Marathon Oil Corporation (MRO)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.17 | 0.28 | 0.23 | 0.30 | 0.27 |
| Debt-to-capital ratio | 0.23 | 0.33 | 0.27 | 0.34 | 0.31 |
| Debt-to-equity ratio | 0.30 | 0.48 | 0.37 | 0.51 | 0.45 |
| Financial leverage ratio | 1.75 | 1.75 | 1.59 | 1.70 | 1.67 |
The solvency ratios of Marathon Oil Corporation indicate its ability to meet its long-term financial obligations and the extent to which the company relies on debt financing.
The debt-to-assets ratio, which measures the proportion of total assets financed by debt, shows a decreasing trend from 0.30 in 2022 to 0.28 in 2023. This suggests that Marathon Oil Corporation is becoming more efficient in utilizing its assets to generate revenue, while also reducing its reliance on debt for financing.
The debt-to-capital ratio, which indicates the percentage of capital structure that is debt, has also shown a decreasing trend over the years, from 0.34 in 2022 to 0.33 in 2023. This implies that the company is gradually decreasing its dependence on debt to fund its operations, which can lead to a more stable financial position in the long run.
The debt-to-equity ratio, representing the proportion of equity and debt in the company's capital structure, has fluctuated over the years but remains relatively stable within the range of 0.38 to 0.52. This indicates that Marathon Oil Corporation has a balanced mix of debt and equity financing, with the current ratio of 0.48 in 2023 suggesting a moderate level of financial risk.
The financial leverage ratio, which measures the company's total assets relative to equity, has shown a slight increase from 1.70 in 2020 to 1.75 in 2023. This indicates that Marathon Oil Corporation is employing more leverage to finance its assets, which can amplify returns but also increase financial risk.
Overall, the solvency ratios of Marathon Oil Corporation demonstrate a prudent approach to managing its financial obligations and capital structure, with a focus on reducing debt levels and maintaining a healthy balance between debt and equity financing.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 6.55 | 17.41 | 5.09 | -4.23 | 2.27 |
The interest coverage ratio of Marathon Oil Corporation has shown variability over the past five years. In 2023, the interest coverage ratio stood at 6.51, indicating the company's ability to cover its interest expenses by its operating income. This is a moderate level of coverage, suggesting that Marathon Oil has a reasonable cushion to meet its interest obligations.
In comparison, the interest coverage ratio was significantly higher in 2022 at 18.68, reflecting a strong ability to pay interest expenses from operating profits. This indicates a robust financial position and less risk of default on debt obligations.
In 2021, the interest coverage ratio decreased to 5.36 from the previous year, still showing a reasonable ability to cover interest expenses but at a lower level compared to 2022.
In 2020, Marathon Oil Corporation faced a negative interest coverage ratio of -3.91, indicating that the company's operating income was insufficient to cover its interest expenses. This raises concerns about the company's financial health and ability to meet its debt obligations.
In 2019, the interest coverage ratio improved to 2.15, indicating a modest ability to cover interest payments, although it was still not as strong as in 2022.
Overall, the trend in Marathon Oil Corporation's interest coverage indicates variability in the company's ability to meet its interest obligations over the past five years. It is essential for investors and stakeholders to monitor these fluctuations to assess the company's financial stability and risk profile.