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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Solvency Ratios (Summary)
Halliburton Co., solvency ratios (quarterly data)
Based on: 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), 10-K (reporting date: 2017-12-31), 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).
The financial data reveals several key trends concerning the company's leverage and its ability to cover interest expenses over the analyzed periods.
- Debt to Equity Ratio
- This ratio remained relatively stable and moderate, fluctuating between 0.48 and 0.51 during early periods from March 2014 to September 2015. However, a significant increase was observed starting December 2015, where the ratio nearly doubled to 0.99 and continued rising to peak at 1.33 by June 2016. Subsequently, the ratio exhibited a gradual decline, settling around 1.1 by December 2018, indicating an overall higher reliance on debt compared to equity over the later periods.
- Debt to Capital Ratio
- A similar pattern to the debt to equity ratio was evident. The ratio sustained a steady range of 0.33 to 0.34 until September 2015, followed by a sharp increase reaching 0.57 in December 2016. After this peak, the ratio slightly decreased and stabilized in the range of 0.52 to 0.57 through the end of 2018. This indicates that debt comprised a larger proportion of the company's capital structure during the latter periods.
- Debt to Assets Ratio
- The ratio mirrored previous debt metrics, maintaining levels near 0.24 to 0.26 up to September 2015, then exhibiting a pronounced rise to approximately 0.46 by December 2016. The ratio then showed a slow but consistent decline to 0.40 by December 2018. This suggests that a greater portion of assets was financed through debt around the middle period examined, with some reduction thereafter.
- Financial Leverage Ratio
- This measure showed an initial gradual decline from 2.13 in March 2014 to 1.95 in June 2015. Thereafter, a marked increase was seen beginning December 2015, peaking at 3.01 by both December 2017 and March 2018. The ratio then gradually decreased to 2.73 at the end of 2018. This trend indicates that the company increased its use of debt relative to equity, achieving higher leverage especially in the years 2016 through 2018.
- Interest Coverage Ratio
- Data for interest coverage starts from December 2014 with a relatively strong coverage ratio of 12.9. There is a steady decline thereafter, turning negative by December 2015 (-1.02) and reaching a trough of -11.13 by September 2016, indicating an inability to cover interest expenses comfortably. Following this low point, the ratio gradually recovers, turning positive around June 2017 and increasing to 4.03 by December 2018, which reflects improved earnings relative to interest obligations but still at a more moderate coverage level than initially observed.
Overall, the company experienced a period of increasing leverage beginning in late 2015, with debt levels relative to equity, capital, and assets rising sharply. This was accompanied by a significant deterioration in interest coverage, signaling stress in meeting interest payments during the peak leverage phase. In subsequent periods, there was a general movement towards deleveraging or stabilization of debt ratios and improvement in interest coverage, suggesting efforts to strengthen financial health and enhance earnings relative to interest commitments.
Debt Ratios
Coverage Ratios
Debt to Equity
Halliburton Co., debt to equity calculation (quarterly data)
| Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | 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 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||||
| Short-term borrowings and current maturities of long-term debt | ||||||||||||||||||||||||||
| Long-term debt, excluding current maturities | ||||||||||||||||||||||||||
| Total debt | ||||||||||||||||||||||||||
| Company shareholders’ equity | ||||||||||||||||||||||||||
| Solvency Ratio | ||||||||||||||||||||||||||
| Debt to equity1 | ||||||||||||||||||||||||||
| Benchmarks | ||||||||||||||||||||||||||
| Debt to Equity, Competitors2 | ||||||||||||||||||||||||||
| Schlumberger Ltd. | ||||||||||||||||||||||||||
Based on: 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), 10-K (reporting date: 2017-12-31), 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).
1 Q4 2018 Calculation
Debt to equity = Total debt ÷ Company shareholders’ equity
= ÷ =
2 Click competitor name to see calculations.
- Total Debt
- The total debt remained relatively stable around $7.8 billion from the first quarter of 2014 through the third quarter of 2015. There was a significant increase in the fourth quarter of 2015, with total debt nearly doubling to approximately $15.3 billion. Following this spike, debt levels declined gradually over the subsequent quarters, reaching about $10.5 billion by the end of 2018.
