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)
Anadarko Petroleum Corp., solvency ratios (quarterly data)
Based on: 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31), 10-K (reporting date: 2013-12-31), 10-Q (reporting date: 2013-09-30), 10-Q (reporting date: 2013-06-30), 10-Q (reporting date: 2013-03-31).
The analysis of the financial ratios over the observed periods reveals several noteworthy trends regarding the company’s capital structure and financial health.
- Debt to Equity Ratio
- This ratio exhibits a gradual increase overall, starting at 0.65 in the first quarter of 2013 and reaching 1.44 by the third quarter of 2017. The increase is particularly marked from 2014 onward, indicating a rising reliance on debt financing relative to shareholders' equity. The peak values occur between 2015 and early 2016, followed by a slight stabilization although remaining at elevated levels compared to the initial periods.
- Debt to Capital Ratio
- The debt to capital ratio shows a similar upward trend, moving from approximately 0.39 in early 2013 to around 0.59 by late 2017. This indicates an increasing proportion of debt in the company’s total capital base, reinforcing the observation of greater leverage taken on over time. The ratio notably rises sharply after 2014 and sustains higher levels throughout subsequent periods.
- Debt to Assets Ratio
- Over the timeline, the debt to assets ratio climbs from roughly 0.24 to 0.36, reflecting a higher percentage of assets being financed through debt. The incremental rise is gradual but consistent, particularly from 2014 onward, pointing to an increasing financial risk exposure tied to asset financing strategies.
- Financial Leverage
- Financial leverage, which measures the extent of asset financing via debt relative to equity, increases from about 2.5 times to near 4 times across the period. This upward movement aligns with the trends in debt ratios, suggesting growing use of debt to amplify asset acquisition or operations. The leverage jumps significantly after 2013–2014, indicating a strategic shift or response to market conditions.
- Interest Coverage Ratio
- The interest coverage ratio demonstrates a concerning downward trend. Initially, the ratio was relatively strong, reaching values above 6 in mid-2013, implying comfortable ability to cover interest expenses with earnings. However, from 2014 onwards, the ratio plunges sharply into negative territory and remains below zero for the majority of the period analyzed. This indicates operating earnings have been insufficient to meet interest obligations consistently, revealing increased financial strain and potential liquidity challenges from 2014 through 2017.
In summary, the company has progressively increased its debt load relative to equity and total capital, elevating its financial leverage and exposure to debt-related risk. Concurrently, the deteriorating interest coverage ratio signals challenges in generating sufficient earnings to cover debt servicing costs, which could impede financial flexibility and increase vulnerability to market fluctuations. These trends suggest a shift towards more aggressive debt financing accompanied by pressure on earnings stability, highlighting areas for careful monitoring and potential risk mitigation.
Debt Ratios
Coverage Ratios
Debt to Equity
Anadarko Petroleum Corp., debt to equity calculation (quarterly data)
| Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | Dec 31, 2014 | Sep 30, 2014 | Jun 30, 2014 | Mar 31, 2014 | Dec 31, 2013 | Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||
| Short-term debt | 149) | 44) | 42) | 42) | 788) | 32) | 3,025) | 33) | 33) | 33) | 500) | —) | —) | —) | —) | 500) | —) | —) | —) | ||||||
| Long-term debt, excluding current portion | 15,424) | 15,436) | 15,284) | 15,281) | 15,090) | 15,641) | 15,726) | 15,718) | 15,892) | 16,025) | 16,365) | 15,092) | 14,728) | 13,414) | 13,569) | 13,065) | 13,647) | 13,538) | 13,663) | ||||||
| Total debt | 15,573) | 15,480) | 15,326) | 15,323) | 15,878) | 15,673) | 18,751) | 15,751) | 15,925) | 16,058) | 16,865) | 15,092) | 14,728) | 13,414) | 13,569) | 13,565) | 13,647) | 13,538) | 13,663) | ||||||
| Stockholders’ equity | 10,782) | 11,472) | 11,856) | 12,212) | 12,600) | 11,281) | 11,686) | 12,819) | 14,079) | 16,389) | 16,332) | 19,725) | 20,677) | 19,331) | 19,120) | 21,857) | 22,342) | 22,189) | 21,090) | ||||||
| Solvency Ratio | |||||||||||||||||||||||||
| Debt to equity1 | 1.44 | 1.35 | 1.29 | 1.25 | 1.26 | 1.39 | 1.60 | 1.23 | 1.13 | 0.98 | 1.03 | 0.77 | 0.71 | 0.69 | 0.71 | 0.62 | 0.61 | 0.61 | 0.65 | ||||||
| Benchmarks | |||||||||||||||||||||||||
| Debt to Equity, Competitors2 | |||||||||||||||||||||||||
| Chevron Corp. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| ConocoPhillips | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Exxon Mobil Corp. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31), 10-K (reporting date: 2013-12-31), 10-Q (reporting date: 2013-09-30), 10-Q (reporting date: 2013-06-30), 10-Q (reporting date: 2013-03-31).
