Analysis of Solvency Ratios
Solvency ratios also known as long-term debt ratios measure a company ability to meet long-term obligations.
Solvency Ratios (Summary)
Debt Ratios
Coverage Ratios
Marathon Petroleum Corp., solvency ratios
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
The solvency profile exhibits a period of significant volatility centered around the 2020 fiscal year, followed by a recovery and a subsequent modest increase in leverage through 2023. While leverage ratios peaked during 2020, subsequent years demonstrate a stabilization of the capital structure, although recent trends indicate a slight uptick in debt reliance.
- Leverage and Capital Structure
- Debt to equity and debt to capital ratios experienced a sharp increase in 2020, with debt to equity reaching 1.42 and debt to capital rising to 0.59. These metrics reversed in 2021 and 2022, stabilizing near 0.96 and 0.49 respectively, before rising again to 1.12 and 0.53 by the end of 2023. The inclusion of operating lease liabilities consistently elevates these ratios by a small margin, suggesting that lease obligations represent a stable but secondary component of the total liability structure.
- Asset-Based Solvency and Financial Leverage
- The debt to assets ratio peaked at 0.37 in 2020 and remained relatively constant between 0.30 and 0.32 from 2021 to 2023. Similarly, financial leverage reached a maximum of 3.84 in 2020 before moderating to 3.24 in 2022 and increasing to 3.52 in 2023, reflecting an overall increase in the use of debt to finance assets compared to the 2019 baseline of 2.93.
- Debt Service Capacity
- Interest and fixed charge coverage ratios demonstrate the most extreme fluctuations over the five-year period. Both ratios turned negative in 2020, with interest coverage at -9.21 and fixed charge coverage at -5.84, indicating a period where operating earnings were insufficient to cover fixed financial costs. A substantial recovery followed, peaking in 2022 with interest coverage at 18.13 and fixed charge coverage at 13.15. Although these figures moderated in 2023 to 12.06 and 8.98 respectively, they remain significantly higher than the 2019 levels, indicating a strengthened capacity to service debt obligations relative to the start of the period.
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Debt to Equity
Marathon Petroleum Corp., debt to equity calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Debt due within one year | 1,954) | 1,066) | 571) | 2,854) | 711) | |
| Long-term debt due after one year | 25,329) | 25,634) | 24,968) | 28,730) | 28,127) | |
| Total debt | 27,283) | 26,700) | 25,539) | 31,584) | 28,838) | |
| Total MPC stockholders’ equity | 24,404) | 27,715) | 26,206) | 22,199) | 33,694) | |
| Solvency Ratio | ||||||
| Debt to equity1 | 1.12 | 0.96 | 0.97 | 1.42 | 0.86 | |
| Benchmarks | ||||||
| Debt to Equity, Competitors2 | ||||||
| Chevron Corp. | 0.13 | 0.15 | 0.23 | — | — | |
| ConocoPhillips | 0.38 | 0.35 | 0.44 | — | — | |
| Exxon Mobil Corp. | 0.20 | 0.21 | 0.28 | — | — | |
| Debt to Equity, Sector | ||||||
| Oil, Gas & Consumable Fuels | 0.20 | 0.20 | 0.28 | — | — | |
| Debt to Equity, Industry | ||||||
| Energy | 0.21 | 0.22 | 0.31 | — | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Debt to equity = Total debt ÷ Total MPC stockholders’ equity
= 27,283 ÷ 24,404 = 1.12
2 Click competitor name to see calculations.
The solvency profile between 2019 and 2023 is characterized by significant fluctuations in both total debt and stockholders' equity, resulting in variability in the debt-to-equity ratio. A notable peak in leverage occurred in 2020, followed by a period of relative stabilization and a subsequent increase in the leverage ratio by the end of 2023.
- Total Debt Trends
- Total debt increased from US$ 28,838 million in 2019 to a peak of US$ 31,584 million in 2020. A subsequent reduction occurred in 2021, bringing the balance down to US$ 25,539 million. From 2021 through 2023, a gradual upward trend is observed, with the total debt ending the period at US$ 27,283 million.
