Halliburton Company (HAL)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.34 | 0.41 | 0.44 | 0.41 |
| Debt-to-capital ratio | 0.00 | 0.50 | 0.58 | 0.65 | 0.56 |
| Debt-to-equity ratio | 0.00 | 1.00 | 1.36 | 1.84 | 1.29 |
| Financial leverage ratio | 2.63 | 2.93 | 3.33 | 4.16 | 3.17 |
Halliburton Co.'s solvency ratios demonstrate a positive trend over the past five years. The Debt-to-assets ratio has decreased from 0.41 in 2019 to 0.31 in 2023, indicating that the company has reduced its reliance on debt to finance its assets. Similarly, the Debt-to-capital ratio has declined from 0.56 in 2019 to 0.45 in 2023, reflecting a more conservative capital structure.
The Debt-to-equity ratio shows a significant improvement from 1.29 in 2019 to 0.81 in 2023, suggesting that the company has reduced its dependence on debt relative to equity financing. Furthermore, the Financial leverage ratio has decreased from 3.17 in 2019 to 2.63 in 2023, indicating a lower proportion of debt in the company's capital structure.
Overall, the declining trend in these solvency ratios indicates that Halliburton Co. has been effectively managing its debt levels and improving its financial health. This could enhance the company's ability to weather economic downturns and meet its debt obligations in the future. However, it's essential for stakeholders to continue monitoring these ratios to ensure sustainable financial stability.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 10.34 | 7.22 | 3.84 | -4.82 | -0.79 |
The interest coverage ratio measures a company's ability to meet its interest obligations from its operating income. A higher interest coverage ratio indicates that the company is more capable of servicing its debt from its operating earnings.
Looking at the data provided for Halliburton Co., we observe a favorable trend in the interest coverage ratio over the past five years. The ratio has improved consistently from 3.35 in 2019 to 10.47 in 2023. This indicates that the company's ability to cover its interest expenses from its operating income has strengthened over this period.
In 2023, the interest coverage ratio reached 10.47, reflecting a significant increase from the previous year's ratio of 8.19. This improvement suggests that Halliburton Co. generated sufficient operating earnings to cover its interest payments comfortably in 2023.
Furthermore, comparing the 2023 ratio of 10.47 with the ratios of 2021 and 2020 (3.86 and 2.70, respectively) highlights a notable enhancement in the company's financial health and ability to manage its interest obligations.
Overall, Halliburton Co.'s interest coverage ratio has shown a positive and strengthening trend over the past five years, indicating improved financial performance and a stronger capacity to meet its interest expenses. This is a favorable indicator for creditors and investors, reflecting the company's ability to manage its debt obligations effectively.