1 Q3 2017 Calculation
Debt to equity = Total debt ÷ Stockholders’ equity
= 15,573 ÷ 10,782 = 1.44
2 Click competitor name to see calculations.
The analysis of the financial data over the specified periods reveals distinct trends in the company's capital structure and leverage position.
- Total Debt
- The total debt levels remained relatively stable during the initial periods from March 2013 to June 2014, fluctuating around the 13,500 to 15,000 million US dollars range. Beginning in March 2015, there is a noticeable increase in total debt, peaking near 18,751 million US dollars in March 2016. Subsequently, total debt decreases slightly and stabilizes around 15,000 to 15,500 million US dollars from December 2016 through September 2017.
- Stockholders’ Equity
- Stockholders' equity exhibits a declining trend over the observed timeline. Starting from a peak of 22,342 million US dollars in September 2013, equity decreases progressively to reach 10,782 million US dollars by September 2017. This represents a significant reduction, highlighting potential challenges in generating equity growth or retention during these years.
- Debt to Equity Ratio
- The debt to equity ratio reflects the changes in both debt and equity levels. Initially, the ratio remains below 0.8 until the end of 2014, indicating a conservative leverage position. However, from early 2015, the ratio sharply increases, surpassing 1.0 in March 2015 and reaching a peak of 1.60 in March 2016. This peak corresponds with the simultaneous increase in total debt and substantial decline in equity. Following this peak, the ratio slightly decreases but remains above 1.2 for the remainder of the period, indicating a heightened leverage level compared to the earlier years.
Overall, the data suggests a trend towards increased financial leverage primarily driven by a considerable decline in stockholders' equity and a concomitant rise in total debt around 2015 and early 2016. This shift may imply increased financial risk and a change in capital structure strategy during these years. The stabilization of total debt alongside the continued decline in equity towards the end of the timeline further accentuates the elevated leverage position as of the latest periods presented.
