National Oilwell Varco Inc. (NYSE:NOV)

An analysis of the financial data reveals several notable trends in the company's capital structure over the observed period.

Short-term borrowings and long-term debt

There was a relatively stable level of debt from 2005 through 2010, fluctuating marginally between 840 million and 891 million US dollars. A significant increase occurred in 2012, where debt rose sharply from 510 million in 2011 to 3,149 million. This elevated level of debt persisted through to 2015, reaching a peak of 3,930 million. This suggests a major shift in the company’s financing strategy or capital requirements starting in 2012.

Total Company stockholders’ equity

Shareholders’ equity demonstrated a consistent upward trend from 2005 to 2013, growing from 4,194 million to 22,230 million US dollars, signifying substantial value appreciation and retained earnings accumulation. However, from 2013 onward, equity experienced a decline, dropping to 20,692 million in 2014 and further to 16,383 million in 2015, indicating possible equity reductions or accumulated losses in the later years.

Debt to equity ratio

The ratio shows a decreasing trend from 0.20 in 2005 to a low of 0.03 in 2011, reflecting a strengthening equity base relative to debt or debt reduction during this period. Beginning in 2012, the ratio rose significantly to 0.16 and continued increasing to 0.24 by 2015. This increase aligns with the sharp rise in debt levels and declining equity, indicating a higher reliance on debt financing and a comparatively weaker equity position in the latter years.

Overall, the financial structure evolved from a low-leveraged position with strong equity growth to a more leveraged stance characterized by elevated debt and reduced equity in the final years examined. This shift may imply a strategic decision to increase debt financing or respond to external financial pressures, warranting careful monitoring of debt servicing capabilities and equity preservation moving forward.