Analysis of Solvency Ratios
Quarterly Data
Solvency ratios also known as long-term debt ratios measure a company ability to meet long-term obligations.
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Solvency Ratios (Summary)
Schlumberger Ltd., solvency ratios (quarterly data)
Based on: 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 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).
- Debt to Equity Ratio
- The ratio exhibited an initial upward trend from 1.07 in March 2020 to a peak of 1.49 in September 2020, indicating increased leverage. Subsequently, a consistent decline followed, reaching a low of 0.57 by March 2025. Minor fluctuations were observed afterwards, but the ratio remained generally below 0.75 in the later periods, suggesting a significant reduction in reliance on equity financing over time.
- Debt to Capital Ratio
- This ratio rose moderately from 0.52 in March 2020 to 0.60 in September 2020, then displayed a steady downward trajectory through to March 2025 where it reached 0.36. The data implies a gradual decrease in the proportion of debt within the company’s overall capital structure, indicating improving capital stability. A slight increase was evident in mid-2025, but the overall trend remains downward.
- Debt to Assets Ratio
- The debt relative to total assets rose from 0.34 in March 2020 to 0.40 by the end of 2020, signaling increased leverage on the asset base during that period. Thereafter, a consistent decline occurred, bottoming at 0.25 in March 2025, demonstrating a reduction in debt burden relative to assets. This trend was largely maintained with minor oscillations, showing an improvement in asset financing.
- Financial Leverage Ratio
- Financial leverage peaked at 3.71 in June 2020, reflecting higher asset-to-equity financing levels. From this peak, a general decrease was observed with some minor variations, reaching about 2.31 to 2.51 in early to mid-2025. This indicates a reduction in leverage consistent with the trends seen in debt-related ratios, suggesting a strengthening equity base or asset reduction relative to equity.
- Interest Coverage Ratio
- Interest coverage data began appearing in late 2020 with negative values of -19.07 and -4.01, reflecting periods of insufficient earnings to cover interest expenses. Starting March 2021, the ratio improved markedly, climbing continuously to a peak of 12.19 by September 2024, signaling robust earnings relative to interest obligations. This strong coverage declined slightly in subsequent quarters but remained above 10, indicating good ability to meet interest payments in the later periods.
Debt Ratios
Coverage Ratios
Debt to Equity
Schlumberger Ltd., debt to equity calculation (quarterly data)
Based on: 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 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).
1 Q2 2025 Calculation
Debt to equity = Total debt ÷ Total SLB stockholders’ equity
= ÷ =
The provided financial data reveals the trends in debt, equity, and leverage ratios over multiple quarters.
- Total Debt (US$ in millions)
- Total debt shows a fluctuating but generally declining trend from March 31, 2020, when it stood at 16,642 million USD, peaking slightly in September 2020 at 17,763 million USD. From that point, debt consistently decreased reaching its lowest points toward the end of 2023 with values near 11,965 million USD in December 2023. However, starting from early 2024, debt began increasing again, rising to 14,002 million USD by March 31, 2025, indicating some renewed borrowing or less aggressive debt reduction during this last period.
- Total Stockholders’ Equity (US$ in millions)
- Equity presents a general upward trajectory. It started at 15,561 million USD in March 2020, dropped to a low of 11,941 million USD in September 2020, then began a steady increase through the following quarters, reaching a peak of 21,511 million USD in September 2024. A slight decline followed this peak, with equity slightly falling to 19,515 million USD and 20,302 million USD in the first two quarters of 2025. Overall, equity growth appears robust throughout the period, reflecting value accumulation or retained earnings growth over time.
- Debt to Equity Ratio
- The debt to equity ratio peaked at 1.49 in September 2020, indicating the highest leverage level early in the period analyzed. Following this peak, the ratio steadily decreased, reaching its lowest point of 0.57 in March 2025. This decline in leverage is consistent with the downward trend of total debt and the simultaneous upward trend in equity, signifying a reduction in relative debt burden and stronger capitalization. The ratio's small upticks in some quarters, notably toward the end of the timeline, suggest periodic shifts in capital structure but overall stable and improving credit metrics.
