Occidental Petroleum Corporation (OXY)

Interest coverage

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	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
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	5,245,000	6,893,000	7,026,000	6,696,000	7,215,000	8,015,000	9,909,000	13,452,000	15,093,000	14,902,000	12,635,000	8,063,000	5,319,000	1,888,000	-3,483,000	-11,952,000	-14,460,000	-13,952,000	-10,467,000	-1,432,000
Interest expense (ttm)	US$ in thousands	1,175,000	1,095,000	1,013,000	991,000	945,000	958,000	1,013,000	897,000	1,030,000	1,155,000	1,319,000	1,590,000	1,614,000	1,638,000	1,542,000	1,467,000	1,424,000	1,449,000	1,477,000	1,320,000
Interest coverage		4.46	6.29	6.94	6.76	7.63	8.37	9.78	15.00	14.65	12.90	9.58	5.07	3.30	1.15	-2.26	-8.15	-10.15	-9.63	-7.09	-1.08

December 31, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $5,245,000K ÷ $1,175,000K
= 4.46

Occidental Petroleum Corporation's interest coverage ratio demonstrates a volatile trend over the provided periods. The interest coverage ratio reflects the company's ability to meet its interest obligations with its operating income.

From March 31, 2020, to December 31, 2021, the interest coverage ratio remained negative, indicating that OXY's operating income was not sufficient to cover its interest expenses during these periods. This suggests a potential risk of default on debt obligations.

However, starting from March 31, 2022, the interest coverage ratio began to improve, turning positive in September 2021 and continuing to increase through December 31, 2024. The positive trend indicates that the company's operating income has strengthened enough to comfortably cover its interest expenses, reflecting a healthier financial position.

While the increase in the interest coverage ratio is a positive sign, it is essential for Occidental Petroleum Corporation to sustain and further enhance this trend to ensure long-term financial stability and reliability in meeting its debt obligations.