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
Occidental Petroleum Corp., solvency ratios
Based on: 10-K (reporting date: 2024-12-31), 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).
The solvency profile exhibits a significant trajectory of deleveraging and risk reduction between 2020 and 2022, followed by a period of stabilization and a slight increase in leverage ratios toward the end of 2024.
- Leverage and Capital Structure
- A sharp decline in the debt-to-equity ratio is evident, falling from 1.95 in 2020 to 0.65 by 2023. This trend is mirrored in the debt-to-assets ratio, which decreased from 0.45 to 0.27 over the same period. A modest reversal occurred in 2024, with the debt-to-equity ratio rising to 0.76 and the debt-to-assets ratio increasing to 0.31, indicating a slight uptick in debt reliance.
- The debt-to-capital ratio followed a consistent downward path from 0.66 in 2020 to a low of 0.39 in 2023, before adjusting to 0.43 in 2024. Correspondingly, financial leverage decreased significantly from 4.31 in 2020 to 2.41 in 2022, suggesting a substantial reduction in the company's financial risk profile, although this figure trended slightly upward to 2.50 by the end of 2024.
- Debt Serviceability and Coverage
- A critical recovery in debt serviceability occurred after 2020, where both interest coverage (-10.03) and fixed charge coverage (-4.00) were negative. These metrics peaked in 2022, with interest coverage reaching 14.71 and fixed charge coverage reaching 6.42, signaling a period of high liquidity relative to fixed obligations.
- Following the 2022 peak, a downward trend in coverage is observed. Interest coverage declined to 7.80 in 2023 and further to 4.46 in 2024. Fixed charge coverage similarly fell to 3.09 in 2023 and 2.26 in 2024. While these ratios remain positive, the declining trend indicates a reduction in the cushion available to meet interest and fixed financial commitments.
Overall, the data reflects a successful transition from a high-leverage, high-risk position in 2020 to a more stable capital structure. However, the most recent figures from 2024 suggest a gradual return to higher leverage and a narrowing of coverage margins.
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Debt to Equity
Occidental Petroleum Corp., debt to equity calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current maturities of long-term debt | 1,138) | 1,202) | 165) | 186) | 440) | |
| Long-term debt, net, excluding current maturities | 24,978) | 18,536) | 19,670) | 29,431) | 35,745) | |
| Total debt | 26,116) | 19,738) | 19,835) | 29,617) | 36,185) | |
| Stockholders’ equity | 34,159) | 30,250) | 30,085) | 20,327) | 18,573) | |
| Solvency Ratio | ||||||
| Debt to equity1 | 0.76 | 0.65 | 0.66 | 1.46 | 1.95 | |
| Benchmarks | ||||||
| Debt to Equity, Competitors2 | ||||||
| Chevron Corp. | 0.16 | 0.13 | 0.15 | 0.23 | — | |
| ConocoPhillips | 0.38 | 0.38 | 0.35 | 0.44 | — | |
| ExxonMobil Holdings Corp. | 0.16 | 0.20 | 0.21 | 0.28 | — | |
| Debt to Equity, Sector | ||||||
| Oil, Gas & Consumable Fuels | 0.19 | 0.20 | 0.20 | 0.28 | — | |
| Debt to Equity, Industry | ||||||
| Energy | 0.20 | 0.21 | 0.22 | 0.31 | — | |
Based on: 10-K (reporting date: 2024-12-31), 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).
1 2024 Calculation
Debt to equity = Total debt ÷ Stockholders’ equity
= 26,116 ÷ 34,159 = 0.76
2 Click competitor name to see calculations.
The solvency profile exhibits a significant deleveraging trend between 2020 and 2023, followed by a moderate increase in leverage during the 2024 fiscal year. The overall trajectory indicates a strategic transition from a high-debt position to a more conservative capital structure, although recent activity suggests a renewed utilization of debt financing.