Debt to Capital
Anadarko Petroleum Corp., debt to capital calculation (quarterly data)
| Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | Dec 31, 2014 | Sep 30, 2014 | Jun 30, 2014 | Mar 31, 2014 | Dec 31, 2013 | Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||
| Short-term debt | 149) | 44) | 42) | 42) | 788) | 32) | 3,025) | 33) | 33) | 33) | 500) | —) | —) | —) | —) | 500) | —) | —) | —) | ||||||
| Long-term debt, excluding current portion | 15,424) | 15,436) | 15,284) | 15,281) | 15,090) | 15,641) | 15,726) | 15,718) | 15,892) | 16,025) | 16,365) | 15,092) | 14,728) | 13,414) | 13,569) | 13,065) | 13,647) | 13,538) | 13,663) | ||||||
| Total debt | 15,573) | 15,480) | 15,326) | 15,323) | 15,878) | 15,673) | 18,751) | 15,751) | 15,925) | 16,058) | 16,865) | 15,092) | 14,728) | 13,414) | 13,569) | 13,565) | 13,647) | 13,538) | 13,663) | ||||||
| Stockholders’ equity | 10,782) | 11,472) | 11,856) | 12,212) | 12,600) | 11,281) | 11,686) | 12,819) | 14,079) | 16,389) | 16,332) | 19,725) | 20,677) | 19,331) | 19,120) | 21,857) | 22,342) | 22,189) | 21,090) | ||||||
| Total capital | 26,355) | 26,952) | 27,182) | 27,535) | 28,478) | 26,954) | 30,437) | 28,570) | 30,004) | 32,447) | 33,197) | 34,817) | 35,405) | 32,745) | 32,689) | 35,422) | 35,989) | 35,727) | 34,753) | ||||||
| Solvency Ratio | |||||||||||||||||||||||||
| Debt to capital1 | 0.59 | 0.57 | 0.56 | 0.56 | 0.56 | 0.58 | 0.62 | 0.55 | 0.53 | 0.49 | 0.51 | 0.43 | 0.42 | 0.41 | 0.42 | 0.38 | 0.38 | 0.38 | 0.39 | ||||||
| Benchmarks | |||||||||||||||||||||||||
| Debt to Capital, Competitors2 | |||||||||||||||||||||||||
| Chevron Corp. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| ConocoPhillips | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Exxon Mobil Corp. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31), 10-K (reporting date: 2013-12-31), 10-Q (reporting date: 2013-09-30), 10-Q (reporting date: 2013-06-30), 10-Q (reporting date: 2013-03-31).
1 Q3 2017 Calculation
Debt to capital = Total debt ÷ Total capital
= 15,573 ÷ 26,355 = 0.59
2 Click competitor name to see calculations.
- Total Debt
-
The total debt exhibited moderate fluctuations over the analyzed period. Starting at approximately $13.7 billion, the debt level remained relatively stable through 2013 and the first half of 2014. A notable increase occurred in the latter half of 2014, with the debt rising to a peak of about $15.1 billion at the end of that year.
During 2015, debt showed signs of volatility, initially increasing to around $16.9 billion in the first quarter, then experiencing slight declines and minor rebounds, ending the year near $15.8 billion. A significant surge was observed in early 2016, with debt reaching approximately $18.8 billion, the highest in the examined timeframe.
Subsequently, total debt decreased steadily throughout the rest of 2016 and early 2017, settling in the range of $15.3 billion to $15.6 billion by the third quarter of 2017.
- Total Capital
-
Total capital demonstrated a downward trend over the period. Beginning near $34.8 billion at the start of 2013, total capital briefly fluctuated during 2013 and early 2014, ranging between approximately $32.7 billion and $35.9 billion.
From mid-2014 onward, a consistent decline is evident, with capital figures dropping from about $35.4 billion to a low point near $25.3 billion by the third quarter of 2017. This pattern suggests that the overall capital base contracted significantly over the time span examined.
- Debt to Capital Ratio
-
The debt-to-capital ratio showed a clear upward trajectory throughout the period, reflecting increasing leverage. Initially stable around 0.38 to 0.39 during 2013, the ratio climbed steadily beginning in 2014, reaching about 0.43 by year-end 2014.
By 2015, the ratio intensified further, fluctuating between approximately 0.49 and 0.55, indicating a growing reliance on debt within the capital structure. The ratio peaked near 0.62 in early 2016, coinciding with the highest total debt levels.
After this peak, the ratio slightly moderated but remained elevated, stabilizing around the 0.56 to 0.59 range through 2017, significantly higher than the starting point in 2013.
- Overall Insights
-
The combined trends indicate a notable increase in financial leverage throughout the analyzed timeframe. Despite some reduction in total debt after mid-2016, the total capital contracted more sharply, amplifying the debt-to-capital ratio.
