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)
Valero Energy 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).
- Debt to Equity
- The debt to equity ratio increased from 0.44 in 2019 to a peak of 0.78 in 2020, followed by a slight decline to 0.75 in 2021. Subsequently, it decreased notably to 0.49 in 2022 and returned to the initial level of 0.44 in 2023.
- Debt to Equity (Including Operating Lease Liability)
- This ratio followed a similar trajectory, rising from 0.50 in 2019 to 0.84 in 2020, which was the highest level observed. It then dropped steadily to 0.82 in 2021, 0.54 in 2022, and further to 0.48 in 2023.
- Debt to Capital
- The debt to capital ratio rose from 0.31 in 2019 to 0.44 in 2020, followed by a minor decrease to 0.43 in 2021. The ratio then declined to 0.33 in 2022 and further to 0.30 in 2023, nearing the level recorded in 2019.
- Debt to Capital (Including Operating Lease Liability)
- This ratio mirrored the debt to capital trends but at slightly higher levels, increasing from 0.33 in 2019 to 0.46 in 2020. It decreased to 0.45 in 2021, then dropped to 0.35 in 2022, and 0.32 in 2023.
- Debt to Assets
- The debt to assets ratio showed an initial increase from 0.18 in 2019 to 0.28 in 2020, then decreased to 0.24 in 2021. It further declined to 0.19 in 2022 and returned to 0.18 in 2023, consistent with 2019 levels.
- Debt to Assets (Including Operating Lease Liability)
- This ratio increased from 0.20 in 2019 to 0.31 in 2020, decreased to 0.26 in 2021, then further declined to 0.21 in 2022 and 0.20 in 2023, closely paralleling the debt to assets trend without lease liabilities.
- Financial Leverage
- Financial leverage rose steadily from 2.47 in 2019 to a peak of 3.14 in 2021. After this peak, it decreased to 2.59 in 2022 and further to 2.39 in 2023, approaching the 2019 level.
- Interest Coverage
- Interest coverage exhibited significant variability. It was strong at 8.68 in 2019 but fell sharply to a negative value of -2.57 in 2020, indicating an inability to cover interest expenses that year. It then recovered to 3.56 in 2021 and showed a substantial increase to 28.24 in 2022, before declining to 20.88 in 2023, remaining at a robust level.
- Fixed Charge Coverage
- This ratio followed a pattern similar to interest coverage, declining from 4.9 in 2019 to -1.02 in 2020, reflecting financial distress. It improved to 2.57 in 2021, surged to 17.27 in 2022, and subsequently declined to 12.65 in 2023, maintaining healthy coverage.
Debt Ratios
Coverage Ratios
Debt to Equity
Valero Energy 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) | ||||||
| Current portion of debt and finance lease obligations | 1,406) | 1,109) | 1,264) | 723) | 494) | |
| Debt and finance lease obligations, less current portion | 10,118) | 10,526) | 12,606) | 13,954) | 9,178) | |
| Total debt | 11,524) | 11,635) | 13,870) | 14,677) | 9,672) | |
| Total Valero Energy Corporation stockholders’ equity | 26,346) | 23,561) | 18,430) | 18,801) | 21,803) | |
| Solvency Ratio | ||||||
| Debt to equity1 | 0.44 | 0.49 | 0.75 | 0.78 | 0.44 | |
| Benchmarks | ||||||
| Debt to Equity, Competitors2 | ||||||
| Chevron Corp. | 0.13 | 0.15 | 0.23 | 0.34 | — | |
| ConocoPhillips | 0.38 | 0.35 | 0.44 | 0.51 | — | |
| Exxon Mobil Corp. | 0.20 | 0.21 | 0.28 | 0.43 | — | |
| Occidental Petroleum Corp. | 0.65 | 0.66 | 1.46 | 1.95 | — | |
| Debt to Equity, Sector | ||||||
| Oil, Gas & Consumable Fuels | 0.23 | 0.23 | 0.34 | 0.48 | — | |
| Debt to Equity, Industry | ||||||
| Energy | 0.24 | 0.25 | 0.37 | 0.52 | — | |
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 Valero Energy Corporation stockholders’ equity
= 11,524 ÷ 26,346 = 0.44
2 Click competitor name to see calculations.
The financial data exhibits significant fluctuations across the observed period from 2019 to 2023. Notable patterns emerge in the company’s leverage and equity positions.