- Total Debt Trends
- A consistent reduction in total debt is observed from 2020 to 2023, with the balance decreasing from 36,185 million US$ to 19,738 million US$. This represents a cumulative reduction of approximately 45% over three years. However, this trend reversed in 2024, as total debt rose to 26,116 million US$, marking a 32% increase from the previous year's low.
- Stockholders’ Equity Growth
- Equity has demonstrated steady growth throughout the analyzed period, rising from 18,573 million US$ in 2020 to 34,159 million US$ in 2024. The most substantial increase occurred between 2021 and 2022, where equity grew by approximately 48%, contributing significantly to the strengthening of the balance sheet.
- Debt to Equity Ratio Analysis
- The debt to equity ratio reflects a sharp improvement in solvency, falling from 1.95 in 2020 to a low of 0.65 in 2023. This decline was driven by the simultaneous reduction of liabilities and the expansion of the equity base. In 2024, the ratio increased to 0.76, reflecting the uptick in total debt, though the level remains substantially lower than the 2020 and 2021 benchmarks.
The data indicates that the period of aggressive debt repayment and equity accumulation between 2020 and 2023 successfully lowered the company's financial risk. While the 2024 figures show a rise in the debt to equity ratio, the solvency position remains robust compared to the initial 2020 baseline.
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Debt to Equity (including Operating Lease Liability)
Occidental Petroleum Corp., debt to equity (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current maturities of long-term debt | 1,138) | 1,202) | 165) | 186) | 440) | |
| Long-term debt, net, excluding current maturities | 24,978) | 18,536) | 19,670) | 29,431) | 35,745) | |
| Total debt | 26,116) | 19,738) | 19,835) | 29,617) | 36,185) | |
| Current operating lease liabilities | 374) | 446) | 273) | 186) | 473) | |
| Non-current operating lease liabilities | 614) | 727) | 657) | 585) | 641) | |
| Total debt (including operating lease liability) | 27,104) | 20,911) | 20,765) | 30,388) | 37,299) | |
| Stockholders’ equity | 34,159) | 30,250) | 30,085) | 20,327) | 18,573) | |
| Solvency Ratio | ||||||
| Debt to equity (including operating lease liability)1 | 0.79 | 0.69 | 0.69 | 1.49 | 2.01 | |
| Benchmarks | ||||||
| Debt to Equity (including Operating Lease Liability), Competitors2 | ||||||
| Chevron Corp. | 0.19 | 0.16 | 0.17 | 0.25 | — | |
| ConocoPhillips | 0.39 | 0.40 | 0.36 | 0.45 | — | |
| ExxonMobil Holdings Corp. | 0.18 | 0.23 | 0.24 | 0.31 | — | |
| Debt to Equity (including Operating Lease Liability), Sector | ||||||
| Oil, Gas & Consumable Fuels | 0.21 | 0.22 | 0.23 | 0.31 | — | |
| Debt to Equity (including Operating Lease Liability), Industry | ||||||
| Energy | 0.23 | 0.24 | 0.25 | 0.34 | — | |
Based on: 10-K (reporting date: 2024-12-31), 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).
1 2024 Calculation
Debt to equity (including operating lease liability) = Total debt (including operating lease liability) ÷ Stockholders’ equity
= 27,104 ÷ 34,159 = 0.79
2 Click competitor name to see calculations.
The solvency profile from 2020 to 2024 is characterized by a period of aggressive deleveraging followed by a recent moderate increase in debt obligations. This trajectory indicates a significant strengthening of the balance sheet over the five-year period, shifting from a highly leveraged position to a more conservative capital structure.
- Total Debt Dynamics
- A substantial reduction in total debt, including operating lease liabilities, occurred between 2020 and 2022, with balances falling from 37,299 million US$ to 20,765 million US$. Following a period of stability in 2023, an upward trend is observed in 2024, as debt levels rose to 27,104 million US$.
