Analysis of Solvency Ratios
Quarterly Data
Solvency ratios also known as long-term debt ratios measure a company ability to meet long-term obligations.
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- Analysis of Short-term (Operating) Activity Ratios
- Analysis of Long-term (Investment) Activity Ratios
- Analysis of Reportable Segments
- Common Stock Valuation Ratios
- Enterprise Value (EV)
- Price to FCFE (P/FCFE)
- Dividend Discount Model (DDM)
- Present Value of Free Cash Flow to Equity (FCFE)
- Price to Operating Profit (P/OP) since 2005
- Analysis of Debt
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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), 10-K (reporting date: 2012-12-31), 10-Q (reporting date: 2012-09-30), 10-Q (reporting date: 2012-06-30), 10-Q (reporting date: 2012-03-31).
- Debt to Equity
- The debt to equity ratio shows a generally increasing trend over the observed periods. Starting at 0.76 in March 2012, it declined gradually to 0.61 by September 2013, indicating a reduction in leverage at that point. From late 2013 onward, the ratio rose steadily, peaking at 1.44 in September 2017. This increase suggests a growing reliance on debt financing relative to shareholders' equity in the latter periods.
- Debt to Capital
- The debt to capital ratio exhibited a slight decline from 0.43 in March 2012 to around 0.38 in mid-2013, reflecting a modest reduction in debt proportion within the overall capital structure. Subsequently, it increased notably from 0.43 in December 2014 to 0.59 by September 2017, highlighting a rising debt component in the company's capital base over time.
- Debt to Assets
- This ratio remained relatively stable initially, around 0.28 in early 2012, gradually decreasing to about 0.24 by late 2013. Afterward, it increased significantly, reaching 0.36 by the end of the period in September 2017. The upward movement indicates a strengthening debt burden relative to total assets in the more recent years.
- Financial Leverage
- Financial leverage showed an upward trajectory throughout the timeline. Beginning near 2.69 in March 2012, it dipped slightly to 2.47 in mid-2013 but then increased substantially to 4.0 by September 2017. This pattern is consistent with the other leverage metrics and implies increased use of debt to amplify the company's asset base.
- Interest Coverage
- Interest coverage ratios, available starting from December 2012, reveal considerable volatility and a pronounced decline over time. Initially strong, with values like 5.8 and above in 2012 and early 2013, the ratio dropped to negative values beginning in 2014, such as -0.13 in December 2013 and further down to -10.74 by December 2015. Although there was some recovery to slightly less negative levels in later quarters, the persistently negative values indicate difficulties in covering interest expenses from earnings during much of the latter period.
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 | Dec 31, 2012 | Sep 30, 2012 | Jun 30, 2012 | Mar 31, 2012 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||||||||
| Short-term debt | ||||||||||||||||||||||||||||||
| Long-term debt, excluding current portion | ||||||||||||||||||||||||||||||
| Total debt | ||||||||||||||||||||||||||||||
| Stockholders’ equity | ||||||||||||||||||||||||||||||
| Solvency Ratio | ||||||||||||||||||||||||||||||
| Debt to equity1 | ||||||||||||||||||||||||||||||
| Benchmarks | ||||||||||||||||||||||||||||||
| Debt to Equity, Competitors2 | ||||||||||||||||||||||||||||||
| Chevron Corp. | ||||||||||||||||||||||||||||||
| ConocoPhillips | ||||||||||||||||||||||||||||||
| Exxon Mobil Corp. | ||||||||||||||||||||||||||||||
| Occidental Petroleum 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), 10-K (reporting date: 2012-12-31), 10-Q (reporting date: 2012-09-30), 10-Q (reporting date: 2012-06-30), 10-Q (reporting date: 2012-03-31).
1 Q3 2017 Calculation
Debt to equity = Total debt ÷ Stockholders’ equity
= ÷ =
2 Click competitor name to see calculations.
The financial data reveals several notable trends in the company's capital structure and leverage over the presented quarterly periods. Total debt exhibits a general increasing pattern, with fluctuations throughout the timeline, starting at approximately 15.4 billion US dollars in the first quarter of 2012 and rising to around 15.6 billion by the third quarter of 2017. Despite some interim decreases, especially notable in mid-2013 and again in early 2015, the overall trajectory is upward, with a pronounced peak above 18.7 billion in the first half of 2016.
Stockholders’ equity shows a declining trend over the same period. Initially around 20.3 billion US dollars in early 2012, equity slightly increased until mid-2013 but then steadily declined, reaching about 10.8 billion by the third quarter of 2017. This decline suggests either accumulated losses, dividend payments exceeding earnings, share repurchases, or changes in asset valuations impacting equity negatively.