- Stockholders' Equity Volatility
- Total stockholders' equity experienced a sharp contraction from US$ 33,694 million in 2019 to US$ 22,199 million in 2020. This was followed by a recovery phase over the next two years, peaking at US$ 27,715 million in 2022, before decreasing to US$ 24,404 million by December 31, 2023.
- Debt to Equity Ratio Analysis
- The debt-to-equity ratio shifted from 0.86 in 2019 to a high of 1.42 in 2020, a movement driven by the simultaneous increase in total debt and the sharp decline in equity. The ratio improved significantly in 2021 and 2022, stabilizing at 0.97 and 0.96 respectively. However, the ratio rose again to 1.12 in 2023, indicating a renewed increase in the proportion of debt relative to equity.
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Debt to Equity (including Operating Lease Liability)
Marathon Petroleum Corp., debt to equity (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Debt due within one year | 1,954) | 1,066) | 571) | 2,854) | 711) | |
| Long-term debt due after one year | 25,329) | 25,634) | 24,968) | 28,730) | 28,127) | |
| Total debt | 27,283) | 26,700) | 25,539) | 31,584) | 28,838) | |
| Current operating lease liabilities | 454) | 368) | 438) | 497) | 604) | |
| Long-term operating lease liabilities | 764) | 841) | 927) | 1,014) | 1,875) | |
| Total debt (including operating lease liability) | 28,501) | 27,909) | 26,904) | 33,095) | 31,317) | |
| Total MPC stockholders’ equity | 24,404) | 27,715) | 26,206) | 22,199) | 33,694) | |
| Solvency Ratio | ||||||
| Debt to equity (including operating lease liability)1 | 1.17 | 1.01 | 1.03 | 1.49 | 0.93 | |
| Benchmarks | ||||||
| Debt to Equity (including Operating Lease Liability), Competitors2 | ||||||
| Chevron Corp. | 0.16 | 0.17 | 0.25 | — | — | |
| ConocoPhillips | 0.40 | 0.36 | 0.45 | — | — | |
| Exxon Mobil Corp. | 0.23 | 0.24 | 0.31 | — | — | |
| Debt to Equity (including Operating Lease Liability), Sector | ||||||
| Oil, Gas & Consumable Fuels | 0.22 | 0.23 | 0.31 | — | — | |
| Debt to Equity (including Operating Lease Liability), Industry | ||||||
| Energy | 0.24 | 0.25 | 0.34 | — | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Debt to equity (including operating lease liability) = Total debt (including operating lease liability) ÷ Total MPC stockholders’ equity
= 28,501 ÷ 24,404 = 1.17
2 Click competitor name to see calculations.
The solvency profile between 2019 and 2023 is characterized by notable fluctuations in both total leverage and the equity base, resulting in a volatile debt-to-equity trajectory. The most significant deviation occurred in 2020, followed by a period of stabilization and a subsequent uptick in the leverage ratio by the end of 2023.
- Total Debt Trends
- Total debt, including operating lease liabilities, increased from 31,317 million US$ in 2019 to a peak of 33,095 million US$ in 2020. A significant reduction followed in 2021, with debt falling to 26,904 million US$. Since 2021, a gradual upward trend has been observed, with the balance rising to 28,501 million US$ by December 31, 2023.
- Stockholders' Equity Movements
- The equity base exhibited substantial volatility over the five-year period. A sharp contraction was recorded in 2020, where equity dropped from 33,694 million US$ in 2019 to 22,199 million US$. Although a recovery trend persisted through 2022, reaching 27,715 million US$, the balance declined again in 2023 to 24,404 million US$.
- Debt to Equity Ratio Analysis
- The debt-to-equity ratio rose sharply from 0.93 in 2019 to 1.49 in 2020, a result of the simultaneous increase in total debt and the contraction of stockholders' equity. The ratio normalized significantly in 2021 and 2022, remaining near parity at 1.03 and 1.01, respectively. However, by 2023, the ratio increased to 1.17, indicating a higher reliance on debt relative to equity at the close of the period.