- Stockholders' Equity Growth
- Equity demonstrated consistent growth throughout the analyzed period. From a baseline of 18,573 million US$ in 2020, the value rose steadily to reach 34,159 million US$ by 2024. The most pronounced increase took place between 2021 and 2022, providing a stronger capital cushion for the organization.
- Debt to Equity Ratio Analysis
- The debt to equity ratio experienced a sharp contraction from 2.01 in 2020 to 0.69 in 2022, signaling a marked decrease in financial leverage. While the ratio remained constant at 0.69 through 2023, a slight increase to 0.79 was recorded in 2024. Despite this recent uptick, the 2024 ratio remains significantly lower than the 2020 peak, reflecting an overall improvement in long-term solvency.
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Debt to Capital
Occidental Petroleum Corp., debt to capital calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current maturities of long-term debt | 1,138) | 1,202) | 165) | 186) | 440) | |
| Long-term debt, net, excluding current maturities | 24,978) | 18,536) | 19,670) | 29,431) | 35,745) | |
| Total debt | 26,116) | 19,738) | 19,835) | 29,617) | 36,185) | |
| Stockholders’ equity | 34,159) | 30,250) | 30,085) | 20,327) | 18,573) | |
| Total capital | 60,275) | 49,988) | 49,920) | 49,944) | 54,758) | |
| Solvency Ratio | ||||||
| Debt to capital1 | 0.43 | 0.39 | 0.40 | 0.59 | 0.66 | |
| Benchmarks | ||||||
| Debt to Capital, Competitors2 | ||||||
| Chevron Corp. | 0.14 | 0.11 | 0.13 | 0.18 | — | |
| ConocoPhillips | 0.27 | 0.28 | 0.26 | 0.31 | — | |
| ExxonMobil Holdings Corp. | 0.14 | 0.17 | 0.17 | 0.22 | — | |
| Debt to Capital, Sector | ||||||
| Oil, Gas & Consumable Fuels | 0.16 | 0.16 | 0.17 | 0.22 | — | |
| Debt to Capital, Industry | ||||||
| Energy | 0.17 | 0.18 | 0.18 | 0.24 | — | |
Based on: 10-K (reporting date: 2024-12-31), 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).
1 2024 Calculation
Debt to capital = Total debt ÷ Total capital
= 26,116 ÷ 60,275 = 0.43
2 Click competitor name to see calculations.
Between 2020 and 2024, a significant deleveraging cycle occurred, followed by a moderate increase in both debt and total capital in the final period. The overall solvency profile improved substantially from the start of the period, characterized by a consistent reduction in the debt-to-capital ratio until 2023, before a slight reversal in 2024.
- Total Debt Trends
- Total debt experienced a sharp decline from US$ 36,185 million in 2020 to a low of US$ 19,738 million by 2023. This downward trajectory represents a reduction of approximately 45% over three years. However, this trend reversed in 2024, with total debt increasing to US$ 26,116 million.
- Total Capital Fluctuations
- Total capital remained relatively stable between 2021 and 2023, hovering around the US$ 49,900 million mark after an initial decrease from US$ 54,758 million in 2020. A notable expansion occurred in 2024, where total capital rose to US$ 60,275 million, coinciding with the increase in total debt.
- Debt to Capital Ratio Analysis
- The debt to capital ratio demonstrates a strong improving trend in solvency from 2020 to 2023, falling from 0.66 to 0.39. This indicate a strategic shift toward a less leveraged capital structure. While the ratio rose to 0.43 in 2024, the level remains significantly lower than the 2020 peak, suggesting that the increase in debt was managed relative to the growth in total capital.
