditors as negative interest coverage implies financial distress.
However, the situation improved dramatically by December 2021, with the interest coverage ratio jumping to a healthy 12.29. This suggests that ConocoPhillips had significantly increased its ability to cover its interest expenses through its operating income.
By December 2022, the interest coverage ratio further improved to 27.76, indicating a strong financial position and the ability to comfortably meet its interest obligations.
In the subsequent years, the interest coverage ratio remained strong, albeit slightly decreasing to 16.32 in December 2023 and 18.88 in December 2024. Despite the decrease, the ratios indicate that ConocoPhillips still had a good capacity to cover its interest payments.
Overall, the trend in ConocoPhillips' interest coverage ratio demonstrates an initial struggle followed by significant improvement and subsequent stable performance, suggesting a strengthening financial position and ability to meet debt obligations through operating income.