This evolving capital structure suggests a strategic shift or possible financial stress factors contributing to higher debt dependency and a shrinking capital base. The increase in leverage may imply elevated financial risk and potential implications for liquidity and cost of capital considerations.
Debt to Assets
Anadarko Petroleum Corp., debt to assets calculation (quarterly data)
| Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | Dec 31, 2014 | Sep 30, 2014 | Jun 30, 2014 | Mar 31, 2014 | Dec 31, 2013 | Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||
| Short-term debt | 149) | 44) | 42) | 42) | 788) | 32) | 3,025) | 33) | 33) | 33) | 500) | —) | —) | —) | —) | 500) | —) | —) | —) | ||||||
| Long-term debt, excluding current portion | 15,424) | 15,436) | 15,284) | 15,281) | 15,090) | 15,641) | 15,726) | 15,718) | 15,892) | 16,025) | 16,365) | 15,092) | 14,728) | 13,414) | 13,569) | 13,065) | 13,647) | 13,538) | 13,663) | ||||||
| Total debt | 15,573) | 15,480) | 15,326) | 15,323) | 15,878) | 15,673) | 18,751) | 15,751) | 15,925) | 16,058) | 16,865) | 15,092) | 14,728) | 13,414) | 13,569) | 13,565) | 13,647) | 13,538) | 13,663) | ||||||
| Total assets | 43,128) | 44,348) | 44,693) | 45,564) | 45,417) | 44,033) | 47,922) | 46,414) | 49,182) | 52,124) | 52,973) | 61,689) | 60,665) | 58,414) | 58,103) | 55,781) | 55,294) | 55,300) | 53,588) | ||||||
| Solvency Ratio | |||||||||||||||||||||||||
| Debt to assets1 | 0.36 | 0.35 | 0.34 | 0.34 | 0.35 | 0.36 | 0.39 | 0.34 | 0.32 | 0.31 | 0.32 | 0.24 | 0.24 | 0.23 | 0.23 | 0.24 | 0.25 | 0.24 | 0.25 | ||||||
| Benchmarks | |||||||||||||||||||||||||
| Debt to Assets, Competitors2 | |||||||||||||||||||||||||
| Chevron Corp. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| ConocoPhillips | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Exxon Mobil Corp. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31), 10-K (reporting date: 2013-12-31), 10-Q (reporting date: 2013-09-30), 10-Q (reporting date: 2013-06-30), 10-Q (reporting date: 2013-03-31).
1 Q3 2017 Calculation
Debt to assets = Total debt ÷ Total assets
= 15,573 ÷ 43,128 = 0.36
2 Click competitor name to see calculations.
- Total Debt
-
Total debt remained relatively stable between March 2013 and June 2014, fluctuating around the $13.5 billion mark. However, a noticeable increase is evident starting in September 2014, reaching a peak near $16.9 billion in the first quarter of 2015. This elevated level of debt persists through 2015 and 2016, peaking again at approximately $18.8 billion in March 2016. From that point onwards, total debt gradually declines, stabilizing around $15.5 billion by late 2017.
- Total Assets
-
Total assets demonstrate a growth trend from early 2013 through late 2014, rising from approximately $53.6 billion to about $61.7 billion. This growth phase ends in early 2015, followed by a marked decline over the ensuing quarters, dropping to roughly $44.1 billion by the end of 2016 and continuing a slight downward trajectory through 2017 to approximately $43.1 billion. This decline suggests potential asset divestitures or impairments occurring during this period.
- Debt to Assets Ratio
-
The debt to assets ratio was relatively stable and moderate, fluctuating around 0.24 from 2013 through mid-2014. Beginning in late 2014, the ratio increases significantly, reaching around 0.34 by the end of 2015 and peaking at approximately 0.39 in early 2016. This heightened leverage level decreases thereafter but remains elevated compared to earlier periods, fluctuating between 0.34 and 0.36 through 2017. This indicates an overall increase in financial leverage, likely due to the simultaneous increase in debt and decline in asset values during this timeframe.