- Company Shareholders’ Equity
- Shareholders' equity showed a consistent upward trend from the first quarter of 2014 through the end of 2014, rising from $13.7 billion to $16.3 billion. During 2015, equity remained relatively stable around $15.5 billion. Beginning in 2016, equity declined steadily, bottoming out at around $8.3 billion by the end of 2017 before showing some recovery in 2018, increasing modestly to approximately $9.5 billion.
- Debt to Equity Ratio
- This ratio was below 1.0 for the first one and a half years, indicating a conservative capital structure with more equity than debt. The ratio rose sharply to nearly 1.0 in the fourth quarter of 2015, reflecting the dramatic increase in debt. Throughout 2016 and 2017, it remained elevated, fluctuating between 1.19 and 1.33, indicating higher leverage. Toward the end of 2018, the ratio showed a gradual decline, reaching about 1.1.
- Summary of Trends
- The data reveals a significant capital structure shift in late 2015, where debt levels surged and equity decreased over the subsequent years, resulting in increased leverage. The company went from a low leverage position to a higher leverage stance, which marginally improved by the end of the reported period. These trends suggest strategic adjustments or external financial pressures leading to greater reliance on debt financing during the interval analyzed.
Debt to Capital
Halliburton Co., debt to capital calculation (quarterly data)
| Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | Dec 31, 2014 | Sep 30, 2014 | Jun 30, 2014 | Mar 31, 2014 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||||
| Short-term borrowings and current maturities of long-term debt | ||||||||||||||||||||||||||
| Long-term debt, excluding current maturities | ||||||||||||||||||||||||||
| Total debt | ||||||||||||||||||||||||||
| Company shareholders’ equity | ||||||||||||||||||||||||||
| Total capital | ||||||||||||||||||||||||||
| Solvency Ratio | ||||||||||||||||||||||||||
| Debt to capital1 | ||||||||||||||||||||||||||
| Benchmarks | ||||||||||||||||||||||||||
| Debt to Capital, Competitors2 | ||||||||||||||||||||||||||
| Schlumberger Ltd. | ||||||||||||||||||||||||||
Based on: 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), 10-K (reporting date: 2017-12-31), 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).
1 Q4 2018 Calculation
Debt to capital = Total debt ÷ Total capital
= ÷ =
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals several significant trends in the debt and capital structure over the observed periods.
- Total Debt
-
Total debt remained relatively stable from March 2014 through September 2015, fluctuating slightly around the 7,800 million US$ mark. However, there was a notable increase in the fourth quarter of 2015, where total debt nearly doubled to approximately 15,346 million US$, a level which was maintained in the subsequent quarter. Following this peak, total debt began a gradual decreasing trend through 2016 and 2017, declining to around 10,900 million US$ by the end of 2017. This downward trend continued moderately into 2018, stabilizing near 10,457 million US$ by year-end.
- Total Capital
-
Total capital showed a generally increasing pattern from early 2014 to the end of 2014, rising steadily from about 21,541 million US$ to over 24,000 million US$. This upward trend was maintained into the first three quarters of 2015, with capital stabilizing in the mid-23,000 million US$ range. Similar to total debt, a significant jump was observed in the last quarter of 2015, where total capital surged to exceed 30,000 million US$. Subsequently, total capital declined sharply throughout 2016, returning to approximately 21,793 million US$ by year-end. The years 2017 and 2018 showed relative stability with only minor fluctuations, with capital levels oscillating in the 19,000 to 20,000 million US$ range.
- Debt to Capital Ratio
-
The debt to capital ratio exhibited a declining trend from 0.36 in March 2014 to 0.33 by December 2014, reflecting a period of modest deleveraging or growth in capital relative to debt. In the middle quarters of 2015, the ratio hovered around 0.33 to 0.34, indicating relative stability. A marked increase was observed in the fourth quarter of 2015, aligning with the surge in total debt and capital, pushing the ratio to 0.50 and further rising above 0.54 in early 2016. From mid-2016 onwards, the ratio remained elevated, fluctuating between 0.54 and 0.57, suggesting a higher leverage position compared to previous years. Towards the end of 2018, the ratio showed a slight decrease to 0.52, indicating a minor deleveraging trend or capital increase relative to debt during that period.
Overall, the data indicate a significant capital and debt restructuring event occurring at the end of 2015, resulting in heightened leverage. Despite this, a subsequent gradual reduction in both total debt and capital brought leverage ratios to somewhat more moderate levels by late 2018, though still elevated compared to the early 2014 baseline.