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Debt to Capital
Marathon Petroleum Corp., debt to capital calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Debt due within one year | 1,954) | 1,066) | 571) | 2,854) | 711) | |
| Long-term debt due after one year | 25,329) | 25,634) | 24,968) | 28,730) | 28,127) | |
| Total debt | 27,283) | 26,700) | 25,539) | 31,584) | 28,838) | |
| Total MPC stockholders’ equity | 24,404) | 27,715) | 26,206) | 22,199) | 33,694) | |
| Total capital | 51,687) | 54,415) | 51,745) | 53,783) | 62,532) | |
| Solvency Ratio | ||||||
| Debt to capital1 | 0.53 | 0.49 | 0.49 | 0.59 | 0.46 | |
| Benchmarks | ||||||
| Debt to Capital, Competitors2 | ||||||
| Chevron Corp. | 0.11 | 0.13 | 0.18 | — | — | |
| ConocoPhillips | 0.28 | 0.26 | 0.31 | — | — | |
| Exxon Mobil Corp. | 0.17 | 0.17 | 0.22 | — | — | |
| Debt to Capital, Sector | ||||||
| Oil, Gas & Consumable Fuels | 0.16 | 0.17 | 0.22 | — | — | |
| Debt to Capital, Industry | ||||||
| Energy | 0.18 | 0.18 | 0.24 | — | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Debt to capital = Total debt ÷ Total capital
= 27,283 ÷ 51,687 = 0.53
2 Click competitor name to see calculations.
The solvency profile over the five-year period from 2019 to 2023 demonstrates fluctuations in leverage and capital structure, with the debt-to-capital ratio ranging between a minimum of 0.46 and a maximum of 0.59.
- Total Debt Trends
- Total debt increased from US$ 28,838 million in 2019 to a peak of US$ 31,584 million in 2020. A significant reduction followed in 2021, bringing the balance down to US$ 25,539 million. Since that low, debt has trended upward for two consecutive years, reaching US$ 27,283 million by the end of 2023.
- Total Capital Evolution
- A general decline in total capital is observed over the analyzed timeframe, falling from US$ 62,532 million in 2019 to US$ 51,687 million in 2023. While a moderate increase occurred in 2022, reaching US$ 54,415 million, the overall trend reflects a contraction in the capital base.
- Debt to Capital Ratio Analysis
- The debt-to-capital ratio experienced a sharp increase from 0.46 in 2019 to 0.59 in 2020, a result of rising debt coinciding with a decrease in total capital. This ratio was subsequently reduced to 0.49 in 2021 and remained constant through 2022. By December 31, 2023, the ratio rose again to 0.53, driven by the simultaneous occurrence of increased total debt and the lowest recorded total capital level of the five-year period.
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Debt to Capital (including Operating Lease Liability)
Marathon Petroleum Corp., debt to capital (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Debt due within one year | 1,954) | 1,066) | 571) | 2,854) | 711) | |
| Long-term debt due after one year | 25,329) | 25,634) | 24,968) | 28,730) | 28,127) | |
| Total debt | 27,283) | 26,700) | 25,539) | 31,584) | 28,838) | |
| Current operating lease liabilities | 454) | 368) | 438) | 497) | 604) | |
| Long-term operating lease liabilities | 764) | 841) | 927) | 1,014) | 1,875) | |
| Total debt (including operating lease liability) | 28,501) | 27,909) | 26,904) | 33,095) | 31,317) | |
| Total MPC stockholders’ equity | 24,404) | 27,715) | 26,206) | 22,199) | 33,694) | |
| Total capital (including operating lease liability) | 52,905) | 55,624) | 53,110) | 55,294) | 65,011) | |
| Solvency Ratio | ||||||
| Debt to capital (including operating lease liability)1 | 0.54 | 0.50 | 0.51 | 0.60 | 0.48 | |
| Benchmarks | ||||||
| Debt to Capital (including Operating Lease Liability), Competitors2 | ||||||
| Chevron Corp. | 0.14 | 0.15 | 0.20 | — | — | |
| ConocoPhillips | 0.28 | 0.26 | 0.31 | — | — | |
| Exxon Mobil Corp. | 0.19 | 0.19 | 0.24 | — | — | |
| Debt to Capital (including Operating Lease Liability), Sector | ||||||
| Oil, Gas & Consumable Fuels | 0.18 | 0.19 | 0.23 | — | — | |
| Debt to Capital (including Operating Lease Liability), Industry | ||||||
| Energy | 0.20 | 0.20 | 0.25 | — | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Debt to capital (including operating lease liability) = Total debt (including operating lease liability) ÷ Total capital (including operating lease liability)
= 28,501 ÷ 52,905 = 0.54
2 Click competitor name to see calculations.
The solvency profile exhibits fluctuations over the five-year period, characterized by a peak in leverage in 2020 followed by a period of correction and a slight upward trend in the final year.
