Chevron Corp (CVX)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.01 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.01 | 0.01 | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.01 | 0.01 | 0.00 |
| Financial leverage ratio | 1.63 | 1.62 | 1.72 | 1.82 | 1.65 |
Based on the solvency ratios of Chevron Corp. over the past five years, we can observe the following trends:
1. Debt-to-assets ratio:
- The debt-to-assets ratio has shown a decreasing trend from 0.11 in 2019 to 0.08 in 2023.
- This indicates that Chevron has been effectively managing its debt in relation to its total assets, which is a positive sign for the company's solvency and financial health.
2. Debt-to-capital ratio:
- Similar to the debt-to-assets ratio, the debt-to-capital ratio has also been decreasing over the years, from 0.16 in 2019 to 0.11 in 2023.
- This suggests that Chevron has been reducing its dependence on debt to finance its operations, which is generally viewed favorably by investors and creditors.
3. Debt-to-equity ratio:
- The debt-to-equity ratio has displayed a declining trend as well, dropping from 0.19 in 2019 to 0.13 in 2023.
- A decreasing debt-to-equity ratio indicates that Chevron is relying less on debt financing and has a stronger equity position, enhancing its solvency and reducing financial risk.
4. Financial leverage ratio:
- The financial leverage ratio, which measures the company's use of debt in its capital structure, has shown a slight fluctuation but has remained relatively stable over the years.
- With a financial leverage ratio hovering around 1.6 to 1.8, Chevron maintains a balanced mix of debt and equity financing, ensuring its solvency and financial stability.
In conclusion, based on the solvency ratios analyzed, Chevron Corp. has demonstrated prudent management of its debt levels and a strong financial position, as evidenced by the improving trends in its debt ratios over the past five years.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 48.88 | 79.62 | 28.84 | -9.12 | 7.87 |
Chevron Corp.'s interest coverage ratio has shown significant fluctuations over the past five years. The interest coverage ratio was 66.87 in 2023, indicating that the company generated 66.87 times the amount needed to cover its interest expenses for the year. This represents a decline from the previous year, where the ratio stood at 94.06.
In 2021, Chevron Corp.'s interest coverage ratio was 30.67, reflecting an improvement from the negative ratio of -9.42 in 2020. The negative ratio in 2020 suggests that the company did not generate enough income to cover its interest expenses for that year.
Overall, the trend in interest coverage for Chevron Corp. has been volatile, with fluctuations in the company's ability to cover its interest expenses. It is important for investors and analysts to closely monitor the interest coverage ratio to assess the company's financial health and ability to meet its debt obligations.