Debt to Assets
Halliburton Co., debt to assets calculation (quarterly data)
| Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | 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 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||||
| Short-term borrowings and current maturities of long-term debt | ||||||||||||||||||||||||||
| Long-term debt, excluding current maturities | ||||||||||||||||||||||||||
| Total debt | ||||||||||||||||||||||||||
| Total assets | ||||||||||||||||||||||||||
| Solvency Ratio | ||||||||||||||||||||||||||
| Debt to assets1 | ||||||||||||||||||||||||||
| Benchmarks | ||||||||||||||||||||||||||
| Debt to Assets, Competitors2 | ||||||||||||||||||||||||||
| Schlumberger Ltd. | ||||||||||||||||||||||||||
Based on: 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), 10-K (reporting date: 2017-12-31), 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).
1 Q4 2018 Calculation
Debt to assets = Total debt ÷ Total assets
= ÷ =
2 Click competitor name to see calculations.
The financial data reveals several notable trends over the examined periods. Total debt remained relatively stable from the first quarter of 2014 through the third quarter of 2015, fluctuating slightly around the 7,800 million US dollar mark. A significant increase in total debt occurred in the fourth quarter of 2015, nearly doubling to approximately 15,346 million US dollars. Following this peak, total debt gradually decreased over the subsequent quarters, reaching about 10,457 million US dollars by the end of 2018.
Total assets showed a fluctuating pattern with an overall downward trend. The highest asset value was recorded in the fourth quarter of 2015 at approximately 36,942 million US dollars. Before this peak, total assets slowly increased from around 29,256 million US dollars in early 2014 to over 32,000 million US dollars in late 2014. After the peak in late 2015, total assets declined sharply and then stabilized around the 25,000 to 26,000 million US dollars range during 2017 and 2018.
The debt to assets ratio offers insight into the company's leverage. This ratio gradually decreased from 0.27 in early 2014 to a low of 0.24 by the end of 2014, reflecting a reduction in debt relative to assets. However, a sharp increase occurred in the fourth quarter of 2015, jumping to 0.42, corresponding with the simultaneous increase in total debt and peak in asset value. Following this spike, the ratio remained elevated, fluctuating between 0.40 and 0.47 through 2018, indicating higher leverage levels relative to the earlier period.
In summary, the data points to a period of relatively stable debt and increasing assets in the early years, followed by a significant increase in leverage from late 2015 onward. Although both total debt and total assets declined after their peaks, the elevated debt to assets ratio during the later quarters suggests the company maintained a higher degree of financial leverage throughout 2016 to 2018.
- Total debt
- Stable near 7,800 million USD through early 2015, doubled in Q4 2015, then declining steadily to about 10,457 million USD by end 2018.
- Total assets
- Increased to peak at nearly 37,000 million USD in Q4 2015, then decreased and stabilized around 25,000–26,000 million USD from 2017 onward.
- Debt to assets ratio
- Decreased slightly early on (0.27 to 0.24), spiked sharply to about 0.42 in late 2015, remaining elevated between 0.40 and 0.47 through 2018.
Financial Leverage
Halliburton Co., financial leverage calculation (quarterly data)
| Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | 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 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||||
| Total assets | ||||||||||||||||||||||||||
| Company shareholders’ equity | ||||||||||||||||||||||||||
| Solvency Ratio | ||||||||||||||||||||||||||
| Financial leverage1 | ||||||||||||||||||||||||||
| Benchmarks | ||||||||||||||||||||||||||
| Financial Leverage, Competitors2 | ||||||||||||||||||||||||||
| Schlumberger Ltd. | ||||||||||||||||||||||||||
Based on: 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), 10-K (reporting date: 2017-12-31), 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).
1 Q4 2018 Calculation
Financial leverage = Total assets ÷ Company shareholders’ equity
= ÷ =
2 Click competitor name to see calculations.
- Total Assets
- The total assets exhibit a fluctuating trend over the observed periods. Initially, there is a gradual increase from approximately 29.3 billion USD in March 2014 to a peak near 37.0 billion USD by December 2015. Following this peak, a decline is noted, with assets decreasing to around 25.0 billion USD by the end of 2017, before stabilizing in the range of approximately 25.1 to 25.9 billion USD throughout 2018. This pattern suggests significant asset revaluation or divestitures post-2015 peak, with stabilization occurring thereafter.
