Liberty Oilfield Services Inc (LBRT)

The solvency ratios of Liberty Oilfield Services Inc reflect its ability to meet its long-term financial obligations and indicate the company's level of financial risk. Here is a detailed analysis of the solvency ratios based on the provided data:

1. Debt-to-Assets Ratio: This ratio measures the proportion of a company's assets that are financed by debt. Liberty Oilfield Services Inc's Debt-to-Assets Ratio has been relatively low and stable over the period, ranging from 0.04 to 0.11. This indicates that the company relies less on debt to finance its assets, which can be considered a positive sign of financial health.

2. Debt-to-Capital Ratio: The Debt-to-Capital Ratio represents the proportion of a company's capital structure that is financed by debt. Liberty Oilfield Services Inc's Debt-to-Capital Ratio has shown fluctuations over the period, but generally stayed within the range of 0.07 to 0.17. The lower the ratio, the lower the financial risk, and in this case, the company maintained a moderate level of debt relative to its total capital.

3. Debt-to-Equity Ratio: The Debt-to-Equity Ratio compares a company's total debt to its shareholder equity. Liberty Oilfield Services Inc's Debt-to-Equity Ratio fluctuated between 0.06 and 0.21 during the period, showing some variability. A lower ratio is generally preferable as it indicates lower financial risk and signifies that the company relies more on equity financing.

4. Financial Leverage Ratio: The Financial Leverage Ratio measures the extent to which a company uses debt to finance its operations. Liberty Oilfield Services Inc's Financial Leverage Ratio ranged from 1.59 to 2.34, indicating that the company has been leveraging its operations with debt, but the ratio has been relatively stable over time.

In summary, Liberty Oilfield Services Inc's solvency ratios suggest the company has maintained a conservative approach towards debt financing, with low to moderate levels of leverage. The stable and relatively low debt levels compared to assets and capital indicate a lower financial risk and a strong solvency position for the company.

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Coverage ratios

The interest coverage ratio for Liberty Oilfield Services Inc demonstrates the company's ability to meet its interest payments from its earnings. A ratio above 1 indicates the company can easily cover its interest expenses, while a ratio below 1 suggests potential difficulties in meeting interest obligations.

From March 31, 2020, to December 31, 2020, Liberty Oilfield Services Inc experienced declining interest coverage ratios, with the ratio dropping to -9.10 by the end of the year. This indicates a significant decrease in the company's ability to cover its interest payments with its operating income.

However, from March 31, 2022, onwards, the interest coverage ratio started to improve consistently. By the end of December 31, 2024, the ratio had reached 12.09, signaling a substantial recovery in the company's ability to meet its interest obligations.

Overall, the trend in the interest coverage ratio for Liberty Oilfield Services Inc reflects a period of financial strain followed by a notable improvement in the company's ability to cover its interest expenses, suggesting a positive turnaround in its financial health.