Phillips 66 (PSX)
Solvency ratios
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 2.47 | 2.52 | 2.50 | 2.55 | 2.59 | 2.74 | 2.59 | 2.78 | 2.90 | 3.11 | 3.14 | 3.09 | 2.88 | 2.75 | 2.63 | 2.50 | 2.36 | 2.36 | 2.33 | 2.39 |
The solvency ratios of Phillips 66 provide insight into the company's ability to meet its long-term financial obligations.
1. Debt-to-assets ratio: This ratio shows the proportion of the company's assets that are financed by debt. Phillips 66's debt-to-assets ratio has been relatively stable, ranging from 0.22 to 0.27. This indicates that, on average, around 22% to 27% of the company's assets are funded by debt over the past eight quarters.
2. Debt-to-capital ratio: The debt-to-capital ratio measures the extent to which a company uses debt to finance its operations relative to its total capital structure. Phillips 66's debt-to-capital ratio has been consistent, hovering around 0.37 to 0.40. This suggests that the company relies on debt for about 37% to 40% of its total capital.
3. Debt-to-equity ratio: The debt-to-equity ratio assesses the level of financial leverage a company uses to support its operations. Phillips 66's debt-to-equity ratio has varied between 0.58 and 0.66. This indicates that the company's shareholders' equity is responsible for roughly 58% to 66% of its financing, while the rest is funded by debt.
4. Financial leverage ratio: The financial leverage ratio reflects the company's level of debt relative to its equity and measures how much the company depends on debt to finance its assets. Phillips 66's financial leverage ratio has fluctuated between 2.47 and 2.78. The trend shows that for every dollar of equity, the company has between $2.47 and $2.78 of debt.
Overall, the solvency ratios of Phillips 66 imply a relatively stable and manageable level of debt in relation to its assets, capital, equity, and overall financial structure over the analyzed eight quarters. A consistent monitoring of these ratios will be necessary to ensure the company maintains a healthy balance between debt and equity financing.
Coverage ratios
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | 8.57 | 7.52 | 11.30 | 18.58 | 17.62 | 17.31 | 7.54 | -0.52 | -3.95 | 26.46 | 25.09 | 24.69 | 17.21 | -17.06 | -13.95 | -11.77 | 647.17 | 242.33 | 125.74 | 81.07 |
Phillips 66's interest coverage ratio has shown strong fluctuations over the past eight quarters, ranging from a low of 9.10 in Q1 2022 to a high of 25.42 in Q1 2023. The interest coverage ratio measures the company's ability to meet its interest payment obligations on outstanding debt. A higher ratio indicates that the company is more capable of covering its interest expenses with its operating income.
The trend in Phillips 66's interest coverage ratio reveals an overall improvement from 2022 to 2023, with the ratio consistently increasing over the quarters. This improvement suggests that the company's operating income has been sufficient to cover its interest payments with greater ease over time.
The substantial increase in interest coverage ratio from Q1 2023 to Q2 2023, and its subsequent maintenance at relatively high levels in Q3 and Q4 2023, indicates a significant enhancement in the company's financial strength and ability to service its debt obligations. This trend bodes well for Phillips 66's financial health and indicates a positive outlook for its ability to manage its debt burden effectively.