Marathon Oil Corp. (NYSE:MRO)

Debt to Equity Ratio

The debt to equity ratio remained relatively stable from 2017 to 2019, fluctuating slightly between 0.45 and 0.47. In 2020, there was an increase to 0.51, followed by a notable decrease to 0.38 in 2021. Including operating lease liabilities, the ratio shows a similar pattern, maintaining near parity over the years with a peak in 2020 and a drop in 2021.

Debt to Capital Ratio

This ratio showed consistent stability from 2017 to 2019, holding around 0.31. It rose marginally to 0.34 in 2020 and then dropped significantly to 0.27 in 2021. When including operating lease liabilities, the trend is very similar with slightly higher values but the same overall pattern of stability, a small increase in 2020, and a sharp decrease in 2021.

Debt to Assets Ratio

The debt to assets ratio exhibited a gradual increase from 0.25 in 2017 to 0.30 in 2020, indicating a growing proportion of debt relative to total assets over this period. The ratio then declined to 0.24 in 2021, suggesting a reduction in leverage relative to asset base. Adjusting for operating lease liabilities follows the same trend with slightly elevated ratios but identical directional movement.

Financial Leverage

Financial leverage decreased steadily from 1.88 in 2017 to 1.59 in 2021. This decline indicates a gradual reduction in the use of debt financing relative to equity, reflecting a less leveraged capital structure over the five-year period.

Interest Coverage Ratio

The interest coverage ratio displayed significant volatility. It was negative at -0.2 in 2017, indicating insufficient operating income to cover interest expenses. It improved substantially to 6.1 in 2018, followed by a decline to 2.4 in 2019. In 2020, the ratio dropped sharply to -4.25, possibly signaling operating losses or high interest costs relative to earnings during that year. The metric rebounded to 4.91 in 2021, demonstrating improved ability to meet interest obligations.

Fixed Charge Coverage Ratio

This ratio exhibits a pattern similar to interest coverage but with generally lower values. It was close to zero in 2017 (0.02), rose to 4.77 in 2018, then declined to 1.49 in 2019. The ratio turned negative in 2020 at -1.68, indicating struggles to cover fixed charges, but recovered to 3.11 in 2021, suggesting resumed financial stability in covering fixed financial obligations.

The analysis of the financial data for Marathon Oil Corp. over the five-year period from 2017 to 2021 reveals significant trends in the company's debt structure and equity position.

Total Debt

Total debt remained relatively stable from 2017 to 2019, with marginal increases from $5,494 million in 2017 to $5,501 million in 2019. In 2020, there was a slight decline to $5,404 million, followed by a more pronounced decrease to $4,044 million in 2021. This trend indicates a concerted effort to reduce debt levels, especially notable in the final year observed.

Stockholders’ Equity

Stockholders’ equity showed gradual growth from $11,708 million in 2017 to $12,153 million in 2019. However, in 2020, equity declined notably to $10,561 million, reflecting a reduction of roughly 13%. In 2021, equity recovered slightly to $10,686 million but remained below the 2017-2019 levels. This pattern suggests some financial challenges or adjustments occurred in 2020 that impacted the equity base.

Debt to Equity Ratio

The debt to equity ratio decreased modestly from 0.47 in 2017 to 0.45 in 2018 and 2019, indicating a stable leverage position during that period. In 2020, the ratio increased to 0.51, reflecting relatively higher leverage possibly due to the decline in equity combined with minimal debt reduction. In 2021, the ratio significantly decreased to 0.38, the lowest level in the five-year span, driven by substantial debt reduction and modest equity recovery.

Overall, the data suggest that Marathon Oil Corp. maintained a relatively stable leverage profile through 2019, encountered a period of financial contraction or restructuring in 2020 impacting equity, and subsequently executed a strategy to reduce debt substantially by 2021. The interplay between debt and equity positions results in an improved leverage ratio by the end of the period, potentially indicating strengthened financial stability and reduced credit risk.

The financial data over the period from the end of 2017 through the end of 2021 display notable trends in debt levels, equity, and the debt-to-equity ratio.

Total Debt (including operating lease liability)

The company's total debt demonstrated relative stability from 2017 to 2020, with modest fluctuations: starting at 5494 million USD in 2017, slightly increasing to a peak of 5709 million USD in 2019, and decreasing slightly to 5541 million USD in 2020. In 2021, a significant reduction occurred, with total debt dropping to 4107 million USD. This marked decrease suggests a strategic decision to deleverage or restructure debt during that year.

Stockholders’ Equity

Equity showed a general pattern of modest growth from 11708 million USD in 2017 to 12153 million USD in 2019, indicating relative stability and slight appreciation. However, a decline occurred in 2020, with equity decreasing to 10561 million USD. By the end of 2021, equity showed partial recovery, increasing marginally to 10686 million USD but remaining below the pre-2020 levels.

Debt to Equity Ratio (including operating lease liability)

The debt-to-equity ratio trended downward overall, demonstrating improving leverage conditions. The ratio began at 0.47 in 2017, dipped slightly to 0.45 in 2018, reverted to 0.47 in 2019, and increased to a peak of 0.52 in 2020, reflective of increased leverage when equity declined. In 2021, the ratio significantly improved to 0.38, consistent with the substantial reduction in debt and recovery in equity.

