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Barrick Gold Corp. (ABX) | Long-term Debt and Solvency Analysis

Solvency ratios also known as long-term debt ratios measure a company's ability to meet long-term obligations.


Ratios (Summary)

Barrick Gold Corp., debt and solvency ratios

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    Dec 31, 2012 Dec 31, 2011 Dec 31, 2010
Debt to equity 0.64 0.57 0.34
Debt to capital 0.39 0.36 0.25
Interest coverage -7.08 52.31 39.74

Source: Based on data from Barrick Gold Corp. Annual Reports

Ratio Description The company
Debt-to-equity ratio A solvency ratio calculated as total debt divided by total shareholders' equity. Barrick Gold Corp.'s debt-to-equity ratio deteriorated from 2010 to 2011 and from 2011 to 2012.
Debt-to-capital ratio A solvency ratio calculated as total debt divided by total debt plus shareholders' equity. Barrick Gold Corp.'s debt-to-capital ratio deteriorated from 2010 to 2011 and from 2011 to 2012.
Interest coverage ratio A solvency ratio calculated as EBIT divided by interest payments. Barrick Gold Corp.'s interest coverage ratio improved from 2010 to 2011 but then deteriorated significantly from 2011 to 2012.

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Debt to Equity

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    Dec 31, 2012 Dec 31, 2011 Dec 31, 2010
  Selected Financial Data (USD $ in millions)
Current portion of long-term debt 1,848  196  14 
Long-term debt, excluding current portion 12,095  13,173  6,624 
Total debt 13,943  13,369  6,638 
Equity attributable to Barrick Gold Corporation shareholders 21,845  23,363  19,472 
  Debt to Equity, Comparison to Industry
Barrick Gold Corp.1 0.64 0.57 0.34
  Industry, Basic Materials 0.50 0.43 0.42

Source: Based on data from Barrick Gold Corp. Annual Reports

2012 Calculations

1 Debt to equity = Total debt ÷ Equity attributable to Barrick Gold Corporation shareholders
= 13,943 ÷ 21,845 = 0.64

Ratio Description The company
Debt-to-equity ratio A solvency ratio calculated as total debt divided by total shareholders' equity. Barrick Gold Corp.'s debt-to-equity ratio deteriorated from 2010 to 2011 and from 2011 to 2012.

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Debt to Capital

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    Dec 31, 2012 Dec 31, 2011 Dec 31, 2010
  Selected Financial Data (USD $ in millions)
Current portion of long-term debt 1,848  196  14 
Long-term debt, excluding current portion 12,095  13,173  6,624 
Total debt 13,943  13,369  6,638 
Equity attributable to Barrick Gold Corporation shareholders 21,845  23,363  19,472 
Total capital 35,788  36,732  26,110 
  Debt to Capital, Comparison to Industry
Barrick Gold Corp.1 0.39 0.36 0.25
  Industry, Basic Materials 0.33 0.30 0.30

Source: Based on data from Barrick Gold Corp. Annual Reports

2012 Calculations

1 Debt to capital = Total debt ÷ Total capital
= 13,943 ÷ 35,788 = 0.39

Ratio Description The company
Debt-to-capital ratio A solvency ratio calculated as total debt divided by total debt plus shareholders' equity. Barrick Gold Corp.'s debt-to-capital ratio deteriorated from 2010 to 2011 and from 2011 to 2012.

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Interest Coverage

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    Dec 31, 2012 Dec 31, 2011 Dec 31, 2010
  Selected Financial Data (USD $ in millions)
Net income (loss) attributable to equity holders of Barrick Gold Corporation (665) 4,484  3,582 
Add: Net (income) loss attributable to non-controlling interests (12) 53  48 
Add: Interest expense 113  133  134 
Add: Income tax expense (benefit) (236) 2,287  1,561 
Earnings before interest and tax (EBIT) (800) 6,957  5,325 
  Interest Coverage, Comparison to Industry
Barrick Gold Corp.1 -7.08 52.31 39.74
  Industry, Basic Materials 8.52 17.42 13.62

Source: Based on data from Barrick Gold Corp. Annual Reports

2012 Calculations

1 Interest coverage = EBIT ÷ Interest expense
= -800 ÷ 113 = -7.08

Ratio Description The company
Interest coverage ratio A solvency ratio calculated as EBIT divided by interest payments. Barrick Gold Corp.'s interest coverage ratio improved from 2010 to 2011 but then deteriorated significantly from 2011 to 2012.

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