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Debt to Capital (including Operating Lease Liability)
Occidental Petroleum Corp., debt to capital (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current maturities of long-term debt | 1,138) | 1,202) | 165) | 186) | 440) | |
| Long-term debt, net, excluding current maturities | 24,978) | 18,536) | 19,670) | 29,431) | 35,745) | |
| Total debt | 26,116) | 19,738) | 19,835) | 29,617) | 36,185) | |
| Current operating lease liabilities | 374) | 446) | 273) | 186) | 473) | |
| Non-current operating lease liabilities | 614) | 727) | 657) | 585) | 641) | |
| Total debt (including operating lease liability) | 27,104) | 20,911) | 20,765) | 30,388) | 37,299) | |
| Stockholders’ equity | 34,159) | 30,250) | 30,085) | 20,327) | 18,573) | |
| Total capital (including operating lease liability) | 61,263) | 51,161) | 50,850) | 50,715) | 55,872) | |
| Solvency Ratio | ||||||
| Debt to capital (including operating lease liability)1 | 0.44 | 0.41 | 0.41 | 0.60 | 0.67 | |
| Benchmarks | ||||||
| Debt to Capital (including Operating Lease Liability), Competitors2 | ||||||
| Chevron Corp. | 0.16 | 0.14 | 0.15 | 0.20 | — | |
| ConocoPhillips | 0.28 | 0.28 | 0.26 | 0.31 | — | |
| ExxonMobil Holdings Corp. | 0.15 | 0.19 | 0.19 | 0.24 | — | |
| Debt to Capital (including Operating Lease Liability), Sector | ||||||
| Oil, Gas & Consumable Fuels | 0.18 | 0.18 | 0.19 | 0.23 | — | |
| Debt to Capital (including Operating Lease Liability), Industry | ||||||
| Energy | 0.19 | 0.20 | 0.20 | 0.25 | — | |
Based on: 10-K (reporting date: 2024-12-31), 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).
1 2024 Calculation
Debt to capital (including operating lease liability) = Total debt (including operating lease liability) ÷ Total capital (including operating lease liability)
= 27,104 ÷ 61,263 = 0.44
2 Click competitor name to see calculations.
An analysis of the solvency metrics indicates a significant deleveraging process occurred between 2020 and 2022, resulting in a strengthened capital structure. While there was a moderate increase in debt and a corresponding slight rise in the debt-to-capital ratio in 2024, the overall solvency position remains substantially improved compared to the 2020 baseline.
- Debt to Capital Ratio Trend
- The ratio exhibited a sharp downward trend from 0.67 in 2020 to 0.41 in 2022. This figure remained stable at 0.41 through 2023 before experiencing a marginal increase to 0.44 in 2024. This trajectory indicates a strategic shift toward a less debt-intensive capital structure.
- Total Debt Dynamics
- Total debt, including operating lease liabilities, decreased consistently from 37,299 million US dollars in 2020 to a low of 20,765 million US dollars in 2022. After a period of stability in 2023, total debt rose to 27,104 million US dollars by the end of 2024, though this remains significantly lower than the 2020 peak.
- Total Capital Evolution
- Total capital remained relatively range-bound between 2021 and 2023, fluctuating between 50,715 million and 51,161 million US dollars. A notable expansion occurred in 2024, with total capital increasing to 61,263 million US dollars, which contributed to tempering the impact of the increased debt on the overall solvency ratio.
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Debt to Assets
Occidental Petroleum Corp., debt to assets calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current maturities of long-term debt | 1,138) | 1,202) | 165) | 186) | 440) | |
| Long-term debt, net, excluding current maturities | 24,978) | 18,536) | 19,670) | 29,431) | 35,745) | |
| Total debt | 26,116) | 19,738) | 19,835) | 29,617) | 36,185) | |
| Total assets | 85,445) | 74,008) | 72,609) | 75,036) | 80,064) | |
| Solvency Ratio | ||||||
| Debt to assets1 | 0.31 | 0.27 | 0.27 | 0.39 | 0.45 | |
| Benchmarks | ||||||
| Debt to Assets, Competitors2 | ||||||
| Chevron Corp. | 0.10 | 0.08 | 0.09 | 0.13 | — | |
| ConocoPhillips | 0.20 | 0.20 | 0.18 | 0.22 | — | |
| ExxonMobil Holdings Corp. | 0.09 | 0.11 | 0.11 | 0.14 | — | |
| Debt to Assets, Sector | ||||||
| Oil, Gas & Consumable Fuels | 0.11 | 0.11 | 0.11 | 0.15 | — | |
| Debt to Assets, Industry | ||||||
| Energy | 0.12 | 0.12 | 0.12 | 0.16 | — | |
Based on: 10-K (reporting date: 2024-12-31), 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).
