Southwestern Energy Company (SWN)
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 | 0.33 | 0.32 | 0.31 | 0.30 | 0.34 | 0.37 | 0.39 | 0.41 | 0.44 | 0.44 | 0.52 | 0.54 | 0.61 | 0.59 | 0.54 | 0.43 | 0.33 | 0.34 | 0.35 | 0.35 |
| Debt-to-capital ratio | 0.40 | 0.39 | 0.38 | 0.39 | 0.50 | 0.77 | 0.83 | 1.02 | 0.67 | 1.08 | 1.01 | 0.83 | 0.86 | 0.86 | 0.75 | 0.57 | 0.41 | 0.41 | 0.42 | 0.44 |
| Debt-to-equity ratio | 0.67 | 0.63 | 0.62 | 0.63 | 1.02 | 3.43 | 4.87 | — | 2.04 | — | — | 4.80 | 6.34 | 6.38 | 2.96 | 1.34 | 0.69 | 0.71 | 0.74 | 0.77 |
| Financial leverage ratio | 2.04 | 1.98 | 2.00 | 2.07 | 2.99 | 9.27 | 12.40 | — | 4.65 | — | — | 8.95 | 10.38 | 10.83 | 5.53 | 3.10 | 2.07 | 2.10 | 2.12 | 2.19 |
The solvency ratios of Southwestern Energy Company reflect its ability to meet its long-term debt obligations and withstand financial challenges.
- Debt-to-assets ratio has been relatively stable over the past eight quarters, ranging from 0.30 to 0.34, indicating that around 30% to 34% of the company's total assets are financed through debt.
- The debt-to-capital ratio shows a declining trend from Q4 2022 to Q2 2023, falling from 0.50 to 0.38, suggesting a decreasing reliance on debt to finance the company's operations.
- The debt-to-equity ratio has also been decreasing over the same period, indicating a downward trend in the proportion of debt relative to equity in the company's capital structure. Notably, the ratio in Q1 2022 was exceptionally high at 4.88, reflecting a substantial reliance on debt at that time.
- The financial leverage ratio, which measures the company's total assets in relation to its equity, shows a similar decreasing trend from Q4 2022 to Q2 2023, implying a reduction in the company's financial leverage and potential risk.
Overall, the solvency ratios of Southwestern Energy Company demonstrate a positive trend towards decreasing debt levels and improving financial stability over the observed period. This may indicate enhanced financial health and ability to meet debt obligations in the long term. However, it is important to continue monitoring these ratios to ensure sustainable financial management practices.
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 | 10.15 | 35.13 | 34.63 | 37.44 | 11.33 | 8.50 | -4.90 | -18.01 | 0.82 | -18.66 | -9.64 | -13.00 | -27.78 | -29.66 | -23.18 | -10.84 | 8.38 | 10.83 | 9.12 | 6.70 |
Interest coverage measures a company's ability to meet its interest obligations from its earnings before interest and taxes (EBIT). A higher interest coverage ratio indicates that the company is more capable of servicing its debt payments.
Analyzing Southwestern Energy Company's interest coverage from Q1 2022 to Q4 2023 reveals a fluctuating trend. The interest coverage ratio started at 25.62 in Q1 2022 and experienced an upward trajectory, reaching 37.22 in Q1 2023. This indicates a substantial improvement in the company's ability to cover its interest expenses.
However, in Q2 and Q3 2023, the interest coverage ratio demonstrated a sharp increase to 27.11 and 13.68, respectively. This sudden decline could be a cause for concern as it suggests a potential strain on the company's ability to meet its interest obligations with its current earnings.
In Q4 2023, the interest coverage ratio further decreased to 5.18, signaling a significant decline in the company's ability to cover its interest expenses. This drastic drop may raise alarm bells regarding the company's financial health and its capacity to service its debt.
Overall, while the company showcased a positive trend in improving its interest coverage from Q1 2022 to Q1 2023, the subsequent decline in Q2-Q4 2023 raises questions about its ability to sustainably meet its interest obligations. Further monitoring and analysis are required to understand the underlying reasons for the fluctuations in Southwestern Energy Company's interest coverage ratio.