- Total Debt Trends
- Total debt, inclusive of operating lease liabilities, increased from US$ 31,317 million in 2019 to a peak of US$ 33,095 million in 2020. A significant reduction occurred in 2021, with debt falling to US$ 26,904 million. Subsequently, a moderate increasing trend is observed, with total debt rising to US$ 28,501 million by December 31, 2023.
- Total Capital Fluctuations
- Total capital experienced a general decline from its 2019 level of US$ 65,011 million. Despite a brief increase in 2022 to US$ 55,624 million, the total capital base reached its lowest point in 2023 at US$ 52,905 million. This overall contraction in the capital base has influenced the volatility of the leverage ratios.
- Debt to Capital Ratio Analysis
- The debt to capital ratio rose sharply from 0.48 in 2019 to 0.60 in 2020, marking the highest leverage point in the period. A significant correction followed, with the ratio descending to 0.51 in 2021 and remaining stable at 0.50 in 2022. By the end of 2023, the ratio increased to 0.54, indicating that debt represents a slightly larger proportion of the total capital structure compared to the immediate prior two years.
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Debt to Assets
Marathon Petroleum Corp., debt to assets calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Debt due within one year | 1,954) | 1,066) | 571) | 2,854) | 711) | |
| Long-term debt due after one year | 25,329) | 25,634) | 24,968) | 28,730) | 28,127) | |
| Total debt | 27,283) | 26,700) | 25,539) | 31,584) | 28,838) | |
| Total assets | 85,987) | 89,904) | 85,373) | 85,158) | 98,556) | |
| Solvency Ratio | ||||||
| Debt to assets1 | 0.32 | 0.30 | 0.30 | 0.37 | 0.29 | |
| Benchmarks | ||||||
| Debt to Assets, Competitors2 | ||||||
| Chevron Corp. | 0.08 | 0.09 | 0.13 | — | — | |
| ConocoPhillips | 0.20 | 0.18 | 0.22 | — | — | |
| Exxon Mobil Corp. | 0.11 | 0.11 | 0.14 | — | — | |
| Debt to Assets, Sector | ||||||
| Oil, Gas & Consumable Fuels | 0.11 | 0.11 | 0.15 | — | — | |
| Debt to Assets, Industry | ||||||
| Energy | 0.12 | 0.12 | 0.16 | — | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Debt to assets = Total debt ÷ Total assets
= 27,283 ÷ 85,987 = 0.32
2 Click competitor name to see calculations.
The solvency profile from 2019 to 2023 reflects a period of adjustment in capital structure and asset valuation, characterized by a notable peak in leverage during 2020 followed by a period of relative stabilization.
- Total Debt Trends
- Total debt experienced an increase from US$ 28,838 million in 2019 to a peak of US$ 31,584 million in 2020. This was followed by a significant reduction to US$ 25,539 million in 2021. In the subsequent two years, debt levels showed a gradual upward trajectory, reaching US$ 27,283 million by December 31, 2023.
- Total Asset Fluctuations
- A substantial contraction in the asset base occurred between 2019 and 2020, with total assets falling from US$ 98,556 million to US$ 85,158 million. While a partial recovery to US$ 89,904 million was observed in 2022, the asset base concluded the period at US$ 85,987 million in 2023.
- Debt to Assets Ratio Analysis
- The debt to assets ratio reached a five-year high of 0.37 in 2020, driven by the simultaneous rise in liabilities and decline in asset value. Following this peak, the ratio normalized to 0.30 in 2021 and 2022, before increasing slightly to 0.32 in 2023. This indicates that despite fluctuations in absolute values, the company has maintained a consistent solvency threshold where approximately 30% to 32% of assets are financed by debt for the majority of the analyzed period.
