SM Energy Co (SM)

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	0.25	0.26	0.26	0.27	0.55	0.56	0.59	0.73	0.72	0.82	0.86	0.87	0.44	0.42	0.04	0.47	0.41	0.42	0.43	0.42
Debt-to-capital ratio	0.30	0.32	0.32	0.33	0.50	0.52	0.56	0.65	0.65	0.72	0.74	0.71	0.52	0.50	0.08	0.53	0.49	0.49	0.49	0.49
Debt-to-equity ratio	0.44	0.46	0.48	0.49	1.02	1.10	1.28	1.87	1.82	2.54	2.79	2.48	1.10	1.00	0.08	1.13	0.95	0.96	0.97	0.96
Financial leverage ratio	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	2.29	2.27	2.28	2.29

The solvency ratios of SM Energy Co, as indicated in the table, demonstrate the company's ability to meet its long-term financial obligations.

1. Debt-to-assets ratio: This ratio measures the proportion of a company's assets that are financed by debt. SM Energy Co's debt-to-assets ratio has shown a decreasing trend over the quarters, indicating that the company is relying less on debt to finance its assets. This suggests a stronger financial position as a lower ratio implies a lower risk of insolvency.

2. Debt-to-capital ratio: This ratio indicates the percentage of a company's capital structure that is financed by debt. SM Energy Co's debt-to-capital ratio has also declined consistently. A decreasing trend in this ratio suggests that the company is moving towards a more balanced capital structure, with a lower reliance on debt financing.

3. Debt-to-equity ratio: This ratio shows the proportion of a company's equity that is financed by debt. SM Energy Co's debt-to-equity ratio has decreased over the quarters, indicating that the company is becoming less leveraged and is relying more on equity for financing, which is a positive sign for solvency.

4. Financial leverage ratio: This ratio measures the extent to which a company is using debt to finance its operations. SM Energy Co's financial leverage ratio has shown a downward trend, signifying a reduction in the company's reliance on debt to generate profits. A decreasing financial leverage ratio suggests a lower risk of financial distress.

In summary, the solvency ratios of SM Energy Co have been improving over the quarters, reflecting a stronger financial position with reduced reliance on debt financing. This indicates improved solvency and lower financial risk for the company.

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	10.98	11.47	16.21	16.36	12.60	11.94	7.37	3.25	1.29	-2.65	-3.92	-3.30	-4.84	-4.40	-3.34	-2.19	-0.45	2.86	1.39	1.08

The interest coverage ratio for SM Energy Co has demonstrated consistent improvement over the past eight quarters, reflecting the company's ability to generate earnings sufficient to cover its interest expenses. The ratio has been steadily increasing from 3.43 in Q1 2022 to 16.98 in Q1 2023, indicating a strong financial position and reduced financial risk. The most recent ratio of 13.75 in Q4 2023 continues to suggest that the company has a strong capacity to meet its interest obligations with its operating income. Overall, the trend in interest coverage ratios reflects a positive financial performance and effective management of debt obligations by SM Energy Co.