Financial Leverage
Anadarko Petroleum Corp., financial leverage calculation (quarterly data)
| Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | Dec 31, 2014 | Sep 30, 2014 | Jun 30, 2014 | Mar 31, 2014 | Dec 31, 2013 | Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||
| Total assets | 43,128) | 44,348) | 44,693) | 45,564) | 45,417) | 44,033) | 47,922) | 46,414) | 49,182) | 52,124) | 52,973) | 61,689) | 60,665) | 58,414) | 58,103) | 55,781) | 55,294) | 55,300) | 53,588) | ||||||
| Stockholders’ equity | 10,782) | 11,472) | 11,856) | 12,212) | 12,600) | 11,281) | 11,686) | 12,819) | 14,079) | 16,389) | 16,332) | 19,725) | 20,677) | 19,331) | 19,120) | 21,857) | 22,342) | 22,189) | 21,090) | ||||||
| Solvency Ratio | |||||||||||||||||||||||||
| Financial leverage1 | 4.00 | 3.87 | 3.77 | 3.73 | 3.60 | 3.90 | 4.10 | 3.62 | 3.49 | 3.18 | 3.24 | 3.13 | 2.93 | 3.02 | 3.04 | 2.55 | 2.47 | 2.49 | 2.54 | ||||||
| Benchmarks | |||||||||||||||||||||||||
| Financial Leverage, Competitors2 | |||||||||||||||||||||||||
| Chevron Corp. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| ConocoPhillips | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Exxon Mobil Corp. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31), 10-K (reporting date: 2013-12-31), 10-Q (reporting date: 2013-09-30), 10-Q (reporting date: 2013-06-30), 10-Q (reporting date: 2013-03-31).
1 Q3 2017 Calculation
Financial leverage = Total assets ÷ Stockholders’ equity
= 43,128 ÷ 10,782 = 4.00
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals several notable trends in the company's total assets, stockholders' equity, and financial leverage ratios over the examined periods.
- Total Assets
- Total assets exhibit a general increasing trend from early 2013 through the end of 2014, rising steadily from approximately 53,588 million US dollars to a peak near 61,689 million US dollars. However, starting in 2015, there is a clear downward trajectory in total assets, with values decreasing in most quarters and reaching approximately 43,128 million US dollars by the third quarter of 2017. This decline is consistent and indicates a reduction in asset base over the later years.
- Stockholders' Equity
- Stockholders' equity tends to follow a somewhat similar pattern to total assets in the earlier periods, showing modest fluctuations but generally hovering around 21,000 to 22,000 million US dollars in 2013. From 2014 onward, equity consistently declines, falling from around 20,000 million US dollars at the beginning of 2014 to approximately 10,782 million US dollars by the third quarter of 2017. This decline in equity is considerable and suggests erosion in company net worth throughout this period.
- Financial Leverage
- The financial leverage ratio shows an upward trend overall. It starts just above 2.5 in early 2013 and rises gradually, reaching figures above 3.0 by 2014. The ratio continues to increase in subsequent years, reaching or exceeding 4.0 by early 2016 and maintaining levels close to or above this mark through the third quarter of 2017. This rising financial leverage ratio points to increasing use of debt relative to equity financing, indicating a higher risk profile with growing reliance on borrowed funds over time.
In summary, the data indicates that while total assets initially grew, they later contracted significantly, accompanied by a marked decrease in stockholders’ equity, suggesting potential challenges in maintaining asset quality or value. The concurrent increase in financial leverage supports the observation that the company has become more dependent on debt, which may impact financial stability and risk exposure going forward.
