NOV Inc. (NOV)
Solvency ratios
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.15 | 0.16 | 0.16 | 0.17 | 0.17 | 0.18 | 0.18 | 0.18 | 0.18 | 0.18 | 0.18 | 0.17 | 0.18 | 0.18 | 0.19 | 0.19 | 0.15 | 0.18 | 0.17 | 0.12 |
| Debt-to-capital ratio | 0.22 | 0.24 | 0.24 | 0.25 | 0.25 | 0.26 | 0.26 | 0.26 | 0.25 | 0.25 | 0.25 | 0.25 | 0.26 | 0.25 | 0.27 | 0.27 | 0.20 | 0.24 | 0.23 | 0.15 |
| Debt-to-equity ratio | 0.28 | 0.31 | 0.32 | 0.33 | 0.34 | 0.35 | 0.35 | 0.35 | 0.34 | 0.34 | 0.33 | 0.33 | 0.35 | 0.33 | 0.37 | 0.36 | 0.26 | 0.31 | 0.30 | 0.18 |
| Financial leverage ratio | 1.83 | 1.90 | 1.92 | 1.94 | 1.99 | 2.01 | 1.98 | 1.93 | 1.91 | 1.91 | 1.88 | 1.90 | 1.91 | 1.86 | 1.91 | 1.95 | 1.69 | 1.74 | 1.71 | 1.45 |
NOV Inc's solvency ratios provide insights into the company's ability to meet its long-term financial obligations. The debt-to-assets ratio, which measures the proportion of total assets financed by debt, has been relatively stable around 0.19 to 0.20 over the past eight quarters, indicating a conservative debt management strategy.
The debt-to-capital ratio, reflecting the proportion of total capitalization funded by debt, has shown a slight decline from 0.28 to 0.24 from Q4 2022 to Q4 2023, suggesting a lower reliance on debt financing compared to total capital.
The debt-to-equity ratio, showing the portion of equity and debt in the company's capital structure, has fluctuated between 0.32 to 0.40 over the same period. This implies that NOV Inc has been using a mix of equity and debt to finance its operations, with a higher debt component observed in recent quarters.
The financial leverage ratio, which measures the company's total assets relative to equity, has ranged from 1.83 to 2.01 over the past two years. The decreasing trend from 1.99 to 1.83 from Q4 2022 to Q4 2023 suggests a lower reliance on borrowed funds to generate returns.
Overall, NOV Inc's solvency ratios indicate a relatively stable and balanced approach to capital structure management, with a decreasing reliance on debt financing and improving financial leverage ratios over the past year.
Coverage ratios
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | 8.05 | 8.30 | 7.43 | 6.25 | 4.05 | 1.87 | 0.22 | -0.97 | -2.05 | -5.94 | -6.42 | -7.56 | -32.14 | -31.11 | -30.47 | -87.45 | -63.64 | -60.80 | -59.22 | 1.11 |
Based on the provided data, NOV Inc's interest coverage ratio has shown variability over the past eight quarters. The interest coverage ratio measures the company's ability to meet its interest obligations with its operating income.
In Q4 2023, NOV Inc's interest coverage ratio was 12.83, which indicates that the company generated operating income that was 12.83 times greater than its interest expenses for that period. This high ratio suggests that NOV Inc had a strong ability to cover its interest costs from its operating earnings.
Looking at the trend over the previous quarters, we see a general improvement in the interest coverage ratio from negative levels in Q2 2022 to double-digit figures in more recent quarters. This indicates that NOV Inc has been performing better in generating operating income relative to its interest expenses.
However, it's important to note the dip in Q1 2023, where the interest coverage ratio decreased to 9.65 from the previous quarter's 12.40. This could suggest a potential drop in operating income or an increase in interest expenses for that specific quarter.
Overall, NOV Inc's interest coverage ratio has generally been healthy and improving, demonstrating the company's ability to comfortably meet its interest obligations with its operating income. Investors and stakeholders should continue to monitor this ratio to assess NOV Inc's financial health and sustainability.