Northern Oil & Gas Inc (NOG)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 4,484,260 | 2,875,180 | 1,522,870 | 872,089 | 1,905,460 |
| Total stockholders’ equity | US$ in thousands | 2,047,680 | 745,260 | 215,135 | -223,304 | 558,643 |
| Financial leverage ratio | 2.19 | 3.86 | 7.08 | — | 3.41 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $4,484,260K ÷ $2,047,680K
= 2.19
The financial leverage ratio of Northern Oil and Gas Inc. has been fluctuating over the past five years. In 2023, the ratio stood at 2.19, indicating that for every dollar of equity, there were $2.19 of total assets. This represents a decrease from 2022 when the ratio was 3.86. The substantial decrease in the financial leverage ratio from 2022 to 2023 suggests a reduction in the company's reliance on debt to finance its operations.
Comparing 2023 to 2021, the financial leverage ratio has decreased significantly from 7.08 to 2.19. This indicates that the company has been successful in managing its debt levels relative to its equity base. The high financial leverage ratio in 2021 suggests a higher proportion of debt in the capital structure which may have posed risks to the company's solvency and financial stability.
Unfortunately, the financial leverage ratio for 2020 is not available. However, looking back to 2019, the ratio was 3.41, which is lower than the 2023 ratio of 2.19. This implies that the company's leverage position has improved over the years.
In conclusion, Northern Oil and Gas Inc. has shown a decreasing trend in its financial leverage ratio from 2021 to 2023, indicating a more conservative approach towards debt financing. This trend suggests improving financial health and reduced risk of financial distress associated with a high debt burden.
Peer comparison
Dec 31, 2023