- Company Shareholders’ Equity
- Shareholders' equity mirrors some aspects of the asset trend but with a more pronounced decline in later periods. Starting at about 13.7 billion USD in early 2014, equity rises steadily to reach a high near 16.3 billion USD at the end of 2014. Subsequently, equity decreases substantially over time, falling to below 9.0 billion USD by the end of 2017. The equity figure shows modest recovery towards early 2018, rising slightly to approximately 9.5 billion USD by the close of the year. The sustained decline indicates potential losses, dividends, or share repurchases adversely impacting equity.
- Financial Leverage
- Financial leverage, calculated as the ratio of total assets to shareholders’ equity, demonstrates an inverse relationship to equity trends. It starts at a level slightly above 2.1 in early 2014, declining modestly to just under 2.0 through late 2014 and mid-2015. Following this, leverage increases markedly, peaking near 3.0 in late 2017. This increase reflects the contraction in equity relative to assets, consistent with the reduction in shareholders' equity. During 2018, leverage decreases marginally but remains elevated around the 2.7 to 3.0 range, indicating higher reliance on debt or external financing compared to earlier periods.
Interest Coverage
Halliburton Co., interest coverage calculation (quarterly data)
| Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | 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 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||||
| Net income (loss) attributable to company | ||||||||||||||||||||||||||
| Add: Net income attributable to noncontrolling interest | ||||||||||||||||||||||||||
| Less: Income (loss) from discontinued operations, net | ||||||||||||||||||||||||||
| Add: Income tax expense | ||||||||||||||||||||||||||
| Add: Interest expense | ||||||||||||||||||||||||||
| Earnings before interest and tax (EBIT) | ||||||||||||||||||||||||||
| Solvency Ratio | ||||||||||||||||||||||||||
| Interest coverage1 | ||||||||||||||||||||||||||
| Benchmarks | ||||||||||||||||||||||||||
| Interest Coverage, Competitors2 | ||||||||||||||||||||||||||
| Schlumberger Ltd. | ||||||||||||||||||||||||||
Based on: 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), 10-K (reporting date: 2017-12-31), 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).
1 Q4 2018 Calculation
Interest coverage
= (EBITQ4 2018
+ EBITQ3 2018
+ EBITQ2 2018
+ EBITQ1 2018)
÷ (Interest expenseQ4 2018
+ Interest expenseQ3 2018
+ Interest expenseQ2 2018
+ Interest expenseQ1 2018)
= ( + + + )
÷ ( + + + )
=
2 Click competitor name to see calculations.
The earnings before interest and tax (EBIT) display a fluctuating trend over the periods reviewed. Initially, there is a general upward movement from March 31, 2014, reaching a peak of 1,649 million US dollars by September 30, 2014. After this peak, EBIT values decline significantly, turning negative in the first quarter of 2015 and reaching a substantial low point at -3,116 million US dollars by March 31, 2016. Following this trough, EBIT shows signs of recovery, with values gradually improving, turning positive again around September 30, 2016, and exhibiting a positive trend through the end of 2018, albeit with some volatility.
Interest expense shows a steady increase over the timeline, rising from 96 million US dollars in the first quarter of 2014 to a peak of 265 million US dollars in the first quarter of 2017. After that peak, it decreases somewhat and stabilizes around 148-150 million US dollars towards the end of 2018. This indicates a moderate reduction in borrowing costs or changes in debt structure post-2017.
The interest coverage ratio, which measures the company's ability to meet interest payments from EBIT, reflects significant variability. The ratio was strong in early 2014, with values above 8 in most quarters, and peaked at 12.9 in the third quarter of 2014, indicating comfortable coverage of interest expenses. However, starting in 2015, the ratio sharply declines, turning negative during much of 2015 and 2016 concomitant with the negative EBIT values. This implies an inability to cover interest expenses through operational earnings in that period. From late 2016 onwards, the interest coverage ratio begins to improve steadily, turning positive again and reaching above 4 by the end of 2018, suggesting a return to healthier earnings relative to interest costs.
Overall, the data reflect a period of operational and financial distress beginning in 2015 but coupled with subsequent recovery through 2017 and 2018. While interest expenses increased through much of the period, the ability to generate earnings sufficient to cover those expenses has improved significantly after the lows of early 2016.