The debt to equity ratio provides a clear indication of increasing financial leverage during these years. Early ratios begin at approximately 0.76 and gradually decrease through 2012 and early 2013, reaching lows near 0.61, indicating a relatively balanced capital structure with lower reliance on debt. However, from late 2014 onwards, there is a significant and sustained increase in this ratio, peaking at around 1.6 in early 2016. Despite some subsequent moderation, the ratio remains elevated above 1.2 through 2017.
This rise in the debt to equity ratio is primarily driven by the simultaneous increase in total debt and decrease in equity. The heightened leverage indicates that the company increasingly financed its operations and investments through debt rather than equity, thereby assuming greater financial risk. The particularly sharp increase around 2015 to 2016 suggests strategic or market-driven decisions that substantially altered the capital structure during that window.
- Total debt
- Trend shows a gradual increase with some fluctuations, peaking notably above 18.7 billion US dollars in early 2016 before slightly declining but remaining high around 15.5 billion by late 2017.
- Stockholders’ equity
- Demonstrates a persistent decline from over 20 billion US dollars in 2012 to approximately 10.8 billion by 2017, indicating eroding equity value over time.
- Debt to equity ratio
- Initially stable or decreasing, the ratio markedly increases from late 2014, reaching a peak of 1.6 in early 2016, reflecting higher financial leverage due to increased debt and reduced equity.
Overall, the data points to a company that progressively increased its reliance on debt financing while its equity base weakened. This shift toward higher leverage could affect financial stability and risk profiles, necessitating close monitoring of debt servicing capabilities and profitability in future assessments.
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 | Dec 31, 2012 | Sep 30, 2012 | Jun 30, 2012 | Mar 31, 2012 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||||||||
| Short-term debt | ||||||||||||||||||||||||||||||
| Long-term debt, excluding current portion | ||||||||||||||||||||||||||||||
| Total debt | ||||||||||||||||||||||||||||||
| Stockholders’ equity | ||||||||||||||||||||||||||||||
| Total capital | ||||||||||||||||||||||||||||||
| Solvency Ratio | ||||||||||||||||||||||||||||||
| Debt to capital1 | ||||||||||||||||||||||||||||||
| Benchmarks | ||||||||||||||||||||||||||||||
| Debt to Capital, Competitors2 | ||||||||||||||||||||||||||||||
| Chevron Corp. | ||||||||||||||||||||||||||||||
| ConocoPhillips | ||||||||||||||||||||||||||||||
| Exxon Mobil Corp. | ||||||||||||||||||||||||||||||
| Occidental Petroleum 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), 10-K (reporting date: 2012-12-31), 10-Q (reporting date: 2012-09-30), 10-Q (reporting date: 2012-06-30), 10-Q (reporting date: 2012-03-31).
1 Q3 2017 Calculation
Debt to capital = Total debt ÷ Total capital
= ÷ =
2 Click competitor name to see calculations.
The financial data reveals significant fluctuations in the company's debt structure and capital composition over the analyzed periods.
- Total Debt
-
Total debt experienced a general downward trend from March 2012 through December 2012, decreasing from 15,386 million US dollars to 13,269 million US dollars. In the following year, it remained relatively stable around 13,500 million US dollars throughout 2013. However, starting from 2014, total debt increased notably, peaking in March 2015 at 16,865 million US dollars. Subsequent quarters reflected slight declines and fluctuations, with values generally maintaining within the 15,000 to 16,000 million US dollars range. During 2016, the total debt rose sharply again, reaching 18,751 million US dollars in the first quarter before declining to around 15,300 million US dollars by the end of the year and maintaining similar levels into mid-2017.
- Total Capital
-
Total capital followed a more consistent but declining pattern across the examined timeframe. Starting at 35,665 million US dollars in March 2012, it gradually decreased through 2012 and 2013, dipping slightly below 33,000 million US dollars by the end of 2014. Following this trend, total capital further contracted to around 27,000 million US dollars by the end of 2016 and continued to fall slightly, reaching approximately 26,355 million US dollars in September 2017. This persistent decline indicates a reduction in the overall capital base of the company over the years.
- Debt to Capital Ratio
-
The debt to capital ratio revealed shifts in the company’s financial leverage. Initially, the ratio decreased steadily from 0.43 in March 2012 to a low of 0.38 during mid-to-late 2013, reflecting a reduction in reliance on debt relative to total capital. However, from late 2014 onward, the ratio increased substantially, rising above 0.50 by March 2015 and peaking at approximately 0.62 in March 2016. This indicates a heightened proportion of debt financing during this period. Following this peak, the ratio stabilized around the high 0.50s through mid-2017, suggesting sustained elevated leverage levels compared to earlier periods.
Overall, these trends suggest increasing financial leverage characterized by growing debt levels relative to a contracting capital base from 2014 to 2017. The considerable rise in the debt to capital ratio implies a strategic or necessary shift towards greater debt financing, which might affect the company’s risk profile and cost of capital moving forward.