1 2024 Calculation
Debt to assets = Total debt ÷ Total assets
= 26,116 ÷ 85,445 = 0.31
2 Click competitor name to see calculations.
The solvency profile from 2020 to 2024 exhibits a distinct trajectory of aggressive deleveraging followed by a strategic increase in leverage to support asset expansion.
- Debt to Assets Ratio Trends
- A significant downward trend is observed between 2020 and 2022, with the debt to assets ratio decreasing from 0.45 to 0.27. This reduction indicates a substantial improvement in the solvency position and a decreased reliance on borrowed capital relative to the asset base. The ratio remained stable at 0.27 through 2023 before rising to 0.31 in 2024, signaling a moderate increase in financial leverage.
- Total Debt Dynamics
- Total debt underwent a sharp contraction from 2020 to 2023, falling from US$ 36,185 million to US$ 19,738 million. This period of consistent debt reduction was interrupted in 2024, when total debt increased to US$ 26,116 million. The increase in 2024 represents a rise of approximately 32% compared to the 2023 low.
- Total Asset Evolution
- Total assets experienced a period of contraction between 2020 and 2022, declining from US$ 80,064 million to US$ 72,609 million. A reversal occurred in 2023 and 2024, with assets growing to US$ 85,445 million. The simultaneous increase in both total debt and total assets in 2024 suggests that the newly acquired debt was likely utilized to fund the expansion of the asset base.
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Debt to Assets (including Operating Lease Liability)
Occidental Petroleum Corp., debt to assets (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current maturities of long-term debt | 1,138) | 1,202) | 165) | 186) | 440) | |
| Long-term debt, net, excluding current maturities | 24,978) | 18,536) | 19,670) | 29,431) | 35,745) | |
| Total debt | 26,116) | 19,738) | 19,835) | 29,617) | 36,185) | |
| Current operating lease liabilities | 374) | 446) | 273) | 186) | 473) | |
| Non-current operating lease liabilities | 614) | 727) | 657) | 585) | 641) | |
| Total debt (including operating lease liability) | 27,104) | 20,911) | 20,765) | 30,388) | 37,299) | |
| Total assets | 85,445) | 74,008) | 72,609) | 75,036) | 80,064) | |
| Solvency Ratio | ||||||
| Debt to assets (including operating lease liability)1 | 0.32 | 0.28 | 0.29 | 0.40 | 0.47 | |
| Benchmarks | ||||||
| Debt to Assets (including Operating Lease Liability), Competitors2 | ||||||
| Chevron Corp. | 0.12 | 0.10 | 0.11 | 0.15 | — | |
| ConocoPhillips | 0.21 | 0.20 | 0.18 | 0.23 | — | |
| ExxonMobil Holdings Corp. | 0.11 | 0.13 | 0.13 | 0.16 | — | |
| Debt to Assets (including Operating Lease Liability), Sector | ||||||
| Oil, Gas & Consumable Fuels | 0.12 | 0.13 | 0.13 | 0.16 | — | |
| Debt to Assets (including Operating Lease Liability), Industry | ||||||
| Energy | 0.13 | 0.14 | 0.14 | 0.17 | — | |
Based on: 10-K (reporting date: 2024-12-31), 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).
1 2024 Calculation
Debt to assets (including operating lease liability) = Total debt (including operating lease liability) ÷ Total assets
= 27,104 ÷ 85,445 = 0.32
2 Click competitor name to see calculations.
The solvency profile exhibits a distinct trend of aggressive deleveraging between 2020 and 2023, followed by a moderate increase in debt levels in 2024. The overall trajectory indicates a strategic reduction in financial risk during the initial period, resulting in a strengthened balance sheet before a subsequent rise in liabilities.
