Diamondback Energy Inc (FANG)
Solvency ratios
| 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 1.78 | 1.76 | 2.04 | 1.75 | 1.74 | 1.72 | 1.77 | 1.78 | 1.75 | 1.72 | 1.76 | 1.83 | 1.89 | 1.97 | 2.00 | 2.06 | 2.00 | 1.96 | 1.90 | 1.82 |
Diamondback Energy Inc's solvency ratios indicate a strong financial position with consistently low levels of debt relative to its assets, capital, and equity over the years. The Debt-to-assets ratio, Debt-to-capital ratio, and Debt-to-equity ratio have all remained at 0.00 since March 2020, showing that the company has no significant reliance on debt to finance its operations.
The Financial Leverage ratio has shown a slight fluctuation, starting at 1.82 in March 2020 and peaking at 2.06 in March 2021 before gradually decreasing to 1.78 by December 2023. This ratio measures the proportion of the company's total assets that are financed by debt, indicating that Diamondback Energy Inc has maintained a conservative leverage position throughout the analyzed period.
Overall, based on these solvency ratios, Diamondback Energy Inc appears to have a stable and solid financial structure with minimal financial risk associated with its debt levels.
Coverage ratios
| 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | 16.38 | 31.04 | 29.71 | 26.50 | 25.83 | 26.33 | 27.45 | 35.67 | 37.70 | 39.40 | 31.57 | 20.73 | 15.26 | 6.05 | -4.39 | -21.73 | -25.76 | -28.10 | -19.55 | 1.21 |
Interest coverage is a key financial ratio that indicates a company's ability to meet its interest payment obligations on outstanding debt. It is calculated by dividing a company's earnings before interest and taxes (EBIT) by its interest expense. A higher interest coverage ratio suggests that the company is more capable of servicing its debt.
Analyzing Diamondback Energy Inc's interest coverage over the reporting periods from March 31, 2020, to December 31, 2024, reveals fluctuations in the company's ability to cover its interest expenses. The interest coverage ratio started at a low level of 1.21 on March 31, 2020, indicating a relatively tight financial position in terms of servicing debt.
Subsequently, the interest coverage ratio decreased significantly, reaching negative figures in the following quarters, suggesting that Diamondback Energy Inc's EBIT was insufficient to cover its interest obligations. This negative trend continued until September 30, 2021, highlighting potential financial risks associated with the company's debt burden.
However, the trend reversed from September 30, 2021, onwards, with the interest coverage ratio turning positive and showing improvements in Diamondback Energy Inc's ability to cover its interest payments. The ratio increased steadily, reaching its peak at 39.40 on September 30, 2022, indicating a significant improvement in the company's financial health and capacity to service its debt.
From that point onwards, the interest coverage ratio exhibited fluctuations but generally remained at healthier levels compared to the earlier reporting periods, reflecting a more stable financial position for Diamondback Energy Inc.
Overall, the analysis of Diamondback Energy Inc's interest coverage ratio indicates a challenging period in the past, marked by negative ratios, followed by a recovery and improvement in the company's ability to meet its interest payment obligations. Continued monitoring of this ratio will be essential to assess the company's ongoing financial performance and debt management strategies.