LyondellBasell Industries NV (LYB)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| 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 | 2.86 | 2.88 | 3.10 | 4.44 | 3.78 |
The solvency ratios of LyondellBasell Industries NV indicate the company's ability to meet its long-term financial obligations and the extent to which it relies on debt to finance its operations.
The trend analysis of the debt-to-assets ratio shows a decline from 0.40 in 2019 to 0.30 in 2023, which indicates that the company has reduced its reliance on debt in relation to its total assets over the years. This could signify improved financial stability and less financial risk.
Similarly, the debt-to-capital ratio has also decreased from 0.60 in 2019 to 0.46 in 2023, suggesting that the company has managed to decrease its debt in relation to its total capital structure. This improvement indicates a more balanced capital structure and reduced financial risk.
The debt-to-equity ratio has also exhibited a favorable trend, declining from 1.50 in 2019 to 0.87 in 2023. This suggests that the company has reduced its debt relative to shareholder equity, signifying stronger shareholder protection and less reliance on debt financing.
Lastly, the financial leverage ratio has shown a significant improvement, decreasing from 3.78 in 2019 to 2.86 in 2023. This indicates that the company has decreased its financial leverage, reflecting a more sustainable and less risky financial position.
Overall, the solvency ratios of LyondellBasell Industries NV have displayed positive trends, reflecting an improved financial position with lower debt levels relative to assets, capital, equity, and leverage over the years. This indicates enhanced financial stability and risk management within the company’s operations.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 6.40 | 17.77 | 13.05 | 2.96 | 12.66 |
Interest coverage ratio is a key financial metric that indicates a company's ability to cover its interest expenses with its earnings before interest and taxes (EBIT). A higher interest coverage ratio is generally seen as more favorable as it suggests that the company is more capable of meeting its interest obligations.
Looking at the historical trend of LyondellBasell Industries NV's interest coverage ratio from 2019 to 2023, we observe fluctuations in the ratio. In 2019, the interest coverage ratio was 13.23, indicating that the company earned 13.23 times its interest expense in that year. The ratio increased significantly to 20.06 in 2022, signaling a stronger ability to cover interest payments with operating earnings.
However, there was a decline in the interest coverage ratio to 10.20 in 2023, which is still above 1 and indicates that the company's EBIT is still sufficient to cover its interest expenses. It is important to note that a higher interest coverage ratio provides a cushion against potential earnings volatility and economic downturns.
Overall, LyondellBasell Industries NV has demonstrated varying levels of interest coverage over the years, with fluctuations in operating performance impacting the ability to cover interest expenses. Investors and creditors may monitor this ratio to assess the company's financial health and ability to manage debt obligations.