- Debt to Assets Ratio Trend
- The ratio experienced a consistent decline from 0.47 in 2020 to its lowest point of 0.28 in 2023. This reflects a significant reduction in the reliance on borrowed capital relative to the total asset base over a three-year period. A reversal occurred in 2024, with the ratio increasing to 0.32, indicating a shift back toward higher leverage.
- Total Debt Trajectory
- Total debt, including operating lease liabilities, decreased substantially from US$ 37,299 million in 2020 to US$ 20,765 million in 2022. After remaining relatively stable in 2023 at US$ 20,911 million, debt levels rose to US$ 27,104 million by the end of 2024, representing a moderate increase from the 2023 trough.
- Asset Base Evolution
- Total assets showed a slight contraction from US$ 80,064 million in 2020 to US$ 72,609 million in 2022. However, a growth phase began in 2023, culminating in a significant increase to US$ 85,445 million by December 31, 2024. The expansion of the asset base in 2024 partially offset the increase in total debt, preventing the debt-to-assets ratio from returning to the elevated levels observed in 2020.
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Financial Leverage
Occidental Petroleum Corp., financial leverage calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Total assets | 85,445) | 74,008) | 72,609) | 75,036) | 80,064) | |
| Stockholders’ equity | 34,159) | 30,250) | 30,085) | 20,327) | 18,573) | |
| Solvency Ratio | ||||||
| Financial leverage1 | 2.50 | 2.45 | 2.41 | 3.69 | 4.31 | |
| Benchmarks | ||||||
| Financial Leverage, Competitors2 | ||||||
| Chevron Corp. | 1.69 | 1.63 | 1.62 | 1.72 | — | |
| ConocoPhillips | 1.89 | 1.95 | 1.95 | 2.00 | — | |
| ExxonMobil Holdings Corp. | 1.72 | 1.84 | 1.89 | 2.01 | — | |
| Financial Leverage, Sector | ||||||
| Oil, Gas & Consumable Fuels | 1.73 | 1.77 | 1.79 | 1.90 | — | |
| Financial Leverage, Industry | ||||||
| Energy | 1.76 | 1.80 | 1.82 | 1.93 | — | |
Based on: 10-K (reporting date: 2024-12-31), 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).
1 2024 Calculation
Financial leverage = Total assets ÷ Stockholders’ equity
= 85,445 ÷ 34,159 = 2.50
2 Click competitor name to see calculations.
An analysis of the solvency metrics reveals a substantial improvement in the capital structure between 2020 and 2024, characterized by a marked reduction in financial leverage and a consistent expansion of stockholders' equity.
- Financial Leverage Trends
- A significant downward trend in financial leverage is observed from 2020 to 2022, with the ratio declining from 4.31 to 2.41. This indicates a strategic reduction in the reliance on debt to finance assets. Following this sharp decline, the ratio entered a period of stabilization, recording slight increases to 2.45 in 2023 and 2.50 in 2024.
- Equity Growth and Capital Strength
- Stockholders' equity exhibited continuous growth over the analyzed period, rising from 18,573 million US$ in 2020 to 34,159 million US$ by 2024. A particularly notable surge occurred between 2021 and 2022, where equity increased by nearly 50%. This growth in the equity base served as a primary driver in lowering the overall financial leverage ratio, thereby enhancing the solvency position of the organization.
- Asset Base Evolution
- Total assets underwent a period of contraction from 2020 to 2022, decreasing from 80,064 million US$ to 72,609 million US$. However, this trend reversed starting in 2023, with assets growing to 85,445 million US$ by the end of 2024. The fact that assets grew significantly in the final two years while the leverage ratio remained relatively stable suggests that the expansion was supported more by equity or organic growth than by a substantial increase in proportional debt.
