ConocoPhillips (COP)

Financial leverage ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Total assets	US$ in thousands	95,924,000	93,829,000	90,661,000	62,618,000	70,514,000
Total stockholders’ equity	US$ in thousands	49,279,000	48,003,000	45,406,000	29,849,000	34,981,000
Financial leverage ratio		1.95	1.95	2.00	2.10	2.02

December 31, 2023 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $95,924,000K ÷ $49,279,000K
= 1.95

Based on the financial leverage ratio data provided for Conoco Phillips over the past five years, we observe a consistent trend with slight fluctuations. The financial leverage ratio has been relatively stable around the range of 1.95 to 2.10 during this period.

The financial leverage ratio measures the extent to which a company utilizes debt in its capital structure. A higher financial leverage ratio indicates a higher proportion of debt financing compared to equity financing. In this case, the company has maintained a moderate to slightly higher level of financial leverage over the years.

A financial leverage ratio of around 2 suggests that Conoco Phillips's capital structure is balanced between debt and equity, with a significant portion of its assets financed through debt. This could potentially magnify the company's returns in good economic conditions but also increases its financial risk, particularly in times of economic downturn or rising interest rates.

Overall, based on the stable trend of the financial leverage ratio for Conoco Phillips, it appears that the company has maintained a consistent approach to its capital structure and debt management decisions over the past five years.