California Resources Corp (CRC)
Solvency ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.16 | 0.14 | 0.15 | 0.15 | 0.70 |
| Debt-to-capital ratio | 0.24 | 0.20 | 0.24 | 0.26 | 1.09 |
| Debt-to-equity ratio | 0.32 | 0.24 | 0.32 | 0.35 | — |
| Financial leverage ratio | 2.02 | 1.80 | 2.13 | 2.28 | — |
The solvency ratios of California Resources Corp indicate the company's ability to meet its long-term financial obligations.
1. Debt-to-assets ratio:
- The debt-to-assets ratio has decreased from 0.70 in 2019 to 0.16 in 2024, signaling lower financial risk and improved asset coverage of debt.
2. Debt-to-capital ratio:
- The debt-to-capital ratio has shown a declining trend from 1.09 in 2019 to 0.24 in 2024, indicating the company's decreasing reliance on borrowed funds to finance its operations.
3. Debt-to-equity ratio:
- California Resources Corp had an unreported value in 2019 but subsequently showed a consistent improvement in its debt-to-equity ratio, falling from 0.35 in 2021 to 0.32 in 2024. This suggests a strengthening financial position with a reduced reliance on debt relative to equity.
4. Financial leverage ratio:
- The financial leverage ratio decreased from 2.28 in 2019 to 2.02 in 2024, indicative of the company's reduced financial risk and improved ability to service its debts.
Overall, the decreasing trend in these solvency ratios reflect California Resources Corp's efforts to strengthen its financial position, reduce leverage, and enhance its ability to meet its long-term debt obligations.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 7.13 | 14.43 | 15.32 | 5.43 | 1.12 |
The interest coverage ratio for California Resources Corp has shown significant improvement over the years, reflecting the company's ability to meet its interest obligations with operating income.
As of December 31, 2019, the interest coverage ratio was relatively low at 1.12, indicating that the company's operating income was just sufficient to cover its interest payments. However, by December 31, 2021, the ratio had increased to 5.43, suggesting a better cushion for meeting interest expenses.
The trend continued to improve significantly as of December 31, 2022, where the interest coverage ratio surged to 15.32, indicating a much stronger ability to cover interest obligations. This trend was maintained in the following years, with ratios of 14.43 as of December 31, 2023, and 7.13 as of December 31, 2024.
Overall, the increasing trend in the interest coverage ratio reflects a positive financial trajectory for California Resources Corp, showcasing enhanced operational efficiency and profitability in meeting interest payments.