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Interest Coverage
Occidental Petroleum Corp., interest coverage calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income (loss) attributable to Occidental | 3,056) | 4,696) | 13,304) | 2,322) | (14,831) | |
| Add: Net income attributable to noncontrolling interest | 22) | —) | —) | —) | —) | |
| Less: Income (loss) from discontinued operations, net of tax | 182) | —) | —) | (468) | (1,298) | |
| Add: Income tax expense | 1,174) | 1,733) | 813) | 915) | (2,172) | |
| Add: Interest and debt expense, net | 1,175) | 945) | 1,030) | 1,614) | 1,424) | |
| Earnings before interest and tax (EBIT) | 5,245) | 7,374) | 15,147) | 5,319) | (14,281) | |
| Solvency Ratio | ||||||
| Interest coverage1 | 4.46 | 7.80 | 14.71 | 3.30 | -10.03 | |
| Benchmarks | ||||||
| Interest Coverage, Competitors2 | ||||||
| Chevron Corp. | 47.31 | 64.08 | 97.27 | 31.39 | — | |
| ConocoPhillips | 18.46 | 21.88 | 36.07 | 15.38 | — | |
| ExxonMobil Holdings Corp. | 50.07 | 63.17 | 98.43 | 33.98 | — | |
| Interest Coverage, Sector | ||||||
| Oil, Gas & Consumable Fuels | 38.95 | 48.02 | 74.46 | 26.79 | — | |
| Interest Coverage, Industry | ||||||
| Energy | 34.18 | 40.96 | 62.30 | 23.05 | — | |
Based on: 10-K (reporting date: 2024-12-31), 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).
1 2024 Calculation
Interest coverage = EBIT ÷ Interest expense
= 5,245 ÷ 1,175 = 4.46
2 Click competitor name to see calculations.
The solvency profile exhibits a period of extreme volatility followed by a stabilization and a subsequent downward trend in coverage capacity. The period between 2020 and 2024 is characterized by a sharp recovery from severe operational losses to a peak in profitability, followed by a gradual contraction in earnings relative to debt obligations.
- Earnings before Interest and Tax (EBIT)
- A significant operational deficit of US$ 14,281 million was recorded in 2020, which reversed sharply to US$ 5,319 million in 2021. Operational performance reached a peak in 2022 with EBIT ascending to US$ 15,147 million, before declining sequentially to US$ 7,374 million in 2023 and US$ 5,245 million in 2024.
- Interest and Debt Expense
- Net interest and debt expenses remained relatively stable relative to the volatility of EBIT. After an increase to US$ 1,614 million in 2021, expenses trended downward to a minimum of US$ 945 million in 2023, before rising again to US$ 1,175 million by the end of 2024.
- Interest Coverage Ratio
- The ratio reflects a critical solvency position in 2020 at -10.03, indicating an inability to meet interest obligations from operating profits. Solvency improved dramatically to 3.30 in 2021 and reached a maximum of 14.71 in 2022. Subsequently, the coverage ratio experienced a steady decline, falling to 7.80 in 2023 and 4.46 in 2024, signaling a reduced margin of safety regarding debt servicing costs.
