Southwestern Energy Company (SWN)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.33 | 0.34 | 0.44 | 0.61 | 0.33 |
| Debt-to-capital ratio | 0.40 | 0.50 | 0.67 | 0.86 | 0.41 |
| Debt-to-equity ratio | 0.67 | 1.02 | 2.04 | 6.34 | 0.69 |
| Financial leverage ratio | 2.04 | 2.99 | 4.65 | 10.38 | 2.07 |
Southwestern Energy Company's solvency ratios indicate its ability to meet its long-term debt obligations. The debt-to-assets ratio has been relatively stable over the past five years, decreasing from 0.61 in 2020 to 0.33 in 2019, suggesting the company has been managing its debt levels effectively in relation to its total assets.
The debt-to-capital ratio has also shown a decreasing trend, from 0.86 in 2020 to 0.40 in 2023, indicating a lower reliance on debt to finance its operations and investments.
The debt-to-equity ratio has fluctuated significantly over the period, with a sharp increase in 2021 to 2.12 and a subsequent decrease to 0.67 in 2023. This indicates that the company's debt levels relative to its equity have varied widely, with a recent improvement in 2023.
The financial leverage ratio, which measures the proportion of debt in the company's capital structure, has shown a decrease from 10.38 in 2020 to 2.04 in 2023. This suggests that the company has reduced its financial leverage, indicating a stronger equity base relative to debt.
Overall, Southwestern Energy Company's solvency ratios have shown improvement over the past couple of years, indicating better management of debt and capital structure. However, the company should continue to monitor and maintain an optimal level of debt to ensure long-term financial stability.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 10.15 | 11.33 | 0.82 | -27.78 | 8.38 |
The interest coverage ratio measures a company's ability to meet its interest payments on outstanding debt. A higher ratio indicates a company is more capable of servicing its debt.
Southwestern Energy Company's interest coverage has fluctuated over the past five years. In 2023, the interest coverage ratio was 5.18, suggesting that the company generated $5.18 in operating income for every $1 of interest expense. This ratio indicates an adequate ability to cover interest payments, although not as high as in 2022 when it was 40.11.
The significant increase in the interest coverage ratio from 2020 (0.17) to 2021 (20.03) is noteworthy, indicating a substantial improvement in the company's ability to meet its interest obligations. However, the ratio decreased from 2022 to 2023, showing a lower ability to cover interest payments compared to the previous year.
Overall, Southwestern Energy Company's interest coverage ratio has varied widely in recent years, reflecting changes in the company's financial performance and debt obligations. Investors and creditors may monitor this ratio closely to assess the company's capacity to handle its debt burden effectively.