SM Energy Co (SM)
Solvency ratios
| 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 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 | 2.02 | 1.98 | 1.73 | 1.73 | 1.76 | 1.79 | 1.82 | 1.82 | 1.85 | 1.97 | 2.18 | 2.55 | 2.54 | 3.09 | 3.25 | 2.83 | 2.47 | 2.34 | 2.31 | 2.40 |
SM Energy Co's solvency ratios indicate a strong financial position with consistently low levels of debt when compared to its assets, capital, and equity. The debt-to-assets, debt-to-capital, and debt-to-equity ratios have remained at 0.00 throughout the reported periods, suggesting that the company relies minimally on external debt to finance its operations.
The financial leverage ratio, which measures the company's reliance on debt financing, has shown a declining trend over the years. Starting at 2.40 in March 31, 2020, the ratio decreased steadily to 1.73 by June 30, 2024. This indicates that the company has been reducing its debt levels relative to its equity, which is a positive sign of improved financial stability and lower financial risk.
Overall, SM Energy Co's solvency ratios reflect a conservative financial structure and a well-managed balance between debt and equity, implying a solid foundation for future growth and sustainability.
Coverage ratios
| 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | 7.89 | 9.57 | 10.80 | 10.12 | 10.82 | 11.37 | 14.63 | 15.63 | 15.45 | 14.43 | 10.45 | 5.86 | 1.28 | -1.75 | -2.96 | -2.39 | -3.74 | -3.53 | -2.51 | -1.31 |
The interest coverage ratio of SM Energy Co has shown a significant improvement over the past few years. The ratio was negative in the early quarters of 2020, indicating that the company's operating income was insufficient to cover its interest expenses.
However, starting from the end of 2021, the interest coverage ratio turned positive and increased steadily throughout 2022 and 2023. This improvement suggests that the company's operating income has strengthened, allowing it to comfortably cover its interest obligations.
By the end of 2024, the interest coverage ratio was around 7.89, indicating that SM Energy Co's operating income was nearly 7.89 times its interest expenses. This level of interest coverage is generally considered healthy and reflects the company's ability to meet its debt obligations without significant financial strain. Overall, the trend in SM Energy Co's interest coverage ratio demonstrates a positive financial performance and improved financial health.