|
At December 31 |
|
2008 |
2007 |
2006 |
| Current Ratio |
1.1 |
1.2 |
1.3 |
| Interest Coverage Ratio |
166.9 |
69.2 |
53.5 |
| Debt Ratio |
9.3% |
8.6% |
12.5% |
Current Ratio — current assets divided by current liabilities. The current ratio in all periods was adversely affected by the fact that Chevron's inventories are valued on a Last-In, First-Out basis. At year-end 2008, the book value of inventory was lower than replacement costs, based on average acquisition costs during the year, by approximately $9 billion.
Interest Coverage Ratio — income before income tax expense, plus interest and debt expense and amortization of capitalized interest, divided by before-tax interest costs. The company's interest coverage ratio was higher between 2007 and 2008 and between 2006 and 2007, primarily due to higher before-tax income and lower average debt balances in each of the subsequent years.
Debt Ratio — total debt as a percentage of total debt plus equity. The increase between 2007 and 2008 was primarily due to higher debt. The decrease between 2006 and 2007 was due to lower debt and higher stockholders' equity balance.