Hess Corporation (HES)
Solvency ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 2.37 | 2.67 | 2.72 | 3.26 | 3.51 |
Hess Corporation's solvency ratios indicate a strong financial position with consistently low levels of debt relative to its assets, capital, and equity. The debt-to-assets ratio, debt-to-capital ratio, and debt-to-equity ratio have all been reported as 0.00 over the five-year period from 2020 to 2024. This signifies that the company has not been reliant on debt to finance its operations and investments, leading to a minimal risk of financial distress.
Additionally, the financial leverage ratio, which measures the proportion of a company's assets that are financed by debt, has shown a decreasing trend from 3.51 in 2020 to 2.37 in 2024. This declining trend indicates that Hess Corporation has been reducing its reliance on debt over the years, further strengthening its solvency position.
Overall, these solvency ratios suggest that Hess Corporation has a solid financial foundation, with a conservative approach to debt management and a strong ability to meet its long-term financial obligations.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 10.64 | 6.17 | 8.18 | 4.09 | -5.08 |
Interest coverage ratio measures a company's ability to pay its interest expenses on outstanding debt. It is calculated by dividing earnings before interest and taxes (EBIT) by the interest expense.
Analyzing Hess Corporation's interest coverage ratio over the past five years shows a fluctuating trend. In December 2020, the interest coverage was negative at -5.08, indicating that the company's EBIT was insufficient to cover its interest expenses. However, the ratio improved significantly in the subsequent years, reaching 4.09 in December 2021, 8.18 in December 2022, 6.17 in December 2023, and further improving to 10.64 in December 2024.
The increasing trend in the interest coverage ratio suggests that Hess Corporation's ability to meet its interest obligations has strengthened over the years. A higher interest coverage ratio indicates a lower risk of default on debt payments, reflecting improved financial stability and profitability for the company. Overall, the improving trend in interest coverage ratio demonstrates a positive financial performance and indicates a healthier financial position for Hess Corporation.