Analysis of Solvency Ratios
Quarterly Data
Solvency ratios also known as long-term debt ratios measure a company ability to meet long-term obligations.
Solvency Ratios (Summary)
Diamondback Energy Inc., solvency ratios (quarterly data)
Based on: 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
- Debt to Equity Ratio
- The debt to equity ratio displayed a generally increasing trend from the first quarter of 2018 through the end of 2020, rising from 0.31 to a peak of 0.72 in the first quarter of 2021. Following this peak, the ratio showed a consistent decline through the third quarter of 2022, reaching 0.39. This pattern indicates an initial increase in leverage relative to shareholders' equity, followed by a progressive reduction in leverage.
- Debt to Capital Ratio
- This ratio mirrored the debt to equity ratio trend somewhat, with an increase from 0.24 in early 2018 to 0.42 by the first quarter of 2021. Subsequently, it decreased steadily to 0.28 by the third quarter of 2022. The increase suggests growing reliance on debt within the company’s capital structure up to 2021, and a move towards deleveraging thereafter.
- Debt to Assets Ratio
- The debt to assets ratio followed a similar trajectory, climbing from 0.21 in the first quarter of 2018 to 0.35 in the first quarter of 2021. Thereafter, it steadily declined to 0.22 by the third quarter of 2022. This ratio reflects the proportion of total assets financed by debt, aligning with the overall trend of increased leverage up to early 2021 and subsequent reduction.
- Financial Leverage Ratio
- The financial leverage ratio rose consistently from 1.52 in early 2018 to a peak of 2.06 in the first quarter of 2021, indicating increasing asset base relative to equity. Following the peak, the ratio gradually decreased to 1.72 by the third quarter of 2022. This decrease aligns with the observed deleveraging trend across other leverage ratios, indicating reduced risk exposure and a shift towards a more conservative capital structure.
Debt Ratios
Debt to Equity
Diamondback Energy Inc., debt to equity calculation (quarterly data)
| 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 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||
| Current maturities of long-term debt | 10) | 55) | 45) | 45) | 20) | —) | 191) | 191) | 191) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | ||||||
| Long-term debt, excluding current maturities | 5,347) | 5,401) | 5,803) | 6,642) | 6,925) | 7,360) | 7,465) | 5,624) | 5,656) | 5,952) | 5,677) | 5,371) | 4,761) | 4,472) | 4,670) | 4,464) | 2,332) | 1,967) | 1,702) | ||||||
| Total debt | 5,357) | 5,456) | 5,848) | 6,687) | 6,945) | 7,360) | 7,656) | 5,815) | 5,847) | 5,952) | 5,677) | 5,371) | 4,761) | 4,472) | 4,670) | 4,464) | 2,332) | 1,967) | 1,702) | ||||||
| Total Diamondback Energy, Inc. stockholders’ equity | 13,843) | 13,316) | 12,743) | 12,088) | 11,483) | 10,926) | 10,673) | 8,794) | 9,552) | 10,714) | 12,826) | 13,249) | 14,050) | 14,004) | 13,773) | 13,699) | 5,933) | 5,631) | 5,417) | ||||||
| Solvency Ratio | |||||||||||||||||||||||||
| Debt to equity1 | 0.39 | 0.41 | 0.46 | 0.55 | 0.60 | 0.67 | 0.72 | 0.66 | 0.61 | 0.56 | 0.44 | 0.41 | 0.34 | 0.32 | 0.34 | 0.33 | 0.39 | 0.35 | 0.31 | ||||||
| Benchmarks | |||||||||||||||||||||||||
| Debt to Equity, Competitors2 | |||||||||||||||||||||||||
| Chevron Corp. | 0.15 | 0.17 | 0.20 | 0.23 | 0.27 | 0.32 | 0.34 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| ConocoPhillips | 0.35 | 0.34 | 0.38 | 0.44 | 0.45 | 0.45 | 0.46 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Exxon Mobil Corp. | 0.24 | 0.26 | 0.28 | 0.28 | 0.35 | 0.38 | 0.40 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
1 Q3 2022 Calculation
Debt to equity = Total debt ÷ Total Diamondback Energy, Inc. stockholders’ equity
= 5,357 ÷ 13,843 = 0.39
2 Click competitor name to see calculations.
- Total Debt
- The total debt level shows a general upward trend from March 2018 through June 2020, increasing from $1,702 million to a peak near $5,952 million. After this peak, debt levels stabilize somewhat and begin a gradual decline starting in March 2021, falling to approximately $5,357 million by September 2022. This pattern suggests initial aggressive leverage expansion followed by a modest reduction in debt over the later periods.