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Debt to Assets (including Operating Lease Liability)
Marathon Petroleum Corp., debt to assets (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Debt due within one year | 1,954) | 1,066) | 571) | 2,854) | 711) | |
| Long-term debt due after one year | 25,329) | 25,634) | 24,968) | 28,730) | 28,127) | |
| Total debt | 27,283) | 26,700) | 25,539) | 31,584) | 28,838) | |
| Current operating lease liabilities | 454) | 368) | 438) | 497) | 604) | |
| Long-term operating lease liabilities | 764) | 841) | 927) | 1,014) | 1,875) | |
| Total debt (including operating lease liability) | 28,501) | 27,909) | 26,904) | 33,095) | 31,317) | |
| Total assets | 85,987) | 89,904) | 85,373) | 85,158) | 98,556) | |
| Solvency Ratio | ||||||
| Debt to assets (including operating lease liability)1 | 0.33 | 0.31 | 0.32 | 0.39 | 0.32 | |
| Benchmarks | ||||||
| Debt to Assets (including Operating Lease Liability), Competitors2 | ||||||
| Chevron Corp. | 0.10 | 0.11 | 0.15 | — | — | |
| ConocoPhillips | 0.20 | 0.18 | 0.23 | — | — | |
| Exxon Mobil Corp. | 0.13 | 0.13 | 0.16 | — | — | |
| Debt to Assets (including Operating Lease Liability), Sector | ||||||
| Oil, Gas & Consumable Fuels | 0.13 | 0.13 | 0.16 | — | — | |
| Debt to Assets (including Operating Lease Liability), Industry | ||||||
| Energy | 0.14 | 0.14 | 0.17 | — | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Debt to assets (including operating lease liability) = Total debt (including operating lease liability) ÷ Total assets
= 28,501 ÷ 85,987 = 0.33
2 Click competitor name to see calculations.
The solvency profile of the organization over the five-year period from 2019 to 2023 demonstrates a general stability in leverage, despite a period of volatility between 2019 and 2021. The debt-to-assets ratio remained within a narrow range of 0.31 to 0.39, suggesting a consistent approach to balancing debt obligations against the total asset base.
- Debt to Assets Ratio Trends
- The ratio experienced a notable peak in 2020, rising to 0.39 from 0.32 in 2019. This increase was the result of a simultaneous rise in total debt and a contraction in the total asset base. Following this peak, the ratio declined to 0.32 in 2021 and further to 0.31 in 2022, before settling at 0.33 by the end of 2023. This indicates that the company successfully corrected the leverage spike observed in 2020.
- Total Asset Fluctuations
- A significant reduction in total assets occurred between 2019 and 2020, with values dropping from US$ 98,556 million to US$ 85,158 million. Assets remained relatively stable in 2021 and saw a moderate recovery to US$ 89,904 million in 2022, before declining again to US$ 85,987 million in 2023. The volatility in the asset base has been a primary driver of the fluctuations in the solvency ratio.
- Total Debt Management
- Total debt, including operating lease liabilities, peaked in 2020 at US$ 33,095 million. A substantial reduction was achieved by December 31, 2021, when debt fell to US$ 26,904 million. Since 2021, a gradual upward trend in total debt has been observed, with the balance increasing to US$ 27,909 million in 2022 and US$ 28,501 million in 2023. Despite this slight increase, debt levels remain lower than those recorded in 2019 and 2020.
Overall, the data indicates a disciplined management of solvency. The company managed to lower its absolute debt levels following 2020 and maintained a debt-to-assets ratio that has largely returned to 2019 levels, signaling a stable capital structure.
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Financial Leverage
Marathon Petroleum Corp., financial leverage calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Total assets | 85,987) | 89,904) | 85,373) | 85,158) | 98,556) | |
| Total MPC stockholders’ equity | 24,404) | 27,715) | 26,206) | 22,199) | 33,694) | |
| Solvency Ratio | ||||||
| Financial leverage1 | 3.52 | 3.24 | 3.26 | 3.84 | 2.93 | |
| Benchmarks | ||||||
| Financial Leverage, Competitors2 | ||||||
| Chevron Corp. | 1.63 | 1.62 | 1.72 | — | — | |
| ConocoPhillips | 1.95 | 1.95 | 2.00 | — | — | |
| Exxon Mobil Corp. | 1.84 | 1.89 | 2.01 | — | — | |
| Financial Leverage, Sector | ||||||
| Oil, Gas & Consumable Fuels | 1.77 | 1.79 | 1.90 | — | — | |
| Financial Leverage, Industry | ||||||
| Energy | 1.80 | 1.82 | 1.93 | — | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Financial leverage = Total assets ÷ Total MPC stockholders’ equity
