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)
Marathon Oil Corp., solvency ratios (quarterly data)
Based on: 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
The financial ratios indicate notable trends in the leverage structure over the periods analyzed. The debt to equity ratio remained relatively stable between 0.45 and 0.46 from early 2018 through early 2020, with a slight increase reaching 0.54 by the third quarter of 2020. Following this peak, there is a clear downward trend, with the ratio declining to approximately 0.35 by mid-2022, suggesting a reduction in reliance on debt relative to equity in recent periods.
Similarly, the debt to capital ratio held steady at 0.31 through the end of 2019 and showed a mild rise during 2020 to a high of 0.35. This ratio then experienced a consistent decline, falling to around 0.26 by the middle of 2022. This indicates an improvement in the capital structure, with a decreasing proportion of debt used to finance the company's capital base.
The debt to assets ratio exhibited a comparable pattern: starting near 0.25 in early 2018, gradually increasing to a peak near 0.32 during the third quarter of 2020, before declining to approximately 0.22 in mid-2022. This signifies a diminishing share of debt financing relative to total assets, reflecting potentially reduced leverage or asset growth outpacing debt increases.
Financial leverage, defined as the ratio of total assets to equity, remained largely steady in the range 1.75 to 1.81 from early 2018 through 2019. A slight increase occurred in 2020, peaking at 1.71, but from 2021 onward, the ratio slowly declined to around 1.58-1.59 by mid-2022. This suggests a gradual reduction in asset coverage per unit of equity, consistent with lower debt levels relative to equity.
Overall, the data reveals a pattern of modest increases in leverage ratios during 2020, possibly reflecting increased borrowing in that period, followed by a sustained deleveraging trend through 2021 and into 2022. This shift points to strengthening financial stability through reduced debt reliance and improved capital structure management.
Debt Ratios
Debt to Equity
Marathon Oil Corp., debt to equity calculation (quarterly data)
| Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||
| Long-term debt due within one year | 273) | 106) | 36) | 36) | 33) | 500) | —) | 500) | —) | —) | —) | 600) | 600) | —) | —) | —) | —) | —) | ||||||
| Long-term debt, excluding due within one year | 3,709) | 3,908) | 3,978) | 3,977) | 4,875) | 4,905) | 5,404) | 5,405) | 5,503) | 5,502) | 5,501) | 4,903) | 4,902) | 5,501) | 5,499) | 5,498) | 5,497) | 5,495) | ||||||
| Total debt | 3,982) | 4,014) | 4,014) | 4,013) | 4,908) | 5,405) | 5,404) | 5,905) | 5,503) | 5,502) | 5,501) | 5,503) | 5,502) | 5,501) | 5,499) | 5,498) | 5,497) | 5,495) | ||||||
| Stockholders’ equity | 11,532) | 11,366) | 10,686) | 10,796) | 10,634) | 10,671) | 10,561) | 10,892) | 11,175) | 11,958) | 12,153) | 12,271) | 12,101) | 12,208) | 12,128) | 12,044) | 12,132) | 12,034) | ||||||
| Solvency Ratio | ||||||||||||||||||||||||
| Debt to equity1 | 0.35 | 0.35 | 0.38 | 0.37 | 0.46 | 0.51 | 0.51 | 0.54 | 0.49 | 0.46 | 0.45 | 0.45 | 0.45 | 0.45 | 0.45 | 0.46 | 0.45 | 0.46 | ||||||
| Benchmarks | ||||||||||||||||||||||||
| Debt to Equity, Competitors2 | ||||||||||||||||||||||||
| Chevron Corp. | 0.17 | 0.20 | 0.23 | 0.27 | 0.32 | 0.34 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| ConocoPhillips | 0.34 | 0.38 | 0.44 | 0.45 | 0.45 | 0.46 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Exxon Mobil Corp. | 0.26 | 0.28 | 0.28 | 0.35 | 0.38 | 0.40 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
1 Q2 2022 Calculation
Debt to equity = Total debt ÷ Stockholders’ equity
= 3,982 ÷ 11,532 = 0.35
2 Click competitor name to see calculations.
The analysis of the financial data reveals several notable trends in the capital structure and leverage ratios over the observed periods.