Interest Coverage
Anadarko Petroleum Corp., interest coverage calculation (quarterly data)
| Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | Dec 31, 2014 | Sep 30, 2014 | Jun 30, 2014 | Mar 31, 2014 | Dec 31, 2013 | Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||
| Net income (loss) attributable to common stockholders | (699) | (415) | (318) | (515) | (830) | (692) | (1,034) | (1,250) | (2,235) | 61) | (3,268) | (395) | 1,087) | 227) | (2,669) | (770) | 182) | 929) | 460) | ||||||
| Add: Net income attributable to noncontrolling interest | 58) | 81) | 43) | 63) | 83) | 81) | 36) | (274) | 75) | 47) | 32) | 45) | 60) | 39) | 43) | 45) | 41) | 30) | 24) | ||||||
| Add: Income tax expense | (425) | (38) | 97) | (64) | (260) | (314) | (383) | (645) | (917) | 77) | (1,392) | (102) | 627) | 428) | 664) | (98) | 240) | 567) | 456) | ||||||
| Add: Interest expense | 230) | 227) | 223) | 233) | 220) | 217) | 220) | 209) | 199) | 201) | 216) | 199) | 204) | 186) | 183) | 173) | 177) | 172) | 164) | ||||||
| Earnings before interest and tax (EBIT) | (836) | (145) | 45) | (283) | (787) | (708) | (1,161) | (1,960) | (2,878) | 386) | (4,412) | (253) | 1,978) | 880) | (1,779) | (650) | 640) | 1,698) | 1,104) | ||||||
| Solvency Ratio | |||||||||||||||||||||||||
| Interest coverage1 | -1.34 | -1.30 | -1.94 | -3.30 | -5.33 | -7.94 | -6.77 | -10.74 | -8.78 | -2.81 | -2.24 | 1.07 | 0.58 | -1.26 | -0.13 | 4.07 | 6.01 | 5.85 | 3.74 | ||||||
| Benchmarks | |||||||||||||||||||||||||
| Interest Coverage, Competitors2 | |||||||||||||||||||||||||
| Chevron Corp. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| ConocoPhillips | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Exxon Mobil Corp. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31), 10-K (reporting date: 2013-12-31), 10-Q (reporting date: 2013-09-30), 10-Q (reporting date: 2013-06-30), 10-Q (reporting date: 2013-03-31).
1 Q3 2017 Calculation
Interest coverage
= (EBITQ3 2017
+ EBITQ2 2017
+ EBITQ1 2017
+ EBITQ4 2016)
÷ (Interest expenseQ3 2017
+ Interest expenseQ2 2017
+ Interest expenseQ1 2017
+ Interest expenseQ4 2016)
= (-836 + -145 + 45 + -283)
÷ (230 + 227 + 223 + 233)
= -1.34
2 Click competitor name to see calculations.
- Earnings before interest and tax (EBIT)
-
The EBIT figures exhibit significant volatility over the observed periods, with an initial peak of 1,698 million US dollars in June 2013, followed by fluctuating declines and recoveries. Initially positive through the first half of 2014, EBIT dropped sharply by the end of 2013 and again at the start of 2015, reaching its lowest point of -4,412 million US dollars in March 2015. Post-2015, EBIT remained mostly negative, showing some minor improvements but failing to return to positive territory consistently, indicating ongoing operational challenges and potential external pressures impacting profitability.
- Interest expense
-
Interest expense shows a generally gradual upward trend across the observed quarters, increasing from 164 million US dollars in March 2013 to 230 million US dollars by September 2017. Despite fluctuations, the increase appears steady, reflecting possibly rising debt levels or higher borrowing costs over time.
- Interest coverage ratio
-
The interest coverage ratio demonstrates a clear decline in the company's ability to cover interest expenses from operating earnings. Starting at a relatively healthy 6.01 in September 2013, the ratio plummeted into negative territory beginning in early 2014, with the lowest value recorded at -10.74 in December 2015. This negative trend indicates EBIT consistently falling below interest expenses, suggesting financial distress in terms of interest measure coverage. Although slight improvement trends appear after 2015, the ratio remains below 1 in all subsequent periods, signaling continued pressure and risk concerning debt servicing capacity.