- Total Stockholders’ Equity
- Stockholders’ equity displays a significant increase from March 2018 to December 2018, with a sharp rise from about $5,417 million to $13,699 million. After December 2018, equity remains relatively stable with slight fluctuations through early 2020 and then experiences a temporary decrease until December 2020. From March 2021 onward, equity grows steadily again, reaching approximately $13,843 million by September 2022. This indicates capital growth with some degree of volatility around the 2020 period, likely influenced by market or operational factors.
- Debt to Equity Ratio
- The debt to equity ratio starts at a low of 0.31 in March 2018 and fluctuates moderately until the end of 2018. Starting in 2019, the ratio trends upwards, reaching a high of 0.72 in March 2021. This reflects increased leverage relative to equity during this time. Post-March 2021, there is a notable decline in the ratio, moving down to 0.39 by September 2022, which corresponds with the reduction in total debt and the growth in equity levels. This shift indicates a strengthening balance sheet and a lowered reliance on debt financing in the later periods.
- Overall Analysis
- The data reflect a period of expansion in both debt and equity up to late 2018, followed by elevated leverage through early 2021. The company managed to reduce its leverage ratio significantly after this peak, supported by both a reduction in debt and consistent equity growth. The fluctuations in these financial metrics suggest strategic adjustments in capital structure, aiming for a more balanced financial position with diminished financial risk as of the most recent periods.
Debt to Capital
Diamondback Energy Inc., debt to capital calculation (quarterly data)
| Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||
| Current maturities of long-term debt | 10) | 55) | 45) | 45) | 20) | —) | 191) | 191) | 191) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | ||||||
| Long-term debt, excluding current maturities | 5,347) | 5,401) | 5,803) | 6,642) | 6,925) | 7,360) | 7,465) | 5,624) | 5,656) | 5,952) | 5,677) | 5,371) | 4,761) | 4,472) | 4,670) | 4,464) | 2,332) | 1,967) | 1,702) | ||||||
| Total debt | 5,357) | 5,456) | 5,848) | 6,687) | 6,945) | 7,360) | 7,656) | 5,815) | 5,847) | 5,952) | 5,677) | 5,371) | 4,761) | 4,472) | 4,670) | 4,464) | 2,332) | 1,967) | 1,702) | ||||||
| Total Diamondback Energy, Inc. stockholders’ equity | 13,843) | 13,316) | 12,743) | 12,088) | 11,483) | 10,926) | 10,673) | 8,794) | 9,552) | 10,714) | 12,826) | 13,249) | 14,050) | 14,004) | 13,773) | 13,699) | 5,933) | 5,631) | 5,417) | ||||||
| Total capital | 19,200) | 18,772) | 18,591) | 18,775) | 18,428) | 18,286) | 18,329) | 14,609) | 15,399) | 16,666) | 18,503) | 18,620) | 18,811) | 18,476) | 18,443) | 18,164) | 8,266) | 7,599) | 7,119) | ||||||
| Solvency Ratio | |||||||||||||||||||||||||
| Debt to capital1 | 0.28 | 0.29 | 0.31 | 0.36 | 0.38 | 0.40 | 0.42 | 0.40 | 0.38 | 0.36 | 0.31 | 0.29 | 0.25 | 0.24 | 0.25 | 0.25 | 0.28 | 0.26 | 0.24 | ||||||
| Benchmarks | |||||||||||||||||||||||||
| Debt to Capital, Competitors2 | |||||||||||||||||||||||||
| Chevron Corp. | 0.13 | 0.15 | 0.17 | 0.18 | 0.22 | 0.24 | 0.26 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| ConocoPhillips | 0.26 | 0.25 | 0.28 | 0.31 | 0.31 | 0.31 | 0.32 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Exxon Mobil Corp. | 0.20 | 0.21 | 0.22 | 0.22 | 0.26 | 0.28 | 0.29 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
1 Q3 2022 Calculation
Debt to capital = Total debt ÷ Total capital
= 5,357 ÷ 19,200 = 0.28
2 Click competitor name to see calculations.
The analysis of the company's financial data over the presented periods reveals notable trends in its capital structure and indebtedness. Total debt exhibited a significant increase from early 2018 through the end of 2018, nearly doubling within that year. Specifically, total debt rose from approximately $1.7 billion at the beginning of 2018 to more than $4.4 billion by the end of that year. Following this peak, total debt levels fluctuated but remained generally elevated through 2019 and 2020, reaching the highest observed figure of around $7.7 billion in the first quarter of 2021. After this peak, debt declined steadily over the subsequent quarters through late 2022, decreasing to approximately $5.4 billion.