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 | Dec 31, 2012 | Sep 30, 2012 | Jun 30, 2012 | Mar 31, 2012 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||||||||
| Short-term debt | ||||||||||||||||||||||||||||||
| Long-term debt, excluding current portion | ||||||||||||||||||||||||||||||
| Total debt | ||||||||||||||||||||||||||||||
| Total assets | ||||||||||||||||||||||||||||||
| Solvency Ratio | ||||||||||||||||||||||||||||||
| Debt to assets1 | ||||||||||||||||||||||||||||||
| Benchmarks | ||||||||||||||||||||||||||||||
| Debt to Assets, Competitors2 | ||||||||||||||||||||||||||||||
| Chevron Corp. | ||||||||||||||||||||||||||||||
| ConocoPhillips | ||||||||||||||||||||||||||||||
| Exxon Mobil Corp. | ||||||||||||||||||||||||||||||
| Occidental Petroleum 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), 10-K (reporting date: 2012-12-31), 10-Q (reporting date: 2012-09-30), 10-Q (reporting date: 2012-06-30), 10-Q (reporting date: 2012-03-31).
1 Q3 2017 Calculation
Debt to assets = Total debt ÷ Total assets
= ÷ =
2 Click competitor name to see calculations.
The data indicates notable trends in the company's financial structure over the observed periods, specifically concerning total debt, total assets, and the debt-to-assets ratio.
- Total Debt
- Total debt exhibited a generally fluctuating pattern. From March 2012 through December 2014, total debt remained relatively stable, fluctuating between approximately $13.2 billion and $15.1 billion. Starting in early 2015, total debt increased, peaking around $16.9 billion in March 2015, before gradually declining toward the end of 2015. Subsequently, from March 2016 onward, total debt rose again, reaching a peak near $18.8 billion in March 2016. After that, total debt showed minor fluctuations, mostly stabilizing between $15.3 billion and $15.6 billion through September 2017.
- Total Assets
- Total assets demonstrated a downward trend over the period. In the early years (2012 through 2014), assets were generally stable, varying from approximately $52.7 billion to $61.7 billion, even showing slight growth in 2014. However, from 2015 onwards, total assets declined significantly, dropping from about $52.9 billion in March 2015 to around $43.1 billion by September 2017. This indicates a substantial reduction in asset base during the later years.
- Debt to Assets Ratio
- The debt-to-assets ratio reflected changes in both debt levels and asset base. Initially ranging around 0.25 to 0.28 between 2012 and 2014, the ratio increased sharply in 2015 to a peak of 0.34 by December. This elevated ratio persisted through 2016 and 2017, fluctuating mostly between 0.34 and 0.39. The rise in this ratio corresponds with the increase in total debt and decline in total assets, indicating a higher leverage position over the later periods analyzed.
Overall, the analysis identifies a trend of rising leverage and shrinking asset base starting from 2015, which could imply heightened financial risk or strategic shifts affecting the company's balance sheet composition.
Financial Leverage
Anadarko Petroleum Corp., financial leverage calculation (quarterly data)
| Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | Dec 31, 2014 | Sep 30, 2014 | Jun 30, 2014 | Mar 31, 2014 | Dec 31, 2013 | Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | Sep 30, 2012 | Jun 30, 2012 | Mar 31, 2012 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||||||||
| Total assets | ||||||||||||||||||||||||||||||
| Stockholders’ equity | ||||||||||||||||||||||||||||||
| Solvency Ratio | ||||||||||||||||||||||||||||||
| Financial leverage1 | ||||||||||||||||||||||||||||||
| Benchmarks | ||||||||||||||||||||||||||||||
| Financial Leverage, Competitors2 | ||||||||||||||||||||||||||||||
| Chevron Corp. | ||||||||||||||||||||||||||||||
| ConocoPhillips | ||||||||||||||||||||||||||||||
| Exxon Mobil Corp. | ||||||||||||||||||||||||||||||
| Occidental Petroleum 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), 10-K (reporting date: 2012-12-31), 10-Q (reporting date: 2012-09-30), 10-Q (reporting date: 2012-06-30), 10-Q (reporting date: 2012-03-31).
1 Q3 2017 Calculation
Financial leverage = Total assets ÷ Stockholders’ equity
= ÷ =
2 Click competitor name to see calculations.
The financial data indicates a general trend of declining total assets over the periods analyzed, particularly notable from early 2015 onwards. Total assets peaked around the end of 2014, reaching over 61 billion US dollars, before steadily declining to approximately 43 billion US dollars by the third quarter of 2017. This downward trend suggests a contraction in asset base in the latter years of the period under review.
Stockholders' equity similarly shows a declining pattern, albeit with some fluctuations. Initially, equity remained fairly stable, hovering around 20 to 22 billion US dollars from 2012 until early 2014, after which a sharp decline is observed. By early 2015, equity decreased significantly to around 16 billion US dollars and continued to fall through to 2017, ending near 11 billion US dollars. This persistent reduction in equity reflects a possible erosion of net asset value.