- Total Debt
- Total debt increased sharply from 9,672 million USD in 2019 to a peak of 14,677 million USD in 2020, indicating a substantial rise in borrowings or liabilities during this period. After 2020, total debt gradually declined over the following years, reaching 11,524 million USD by the end of 2023. This downward trend suggests efforts to reduce debt levels or improved cash flows allowing for debt repayments.
- Total Stockholders’ Equity
- Equity showed a contrasting trend compared to debt, with a decrease from 21,803 million USD in 2019 to 18,801 million USD in 2020. From 2020 onwards, equity remained relatively stable through 2021 and then increased substantially in 2022 and 2023, reaching 26,346 million USD. This growth in equity indicates strengthening of the company’s net asset base, possibly through retained earnings or capital inflows.
- Debt to Equity Ratio
- The debt to equity ratio rose from 0.44 in 2019 to 0.78 in 2020, reflecting increased leverage and greater reliance on debt capital relative to equity. From 2020 onward, this ratio declined continuously, reaching 0.44 again by the end of 2023. The reduction in this ratio aligns with the decreases in total debt and increases in equity, signaling an improvement in the company’s financial leverage and potentially a lower risk profile.
Overall, the data portrays a period of increased leverage and lower equity in 2020, followed by a recovery phase marked by deleveraging and equity growth through 2023. This transition suggests a strategic focus on strengthening the capital structure and reducing financial risk after the elevated debt levels observed in 2020.
Debt to Equity (including Operating Lease Liability)
Valero Energy 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) | ||||||
| Current portion of debt and finance lease obligations | 1,406) | 1,109) | 1,264) | 723) | 494) | |
| Debt and finance lease obligations, less current portion | 10,118) | 10,526) | 12,606) | 13,954) | 9,178) | |
| Total debt | 11,524) | 11,635) | 13,870) | 14,677) | 9,672) | |
| Current operating lease liabilities | 360) | 311) | 315) | 285) | 331) | |
| Noncurrent operating lease liabilities | 753) | 776) | 940) | 885) | 959) | |
| Total debt (including operating lease liability) | 12,637) | 12,722) | 15,125) | 15,847) | 10,962) | |
| Total Valero Energy Corporation stockholders’ equity | 26,346) | 23,561) | 18,430) | 18,801) | 21,803) | |
| Solvency Ratio | ||||||
| Debt to equity (including operating lease liability)1 | 0.48 | 0.54 | 0.82 | 0.84 | 0.50 | |
| Benchmarks | ||||||
| Debt to Equity (including Operating Lease Liability), Competitors2 | ||||||
| Chevron Corp. | 0.16 | 0.17 | 0.25 | 0.37 | — | |
| ConocoPhillips | 0.40 | 0.36 | 0.45 | 0.54 | — | |
| Exxon Mobil Corp. | 0.23 | 0.24 | 0.31 | 0.46 | — | |
| Occidental Petroleum Corp. | 0.69 | 0.69 | 1.49 | 2.01 | — | |
| Debt to Equity (including Operating Lease Liability), Sector | ||||||
| Oil, Gas & Consumable Fuels | 0.26 | 0.26 | 0.37 | 0.52 | — | |
| Debt to Equity (including Operating Lease Liability), Industry | ||||||
| Energy | 0.27 | 0.28 | 0.40 | 0.55 | — | |
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 Valero Energy Corporation stockholders’ equity
= 12,637 ÷ 26,346 = 0.48
2 Click competitor name to see calculations.
The financial data reveals a dynamic relationship between the company's total debt, stockholders’ equity, and the resulting debt-to-equity ratio over the five-year period ending in 2023.
- Total Debt
- The total debt, including operating lease liabilities, increased significantly from 10,962 million USD in 2019 to a peak of 15,847 million USD in 2020. Subsequently, it showed a general downward trend, decreasing to 15,125 million USD in 2021, further reducing to 12,722 million USD in 2022, and slightly declining again to 12,637 million USD in 2023. This pattern suggests that after a marked increase in 2020, the company has been actively reducing its leverage.
