Crescent Energy Co (CRGY)

Crescent Energy Co's solvency ratios have shown a trend of slight deterioration over the past three years. The debt-to-assets ratio has increased from 0.20 in 2021 to 0.25 in 2023, indicating that 25% of the company's assets are financed by debt. This suggests a potential increase in financial risk as more assets are funded through debt.

Similarly, the debt-to-capital ratio has also risen from 0.25 in 2021 to 0.32 in 2023, implying that 32% of Crescent Energy Co's capital structure is comprised of debt. This indicates a higher dependence on debt financing compared to equity, which may lead to increased interest payments and financial obligations.

The debt-to-equity ratio, which measures the proportion of debt to shareholders' equity, has increased from 0.34 in 2021 to 0.47 in 2023. This signifies that the company's debt levels have grown relative to equity, potentially indicating a weaker financial position and higher leverage.

Furthermore, the financial leverage ratio has also shown an increasing trend, from 1.71 in 2021 to 1.87 in 2023. This means that the company's assets are financed at a multiple of almost 1.87 times its equity, indicating higher financial risk and exposure to fluctuations in business performance.

In conclusion, Crescent Energy Co's solvency ratios have demonstrated a deteriorating trend over the past three years, with increasing levels of debt relative to assets, capital, equity, and financial leverage. It is crucial for the company to closely monitor its debt levels and consider optimizing its capital structure to maintain a healthy solvency position in the long term.

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Coverage ratios

Interest coverage ratio indicates the ability of Crescent Energy Co to meet its interest obligations from its operating profits. The higher the ratio, the better the company's ability to cover its interest payments.

Looking at Crescent Energy Co's interest coverage ratio over the last three years, we can see a trend of fluctuation. In 2021, the interest coverage ratio was relatively low at 0.61, indicating that the company's operating profits were only able to cover its interest expenses 0.61 times. This raises concerns about the company's ability to comfortably meet its interest obligations.

In 2022, the interest coverage ratio improved to 2.39, a significant increase from the previous year. This indicates that Crescent Energy Co's operating profits had more than doubled, providing a stronger cushion to cover its interest payments. This improvement suggests a positive trend in the company's financial health.

However, in 2023, the interest coverage ratio declined to 1.62. Although it is still above 1, indicating that the company's operating profits are sufficient to cover its interest expenses, the decrease from the previous year raises some concerns. It may suggest that the company's earnings are not growing at a pace that can comfortably cover its interest payments.

In conclusion, Crescent Energy Co's interest coverage ratio has shown fluctuations over the last three years, with improvements in 2022 but a slight decline in 2023. Monitoring this ratio is crucial to understanding the company's ability to meet its interest obligations and to assess its financial stability.