- Total Debt
- The total debt remained relatively stable around the 5,500 million USD mark from the first quarter of 2018 through mid-2020. A significant increase occurred in the third quarter of 2020, reaching 5,905 million USD. Subsequently, debt decreased steadily, reaching approximately 3,982 million USD by the second quarter of 2022. This indicates a reduction in debt levels beginning in late 2020, reflecting a possible strategic effort to deleverage.
- Stockholders' Equity
- Stockholders' equity showed a fluctuating but overall stable pattern from early 2018 through 2019, generally staying between about 12,000 and 12,300 million USD. From 2020 onward, equity declined gradually with some variability, hitting a low near 10,561 million USD in the last quarter of 2020. A recovery trend is observable from early 2021, with equity increasing moderately to approximately 11,532 million USD by mid-2022. This suggests some restoration of equity value following declines experienced during 2020.
- Debt to Equity Ratio
- The debt to equity ratio stayed within a narrow range around 0.45 from 2018 to early 2020, indicating consistent leverage levels. A rise in this ratio is evident throughout 2020, peaking at 0.54 in the third quarter, which correlates with increased debt and reduced equity during that year. From late 2020 to mid-2022, the ratio declined steadily to around 0.35, reflecting the reduction in debt and the recovery in equity. This overall decrease points to an improved leverage position and a potentially stronger capital structure.
In summary, the financial data highlight a period of increased leverage and strain on equity during 2020, followed by a concerted effort to reduce debt and regain equity strength. The resulting lower debt to equity ratio by mid-2022 indicates enhanced financial stability and a more conservative balance sheet posture in recent periods.
Debt to Capital
Marathon Oil Corp., debt to capital calculation (quarterly data)
| Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||
| Long-term debt due within one year | 273) | 106) | 36) | 36) | 33) | 500) | —) | 500) | —) | —) | —) | 600) | 600) | —) | —) | —) | —) | —) | ||||||
| Long-term debt, excluding due within one year | 3,709) | 3,908) | 3,978) | 3,977) | 4,875) | 4,905) | 5,404) | 5,405) | 5,503) | 5,502) | 5,501) | 4,903) | 4,902) | 5,501) | 5,499) | 5,498) | 5,497) | 5,495) | ||||||
| Total debt | 3,982) | 4,014) | 4,014) | 4,013) | 4,908) | 5,405) | 5,404) | 5,905) | 5,503) | 5,502) | 5,501) | 5,503) | 5,502) | 5,501) | 5,499) | 5,498) | 5,497) | 5,495) | ||||||
| Stockholders’ equity | 11,532) | 11,366) | 10,686) | 10,796) | 10,634) | 10,671) | 10,561) | 10,892) | 11,175) | 11,958) | 12,153) | 12,271) | 12,101) | 12,208) | 12,128) | 12,044) | 12,132) | 12,034) | ||||||
| Total capital | 15,514) | 15,380) | 14,700) | 14,809) | 15,542) | 16,076) | 15,965) | 16,797) | 16,678) | 17,460) | 17,654) | 17,774) | 17,603) | 17,709) | 17,627) | 17,542) | 17,629) | 17,529) | ||||||
| Solvency Ratio | ||||||||||||||||||||||||
| Debt to capital1 | 0.26 | 0.26 | 0.27 | 0.27 | 0.32 | 0.34 | 0.34 | 0.35 | 0.33 | 0.32 | 0.31 | 0.31 | 0.31 | 0.31 | 0.31 | 0.31 | 0.31 | 0.31 | ||||||
| Benchmarks | ||||||||||||||||||||||||
| Debt to Capital, Competitors2 | ||||||||||||||||||||||||
| Chevron Corp. | 0.15 | 0.17 | 0.18 | 0.22 | 0.24 | 0.26 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| ConocoPhillips | 0.25 | 0.28 | 0.31 | 0.31 | 0.31 | 0.32 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Exxon Mobil Corp. | 0.21 | 0.22 | 0.22 | 0.26 | 0.28 | 0.29 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
1 Q2 2022 Calculation
Debt to capital = Total debt ÷ Total capital
= 3,982 ÷ 15,514 = 0.26
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals several notable trends in the company's capital structure over the observed period.
- Total Debt
- The total debt remained relatively stable around the level of approximately $5,495 million through the initial quarters from March 2018 to June 2020, with a slight increase to $5,905 million recorded in September 2020. Subsequent quarters showed a marked reduction in debt levels, decreasing progressively to about $3,982 million by June 2022. This indicates a strategic effort to reduce leverage after peaking during the latter half of 2020.
