Phillips 66 (PSX)
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 | 2.65 | 2.47 | 2.59 | 2.90 | 2.88 |
Based on the solvency ratios of Phillips 66, we can see that the company has maintained a consistently low level of indebtedness over the years. The debt-to-assets ratio, debt-to-capital ratio, and debt-to-equity ratio have all been at 0.00 for each year from 2020 to 2024. This indicates that the company has not relied heavily on debt to finance its operations and investments, which is generally a positive sign for solvency.
However, it's important to note that while the debt ratios are low, the financial leverage ratio has shown some fluctuations over the years. The financial leverage ratio, which was 2.88 in 2020, increased to 2.90 in 2021, decreased to 2.59 in 2022, and further decreased to 2.47 in 2023 before rising to 2.65 in 2024.
Overall, the low debt ratios coupled with the fluctuating financial leverage ratio suggest that Phillips 66 has been managing its capital structure prudently, with a focus on maintaining a healthy balance between debt and equity to support its operations and growth initiatives.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 3.82 | 11.23 | 23.77 | 3.84 | -8.57 |
The interest coverage ratio for Phillips 66 has shown significant fluctuations over the years based on the provided data.
As of December 31, 2020, the interest coverage ratio was -8.57, indicating that the company's earnings before interest and taxes (EBIT) were insufficient to cover its interest expenses, raising concerns about its ability to meet its debt obligations.
However, by the end of 2021, there was an improvement in the interest coverage ratio to 3.84, suggesting that the company's EBIT was able to cover its interest expenses nearly four times over. This improvement indicates a better financial position compared to the previous year.
The interest coverage ratio further strengthened in 2022, reaching a significant level of 23.77, signaling a substantial increase in the company's ability to cover its interest payments, reflecting strong earnings relative to its interest expenses.
In 2023, although the interest coverage ratio decreased from the previous year, it remained at 11.23, indicating that Phillips 66 continued to have a healthy cushion to meet its interest obligations comfortably.
However, by the end of 2024, the interest coverage ratio dropped to 3.82, signaling a decrease in the company's ability to cover its interest expenses compared to the previous year.
Overall, the analysis of Phillips 66's interest coverage ratio suggests varying levels of financial strength and ability to meet debt obligations over the years, underscoring the importance of monitoring this ratio for assessing the company's financial health and risk profile.