Ovintiv Inc (OVV)
Debt-to-assets ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Long-term debt | US$ in thousands | 5,453,000 | 3,177,000 | 4,786,000 | 6,367,000 | 6,974,000 |
| Total assets | US$ in thousands | 19,987,000 | 15,056,000 | 14,055,000 | 14,469,000 | 21,487,000 |
| Debt-to-assets ratio | 0.27 | 0.21 | 0.34 | 0.44 | 0.32 |
December 31, 2023 calculation
Debt-to-assets ratio = Long-term debt ÷ Total assets
= $5,453,000K ÷ $19,987,000K
= 0.27
The debt-to-assets ratio of Ovintiv Inc has fluctuated over the past five years, ranging from 0.25 to 0.49. A lower ratio indicates that the company relies less on debt to finance its operations and investments, which can be viewed positively by creditors and investors as it suggests a stronger financial position and lower financial risk.
In 2023, the debt-to-assets ratio improved to 0.29 compared to the previous year, indicating that the company has reduced its debt relative to its total assets. This could be a result of better financial management, increased profitability, or a decrease in borrowing.
The significant decrease in the ratio from 0.49 in 2020 to 0.25 in 2022 indicates a substantial improvement in the company's debt management and overall financial health. However, the subsequent increase to 0.35 in 2021 followed by a further decrease in 2022 suggests some volatility in the company's debt levels.
Overall, monitoring Ovintiv Inc's debt-to-assets ratio is crucial for assessing its leverage and financial risk. A stable or decreasing trend in the ratio over time generally signals strong financial management and may enhance investor confidence in the company's ability to meet its debt obligations.
Peer comparison
Dec 31, 2023