In summary, the company has made significant progress in strengthening its equity base while reducing relative debt levels, particularly after mid-2020. The declining debt to equity ratio supports the conclusion that the financial leverage has improved, enhancing financial stability. However, the uptick in debt during early 2024 and early 2025 warrants monitoring to understand whether it represents a new strategic borrowing phase or cyclical funding needs.
Debt to Capital
Schlumberger Ltd., debt to capital calculation (quarterly data)
Based on: 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 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).
1 Q2 2025 Calculation
Debt to capital = Total debt ÷ Total capital
= ÷ =
- Total Debt
- The total debt demonstrated a fluctuating but generally declining trend from March 31, 2020, through December 31, 2023. Starting at $16.6 billion, the debt peaked shortly after at approximately $17.8 billion in September 2020, then decreased steadily to a low around $11.9 billion by the end of 2023. There was a slight uptick through early 2025, with values rising again to approximately $14.0 billion in June 2025 before a small decline by the end of that quarter.
- Total Capital
- Total capital exhibited relative stability with a slight upward trajectory across the observed periods. Initially at about $32.2 billion in early 2020, it decreased somewhat to just under $28.5 billion mid-2021. From that point, total capital generally increased, reaching approximately $34.0 billion by mid-2025. This suggests moderate capital base growth despite some short-term volatility.
- Debt to Capital Ratio
- The debt to capital ratio started at 0.52 in March 2020 and showed a noticeable increase toward 0.60 by September 2020, indicating a higher leverage position during this period. After this peak, a clear downward trend followed, with the ratio decreasing steadily to a low of about 0.36 in March 2025. There was a brief increase to above 0.40 in mid-2025, but the ratio remained significantly lower than in early 2020. This overall decline in the debt to capital ratio reflects a conservative shift in financial structure, characterized by reduced leverage and stronger capitalization.
- Overall Insights
- The financial data indicate that the company has been actively managing its debt levels, achieving a reduction in total debt over the medium term. Concurrently, the total capital base has stabilized and gradually increased, supporting enhanced financial flexibility. The declining debt-to-capital ratio reinforces a trend toward lower financial risk and improved creditworthiness. However, the recent increase in debt and slight rise in leverage in 2025 could warrant monitoring to assess if this represents a change in financial strategy or a short-term adjustment.
Debt to Assets
Schlumberger Ltd., debt to assets calculation (quarterly data)
Based on: 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 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).
1 Q2 2025 Calculation
Debt to assets = Total debt ÷ Total assets
= ÷ =
The financial data reveals several notable trends related to debt, assets, and their relationship over the observed quarters.
- Total Debt
- Total debt started at 16,642 million US dollars in March 2020, peaking during the third quarter of 2020 at 17,763 million US dollars. Following this peak, total debt showed a consistent downward trajectory, declining steadily to reach a low of 11,965 million US dollars by December 2023. After this period, debt fluctuated moderately, rising again to 14,002 million US dollars by March 2025, before slightly decreasing to 13,698 million US dollars in June 2025. Overall, the data suggests successful debt reduction efforts over time, with some variability towards the end of the period.
- Total Assets
- Total assets began at 48,594 million US dollars in March 2020 and initially declined to 42,434 million US dollars by December 2020. From early 2021 onwards, assets generally increased, reaching 47,957 million US dollars in December 2023. Following this upward trend, total assets stabilized around 49,000 million US dollars, with minor fluctuations between 48,769 and 49,775 million US dollars through June 2025. This upward movement indicates asset growth and consolidation over the period examined.
- Debt to Assets Ratio
- The debt-to-assets ratio was 0.34 at the starting quarter in March 2020, climbing to a peak of 0.40 during September and December 2020. This ratio then steadily decreased to a low of 0.25 by December 2023, signifying an improving balance sheet with reduced leverage. Thereafter, from March 2024 towards mid-2025, the ratio fluctuated slightly but remained relatively low, between 0.25 and 0.29. This pattern aligns with the observed trends in debt reduction and asset growth, reflecting enhanced financial stability.
In summary, the company displayed a clear effort to diminish total debt while fostering asset growth, culminating in a declining debt-to-assets ratio indicative of lowering financial risk. Some volatility in debt levels appeared in the latest quarters, but the overall trend through the period suggests strengthening financial health and improved leverage management.