Financial leverage, representing the ratio of total assets to equity, highlights notable changes over the period. It remained relatively stable and somewhat low (around 2.5 to 2.7) from 2012 through 2013. However, from 2014 forward, an upward trend is evident in leverage ratios, increasing from slightly above 3 to reach around 4 by late 2017. This indicates that the company has taken on relatively more debt or liabilities in proportion to its equity, increasing financial risk.
- Total Assets
- Started at approximately 54.5 billion US dollars in early 2012, peaked around 61.7 billion US dollars at the end of 2014, and then declined steadily to around 43.1 billion US dollars by the third quarter of 2017.
- Stockholders’ Equity
- Remained stable around 20 billion US dollars until early 2014, after which it decreased markedly to just above 11 billion US dollars by late 2017, indicating a significant deterioration in net worth.
- Financial Leverage
- Maintained at about 2.5-2.7 from 2012 through 2013, then rose progressively from 3+ in 2014 to approximately 4 by 2017, signaling an increase in liabilities relative to equity.
Overall, the data suggests a period marked by asset reduction and declining equity, coupled with a rising leverage ratio. This combination may imply increased financial risk exposure and potential stresses on the company’s capital structure during these years.
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 | Dec 31, 2012 | Sep 30, 2012 | Jun 30, 2012 | Mar 31, 2012 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||||||||
| Net income (loss) attributable to common stockholders | ||||||||||||||||||||||||||||||
| Add: Net income attributable to noncontrolling interest | ||||||||||||||||||||||||||||||
| Add: Income tax expense | ||||||||||||||||||||||||||||||
| Add: Interest expense | ||||||||||||||||||||||||||||||
| Earnings before interest and tax (EBIT) | ||||||||||||||||||||||||||||||
| Solvency Ratio | ||||||||||||||||||||||||||||||
| Interest coverage1 | ||||||||||||||||||||||||||||||
| Benchmarks | ||||||||||||||||||||||||||||||
| Interest Coverage, Competitors2 | ||||||||||||||||||||||||||||||
| Chevron Corp. | ||||||||||||||||||||||||||||||
| ConocoPhillips | ||||||||||||||||||||||||||||||
| Exxon Mobil Corp. | ||||||||||||||||||||||||||||||
| Occidental Petroleum 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), 10-K (reporting date: 2012-12-31), 10-Q (reporting date: 2012-09-30), 10-Q (reporting date: 2012-06-30), 10-Q (reporting date: 2012-03-31).
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)
= ( + + + )
÷ ( + + + )
=
2 Click competitor name to see calculations.
- Earnings before interest and tax (EBIT)
- The EBIT values reveal considerable volatility over the analyzed periods. Initially, the company recorded positive EBIT figures at the beginning of 2012, peaking at 2,721 million USD in March 2012. However, a significant decline occurred throughout 2013 and 2014, culminating in negative EBIT starting in December 2013. The negative trend persisted through 2015 and 2016, with some quarters showing very substantial losses, notably -4,412 million USD in March 2015. The final quarters into 2017 showed signs of some recovery as losses moderated, albeit EBIT remained negative or near zero with slight positive values in some quarters.
- Interest Expense
- Interest expenses remained relatively stable across the entire timeline, fluctuating slightly in the range of approximately 164 million USD to 233 million USD. There is a gradual but slight upward trend, with expenses increasing toward later periods, particularly noticeable from 2014 onwards. Despite fluctuations in EBIT, interest expense followed a steady and predictable pattern without sharp deviations.
- Interest Coverage Ratio
- The interest coverage ratio displays marked variability, reflecting the company's changing ability to meet interest obligations through operating earnings. In mid-2012 through early 2013, the ratio was comfortably above 3, indicating good coverage. However, after 2013, the ratio declined sharply into negative territory, reflecting an inability to cover interest expenses with earnings, coinciding with the negative EBIT periods. From 2014 onwards, the ratio remained substantially negative, with values frequently below -1, indicating strained financial performance and difficulty servicing debt. Towards the later periods in 2017, minor improvements occurred, but the ratio remained negative, signaling persistent challenges.
- Overall Trends and Insights
- Over the course of the analyzed periods, the financial performance exhibited a downward trend marked by rising losses and diminished capacity to cover interest expenses from operations. The steady increase in interest expenses combined with deteriorating EBIT led to sustained periods where the company’s earnings were insufficient to meet debt obligations. This situation poses concerns regarding operational profitability and financial stability. Slight signs of recovery in late 2016 and 2017 are notable but insufficient to reverse the prevailing negative trend. Continued monitoring of EBIT and interest coverage ratio is advisable to assess future financial health.