Total capital followed a somewhat similar trajectory but with less volatility. There was a substantial jump in total capital at the end of 2018, nearly doubling compared to previous quarters. After stabilizing at elevated levels throughout 2019, total capital showed a declining trend during 2020, decreasing from about $18.5 billion down to roughly $14.6 billion by the end of that year. The period from 2021 to 2022 showed recovery and gradual growth in total capital, ending at around $19.2 billion by the third quarter of 2022.
The debt to capital ratio provides insight into the relative proportion of debt financing within the company's capital structure. The ratio remained relatively stable and low, fluctuating between 0.24 and 0.29 until the end of 2018. Starting in 2019, the ratio rose progressively, peaking at 0.42 in the first quarter of 2021, indicating a higher reliance on debt within the capital mix. Subsequently, the ratio declined steadily through 2022 to about 0.28, suggesting a reduction in leverage and potentially a more conservative capital structure.
- Total debt
- Increased significantly in 2018, peaked in early 2021, then declined through 2022.
- Total capital
- Experienced a major increase at the end of 2018, decreased during 2020, then gradually recovered through 2022.
- Debt to capital ratio
- Stable and low until 2018 year-end, rose to a peak in early 2021, then declined steadily thereafter.
Overall, the data indicate a period of aggressive leveraging culminating in early 2021, followed by a de-leveraging phase through the subsequent quarters. The recovery in total capital alongside the reduction in the debt to capital ratio implies a strategic shift toward strengthening the company's balance sheet and reducing financial risk.
Debt to Assets
Diamondback Energy Inc., debt to assets calculation (quarterly data)
| Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||
| Current maturities of long-term debt | 10) | 55) | 45) | 45) | 20) | —) | 191) | 191) | 191) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | ||||||
| Long-term debt, excluding current maturities | 5,347) | 5,401) | 5,803) | 6,642) | 6,925) | 7,360) | 7,465) | 5,624) | 5,656) | 5,952) | 5,677) | 5,371) | 4,761) | 4,472) | 4,670) | 4,464) | 2,332) | 1,967) | 1,702) | ||||||
| Total debt | 5,357) | 5,456) | 5,848) | 6,687) | 6,945) | 7,360) | 7,656) | 5,815) | 5,847) | 5,952) | 5,677) | 5,371) | 4,761) | 4,472) | 4,670) | 4,464) | 2,332) | 1,967) | 1,702) | ||||||
| Total assets | 23,843) | 23,448) | 23,331) | 22,898) | 22,639) | 22,335) | 21,996) | 17,619) | 18,760) | 20,337) | 23,386) | 23,531) | 23,553) | 23,171) | 22,268) | 21,596) | 9,807) | 8,954) | 8,225) | ||||||
| Solvency Ratio | |||||||||||||||||||||||||
| Debt to assets1 | 0.22 | 0.23 | 0.25 | 0.29 | 0.31 | 0.33 | 0.35 | 0.33 | 0.31 | 0.29 | 0.24 | 0.23 | 0.20 | 0.19 | 0.21 | 0.21 | 0.24 | 0.22 | 0.21 | ||||||
| Benchmarks | |||||||||||||||||||||||||
| Debt to Assets, Competitors2 | |||||||||||||||||||||||||
| Chevron Corp. | 0.09 | 0.10 | 0.12 | 0.13 | 0.16 | 0.18 | 0.19 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| ConocoPhillips | 0.18 | 0.18 | 0.20 | 0.22 | 0.23 | 0.23 | 0.24 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Exxon Mobil Corp. | 0.12 | 0.13 | 0.13 | 0.14 | 0.17 | 0.18 | 0.19 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
1 Q3 2022 Calculation
Debt to assets = Total debt ÷ Total assets
= 5,357 ÷ 23,843 = 0.22
2 Click competitor name to see calculations.
- Total Debt
- The total debt increased steadily from $1,702 million in March 2018 to a peak of $7,656 million in March 2021. Following this peak, there was a gradual decline over the subsequent quarters, with total debt decreasing to $5,357 million by September 2022.
- Total Assets
- Total assets showed consistent growth from $8,225 million in March 2018 to $23,843 million in September 2022. Notably, there was a sharp increase between the end of 2018 and early 2019, rising from $21,596 million to $22,268 million, after which the asset base continued to expand but at a slower, more steady pace.
- Debt to Assets Ratio
- The debt to assets ratio remained relatively stable between 0.21 and 0.24 from March 2018 through December 2018. It then decreased slightly during most of 2019, reaching a low of 0.19 in June 2019, before trending upwards again in 2020 and early 2021, peaking at 0.35 in March 2021. After this peak, the ratio steadily declined, reaching 0.22 by September 2022, reflecting a reduction in leverage relative to asset growth.