- Total Stockholders’ Equity
- The stockholders’ equity experienced a decline from 21,803 million USD in 2019 to 18,801 million USD in 2020 and a marginal additional decrease to 18,430 million USD in 2021. However, a strong recovery occurred thereafter, with equity rising markedly to 23,561 million USD in 2022 and continuing upward to 26,346 million USD in 2023. This indicates an improvement in the company's net asset position over the last two years.
- Debt to Equity Ratio
- Reflecting the movements in debt and equity, the debt-to-equity ratio increased sharply from 0.5 in 2019 to 0.84 in 2020, staying relatively stable at 0.82 in 2021. Thereafter, it decreased significantly to 0.54 in 2022 and continued to drop to 0.48 in 2023. This decline in the ratio highlights a reduction in financial leverage and an enhancement in the company’s equity base relative to its debt load.
Overall, the data suggests that the company faced increased leverage pressures during 2020 and 2021, potentially reflecting economic challenges or strategic borrowing. Following that period, management appears to have prioritized deleveraging and strengthening the equity position, resulting in a more conservative capital structure by 2023.
Debt to Capital
Valero Energy 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) | ||||||
| Current portion of debt and finance lease obligations | 1,406) | 1,109) | 1,264) | 723) | 494) | |
| Debt and finance lease obligations, less current portion | 10,118) | 10,526) | 12,606) | 13,954) | 9,178) | |
| Total debt | 11,524) | 11,635) | 13,870) | 14,677) | 9,672) | |
| Total Valero Energy Corporation stockholders’ equity | 26,346) | 23,561) | 18,430) | 18,801) | 21,803) | |
| Total capital | 37,870) | 35,196) | 32,300) | 33,478) | 31,475) | |
| Solvency Ratio | ||||||
| Debt to capital1 | 0.30 | 0.33 | 0.43 | 0.44 | 0.31 | |
| Benchmarks | ||||||
| Debt to Capital, Competitors2 | ||||||
| Chevron Corp. | 0.11 | 0.13 | 0.18 | 0.25 | — | |
| ConocoPhillips | 0.28 | 0.26 | 0.31 | 0.34 | — | |
| Exxon Mobil Corp. | 0.17 | 0.17 | 0.22 | 0.30 | — | |
| Occidental Petroleum Corp. | 0.39 | 0.40 | 0.59 | 0.66 | — | |
| Debt to Capital, Sector | ||||||
| Oil, Gas & Consumable Fuels | 0.19 | 0.19 | 0.26 | 0.33 | — | |
| Debt to Capital, Industry | ||||||
| Energy | 0.20 | 0.20 | 0.27 | 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 capital = Total debt ÷ Total capital
= 11,524 ÷ 37,870 = 0.30
2 Click competitor name to see calculations.
- Total debt
-
The total debt exhibited an overall increasing trend from 2019 to 2020, rising from 9,672 million US dollars to 14,677 million US dollars. This was followed by a slight decline in 2021 to 13,870 million US dollars. The downward trend continued more noticeably in 2022 and 2023, reaching 11,635 million US dollars and further decreasing to 11,524 million US dollars, respectively.
- Total capital
-
Total capital increased steadily throughout the entire period. Starting at 31,475 million US dollars in 2019, it rose to 33,478 million US dollars in 2020. Despite a minor dip in 2021 to 32,300 million US dollars, total capital resumed growth in 2022 and 2023, reaching 35,196 million US dollars and 37,870 million US dollars, respectively.
- Debt to capital ratio
-
The debt to capital ratio showed a rising pattern from 0.31 in 2019 to a peak of 0.44 in 2020. Following this peak, the ratio gradually decreased over the subsequent years: 0.43 in 2021, 0.33 in 2022, and 0.30 in 2023. This indicates a reduction in leverage relative to capital after 2020, reflecting a shift towards lower debt dependency.