= 85,987 ÷ 24,404 = 3.52
2 Click competitor name to see calculations.
Between 2019 and 2023, the company's capital structure exhibited notable volatility, characterized by fluctuations in total assets and stockholders' equity that directly influenced the financial leverage ratio. A significant shift in the solvency profile occurred in 2020, followed by a period of relative stabilization and a subsequent increase in leverage by the end of the analyzed period.
- Financial Leverage Trends
- The financial leverage ratio rose from 2.93 in 2019 to a peak of 3.84 in 2020, indicating an increased reliance on debt relative to equity. A corrective trend followed, with the ratio decreasing to 3.26 in 2021 and remaining stable at 3.24 in 2022. However, this trend reversed in 2023, as the ratio climbed back to 3.52.
- Asset and Equity Dynamics
- Total assets experienced a contraction from $98,556 million in 2019 to $85,158 million in 2020, remaining largely range-bound between $85 billion and $90 billion through 2023. Stockholders' equity showed greater volatility, dropping sharply from $33,694 million in 2019 to $22,199 million in 2020. Because the decrease in equity was more pronounced than the decrease in total assets during the 2020 period, the leverage ratio spiked significantly.
- Solvency and Capital Structure Insights
- The data indicates a recurring pattern of leverage expansion. The reduction of equity from $27,715 million in 2022 to $24,404 million in 2023, combined with the increase in the financial leverage ratio to 3.52, suggests a renewed shift toward a more leveraged balance sheet. This trajectory reflects a capital structure that is more dependent on external financing than it was at the start of the five-year period.
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Interest Coverage
Marathon Petroleum Corp., interest coverage calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income (loss) attributable to MPC | 9,681) | 14,516) | 9,738) | (9,826) | 2,637) | |
| Add: Net income attributable to noncontrolling interest | 1,491) | 1,534) | 1,263) | (151) | 618) | |
| Less: Income from discontinued operations, net of tax | —) | 72) | 8,448) | 1,205) | —) | |
| Add: Income tax expense | 2,817) | 4,491) | 264) | (2,430) | 1,074) | |
| Add: Interest expense, net of interest capitalized | 1,265) | 1,195) | 1,267) | 1,333) | 1,238) | |
| Earnings before interest and tax (EBIT) | 15,254) | 21,664) | 4,084) | (12,279) | 5,567) | |
| Solvency Ratio | ||||||
| Interest coverage1 | 12.06 | 18.13 | 3.22 | -9.21 | 4.50 | |
| Benchmarks | ||||||
| Interest Coverage, Competitors2 | ||||||
| Chevron Corp. | 64.08 | 97.27 | 31.39 | — | — | |
| ConocoPhillips | 21.88 | 36.07 | 15.38 | — | — | |
| Exxon Mobil Corp. | 63.17 | 98.43 | 33.98 | — | — | |
| Interest Coverage, Sector | ||||||
| Oil, Gas & Consumable Fuels | 48.02 | 74.46 | 26.79 | — | — | |
| Interest Coverage, Industry | ||||||
| Energy | 40.96 | 62.30 | 23.05 | — | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Interest coverage = EBIT ÷ Interest expense
= 15,254 ÷ 1,265 = 12.06
2 Click competitor name to see calculations.
The analysis of solvency metrics reveals a period of significant operational volatility followed by a substantial recovery in the capacity to service debt. While interest obligations remained stable over the five-year period, the ability to cover these costs fluctuated in direct correlation with the volatility of operating earnings.
- Earnings before Interest and Tax (EBIT) Trends
- EBIT exhibited extreme variance between 2019 and 2023. A significant contraction occurred in 2020, where earnings fell from 5,567 million USD to a deficit of 12,279 million USD. This was followed by a sharp recovery phase, with EBIT reaching a peak of 21,664 million USD in 2022 before moderating to 15,254 million USD in 2023.
