NOV Inc. (NOV)
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 | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 1.78 | 1.83 | 1.97 | 1.89 | 1.88 |
NOV Inc. consistently exhibits strong solvency ratios over the years, as indicated by its low debt-to-assets ratio, debt-to-capital ratio, and debt-to-equity ratio, all of which stand at 0.00 across the period from December 31, 2020, to December 31, 2024. This suggests that the company has minimal reliance on debt financing in relation to its total assets, capital, and equity.
Moreover, the financial leverage ratio, which reflects the extent of a company's financial risk due to debt, has shown a relatively stable trend ranging from 1.78 to 1.97 during the same period. This implies that NOV Inc. maintains a conservative capital structure and has a lower proportion of debt in its capital stack, indicating a lower financial risk and a higher degree of financial stability.
Overall, based on these solvency ratios, NOV Inc. appears to be well-positioned to meet its financial obligations and demonstrates a healthy financial structure with limited dependence on debt financing, contributing to its financial strength and stability.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 10.13 | 10.85 | 5.36 | -1.99 | -32.08 |
The interest coverage ratio measures a company's ability to meet its interest payments on outstanding debt. Looking at the historical trend for NOV Inc.'s interest coverage ratio, we see a significant decrease from -32.08 at December 31, 2020, to -1.99 at December 31, 2021, indicating a concerning decline in the company's ability to cover its interest expenses with its operating income.
However, there is a positive turn for NOV Inc. as the interest coverage ratio improved to 5.36 at December 31, 2022, 10.85 at December 31, 2023, and further to 10.13 at December 31, 2024. These improvements suggest that the company's operating income is now more comfortably covering its interest obligations.
Overall, NOV Inc.'s interest coverage has shown a positive turnaround in recent years, from a distressing situation to a more stable and healthy position. Improving interest coverage ratios indicate the company's ability to manage its debt obligations more effectively and reduce the risk of defaulting on its interest payments. However, continuous monitoring of this ratio is recommended to ensure financial stability and sustainability in the long term.