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Fixed Charge Coverage
Occidental Petroleum Corp., fixed charge coverage calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| U.S. federal statutory tax rate | 21.00% | 21.00% | 21.00% | 21.00% | 21.00% | |
| Selected Financial Data (US$ in millions) | ||||||
| Net income (loss) attributable to Occidental | 3,056) | 4,696) | 13,304) | 2,322) | (14,831) | |
| Add: Net income attributable to noncontrolling interest | 22) | —) | —) | —) | —) | |
| Less: Income (loss) from discontinued operations, net of tax | 182) | —) | —) | (468) | (1,298) | |
| Add: Income tax expense | 1,174) | 1,733) | 813) | 915) | (2,172) | |
| Add: Interest and debt expense, net | 1,175) | 945) | 1,030) | 1,614) | 1,424) | |
| Earnings before interest and tax (EBIT) | 5,245) | 7,374) | 15,147) | 5,319) | (14,281) | |
| Add: Operating lease costs | 518) | 398) | 374) | 818) | 861) | |
| Earnings before fixed charges and tax | 5,763) | 7,772) | 15,521) | 6,137) | (13,420) | |
| Interest and debt expense, net | 1,175) | 945) | 1,030) | 1,614) | 1,424) | |
| Operating lease costs | 518) | 398) | 374) | 818) | 861) | |
| Preferred stock dividends and redemption premiums | 679) | 923) | 800) | 800) | 844) | |
| Preferred stock dividends and redemption premiums, tax adjustment1 | 180) | 245) | 213) | 213) | 224) | |
| Preferred stock dividends and redemption premiums, after tax adjustment | 859) | 1,168) | 1,013) | 1,013) | 1,068) | |
| Fixed charges | 2,552) | 2,511) | 2,417) | 3,445) | 3,353) | |
| Solvency Ratio | ||||||
| Fixed charge coverage2 | 2.26 | 3.09 | 6.42 | 1.78 | -4.00 | |
| Benchmarks | ||||||
| Fixed Charge Coverage, Competitors3 | ||||||
| Chevron Corp. | 7.81 | 9.57 | 18.28 | 8.43 | — | |
| ConocoPhillips | 13.34 | 17.14 | 28.76 | 11.94 | — | |
| ExxonMobil Holdings Corp. | 15.85 | 19.68 | 31.21 | 13.55 | — | |
| Fixed Charge Coverage, Sector | ||||||
| Oil, Gas & Consumable Fuels | 11.67 | 14.54 | 25.07 | 10.99 | — | |
| Fixed Charge Coverage, Industry | ||||||
| Energy | 10.25 | 12.31 | 20.61 | 9.19 | — | |
Based on: 10-K (reporting date: 2024-12-31), 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).
1 2024 Calculation
Preferred stock dividends and redemption premiums, tax adjustment = (Preferred stock dividends and redemption premiums × U.S. federal statutory tax rate) ÷ (1 − U.S. federal statutory tax rate)
= (679 × 21.00%) ÷ (1 − 21.00%) = 180
2 2024 Calculation
Fixed charge coverage = Earnings before fixed charges and tax ÷ Fixed charges
= 5,763 ÷ 2,552 = 2.26
3 Click competitor name to see calculations.
The analysis of fixed charge coverage from 2020 to 2024 reveals a period of significant volatility, characterized by an initial recovery from a critical solvency position followed by a gradual decline in the coverage margin over the most recent two years.
- Earnings Before Fixed Charges and Tax
- A substantial reversal is observed between 2020 and 2022. After reporting a deficit of US$ 13,420 million in 2020, earnings surged to a peak of US$ 15,521 million in 2022. However, a downward trajectory followed, with earnings decreasing to US$ 7,772 million in 2023 and further declining to US$ 5,763 million by 2024.
- Fixed Charges Trend
- Fixed charges remained relatively stable during the first two years, peaking at US$ 3,445 million in 2021. A notable reduction occurred in 2022, where charges dropped to US$ 2,417 million, and have since maintained a steady level, ending at US$ 2,552 million in 2024.
- Fixed Charge Coverage Ratio
- The coverage ratio mirrors the volatility of earnings. In 2020, the ratio was -4.00, indicating an inability to meet fixed obligations from operating earnings. This improved to 1.78 in 2021 and reached a peak of 6.42 in 2022. Since that peak, the ratio has contracted, falling to 3.09 in 2023 and 2.26 in 2024, reflecting a narrowing of the solvency safety margin.
The overall trend indicates that while the entity successfully navigated a severe solvency crisis in 2020 and achieved a strong peak in 2022, the subsequent decline in earnings has led to a reduction in the ability to cover fixed obligations, although the ratio remains above the critical 1.0 threshold.
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