- Total Capital
- Total capital exhibited minor fluctuations but overall displayed a downward trajectory across the timeframe. Starting at approximately $17,529 million in the first quarter of 2018, it decreased steadily to a low around $14,700-$15,000 million in 2021, before a slight recovery to $15,514 million by mid-2022. This contraction in capital may reflect adjustments in asset base or equity alongside the debt reduction efforts.
- Debt to Capital Ratio
- The debt to capital ratio remained steady around 0.31 during the first two years, indicating a stable leverage profile initially. However, a gradual increase was observed starting late 2019 into mid-2020, peaking at 0.35 in the third quarter of 2020, which coincides with the period when debt levels increased. Following that, the ratio declined significantly to approximately 0.26 by mid-2022, aligning with the reduction in debt. This shift suggests a deliberate deleveraging process, improving the company’s capital structure strength and lowering financial risk.
Overall, the data suggest that while the company maintained a relatively consistent capital and debt position initially, external or strategic factors prompted an increase in debt around 2020, followed by a concerted effort to reduce debt and improve capital ratios through 2021 and 2022. The reduction in both total debt and the debt to capital ratio in recent quarters indicates an emphasis on enhancing financial stability and possibly responding to market or operational challenges.
Debt to Assets
Marathon Oil Corp., debt to assets calculation (quarterly data)
| Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||
| Long-term debt due within one year | 273) | 106) | 36) | 36) | 33) | 500) | —) | 500) | —) | —) | —) | 600) | 600) | —) | —) | —) | —) | —) | ||||||
| Long-term debt, excluding due within one year | 3,709) | 3,908) | 3,978) | 3,977) | 4,875) | 4,905) | 5,404) | 5,405) | 5,503) | 5,502) | 5,501) | 4,903) | 4,902) | 5,501) | 5,499) | 5,498) | 5,497) | 5,495) | ||||||
| Total debt | 3,982) | 4,014) | 4,014) | 4,013) | 4,908) | 5,405) | 5,404) | 5,905) | 5,503) | 5,502) | 5,501) | 5,503) | 5,502) | 5,501) | 5,499) | 5,498) | 5,497) | 5,495) | ||||||
| Total assets | 18,286) | 17,981) | 16,994) | 17,161) | 17,800) | 18,233) | 17,956) | 18,663) | 18,567) | 19,715) | 20,245) | 20,373) | 21,282) | 21,410) | 21,321) | 21,778) | 21,871) | 21,634) | ||||||
| Solvency Ratio | ||||||||||||||||||||||||
| Debt to assets1 | 0.22 | 0.22 | 0.24 | 0.23 | 0.28 | 0.30 | 0.30 | 0.32 | 0.30 | 0.28 | 0.27 | 0.27 | 0.26 | 0.26 | 0.26 | 0.25 | 0.25 | 0.25 | ||||||
| Benchmarks | ||||||||||||||||||||||||
| Debt to Assets, Competitors2 | ||||||||||||||||||||||||
| Chevron Corp. | 0.10 | 0.12 | 0.13 | 0.16 | 0.18 | 0.19 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| ConocoPhillips | 0.18 | 0.20 | 0.22 | 0.23 | 0.23 | 0.24 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Exxon Mobil Corp. | 0.13 | 0.13 | 0.14 | 0.17 | 0.18 | 0.19 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
1 Q2 2022 Calculation
Debt to assets = Total debt ÷ Total assets
= 3,982 ÷ 18,286 = 0.22
2 Click competitor name to see calculations.
- Debt Levels
- The total debt of the company remained relatively stable around the 5,500 million US$ range from the first quarter of 2018 through mid-2020, peaking slightly at 5,905 million US$ in the third quarter of 2020. Following this period, there was a consistent decline in total debt, reaching approximately 3,982 million US$ by the second quarter of 2022. This downward trend suggests a strategic effort to reduce debt obligations over recent quarters.
- Assets Trend
- Total assets showed a general downward trend over the observed period. Starting from about 21,634 million US$ in the first quarter of 2018, the assets decreased steadily, reaching a low around 16,994 million US$ by the fourth quarter of 2021. However, a slight recovery is observed in early 2022, with assets increasing to approximately 18,286 million US$ by the second quarter of 2022. This fluctuation may reflect asset revaluation, sales, or investment activities impacting the asset base.