In summary, the company maintained somewhat stable total debt levels until 2020, when a more pronounced deleveraging effort was evident in 2021. Equity growth was moderate pre-2020 but experienced a decline during 2020, possibly impacted by external factors, with only limited recovery in 2021. The overall decrease in the debt-to-equity ratio in 2021 suggests a strengthened financial position, with lower leverage and improved balance sheet stability following these adjustments.

Total Debt

The total debt remained relatively stable from 2017 through 2019, with figures around 5,494 to 5,501 million US dollars. A slight reduction was observed in 2020, decreasing to 5,404 million US dollars, followed by a more significant decline in 2021 to 4,044 million US dollars. This indicates a strategic effort to reduce debt levels during the latter part of the period under review.

Total Capital

Total capital exhibited a moderate upward trend from 17,202 million US dollars in 2017 to a peak of 17,654 million US dollars in 2019. Afterward, total capital decreased to 15,965 million US dollars in 2020 and further to 14,730 million US dollars in 2021. This decline in capital base, especially in the last two years, suggests capital restructuring or asset reduction activities.

Debt to Capital Ratio

The debt to capital ratio showed a general pattern of stability around 0.31 during 2017 to 2019, indicating consistent leverage. In 2020, this ratio increased to 0.34, reflecting higher leverage likely due to the decline in total capital amid relatively stable debt levels. By 2021, the ratio decreased substantially to 0.27, consistent with the observed reduction in total debt outpacing the decrease in total capital, signaling improved financial leverage and potentially a stronger balance sheet position.

An analysis of the financial data over the five-year period reveals several notable trends regarding the company's debt and capital structure.

Total debt (including operating lease liability)

The total debt figures remained relatively stable from 2017 through 2020, fluctuating slightly around the 5,400 to 5,700 million US dollar range. A significant decrease is observed in 2021, where total debt dropped to 4,107 million US dollars, indicating a reduction of approximately 26% compared to the previous year.

Total capital (including operating lease liability)

Total capital showed marginal growth from 2017 through 2019, increasing from 17,202 to 17,862 million US dollars. However, a noticeable decline occurred starting in 2020, with total capital falling to 16,102 million, and further declining in 2021 to 14,793 million US dollars. This reflects a reduction of about 17% over two years.

Debt to capital ratio (including operating lease liability)

The debt to capital ratio remained relatively consistent during the 2017-2019 period, oscillating between 0.31 and 0.32. In 2020, it increased slightly to 0.34, indicating a higher proportion of debt within the capital structure during that year. In 2021, the ratio dropped to 0.28, the lowest point in the five-year span, aligning with the company's reduction in total debt and decline in total capital.

Overall, the company demonstrates a strategic reduction in debt levels in 2021, which coincides with a contraction in total capital. The decline in the debt to capital ratio in 2021 suggests an improvement in the capital structure's leverage position, potentially reflecting initiatives to deleverage or optimize the financing mix during that period.

The analysis of the annual financial data reveals notable trends in the company's debt levels, asset base, and leverage ratio over the five-year period from December 31, 2017, to December 31, 2021.

Total Debt

Total debt remained relatively stable from 2017 through 2019, with values around US$5.49 billion to US$5.50 billion. There was a slight reduction observed in 2020 to approximately US$5.40 billion, followed by a more significant decrease to US$4.04 billion by the end of 2021. This downward trend in total debt suggests a strategic effort to reduce leverage or pay down obligations during the latter years.

Total Assets

Total assets exhibited a steady decline each year, decreasing from US$22.01 billion in 2017 to US$16.99 billion in 2021. The asset base contracted by roughly 22.8% over the five-year span. This consistent reduction may reflect asset sales, depreciation exceeding investment, or other factors negatively affecting the asset balance.

Debt to Assets Ratio

The debt to assets ratio initially increased slightly from 0.25 in 2017 to a peak of 0.30 in 2020. This rise was driven by a relatively stable debt level combined with a declining asset base, meaning debt represented a larger proportion of total assets. However, in 2021, this ratio decreased substantially to 0.24, the lowest point in the observed period, corresponding with both a notable reduction in total debt and continued asset decline.

In summary, the financial data reflect a company moving through a phase of asset contraction accompanied by efforts to manage and reduce debt levels. The leverage ratio's peak in 2020 followed by a decline in 2021 indicates a shift towards improving financial stability or deleveraging after a period of heightened relative indebtedness. The persistent decrease in total assets alongside the debt reduction deserves further examination to understand the underlying causes and implications for operational capacity and future growth potential.

Total Debt (including operating lease liability)

The total debt level showed relative stability from 2017 to 2020, fluctuating slightly between approximately $5.49 billion and $5.71 billion. However, in 2021, there was a notable decline, with total debt decreasing significantly to about $4.11 billion. This reduction indicates a deleveraging effort or repayment of debt during the final reported year.

