Northern Oil & Gas Inc (NOG)
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 | — |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | — |
| Financial leverage ratio | 2.41 | 2.19 | 3.86 | 7.08 | — |
Northern Oil & Gas Inc's solvency ratios reflect a strong financial position with consistently low levels of debt relative to its assets, capital, and equity over the period from December 31, 2020, to December 31, 2024.
The Debt-to-assets ratio remained at 0.00 throughout the five-year period, indicating that the company's total debt was effectively non-existent in comparison to its total assets. This suggests that the company relies more on equity financing rather than debt to fund its operations and investments.
Similarly, the Debt-to-capital ratio and Debt-to-equity ratio also remained at 0.00 during the same period. This indicates that the company's capital structure is mainly composed of equity, with minimal or no debt in the financing mix. A low Debt-to-capital and Debt-to-equity ratio are generally seen as positive signs of financial stability and creditworthiness.
The Financial leverage ratio, which measures the proportion of a company's assets that are financed with debt, decreased significantly from 7.08 in 2021 to 2.41 in 2024. This decline indicates a reduction in the company's reliance on debt to finance its operations, which is a positive trend for solvency and risk management.
Overall, Northern Oil & Gas Inc's solvency ratios demonstrate a conservative approach to debt management, with a strong emphasis on equity financing, leading to a favorable financial position and risk profile.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 5.32 | 8.38 | 10.66 | 1.11 | -14.49 |
Based on the data provided, Northern Oil & Gas Inc's interest coverage has shown significant fluctuations over the years.
As of December 31, 2020, the interest coverage ratio was -14.49, indicating that the company's operating income was not sufficient to cover its interest expenses, which is a concerning sign.
However, by December 31, 2021, the interest coverage improved to 1.11, indicating that the company's operating income was just able to cover its interest expenses. This suggests a slight improvement in the company's financial position compared to the previous year.
By December 31, 2022, the interest coverage ratio significantly increased to 10.66, indicating a strong improvement in the company's ability to cover its interest expenses from its operating income. This signals a positive trend in the company's financial health.
The interest coverage ratio slightly decreased to 8.38 by December 31, 2023, which still indicates a healthy coverage of interest expenses by operating income, although not as high as the previous year.
Finally, as of December 31, 2024, the interest coverage ratio decreased further to 5.32, suggesting a slightly declining ability to cover interest expenses compared to the previous year but still at an acceptable level.
Overall, the trend in Northern Oil & Gas Inc's interest coverage ratio shows fluctuations, with a significant improvement in 2022, followed by some fluctuations in the subsequent years. It will be important for the company to maintain a healthy interest coverage ratio to ensure its long-term financial stability.