Ovintiv Inc (OVV)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 19,987,000 | 15,056,000 | 14,055,000 | 14,469,000 | 21,487,000 |
| Total stockholders’ equity | US$ in thousands | 10,370,000 | 7,689,000 | 5,074,000 | 3,837,000 | 9,930,000 |
| Financial leverage ratio | 1.93 | 1.96 | 2.77 | 3.77 | 2.16 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $19,987,000K ÷ $10,370,000K
= 1.93
The financial leverage ratio of Ovintiv Inc has exhibited a fluctuating trend over the past five years. The ratio decreased from 3.77 in 2020 to 1.93 in 2023, indicating a significant reduction in the company's reliance on debt to finance its operations and investments. This decrease suggests improved financial health and decreased risk associated with high debt levels.
However, it is important to note that the ratio increased from 2021 to 2022 before declining again in 2023. This fluctuation may be indicative of changes in the company's capital structure and financing decisions over the years.
Overall, the declining trend in the financial leverage ratio implies that Ovintiv Inc has been gradually reducing its debt levels relative to its equity, which could lead to enhanced financial stability and flexibility in the long run.
Peer comparison
Dec 31, 2023