Valaris Ltd (VAL)
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 | 1.97 | 2.05 | 2.03 | 2.15 | 2.17 | 2.90 | 2.44 | 2.18 | 2.20 | 2.32 | 2.42 | 2.58 | 2.46 | 2.51 | 2.39 | 3.45 | 2.94 | 2.86 | 2.51 | 2.23 |
Based on the solvency ratios of Valaris Ltd, we observe the following trends:
1. Debt-to-Assets Ratio: The debt-to-assets ratio has consistently remained at 0.00 over the years. This indicates that the company has not relied heavily on debt to finance its assets, which suggests a strong financial position and low risk of insolvency.
2. Debt-to-Capital Ratio: Similar to the debt-to-assets ratio, the debt-to-capital ratio has consistently been 0.00 across all reporting periods. This reaffirms the company's prudent debt management practices and a healthy balance between debt and equity in its capital structure.
3. Debt-to-Equity Ratio: The debt-to-equity ratio has also remained at 0.00 throughout the years. This signifies that Valaris Ltd has not financed its operations significantly through shareholder equity, indicating a conservative financial approach.
4. Financial Leverage Ratio: The financial leverage ratio has shown fluctuations over the years, ranging from 1.97 to 3.45. Despite some variability, the ratio has generally trended downwards towards the later reporting periods. A lower financial leverage ratio indicates lower financial risk and a stronger ability to meet financial obligations.
In conclusion, Valaris Ltd demonstrates a robust solvency position with negligible debt levels, a balanced capital structure, and a decreasing trend in financial leverage ratio, reflecting sound financial management practices and a reduced risk of financial distress.
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 | 5.37 | 4.37 | 3.77 | 2.35 | 1.83 | 2.04 | 3.48 | 6.78 | 5.96 | 4.89 | 2.95 | -81.99 | -132.55 | -199.78 | -72.77 | -14.75 | -7.93 | -4.51 | -3.83 | -2.23 |
The interest coverage ratio of Valaris Ltd, a measure of its ability to cover interest expenses with its earnings before interest and taxes (EBIT), has fluctuated significantly over the past few years.
From March 31, 2020, to September 30, 2021, the company experienced negative interest coverage ratios, indicating that its EBIT was insufficient to cover its interest expenses during this period. The ratios worsened during this time, reaching a low of -199.78 on September 30, 2021, suggesting a significant strain on the company's financial position.
However, starting from June 30, 2022, the interest coverage ratio began to improve, turning positive and showing a steady upward trend. By December 31, 2024, the ratio had reached a healthy level of 5.37, indicating that Valaris Ltd's earnings were more than sufficient to cover its interest obligations.
Overall, the improvement in the interest coverage ratio from negative to positive values over the period reflects a positive trend in the company's ability to meet its interest payments using its operating earnings. This suggests a strengthening financial position and a reduced risk of default on debt obligations.