Total Assets

Total assets demonstrated a consistent declining trend over the entire period. Beginning at around $22.01 billion in 2017, assets decreased each year, falling to approximately $16.99 billion by the end of 2021. The asset base contracted by roughly 23% over five years, which may reflect asset disposals, impairments, or other balance sheet reductions.

Debt to Assets Ratio (including operating lease liability)

The debt to assets ratio increased steadily from 0.25 in 2017 to a peak of 0.31 in 2020, driven primarily by declining assets combined with relatively stable debt levels. This upward trend suggests increasing leverage or financial risk throughout this period. Nevertheless, in 2021, the ratio dropped back to 0.24, aligning with the substantial debt reduction observed that year and partially offsetting the effects of the previous asset declines.

The financial data over the five-year period reveals several notable trends related to the company's asset base, equity position, and leverage.

Total Assets

The total assets show a consistent decline from US$22,012 million in 2017 to US$16,994 million in 2021, indicating a gradual reduction in the company's asset base by approximately 23% over the period. This downward trend could reflect asset sales, depreciation, or a strategic decision to streamline operations.

Stockholders’ Equity

Stockholders' equity initially increased slightly from US$11,708 million in 2017 to reach a peak of US$12,153 million in 2019. However, it then declined to US$10,561 million in 2020 before slightly recovering to US$10,686 million in 2021. Overall, equity decreased by about 9% from 2017 to 2021, suggesting pressures on retained earnings or dividend payouts affecting the net worth of shareholders.

Financial Leverage

The financial leverage ratio exhibits a steady decrease from 1.88 in 2017 to 1.59 in 2021. This decline indicates a reduction in the reliance on debt relative to equity over time, which may point to a strengthening balance sheet and a more conservative capital structure. The interim slight increase in 2020 to 1.7 is followed by a further decrease in 2021, reinforcing this general trend of deleveraging.

In summary, the company appears to be reducing its total asset base and financial leverage while experiencing modest declines in stockholders’ equity. The reduction in leverage could improve financial stability, but the declining asset and equity values may warrant closer examination to understand the underlying causes and long-term implications.

The financial data reveals notable volatility in the earnings before interest and tax (EBIT) over the five-year period. Initially, EBIT was significantly negative in 2017, reflecting a loss before interest and taxes. The subsequent year showed a strong improvement, with EBIT increasing substantially in 2018, followed by a decline in 2019, a substantial negative value again in 2020, and a recovery in 2021.

Interest expense demonstrates a declining trend across the period. Starting at 377 million US dollars in 2017, interest expense gradually decreased each year, reaching 257 million US dollars by 2021. This reduction in interest expense could indicate effective debt management or changes in borrowing terms.

The interest coverage ratio mirrors the fluctuations observed in EBIT. In 2017, the ratio was negative, consistent with negative EBIT. This ratio rose sharply in 2018, indicating improved ability to cover interest expenses. It then decreased in 2019, showing a reduced buffer, and turned negative in 2020 alongside the negative EBIT, suggesting difficulty in covering interest costs that year. By 2021, the ratio improved to nearly 5, indicating a strong ability to service interest obligations again.

EBIT Trend

Volatile with significant swings from negative to positive values, indicating fluctuating operational profitability.

Interest Expense

Consistently decreased, suggesting improved financing costs or reduced debt levels.

Interest Coverage Ratio

Highly variable; periods of strong coverage in 2018 and 2021 contrasted by poor coverage or negative values in 2017 and 2020, reflecting operational challenges affecting the company's capacity to meet interest payments.

Overall, the data suggests periods of operational instability with improving financial health towards the end of the period, as evidenced by stronger EBIT and interest coverage in 2021 alongside lower interest expenses.

Earnings before fixed charges and tax

The earnings before fixed charges and tax exhibited significant volatility over the analyzed period. Starting with a minimal positive value of 10 million US dollars at the end of 2017, earnings surged sharply to 1,806 million US dollars by the end of 2018. A decline followed in 2019, reducing earnings to 1,184 million US dollars. This was succeeded by a notable drop into negative territory in 2020, with earnings recorded at -918 million US dollars. By the end of 2021, the earnings recovered to a positive 1,479 million US dollars, indicating a rebound from the previous year's loss.

Fixed charges

Fixed charges fluctuated throughout the period but generally showed signs of moderation after an initial decrease. In 2017, fixed charges were at 464 million US dollars. They decreased to 379 million US dollars in 2018, then increased to a peak of 792 million US dollars in 2019. Subsequently, these charges declined to 547 million US dollars in 2020 and further to 475 million US dollars by the end of 2021, suggesting some containment of fixed financial obligations in the latter years.

Fixed charge coverage ratio

The fixed charge coverage ratio mirrored the fluctuations seen in earnings before fixed charges and tax. In 2017, coverage was negligible at 0.02 times, implying minimal capacity to cover fixed charges. A substantial improvement occurred in 2018 with the ratio rising sharply to 4.77 times, indicating strong earnings relative to fixed charges. However, the ratio declined to 1.49 times in 2019 and turned negative to -1.68 times in 2020, reflecting earnings insufficiency to cover fixed charges during that year. By 2021, the ratio improved again to 3.11 times, although still below the peak of 2018, suggesting recovery in the company's ability to meet its fixed financial obligations.