Debt to Capital (including Operating Lease Liability)
Valero Energy 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) | ||||||
| Current portion of debt and finance lease obligations | 1,406) | 1,109) | 1,264) | 723) | 494) | |
| Debt and finance lease obligations, less current portion | 10,118) | 10,526) | 12,606) | 13,954) | 9,178) | |
| Total debt | 11,524) | 11,635) | 13,870) | 14,677) | 9,672) | |
| Current operating lease liabilities | 360) | 311) | 315) | 285) | 331) | |
| Noncurrent operating lease liabilities | 753) | 776) | 940) | 885) | 959) | |
| Total debt (including operating lease liability) | 12,637) | 12,722) | 15,125) | 15,847) | 10,962) | |
| Total Valero Energy Corporation stockholders’ equity | 26,346) | 23,561) | 18,430) | 18,801) | 21,803) | |
| Total capital (including operating lease liability) | 38,983) | 36,283) | 33,555) | 34,648) | 32,765) | |
| Solvency Ratio | ||||||
| Debt to capital (including operating lease liability)1 | 0.32 | 0.35 | 0.45 | 0.46 | 0.33 | |
| Benchmarks | ||||||
| Debt to Capital (including Operating Lease Liability), Competitors2 | ||||||
| Chevron Corp. | 0.14 | 0.15 | 0.20 | 0.27 | — | |
| ConocoPhillips | 0.28 | 0.26 | 0.31 | 0.35 | — | |
| Exxon Mobil Corp. | 0.19 | 0.19 | 0.24 | 0.32 | — | |
| Occidental Petroleum Corp. | 0.41 | 0.41 | 0.60 | 0.67 | — | |
| Debt to Capital (including Operating Lease Liability), Sector | ||||||
| Oil, Gas & Consumable Fuels | 0.20 | 0.21 | 0.27 | 0.34 | — | |
| Debt to Capital (including Operating Lease Liability), Industry | ||||||
| Energy | 0.21 | 0.22 | 0.28 | 0.36 | — | |
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)
= 12,637 ÷ 38,983 = 0.32
2 Click competitor name to see calculations.
The financial data reveals several key trends in the company's capital structure over the five-year period from 2019 to 2023.
- Total Debt (including operating lease liability)
- The total debt increased significantly from 10,962 million USD in 2019 to a peak of 15,847 million USD in 2020. It then showed a gradual decline over the subsequent years, falling to 12,637 million USD by the end of 2023. This suggests that the company initially took on more debt, possibly in response to external conditions or strategic decisions, and has since actively managed debt levels downward.
- Total Capital (including operating lease liability)
- Total capital exhibited an overall upward trend, rising from 32,765 million USD in 2019 to 38,983 million USD in 2023. After a moderate increase in 2020, there was a slight dip in 2021 but followed by consistent growth through 2022 and 2023. This overall growth in capital indicates an expansion or strengthening of the company’s financial base over this period.
- Debt to Capital Ratio (including operating lease liability)
- The debt to capital ratio showed considerable fluctuation. It increased from 0.33 in 2019 to 0.46 in 2020, indicating a higher leverage position. The ratio remained elevated at 0.45 in 2021 before declining significantly in 2022 to 0.35, and further down to 0.32 in 2023. This decline in leverage ratio in the most recent years highlights a shift toward a more conservative capital structure with reduced relative debt levels.
In summary, the company experienced elevated debt and leverage during 2020 and 2021, possibly reflecting response to market conditions during that timeframe. Subsequently, the company reduced both absolute debt and leverage ratio while capital base expanded, indicating improved financial stability and lower risk profile going into 2023.
