Patterson-UTI Energy Inc (PTEN)

Patterson-UTI Energy Inc's solvency ratios show a generally stable and healthy financial position over the years. The Debt-to-assets ratio, which indicates the proportion of the company's assets financed by debt, has ranged from 0.17 to 0.29 over the five-year period, suggesting a conservative approach to debt management. This ratio decreased notably in 2023, indicating a reduction in debt relative to assets.

The Debt-to-capital ratio, which measures the proportion of capital funded by debt, fluctuated between 0.20 and 0.35 during the same period. This ratio declined in 2023, signaling a lower reliance on debt to finance operations.

The Debt-to-equity ratio, reflecting the level of debt financing relative to equity, ranged from 0.25 to 0.53 over the five years. The company experienced a significant decrease in this ratio in 2023, indicating a higher proportion of equity funding compared to debt.

The Financial leverage ratio, which assesses the company's total debt relative to its equity, varied between 1.54 and 1.89 throughout the period. This ratio peaked in 2022 but remained within a reasonable range, suggesting the company's ability to manage its debt obligations without excessive risk.

Overall, Patterson-UTI Energy Inc's solvency ratios demonstrate prudent debt management and a stable financial structure, highlighting the company's ability to meet its financial obligations and maintain a strong solvency position.

---

Coverage ratios

Patterson-UTI Energy Inc's interest coverage ratio has shown significant fluctuations over the years. In December 31, 2020 and 2021, the company had negative interest coverage ratios of -21.84 and -16.09, respectively, indicating that the company's operating income was not sufficient to cover its interest expenses during these periods.

However, there was a notable improvement in the interest coverage ratio in December 31, 2022 and 2023, with ratios of 5.17 and 6.82, respectively. This indicates that the company's operating income was more than sufficient to cover its interest expenses during these years, reflecting a more favorable financial position.

Unfortunately, the interest coverage ratio deteriorated again by December 31, 2024, with a negative ratio of -12.36. This decrease suggests that the company's operating income once again did not adequately cover its interest obligations, signaling potential financial stress.

Overall, while there was a positive trend in the interest coverage ratio in the middle years, the significant fluctuations raise concerns about the company's ability to consistently meet its interest payments from operating income. It would be important for Patterson-UTI Energy Inc to closely monitor and improve its interest coverage ratio to ensure financial stability and sustainability.