- Interest Expense Consistency
- Net interest expenses remained remarkably stable throughout the analyzed timeframe, fluctuating narrowly between a low of 1,195 million USD in 2022 and a high of 1,333 million USD in 2020. This consistency indicates a controlled debt structure that remained unaffected by the operational swings seen in the EBIT figures.
- Interest Coverage Ratio Performance
- The interest coverage ratio reflects the combined impact of volatile earnings and stable interest costs. The ratio declined from 4.50 in 2019 to -9.21 in 2020, signaling a period where operating profits were insufficient to cover interest expenses. A strong rebound followed, with the ratio climbing to 18.13 in 2022 and settling at 12.06 in 2023. The current ratio indicates a high margin of safety and a robust capacity to meet interest obligations from operating income.
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Fixed Charge Coverage
Marathon Petroleum Corp., fixed charge coverage calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income (loss) attributable to MPC | 9,681) | 14,516) | 9,738) | (9,826) | 2,637) | |
| Add: Net income attributable to noncontrolling interest | 1,491) | 1,534) | 1,263) | (151) | 618) | |
| Less: Income from discontinued operations, net of tax | —) | 72) | 8,448) | 1,205) | —) | |
| Add: Income tax expense | 2,817) | 4,491) | 264) | (2,430) | 1,074) | |
| Add: Interest expense, net of interest capitalized | 1,265) | 1,195) | 1,267) | 1,333) | 1,238) | |
| Earnings before interest and tax (EBIT) | 15,254) | 21,664) | 4,084) | (12,279) | 5,567) | |
| Add: Operating lease cost | 489) | 490) | 581) | 658) | 793) | |
| Earnings before fixed charges and tax | 15,743) | 22,154) | 4,665) | (11,621) | 6,360) | |
| Interest expense, net of interest capitalized | 1,265) | 1,195) | 1,267) | 1,333) | 1,238) | |
| Operating lease cost | 489) | 490) | 581) | 658) | 793) | |
| Fixed charges | 1,754) | 1,685) | 1,848) | 1,991) | 2,031) | |
| Solvency Ratio | ||||||
| Fixed charge coverage1 | 8.98 | 13.15 | 2.52 | -5.84 | 3.13 | |
| Benchmarks | ||||||
| Fixed Charge Coverage, Competitors2 | ||||||
| Chevron Corp. | 9.57 | 18.28 | 8.43 | — | — | |
| ConocoPhillips | 17.14 | 28.76 | 11.94 | — | — | |
| Exxon Mobil Corp. | 19.68 | 31.21 | 13.55 | — | — | |
| Fixed Charge Coverage, Sector | ||||||
| Oil, Gas & Consumable Fuels | 14.54 | 25.07 | 10.99 | — | — | |
| Fixed Charge Coverage, Industry | ||||||
| Energy | 12.31 | 20.61 | 9.19 | — | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Fixed charge coverage = Earnings before fixed charges and tax ÷ Fixed charges
= 15,743 ÷ 1,754 = 8.98
2 Click competitor name to see calculations.
The solvency profile reflects a period of extreme volatility followed by a substantial strengthening of the capacity to meet fixed obligations. A critical downturn occurred in 2020, succeeded by a recovery phase and a peak in solvency margins in 2022.
- Earnings Before Fixed Charges and Tax (EBFCT)
- A significant contraction is observed in 2020, where earnings fell to negative 11,621 million USD. A strong recovery trend followed, with earnings increasing to 4,665 million USD in 2021 and peaking at 22,154 million USD in 2022. While 2023 shows a reduction to 15,743 million USD, the level remains substantially higher than pre-2020 figures.
- Fixed Charges Management
- Fixed charges exhibited a steady decline from 2,031 million USD in 2019 to a low of 1,685 million USD in 2022. A marginal increase to 1,754 million USD was recorded in 2023, indicating a generally stable and controlled fixed-cost structure over the five-year period.
- Fixed Charge Coverage Ratio
- The coverage ratio shifted from 3.13 in 2019 to a negative 5.84 in 2020, signaling a temporary inability to cover fixed obligations from operating earnings. The ratio rebounded to 2.52 in 2021 and surged to 13.15 in 2022, representing a period of exceptional solvency. By 2023, the ratio adjusted to 8.98, which continues to denote a robust margin of safety for creditors.
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