Chevron Corp (CVX)
Interest coverage
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 28,100,000 | 28,225,000 | 30,424,000 | 31,232,000 | 32,826,000 | 36,374,000 | 42,459,000 | 50,634,000 | 50,190,000 | 48,366,000 | 41,658,000 | 30,133,000 | 23,318,000 | 17,186,000 | 9,077,000 | -6,750,000 | -4,818,000 | -15,020,000 | -10,894,000 | 6,459,000 |
| Interest expense (ttm) | US$ in thousands | 594,000 | 515,000 | 465,000 | 472,000 | 469,000 | 472,000 | 486,000 | 495,000 | 516,000 | 548,000 | 594,000 | 650,000 | 712,000 | 756,000 | 746,000 | 733,000 | 697,000 | 676,000 | 709,000 | 735,000 |
| Interest coverage | 47.31 | 54.81 | 65.43 | 66.17 | 69.99 | 77.06 | 87.36 | 102.29 | 97.27 | 88.26 | 70.13 | 46.36 | 32.75 | 22.73 | 12.17 | -9.21 | -6.91 | -22.22 | -15.37 | 8.79 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $28,100,000K ÷ $594,000K
= 47.31
Chevron Corp's interest coverage ratio has shown significant fluctuations over the years based on the provided data. The interest coverage ratio indicates the company's ability to meet its interest obligations with its earnings before interest and taxes (EBIT).
From March 31, 2020 to June 30, 2021, the interest coverage ratio was negative, suggesting that the company's EBIT was insufficient to cover its interest expenses during these periods. This indicates a potential financial risk as Chevron may have struggled to meet its interest payments using its operational earnings.
However, from June 30, 2021 onwards, the interest coverage ratio improved significantly, reaching its peak at 97.27 by December 31, 2022. This improvement indicates a stronger ability to cover interest expenses from operating profits, reflecting a more stable financial position.
In the later periods up to December 31, 2024, the interest coverage ratio declined gradually but remained above 10, indicating that Chevron continued to maintain a healthy level of interest coverage.
Overall, the trend in Chevron Corp's interest coverage ratio shows a transition from financial vulnerability to a more stable and robust financial position, as the company's earnings increasingly covered its interest obligations.
Peer comparison
Dec 31, 2024