Chevron Corp (CVX)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 261,632,000 | 257,709,000 | 239,535,000 | 239,790,000 | 237,428,000 |
| Total stockholders’ equity | US$ in thousands | 160,957,000 | 159,282,000 | 139,067,000 | 131,688,000 | 144,213,000 |
| Financial leverage ratio | 1.63 | 1.62 | 1.72 | 1.82 | 1.65 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $261,632,000K ÷ $160,957,000K
= 1.63
The financial leverage ratio of Chevron Corp. has exhibited some fluctuation over the past five years. The ratio decreased from 1.82 in 2020 to 1.63 in 2023. This reduction indicates that the company relied less on debt financing in 2023 compared to 2020. However, it is important to note that the ratio was relatively stable between 2019 and 2021, hovering around 1.62 to 1.72.
A financial leverage ratio above 1 typically suggests that the company has more debt in its capital structure compared to equity. In Chevron's case, the ratios indicate that the company has been employing leverage in its capital structure over the past five years. A decreasing trend in the ratio, such as from 1.82 in 2020 to 1.63 in 2023, may suggest a move towards a less leveraged capital structure or a more conservative approach to debt utilization.
Overall, analyzing Chevron's financial leverage ratio provides insights into the company's capital structure and its financing decisions over the years. Further examination and comparison with industry benchmarks would provide additional context for evaluating the company's leverage position.
Peer comparison
Dec 31, 2023