Debt to Assets
Valero Energy 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) | ||||||
| Current portion of debt and finance lease obligations | 1,406) | 1,109) | 1,264) | 723) | 494) | |
| Debt and finance lease obligations, less current portion | 10,118) | 10,526) | 12,606) | 13,954) | 9,178) | |
| Total debt | 11,524) | 11,635) | 13,870) | 14,677) | 9,672) | |
| Total assets | 63,056) | 60,982) | 57,888) | 51,774) | 53,864) | |
| Solvency Ratio | ||||||
| Debt to assets1 | 0.18 | 0.19 | 0.24 | 0.28 | 0.18 | |
| Benchmarks | ||||||
| Debt to Assets, Competitors2 | ||||||
| Chevron Corp. | 0.08 | 0.09 | 0.13 | 0.18 | — | |
| ConocoPhillips | 0.20 | 0.18 | 0.22 | 0.25 | — | |
| Exxon Mobil Corp. | 0.11 | 0.11 | 0.14 | 0.20 | — | |
| Occidental Petroleum Corp. | 0.27 | 0.27 | 0.39 | 0.45 | — | |
| Debt to Assets, Sector | ||||||
| Oil, Gas & Consumable Fuels | 0.13 | 0.13 | 0.17 | 0.23 | — | |
| Debt to Assets, Industry | ||||||
| Energy | 0.13 | 0.14 | 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 assets = Total debt ÷ Total assets
= 11,524 ÷ 63,056 = 0.18
2 Click competitor name to see calculations.
The analysis of the financial data over the five-year period reveals several trends related to the company's debt and asset management.
- Total Debt
- The total debt experienced an overall increase followed by a decline toward the end of the period. Starting at US$9,672 million in 2019, total debt rose sharply to US$14,677 million in 2020, marking a substantial increase. After this peak, the debt decreased gradually each year to US$11,524 million by 2023.
- Total Assets
- Total assets showed a consistent growth trend throughout the period. From US$53,864 million in 2019, the assets decreased slightly in 2020 to US$51,774 million but then increased steadily over the following three years to reach US$63,056 million in 2023. This reflects an expanding asset base over time.
- Debt to Assets Ratio
- The debt-to-assets ratio mirrors the debt fluctuations relative to asset changes. It increased from 0.18 in 2019 to a peak of 0.28 in 2020, indicating a higher reliance on debt financing compared to assets during that year. Subsequently, the ratio declined each year, reaching 0.18 again by 2023, suggesting a reduction in financial leverage and possibly a more conservative capital structure.
In summary, the company initially increased its debt significantly in 2020 amid slightly decreased assets, resulting in a higher leverage ratio. Following this, both a reduction in debt and an increase in assets contributed to a steady decline in leverage, returning to the level observed in 2019. This pattern indicates a strategic move toward deleveraging and asset growth after an initial period of increased borrowing.
Debt to Assets (including Operating Lease Liability)
Valero Energy Corp., debt to assets (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current portion of debt and finance lease obligations | 1,406) | 1,109) | 1,264) | 723) | 494) | |
| Debt and finance lease obligations, less current portion | 10,118) | 10,526) | 12,606) | 13,954) | 9,178) | |
| Total debt | 11,524) | 11,635) | 13,870) | 14,677) | 9,672) | |
| Current operating lease liabilities | 360) | 311) | 315) | 285) | 331) | |
| Noncurrent operating lease liabilities | 753) | 776) | 940) | 885) | 959) | |
| Total debt (including operating lease liability) | 12,637) | 12,722) | 15,125) | 15,847) | 10,962) | |
| Total assets | 63,056) | 60,982) | 57,888) | 51,774) | 53,864) | |
| Solvency Ratio | ||||||
| Debt to assets (including operating lease liability)1 | 0.20 | 0.21 | 0.26 | 0.31 | 0.20 | |
| Benchmarks | ||||||
| Debt to Assets (including Operating Lease Liability), Competitors2 | ||||||
| Chevron Corp. | 0.10 | 0.11 | 0.15 | 0.20 | — | |
| ConocoPhillips | 0.20 | 0.18 | 0.23 | 0.26 | — | |
| Exxon Mobil Corp. | 0.13 | 0.13 | 0.16 | 0.22 | — | |
| Occidental Petroleum Corp. | 0.28 | 0.29 | 0.40 | 0.47 | — | |
| Debt to Assets (including Operating Lease Liability), Sector | ||||||
| Oil, Gas & Consumable Fuels | 0.14 | 0.14 | 0.19 | 0.24 | — | |
| Debt to Assets (including Operating Lease Liability), Industry | ||||||
| Energy | 0.15 | 0.15 | 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 assets (including operating lease liability) = Total debt (including operating lease liability) ÷ Total assets
= 12,637 ÷ 63,056 = 0.20
2 Click competitor name to see calculations.
The analysis of the annual financial data reveals the following trends and insights regarding the company's debt levels, asset base, and leverage ratios over the five-year period from 2019 to 2023.
