Hess Corporation (HES)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.35 | 0.38 | 0.39 | 0.44 | 0.33 |
| Debt-to-capital ratio | 0.48 | 0.51 | 0.56 | 0.61 | 0.45 |
| Debt-to-equity ratio | 0.92 | 1.05 | 1.26 | 1.54 | 0.82 |
| Financial leverage ratio | 2.67 | 2.76 | 3.26 | 3.51 | 2.49 |
Hess Corporation's solvency ratios reflect the company's ability to meet its long-term financial obligations and the extent to which it relies on debt financing. The trends observed over the past five years provide valuable insights into the company's financial health and risk profile.
The debt-to-assets ratio has shown a declining trend from 0.45 in 2020 to 0.37 in 2023, indicating that the proportion of assets financed by debt has decreased over the years, which may suggest a lower financial risk exposure.
Similarly, the debt-to-capital ratio has also exhibited a decreasing trend from 0.61 in 2020 to 0.49 in 2023, implying a reduced reliance on debt capital to fund the company's operations and investments.
The debt-to-equity ratio, on the other hand, has fluctuated over the years, peaking at 1.59 in 2020 and then decreasing to 0.98 in 2023. This ratio indicates the extent to which the company's operations are funded by debt relative to equity, with a lower ratio signaling a more favorable balance between debt and equity financing.
Lastly, the financial leverage ratio, which measures the company's total assets relative to equity, has shown a decreasing trend from 3.51 in 2020 to 2.67 in 2023. This trend suggests that the company's reliance on debt to finance its assets has decreased, indicating a potentially improved financial stability and lower risk of default.
Overall, the decreasing trends in the solvency ratios of Hess Corporation over the past five years indicate an improving financial position with reduced reliance on debt financing, which may enhance the company's long-term sustainability and financial stability.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 5.42 | 7.48 | 3.41 | -5.63 | 1.14 |
Hess Corporation's interest coverage ratio has fluctuated over the past five years. In 2023, the interest coverage ratio improved to 6.06, indicating the company generated sufficient operating income to cover its interest expenses. This was a decrease from the previous year's ratio of 7.80. In 2021, the interest coverage ratio was 4.17, representing a moderate ability to cover interest payments. However, in 2020, the company exhibited a negative interest coverage ratio of -0.84, indicating that the operating income was insufficient to cover interest expenses, which could be a cause for concern. The improvement in 2023 reflects a more favorable financial position for Hess Corporation compared to the previous year, albeit still lower than the ideal levels.