ProPetro Holding Corp (PUMP)
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 | 1.50 | 1.48 | 1.40 | 1.28 | 1.21 |
ProPetro Holding Corp has consistently maintained a strong solvency position based on the solvency ratios provided.
1. Debt-to-assets ratio: ProPetro has consistently reported a debt-to-assets ratio of 0.00 across all the years analyzed. This indicates that the company has not relied on debt to finance its assets, reflecting a robust financial position in terms of asset funding.
2. Debt-to-capital ratio: Similar to the debt-to-assets ratio, the debt-to-capital ratio for ProPetro has been consistently reported at 0.00 for each year. This signifies that the company has not used debt extensively to fund its capital structure, thereby demonstrating a strong financial standing in terms of capital utilization.
3. Debt-to-equity ratio: ProPetro's debt-to-equity ratio has also been recorded at 0.00 for each year studied. This implies that the company's debt levels have been minimal in relation to its equity, indicating a low financial risk associated with debt obligations in comparison to shareholders' equity.
4. Financial leverage ratio: The financial leverage ratio for ProPetro has shown a slight increase over the years, from 1.21 in 2020 to 1.50 in 2024. While the ratio has gradually increased, it remains below 2.0, suggesting that the company's reliance on debt to finance its assets and operations is still moderate, indicating a balanced approach to capital structure management.
Overall, based on the solvency ratios provided, ProPetro Holding Corp exhibits a sound financial position with a strong solvency profile, as indicated by its low debt levels in relation to assets, capital, and equity, coupled with a reasonable financial leverage ratio over the years analyzed.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | -20.66 | 22.76 | 103.10 | -110.46 | -55.44 |
Based on the data provided, the interest coverage ratio of ProPetro Holding Corp has fluctuated significantly over the years.
On December 31, 2020, the interest coverage ratio was -55.44, indicating that the company's earnings before interest and taxes (EBIT) were insufficient to cover its interest expenses at that time. This suggests a potential risk of financial distress due to the significant shortfall in covering interest obligations.
By December 31, 2021, the interest coverage ratio worsened to -110.46, reflecting a further decline in the company's ability to meet its interest payments with its operating income. This implies a continued strain on the company's financial health and viability.
However, there was a notable turnaround in the interest coverage ratio by December 31, 2022, where it improved significantly to 103.10. This indicates a robust improvement in ProPetro Holding Corp's ability to meet its interest obligations with its EBIT, showing a strong financial position and reduced risk of default.
Subsequently, by December 31, 2023, the interest coverage ratio declined to 22.76, suggesting a slight decrease in the company's ability to cover its interest expenses compared to the previous year. Although the ratio remained positive, it indicates a slight weakening in financial strength.
Finally, as of December 31, 2024, the interest coverage ratio deteriorated to -20.66, returning to a negative value. This signifies that once again, the company's EBIT was insufficient to cover its interest expenses, highlighting a potential financial strain and risk.
In conclusion, the analysis of ProPetro Holding Corp's interest coverage reveals significant fluctuations in the company's ability to meet its interest obligations over the years, indicating varying levels of financial health and potential risk of default.