- Total Debt (Including Operating Lease Liability)
- The total debt experienced a significant increase from 10,962 million US dollars in 2019 to a peak of 15,847 million US dollars in 2020. Following this peak, total debt showed a declining trend, reducing to 15,125 million in 2021, then further decreasing to 12,722 million in 2022, and stabilizing around 12,637 million in 2023. This pattern indicates an initial rise in indebtedness, possibly due to increased financing needs or operational leverage during 2020, followed by a gradual deleveraging in subsequent years.
- Total Assets
- Total assets have shown a generally positive growth trend throughout the period. Beginning at 53,864 million US dollars in 2019, total assets dipped slightly to 51,774 million in 2020 but rebounded strongly in following years. By 2021, assets increased to 57,888 million, then continued rising to 60,982 million in 2022 and 63,056 million in 2023. The overall growth in total assets suggests ongoing investment or asset accumulation, strengthening the company’s asset base over time.
- Debt to Assets Ratio (Including Operating Lease Liability)
- The debt to assets ratio mirrored the fluctuation in total debt relative to assets. Starting at 0.20 in 2019, the ratio increased markedly to 0.31 in 2020, reflecting higher leverage and greater reliance on debt financing relative to asset size. Subsequently, the ratio declined to 0.26 in 2021, then dropped further to 0.21 in 2022 and 0.20 in 2023, indicating a move toward a more conservative leverage position and an improvement in the company’s capital structure over these years.
In summary, the data indicate that the company increased its debt substantially in 2020, likely in response to specific operational or market conditions, before undertaking a period of debt reduction and asset growth. The leverage ratios demonstrate an initial increase in financial risk followed by a steady improvement, suggesting a strategic focus on strengthening the balance sheet and reducing financial leverage in the most recent years.
Financial Leverage
Valero Energy 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 | 63,056) | 60,982) | 57,888) | 51,774) | 53,864) | |
| Total Valero Energy Corporation stockholders’ equity | 26,346) | 23,561) | 18,430) | 18,801) | 21,803) | |
| Solvency Ratio | ||||||
| Financial leverage1 | 2.39 | 2.59 | 3.14 | 2.75 | 2.47 | |
| Benchmarks | ||||||
| Financial Leverage, Competitors2 | ||||||
| Chevron Corp. | 1.63 | 1.62 | 1.72 | 1.82 | — | |
| ConocoPhillips | 1.95 | 1.95 | 2.00 | 2.10 | — | |
| Exxon Mobil Corp. | 1.84 | 1.89 | 2.01 | 2.12 | — | |
| Occidental Petroleum Corp. | 2.45 | 2.41 | 3.69 | 4.31 | — | |
| Financial Leverage, Sector | ||||||
| Oil, Gas & Consumable Fuels | 1.81 | 1.83 | 1.99 | 2.12 | — | |
| Financial Leverage, Industry | ||||||
| Energy | 1.84 | 1.86 | 2.02 | 2.17 | — | |
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
Financial leverage = Total assets ÷ Total Valero Energy Corporation stockholders’ equity
= 63,056 ÷ 26,346 = 2.39
2 Click competitor name to see calculations.
The analysis of Valero Energy Corp.'s financial data reveals several notable trends over the five-year period ending December 31, 2023.
- Total Assets
- Total assets exhibited a fluctuating but generally upward trend. Starting at $53,864 million in 2019, total assets slightly decreased in 2020 to $51,774 million. However, this was followed by consistent increases in 2021, 2022, and 2023, reaching $57,888 million, $60,982 million, and $63,056 million respectively. This indicates a recovery and subsequent growth in the company’s asset base after a mild contraction in 2020.
