Diamondback Energy Inc (FANG)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.23 | 0.24 | 0.29 | 0.32 | 0.23 |
| Debt-to-capital ratio | 0.29 | 0.29 | 0.35 | 0.39 | 0.29 |
| Debt-to-equity ratio | 0.40 | 0.42 | 0.55 | 0.64 | 0.41 |
| Financial leverage ratio | 1.74 | 1.75 | 1.89 | 2.00 | 1.78 |
The solvency ratios of Diamondback Energy Inc over the past five years show a trend of decreasing leverage and improving financial strength.
The debt-to-assets ratio, which measures the proportion of total assets financed by debt, decreased from 0.33 in 2020 to 0.23 in 2023, indicating a lower reliance on debt to finance the company's assets.
The debt-to-capital ratio, which reflects the proportion of total capitalization that comes from debt, also decreased from 0.40 in 2020 to 0.29 in 2023, suggesting a lower level of financial risk and a more balanced capital structure.
Similarly, the debt-to-equity ratio, showing the proportion of equity and debt in the company's capital structure, decreased from 0.66 in 2020 to 0.40 in 2023, indicating a reduced financial risk and a stronger equity position.
The financial leverage ratio, which measures the extent to which the company relies on debt to finance its operations, decreased from 2.00 in 2020 to 1.74 in 2023, reflecting a declining level of leverage and improved financial stability.
Overall, the decreasing trend in these solvency ratios suggests that Diamondback Energy Inc has been effectively managing its debt levels and strengthening its financial position over the past five years.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 24.17 | 35.97 | 15.14 | -27.53 | 2.67 |
The interest coverage ratio measures a company's ability to cover its interest expenses with its operating income. A higher ratio indicates a stronger ability to meet interest payments.
Diamondback Energy Inc's interest coverage has shown fluctuations over the past five years. In 2023, the interest coverage ratio was 26.76, indicating a strong ability to cover interest expenses. This represents an increase from 2022 when the ratio was 44.89, suggesting that the company's interest coverage has slightly weakened despite still being at a robust level.
In 2021, the interest coverage ratio was 21.78, showing a decrease from the previous year. In 2020, the ratio was significantly lower at 2.72, indicating a potentially risky situation where the company's operating income was only 2.72 times the amount of its interest expenses.
However, in 2019, the interest coverage ratio improved to 8.63 from the low in 2020, demonstrating a recovery in the company's ability to cover interest payments.
Overall, Diamondback Energy Inc's interest coverage ratio has shown variability in recent years, with fluctuations in the company's ability to cover interest expenses. This suggests the importance of monitoring the company's financial performance and its ability to generate sufficient operating income to meet its interest obligations.