- Overall Analysis
- The company exhibited a significant increase in both debt and asset levels over the observed period, with total debt rising sharply until early 2021 followed by a reduction phase. Total assets more than doubled, indicating considerable expansion or acquisition activity. The debt to assets ratio suggests a cyclical pattern of leverage: an initial increase in indebtedness relative to assets was followed by deleveraging starting in 2021. This pattern may indicate a strategic shift towards balance sheet strengthening and risk reduction after a period of increased financial leverage.
Financial Leverage
Diamondback Energy Inc., financial leverage calculation (quarterly data)
| Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||
| Total assets | 23,843) | 23,448) | 23,331) | 22,898) | 22,639) | 22,335) | 21,996) | 17,619) | 18,760) | 20,337) | 23,386) | 23,531) | 23,553) | 23,171) | 22,268) | 21,596) | 9,807) | 8,954) | 8,225) | ||||||
| Total Diamondback Energy, Inc. stockholders’ equity | 13,843) | 13,316) | 12,743) | 12,088) | 11,483) | 10,926) | 10,673) | 8,794) | 9,552) | 10,714) | 12,826) | 13,249) | 14,050) | 14,004) | 13,773) | 13,699) | 5,933) | 5,631) | 5,417) | ||||||
| Solvency Ratio | |||||||||||||||||||||||||
| Financial leverage1 | 1.72 | 1.76 | 1.83 | 1.89 | 1.97 | 2.04 | 2.06 | 2.00 | 1.96 | 1.90 | 1.82 | 1.78 | 1.68 | 1.65 | 1.62 | 1.58 | 1.65 | 1.59 | 1.52 | ||||||
| Benchmarks | |||||||||||||||||||||||||
| Financial Leverage, Competitors2 | |||||||||||||||||||||||||
| Chevron Corp. | 1.64 | 1.68 | 1.70 | 1.72 | 1.77 | 1.82 | 1.83 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| ConocoPhillips | 1.93 | 1.87 | 1.90 | 2.00 | 1.98 | 1.93 | 1.94 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Exxon Mobil Corp. | 1.99 | 2.07 | 2.10 | 2.01 | 2.10 | 2.13 | 2.13 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
1 Q3 2022 Calculation
Financial leverage = Total assets ÷ Total Diamondback Energy, Inc. stockholders’ equity
= 23,843 ÷ 13,843 = 1.72
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals several notable trends in the company's balance sheet and financial leverage over the observed period.
- Total Assets
- Total assets display a general upward trend from March 2018 through September 2019, increasing from $8,225 million to a peak of approximately $23,553 million. This is followed by a decline starting in March 2020, bottoming out around $17,619 million in December 2020. After this low point, assets steadily recover through September 2022, reaching about $23,843 million. The substantial spike in late 2018 suggests a significant acquisition, revaluation, or capital investment, while the subsequent decline in 2020 likely reflects asset sales, impairments, or the economic impact experienced during that period. The recovery post-2020 indicates stabilization and gradual growth in asset base.
- Total Stockholders’ Equity
- Stockholders’ equity also follows a similar pattern, rising steadily from $5,417 million in March 2018 to $14,050 million by September 2019, then sharply dropping to approximately $8,794 million by December 2020. From 2021 onward, equity shows consistent growth, climbing to $13,843 million by September 2022. The strong increase in equity until late 2019, coupled with the total assets surge, might reflect retained earnings growth and capital infusion. The marked reduction in 2020 may imply asset write-downs, dividend payouts exceeding earnings, or other equity-reducing events. The resumption of equity growth suggests improved profitability or capital structure management following the downturn.
- Financial Leverage
- The financial leverage ratio (total assets divided by stockholders’ equity) exhibits a gradual increase from 1.52 in March 2018 to a peak of 2.06 in March 2021, indicating a growing reliance on debt or liabilities relative to equity during this time. After peaking, the ratio declines to 1.72 by September 2022, signaling an improving capital structure with reduced leverage. The rising leverage through 2020 and early 2021 might be connected to the company increasing its debt to finance assets or cover operational needs during challenging times. The subsequent decline points to deleveraging efforts or equity strengthening through earnings retention or capital raising.
Overall, the financial data suggests the company experienced significant growth in asset base and equity through 2018-2019, followed by a contraction coinciding with broader market or company-specific challenges around 2020. Since then, the company has taken steps to stabilize and improve its financial position, as evidenced by recovering assets and equity and a declining financial leverage ratio, indicating a more balanced capital structure.