- Total Stockholders’ Equity
- Stockholders' equity showed more volatility within the same timeframe. It decreased from $21,803 million in 2019 to $18,801 million in 2020 and further to $18,430 million in 2021. Starting in 2022, equity rebounded significantly to $23,561 million and continued increasing in 2023, reaching $26,346 million. This recovery suggests an improvement in retained earnings, capital contributions, or a combination of factors enhancing shareholder value after a period of decline.
- Financial Leverage
- The financial leverage ratio, calculated as total assets divided by total equity, varied noticeably. It increased steadily from 2.47 in 2019 to a peak of 3.14 in 2021, implying a higher degree of indebtedness relative to equity during that period. From 2022 onwards, the ratio decreased to 2.59 and then to 2.39 in 2023, indicating a reduction in leverage and a potentially stronger equity position relative to total assets.
Overall, the data suggest that the company experienced some financial stresses or adjustments during 2020 and 2021, as reflected in declining equity and increasing leverage. However, the subsequent years show signs of stabilization and improvement, with growth in both total assets and equity, accompanied by a reduction in leverage. This trajectory indicates a move towards a more balanced capital structure and enhanced financial strength by the end of 2023.
Interest Coverage
Valero Energy Corp., interest coverage calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income (loss) attributable to Valero Energy Corporation stockholders | 8,835) | 11,528) | 930) | (1,421) | 2,422) | |
| Add: Net income attributable to noncontrolling interest | 314) | 351) | 358) | 314) | 362) | |
| Add: Income tax expense | 2,619) | 3,428) | 255) | (903) | 702) | |
| Add: Interest and debt expense, net of capitalized interest | 592) | 562) | 603) | 563) | 454) | |
| Earnings before interest and tax (EBIT) | 12,360) | 15,869) | 2,146) | (1,447) | 3,940) | |
| Solvency Ratio | ||||||
| Interest coverage1 | 20.88 | 28.24 | 3.56 | -2.57 | 8.68 | |
| Benchmarks | ||||||
| Interest Coverage, Competitors2 | ||||||
| Chevron Corp. | 64.08 | 97.27 | 31.39 | -9.69 | — | |
| ConocoPhillips | 21.88 | 36.07 | 15.38 | -2.90 | — | |
| Exxon Mobil Corp. | 63.17 | 98.43 | 33.98 | -23.94 | — | |
| Occidental Petroleum Corp. | 7.80 | 14.71 | 3.30 | -10.03 | — | |
| Interest Coverage, Sector | ||||||
| Oil, Gas & Consumable Fuels | 35.53 | 54.91 | 17.67 | -12.51 | — | |
| Interest Coverage, Industry | ||||||
| Energy | 32.12 | 48.83 | 16.26 | -13.30 | — | |
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
= 12,360 ÷ 592 = 20.88
2 Click competitor name to see calculations.
The financial data indicates significant fluctuations in the company's earnings before interest and tax (EBIT) over the five-year period. Beginning with a positive EBIT of 3940 million US dollars in 2019, the company experienced a notable decline into a negative EBIT in 2020, amounting to -1447 million. This loss was followed by a recovery in 2021 to a positive EBIT of 2146 million. A substantial improvement is observed in 2022, with EBIT rising sharply to 15869 million, before tapering slightly to 12360 million in 2023.
Interest and debt expense, net of capitalized interest, showed moderate increases over the same period. Starting at 454 million in 2019, expenses rose steadily each year, reaching 592 million by 2023. The incremental changes suggest a relatively stable but gradually increasing interest burden.
Interest coverage ratio, which measures the ability to meet interest obligations from operating earnings, reflects the volatility in EBIT. The ratio was strong at 8.68 times in 2019 but dropped to a negative ratio of -2.57 in 2020 due to the negative EBIT. Improvement occurred over the following years, with the ratio increasing to 3.56 in 2021, then surging to 28.24 in 2022, and settling at 20.88 in 2023. The high coverage ratios in the last two years indicate a robust capacity to cover interest expenses, likely driven by the substantial EBIT growth.
- EBIT Trend
- The EBIT showed high volatility with a sharp decline in 2020, a recovery in 2021, and strong growth in 2022, followed by a moderate decrease in 2023.
