Coterra Energy Inc (CTRA)

Coterra Energy Inc has shown a decreasing trend in its solvency ratios over the past five years. The Debt-to-assets ratio has improved from 0.21 in 2020 to 0.08 in 2023 before showing a slight increase to 0.16 in 2024. This indicates that the company has been able to reduce its debt in relation to its total assets, which generally reflects a healthier financial position.

Similarly, the Debt-to-capital ratio has also declined consistently from 0.30 in 2020 to 0.11 in 2023, before increasing slightly to 0.21 in 2024. This shows a decreasing reliance on debt financing compared to the company's total capital structure.

The Debt-to-equity ratio has experienced a substantial decline from 0.43 in 2020 to 0.12 in 2023, before rising again to 0.27 in 2024. This ratio indicates the proportion of debt used to finance the company's operations in relation to equity, with the downward trend suggesting lower financial risk.

Furthermore, the Financial leverage ratio has decreased from 2.04 in 2020 to 1.57 in 2023, showing a slight increase to 1.65 in 2024. This ratio reflects the company's reliance on debt to finance its assets, with a lower ratio indicating lower financial risk and leverage.

Overall, the decreasing trend in these solvency ratios signals an improvement in Coterra Energy Inc's financial health and reduced reliance on debt financing over the years, which may enhance its stability and long-term sustainability.

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Coverage ratios

The interest coverage ratio for Coterra Energy Inc has shown a positive trend over the past few years, indicating the company's ability to meet its interest obligations comfortably with its operating income.

As of December 31, 2020, the interest coverage ratio was 5.94, which indicates that the company generated operating income nearly six times larger than its interest expenses during that period. This suggests a moderate level of financial flexibility.

By December 31, 2021, the interest coverage ratio increased significantly to 25.23, signaling a substantial improvement in the company's ability to cover its interest payments. This significant increase could be attributed to either a rise in operating income or a decrease in interest expenses.

The trend continued to improve as of December 31, 2022, with the interest coverage ratio reaching a robust 65.99. Such a high ratio demonstrates a very strong ability to meet interest obligations from operating income, reflecting a healthy financial position for the company.

However, by December 31, 2023, the interest coverage ratio decreased to 30.15 from the previous year's peak. While still at a healthy level, this slight decrease may raise questions about the company's future ability to cover its interest expenses at the same level if operating income were to decrease or interest expenses were to rise significantly.

Unfortunately, no data is provided for December 31, 2024. It would be important for investors and stakeholders to monitor the company's interest coverage ratio closely in the future to ensure that Coterra Energy Inc maintains a strong financial position and can comfortably meet its interest obligations.