Ovintiv Inc (OVV)
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 | 1.86 | 1.93 | 1.96 | 2.77 | 3.77 |
Ovintiv Inc has consistently shown a strong solvency position based on its solvency ratios.
1. Debt-to-assets ratio: The company's debt-to-assets ratio has been at 0.00 for each year from 2020 to 2024. This indicates that Ovintiv has not relied heavily on debt to finance its assets, implying a low financial risk and a strong financial position in terms of asset ownership.
2. Debt-to-capital ratio: Similar to the debt-to-assets ratio, Ovintiv's debt-to-capital ratio has also been constant at 0.00 across the same period. This reaffirms the company's minimal reliance on debt in relation to its capital structure, suggesting a healthy balance between debt and equity financing.
3. Debt-to-equity ratio: Ovintiv's debt-to-equity ratio has consistently remained at 0.00 from 2020 to 2024. This further supports the notion that the company has a low level of debt relative to its equity, signifying a robust financial position and a reduced vulnerability to financial distress.
4. Financial leverage ratio: The trend in Ovintiv's financial leverage ratio reflects a decreasing pattern, from 3.77 in 2020 to 1.86 in 2024. This decline indicates a reduction in the company's reliance on debt to finance its operations, implying an improving financial health and stability over the years.
Overall, based on the solvency ratios analyzed, Ovintiv Inc appears to maintain a solid financial foundation with a conservative debt structure, low leverage, and a strong ability to meet its financial obligations in the long term.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 4.28 | 8.07 | 12.45 | 4.64 | -14.44 |
Interest coverage ratio is a measure of a company's ability to meet its interest payments on outstanding debt. A higher interest coverage ratio indicates that the company is more capable of servicing its debt obligations.
Analyzing the data provided for Ovintiv Inc, we can observe a significant improvement in the interest coverage ratio over the years. In December 2020, the interest coverage ratio was -14.44, indicating a potential concern as the company's operating income was insufficient to cover its interest expenses.
However, by December 2021, the interest coverage ratio increased to 4.64, suggesting a positive turnaround as the company's operating income became more sufficient to meet its interest payments. This trend continued to improve over the following years, reaching 12.45 in December 2022, 8.07 in December 2023, and 4.28 in December 2024.
The increasing interest coverage ratios reflect Ovintiv Inc's strengthening financial position and its ability to cover interest expenses comfortably. This indicates a positive trajectory for the company's financial health and may signify improved creditworthiness and stability in meeting its debt obligations.