- Debt to Assets Ratio
- The debt to assets ratio increased gradually from 0.25 at the beginning of 2018 to a peak of 0.32 in the third quarter of 2020, indicating an increased proportion of debt relative to assets during this period. Post-peak, the ratio declined steadily to approximately 0.22 by mid-2022, signaling an improved balance sheet strength with relatively lower leverage. This decline is consistent with the observed reduction in total debt and the modest asset recovery.
- Overall Financial Position
- The data suggests the company experienced pressure on its financial structure up to late 2020, characterized by rising debt relative to assets and a shrinking asset base. Subsequent quarters indicate a strategic shift towards deleveraging and stabilizing the asset base, improving the leverage ratio and potentially enhancing financial stability. The improvements in leverage metrics highlight a focus on reducing financial risk and optimizing capital structure.
Financial Leverage
Marathon Oil Corp., financial leverage calculation (quarterly data)
| Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||
| Total assets | 18,286) | 17,981) | 16,994) | 17,161) | 17,800) | 18,233) | 17,956) | 18,663) | 18,567) | 19,715) | 20,245) | 20,373) | 21,282) | 21,410) | 21,321) | 21,778) | 21,871) | 21,634) | ||||||
| Stockholders’ equity | 11,532) | 11,366) | 10,686) | 10,796) | 10,634) | 10,671) | 10,561) | 10,892) | 11,175) | 11,958) | 12,153) | 12,271) | 12,101) | 12,208) | 12,128) | 12,044) | 12,132) | 12,034) | ||||||
| Solvency Ratio | ||||||||||||||||||||||||
| Financial leverage1 | 1.59 | 1.58 | 1.59 | 1.59 | 1.67 | 1.71 | 1.70 | 1.71 | 1.66 | 1.65 | 1.67 | 1.66 | 1.76 | 1.75 | 1.76 | 1.81 | 1.80 | 1.80 | ||||||
| Benchmarks | ||||||||||||||||||||||||
| Financial Leverage, Competitors2 | ||||||||||||||||||||||||
| Chevron Corp. | 1.68 | 1.70 | 1.72 | 1.77 | 1.82 | 1.83 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| ConocoPhillips | 1.87 | 1.90 | 2.00 | 1.98 | 1.93 | 1.94 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Exxon Mobil Corp. | 2.07 | 2.10 | 2.01 | 2.10 | 2.13 | 2.13 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
1 Q2 2022 Calculation
Financial leverage = Total assets ÷ Stockholders’ equity
= 18,286 ÷ 11,532 = 1.59
2 Click competitor name to see calculations.
The total assets of the company exhibit a generally declining trend over the observed periods, starting at approximately $21.6 billion and decreasing to around $18.3 billion by mid-2022. This decline is consistent throughout most quarters, with a few minor fluctuations, indicating a reduction in the asset base over time.
Stockholders’ equity shows a somewhat stable pattern with slight fluctuations. Beginning near $12.0 billion, the equity remains mostly within the range of $10.5 billion to $12.2 billion across the periods. A gradual decrease can be observed from early 2020 to the end of 2020, followed by a modest recovery in 2021 and continuing into 2022, suggesting resilience or moderate efforts to stabilize equity levels despite reductions in total assets.
The financial leverage ratio remains relatively stable around a range from approximately 1.58 to 1.8 across the full timeline. This stability suggests that the company maintained a consistent balance between debt and equity financing. The leverage ratio shows a slight decreasing trend from 2018 to 2022, which could imply either a modest reduction in the use of debt or an adjustment in the capital structure towards less reliance on borrowed funds.
- Total Assets
- Overall decreasing trend from approximately $21.6 billion to $18.3 billion, reflecting a contraction in asset base across the reported quarters.
- Stockholders’ Equity
- Relatively stable with mild fluctuations, ranging mostly between $10.5 billion and $12.2 billion. A dip is observed around 2020, with recovery thereafter.
- Financial Leverage
- Maintained a consistent ratio near 1.6 to 1.8, showing only slight declines over time, indicating stable capital structure management and limited changes in debt reliance.
The combined analysis suggests that the company has been experiencing a gradual decrease in total assets, perhaps due to divestitures, depreciation, or other operational factors, while attempting to maintain stable equity levels and a cautious leverage position. The relatively steady financial leverage ratio indicates prudent financial risk management throughout the observed periods.