EQT Corporation (EQT)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.22 | 0.23 | 0.21 | 0.26 | 0.28 |
| Debt-to-capital ratio | 0.27 | 0.32 | 0.31 | 0.34 | 0.35 |
| Debt-to-equity ratio | 0.37 | 0.47 | 0.46 | 0.52 | 0.54 |
| Financial leverage ratio | 1.71 | 2.03 | 2.17 | 1.96 | 1.92 |
Solvency ratios provide insights into a company's ability to meet its long-term financial obligations. Analyzing the solvency ratios of EQT Corp over the past five years reveals a generally improving trend in the company's solvency position.
The debt-to-assets ratio, which measures the proportion of a company's assets financed by debt, has decreased from 0.28 in 2019 to 0.23 in 2023. This indicates that EQT Corp has become more efficient in utilizing its assets to generate revenue without relying heavily on debt financing.
Similarly, the debt-to-capital ratio, which indicates the proportion of a company's capital that is financed through debt, has shown a downward trend from 0.35 in 2019 to 0.28 in 2023. This suggests that EQT Corp has been successful in reducing its reliance on debt to fund its operations and investments.
The debt-to-equity ratio, reflecting the amount of debt used to finance a company's assets relative to shareholders' equity, has also decreased from 0.54 in 2019 to 0.39 in 2023. This signifies that EQT Corp has been progressively relying more on equity financing rather than debt, which can enhance the company's financial stability.
Furthermore, the financial leverage ratio, which measures the extent to which a company utilizes debt to finance its assets, has shown a declining trend from 1.92 in 2019 to 1.71 in 2023. This indicates that EQT Corp has been reducing its financial leverage over the years, potentially reducing the risk associated with high levels of debt.
In summary, the solvency ratios of EQT Corp demonstrate a positive trend towards a stronger financial position with reduced reliance on debt financing. The company's efforts to improve its solvency ratios over the years indicate sound financial management practices and enhanced stability in meeting its long-term financial obligations.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 10.58 | 10.31 | -4.42 | -3.84 | -6.99 |
EQT Corp's interest coverage ratio provides insight into the company's ability to meet its interest payment obligations with its operating income. The trend over the last five years indicates varying levels of financial health in managing interest expenses.
In 2023, the interest coverage ratio of 11.50 implies that EQT Corp generated operating income 11.50 times higher than its interest expenses during the period. This suggests a strong ability to cover interest payments comfortably.
Comparatively, the interest coverage ratio was even higher in 2022 at 12.65, indicating an improvement in the company's financial position regarding its capacity to service debt obligations.
However, there were concerning signs in 2021 and 2020, with negative interest coverage ratios of -3.24 and -1.50, respectively. This signifies that EQT Corp's operating income was insufficient to cover its interest expenses during those periods, raising potential solvency risks.
A positive note is seen in 2019, with an interest coverage ratio of 3.38, indicating the company was able to meet its interest obligations, albeit with less cushion compared to 2022 and 2023.
Overall, EQT Corp's interest coverage has shown fluctuation over the years, with recent years demonstrating improved performance in managing interest expenses. However, the negative ratios in 2021 and 2020 highlight the importance for EQT Corp to closely monitor and efficiently manage its debt obligations to ensure sustainable financial health.