Diamondback Energy Inc (FANG)
Debt-to-equity ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Long-term debt | US$ in thousands | 6,641,000 | 6,238,000 | 6,642,000 | 5,624,000 | 5,371,000 |
| Total stockholders’ equity | US$ in thousands | 16,625,000 | 15,009,000 | 12,088,000 | 8,794,000 | 13,249,000 |
| Debt-to-equity ratio | 0.40 | 0.42 | 0.55 | 0.64 | 0.41 |
December 31, 2023 calculation
Debt-to-equity ratio = Long-term debt ÷ Total stockholders’ equity
= $6,641,000K ÷ $16,625,000K
= 0.40
Diamondback Energy Inc's debt-to-equity ratio has shown fluctuations over the past five years. The ratio decreased from 0.66 in 2020 to 0.40 in 2023, indicating a significant improvement in the company's debt management. This suggests that Diamondback Energy has been able to reduce its reliance on debt as a source of financing relative to shareholders' equity.
In 2021, the ratio increased to 0.55 before declining again in 2022 and 2023. Overall, the trend indicates that the company has maintained a relatively moderate level of debt in relation to its equity, with a slight upward trend in recent years.
A lower debt-to-equity ratio generally signals a stronger financial position and lower financial risk for the company. Diamondback Energy's decreasing ratio over the past few years may indicate a strategic effort to strengthen its balance sheet and financial stability. However, it is essential to consider the industry norms and the company's specific circumstances when evaluating the significance of these changes.
Peer comparison
Dec 31, 2023