Occidental Petroleum Corporation (OXY)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.27 | 0.39 | 0.45 | 0.36 |
| Debt-to-capital ratio | 0.00 | 0.40 | 0.59 | 0.66 | 0.53 |
| Debt-to-equity ratio | 0.00 | 0.65 | 1.45 | 1.92 | 1.13 |
| Financial leverage ratio | 2.45 | 2.41 | 3.69 | 4.31 | 3.13 |
The solvency ratios of Occidental Petroleum Corp. over the past five years indicate the company's ability to meet its financial obligations and manage its debt levels. The debt-to-assets ratio has been relatively stable at around 0.27 in 2023 and 2022, indicating that 27% of the company's assets are financed by debt. This suggests a healthy balance between debt and assets.
Similarly, the debt-to-capital ratio has remained consistent at around 0.39 in 2023 and 0.40 in 2022, indicating that 39-40% of the company's capital structure is comprised of debt. This ratio reflects the degree of financial leverage utilized by the company to fund its operations.
On the other hand, the debt-to-equity ratio has shown significant fluctuations, with a sharp decrease from 1.46 in 2021 to 0.65 in 2023. This indicates that the company is relying less on debt financing and has improved its capital structure by reducing the proportion of debt relative to equity.
The financial leverage ratio, which measures the company's total assets relative to equity, has also shown improvements over the years, declining from 4.31 in 2020 to 2.45 in 2023. This indicates that the company has reduced its reliance on debt to finance its operations and has a stronger equity base.
Overall, the solvency ratios of Occidental Petroleum Corp. have shown a positive trend in recent years, reflecting prudent financial management practices and a more balanced capital structure.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | — | — | — | — | — |
Occidental Petroleum Corp.'s interest coverage ratio has experienced fluctuations over the past five years. In 2023, the interest coverage ratio stands at a healthy 8.50, indicating the company's ability to cover its interest expenses 8.50 times over with its earnings before interest and taxes.
Compared to 2022, where the interest coverage ratio was 15.27, the current ratio has decreased but still remains at a reasonable level. This decline may be attributed to changes in the company's earnings or interest expenses during the year.
In 2021, the interest coverage ratio was 3.94, showing a moderate level of coverage. Prior to that, in 2020, the ratio was -0.62, indicating that the company's earnings were not sufficient to cover its interest expenses during that period. However, the ratio improved in 2019 to 2.99, signifying a better position compared to 2020.
Overall, Occidental Petroleum Corp.'s interest coverage ratio has shown variability over the past five years, with fluctuations in earnings and interest expenses impacting the company's ability to cover its interest obligations. Investors and creditors may monitor these fluctuations to assess the company's financial health and ability to meet its debt obligations.