Financial Leverage
Schlumberger Ltd., financial leverage calculation (quarterly data)
Based on: 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 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).
1 Q2 2025 Calculation
Financial leverage = Total assets ÷ Total SLB stockholders’ equity
= ÷ =
- Total Assets
- Over the observed periods, total assets exhibit an overall declining trend initially, dropping from approximately 48,594 million US dollars on March 31, 2020, to around 40,036 million by March 31, 2021. Following this decline, assets then gradually increase, reaching approximately 45,813 million by December 31, 2023. In the subsequent periods, total assets fluctuate slightly but generally stabilize in the range of 48,000 to 49,700 million US dollars, ending at 48,769 million on December 31, 2024, and showing a minor decrease thereafter.
- Total Stockholders’ Equity
- Stockholders’ equity initially decreases sharply from 15,561 million US dollars at the start of 2020 to a low of approximately 11,941 million by September 30, 2020. Subsequently, a consistent upward trend is observed through 2021 and 2022, with equity rising steadily to about 20,189 million by December 31, 2023. There is some volatility afterward, with equity declining to 19,515 million by June 30, 2025, indicating some erosion of equity in the most recent periods.
- Financial Leverage
- Financial leverage ratios show a noticeable reduction from 3.12 in March 2020 to 2.77 by December 31, 2021, reflecting a reduction in the relative debt burden compared to equity. This downward trend in leverage continues modestly through early 2024, reaching a low near 2.31. However, from 2024 onwards, a slight increase is seen, with leverage moving up to approximately 2.51 by June 30, 2025, suggesting a mild elevation in financial risk or increased use of debt during the latter periods.
- Summary
- The financial data reveal an initial period marked by contraction in total assets and equity, coupled with relatively high leverage, likely reflecting challenging business conditions. This phase is followed by a recovery and growth period for both assets and equity, accompanied by a consistent reduction in leverage, indicating strengthening financial health and perhaps improved operational performance. The later periods show stabilization in total assets and some fluctuations in equity with a slight uptick in leverage, signaling caution in the management of financial structure or potential shifts in external factors affecting the company's leverage position.
Interest Coverage
Schlumberger Ltd., interest coverage calculation (quarterly data)
Based on: 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 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).
1 Q2 2025 Calculation
Interest coverage
= (EBITQ2 2025
+ EBITQ1 2025
+ EBITQ4 2024
+ EBITQ3 2024)
÷ (Interest expenseQ2 2025
+ Interest expenseQ1 2025
+ Interest expenseQ4 2024
+ Interest expenseQ3 2024)
= ( + + + )
÷ ( + + + )
=
- Earnings before interest and tax (EBIT)
-
The EBIT demonstrates a marked improvement from negative values in early 2020 to consistent profitability in subsequent periods. Starting at a significant loss of -7953 million US dollars in March 2020, it gradually recovers, becoming positive by September 2020. Throughout 2021 and 2022, EBIT maintains an upward trajectory, reaching its highest values in late 2022 and early 2023, fluctuating between approximately 1200 and 1600 million US dollars. Though some volatility is present, the overall trend remains upward, with EBIT sustaining robust profitability through to mid-2025, despite a slight decline after March 2025.
- Interest Expense
-
Interest expense remains relatively stable across all periods, fluctuating within a narrow range between 113 and 147 million US dollars. These minor variations do not display any significant upward or downward trend, suggesting consistent borrowing costs or stable debt levels throughout the observed periods.
- Interest Coverage Ratio
-
The interest coverage ratio exhibits a dramatic improvement from substantially negative values during 2020 to strong positive coverage in subsequent years. Initially, the ratio is deeply negative, reflecting losses and inadequate earnings to cover interest expenses. From early 2021 onwards, the ratio turns positive and improves steadily, surpassing the threshold of 5 by the end of 2020 and continuing an upward trend through 2023, reaching levels above 12 in the early part of 2024. Although a slight decline is noted towards mid-2025, the ratio remains comfortably above 10, indicating a strong ability to service interest obligations over the majority of the period.