- Interest and Debt Expense
- Interest expenses rose gradually and consistently over the five years, suggesting controlled management of debt costs despite EBIT fluctuations.
- Interest Coverage Ratio
- The interest coverage ratio exhibited significant variability, declining sharply in 2020, then improving markedly in subsequent years reflecting enhanced earnings relative to interest obligations.
Fixed Charge Coverage
Valero Energy 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 Valero Energy Corporation stockholders | 8,835) | 11,528) | 930) | (1,421) | 2,422) | |
| Add: Net income attributable to noncontrolling interest | 314) | 351) | 358) | 314) | 362) | |
| Add: Income tax expense | 2,619) | 3,428) | 255) | (903) | 702) | |
| Add: Interest and debt expense, net of capitalized interest | 592) | 562) | 603) | 563) | 454) | |
| Earnings before interest and tax (EBIT) | 12,360) | 15,869) | 2,146) | (1,447) | 3,940) | |
| Add: Operating lease cost | 418) | 379) | 381) | 434) | 439) | |
| Earnings before fixed charges and tax | 12,778) | 16,248) | 2,527) | (1,013) | 4,379) | |
| Interest and debt expense, net of capitalized interest | 592) | 562) | 603) | 563) | 454) | |
| Operating lease cost | 418) | 379) | 381) | 434) | 439) | |
| Fixed charges | 1,010) | 941) | 984) | 997) | 893) | |
| Solvency Ratio | ||||||
| Fixed charge coverage1 | 12.65 | 17.27 | 2.57 | -1.02 | 4.90 | |
| Benchmarks | ||||||
| Fixed Charge Coverage, Competitors2 | ||||||
| Chevron Corp. | 9.57 | 18.28 | 8.43 | -1.29 | — | |
| ConocoPhillips | 17.14 | 28.76 | 11.94 | -1.79 | — | |
| Exxon Mobil Corp. | 19.68 | 31.21 | 13.55 | -9.65 | — | |
| Occidental Petroleum Corp. | 3.09 | 6.42 | 1.78 | -4.00 | — | |
| Fixed Charge Coverage, Sector | ||||||
| Oil, Gas & Consumable Fuels | 11.61 | 20.00 | 7.82 | -4.39 | — | |
| Fixed Charge Coverage, Industry | ||||||
| Energy | 10.33 | 17.37 | 7.02 | -4.45 | — | |
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
= 12,778 ÷ 1,010 = 12.65
2 Click competitor name to see calculations.
- Earnings before fixed charges and tax
-
The earnings before fixed charges and tax exhibited significant volatility over the five-year period. In 2019, the earnings stood at a positive value of 4,379 million US dollars. However, there was a sharp decline in 2020, resulting in a negative figure of -1,013 million US dollars, indicating a substantial downturn in operational profitability. Subsequently, the earnings rebounded in 2021 to 2,527 million US dollars and experienced a pronounced increase in 2022, reaching 16,248 million US dollars. The most recent year, 2023, showed a slight decrease to 12,778 million US dollars, although the value remained considerably higher than the earlier years.
- Fixed charges
-
Fixed charges remained relatively stable across the observed period, fluctuating between 893 million US dollars in 2019 and 1,010 million US dollars in 2023. The charges showed a gradual increase from 893 million in 2019 to 997 million in 2020, followed by a minor decline to 984 million in 2021 and 941 million in 2022, before increasing again to the highest value in 2023. Overall, the changes in fixed charges were marginal compared to the volatility seen in earnings before fixed charges and tax.
- Fixed charge coverage ratio
-
The fixed charge coverage ratio reflected the fluctuations in earnings over the period. In 2019, the ratio was 4.9, indicating adequate coverage of fixed charges by earnings. The ratio turned negative in 2020 (-1.02), further confirming the operational challenges faced during that year. Recovery was evident in 2021 when the ratio improved to 2.57, showing partial restoration of earnings capacity. A substantial improvement occurred in 2022, with the ratio reaching 17.27, signaling very strong coverage of fixed charges. In 2023, the ratio decreased to 12.65, still representing robust earnings relative to fixed obligations despite the decline from the previous year.