Halliburton Company (HAL)
Solvency ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.29 | 0.31 | 0.34 | 0.41 | 0.44 |
| Debt-to-capital ratio | 0.42 | 0.45 | 0.50 | 0.58 | 0.65 |
| Debt-to-equity ratio | 0.72 | 0.81 | 1.00 | 1.36 | 1.84 |
| Financial leverage ratio | 2.44 | 2.63 | 2.93 | 3.33 | 4.16 |
Halliburton Company's solvency ratios have shown a positive trend over the years, indicating a strengthening financial position.
The Debt-to-assets ratio has declined from 0.44 in 2020 to 0.29 in 2024, signifying a decreasing reliance on debt to finance its assets.
Similarly, the Debt-to-capital ratio has also decreased from 0.65 in 2020 to 0.42 in 2024, reflecting a reduction in the proportion of debt in the company's capital structure.
The Debt-to-equity ratio has exhibited a downward trend from 1.84 in 2020 to 0.72 in 2024, suggesting an improvement in the company's ability to meet its financial obligations through equity financing.
Additionally, the Financial leverage ratio has consistently decreased from 4.16 in 2020 to 2.44 in 2024, indicating a decline in the company's reliance on borrowed funds to support its operations.
Overall, the decreasing trend in these solvency ratios reflects Halliburton Company's efforts to strengthen its financial stability and reduce its dependency on debt financing.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 8.49 | 10.34 | 7.22 | 3.84 | -4.82 |
Halliburton Company's interest coverage ratio has shown a fluctuating trend over the past five years. Starting at a concerning level of -4.82 on December 31, 2020, indicating that the company did not generate enough operating income to cover its interest expenses. However, there has been a significant improvement in subsequent years with the interest coverage ratio increasing to 3.84 on December 31, 2021, 7.22 on December 31, 2022, 10.34 on December 31, 2023, and then declining slightly to 8.49 on December 31, 2024.
The positive trend in the interest coverage ratio from negative territory to levels above 1 indicates that Halliburton Company has been able to generate sufficient operating income to comfortably cover its interest expenses in recent years. This improvement suggests a strengthened financial position and reduced financial risk, which is a positive signal for investors and creditors. However, the slight decline in the interest coverage ratio in 2024 could indicate a need for continued monitoring to ensure sustained ability to meet interest obligations.