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)
GlaxoSmithKline PLC, solvency ratios
Based on: 20-F (reporting date: 2014-12-31), 20-F (reporting date: 2013-12-31), 20-F (reporting date: 2012-12-31), 20-F (reporting date: 2011-12-31), 20-F (reporting date: 2010-12-31).
| Solvency ratio | Description | The company |
|---|---|---|
| Debt to equity ratio | A solvency ratio calculated as total debt divided by total shareholders’ equity. | GlaxoSmithKline PLC debt to equity ratio improved from 2012 to 2013 but then deteriorated significantly from 2013 to 2014. |
| Debt to capital ratio | A solvency ratio calculated as total debt divided by total debt plus shareholders’ equity. | GlaxoSmithKline PLC debt to capital ratio improved from 2012 to 2013 but then deteriorated significantly from 2013 to 2014. |
| Debt to assets ratio | A solvency ratio calculated as total debt divided by total assets. | GlaxoSmithKline PLC debt to assets ratio improved from 2012 to 2013 but then deteriorated significantly from 2013 to 2014. |
| Financial leverage ratio | A solvency ratio calculated as total assets divided by total shareholders’ equity. | GlaxoSmithKline PLC financial leverage ratio decreased from 2012 to 2013 but then increased from 2013 to 2014 exceeding 2012 level. |
| Solvency ratio | Description | The company |
|---|---|---|
| Interest coverage ratio | A solvency ratio calculated as EBIT divided by interest payments. | GlaxoSmithKline PLC interest coverage ratio improved from 2012 to 2013 but then deteriorated significantly from 2013 to 2014. |
Debt to Equity
GlaxoSmithKline PLC, debt to equity calculation, comparison to benchmarks
| Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | Dec 31, 2010 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions, translated from GBP £) | ||||||
| Short-term borrowings | 4,970) | 4,622) | 5,905) | 4,192) | 448) | |
| Long-term borrowings | 26,754) | 25,615) | 23,859) | 18,961) | 22,794) | |
| Total debt | 31,724) | 30,237) | 29,764) | 23,153) | 23,241) | |
| Shareholders’ equity | 7,200) | 11,596) | 9,449) | 12,480) | 13,679) | |
| Solvency Ratio | ||||||
| Debt to equity1 | 4.41 | 2.61 | 3.15 | 1.86 | 1.70 | |
| Benchmarks | ||||||
| Debt to Equity, Competitors2 | ||||||
| AbbVie Inc. | — | — | — | — | — | |
| Amgen Inc. | — | — | — | — | — | |
| Bristol-Myers Squibb Co. | — | — | — | — | — | |
| Danaher Corp. | — | — | — | — | — | |
| Eli Lilly & Co. | — | — | — | — | — | |
| Gilead Sciences Inc. | — | — | — | — | — | |
| Johnson & Johnson | — | — | — | — | — | |
| Merck & Co. Inc. | — | — | — | — | — | |
| Pfizer Inc. | — | — | — | — | — | |
| Regeneron Pharmaceuticals Inc. | — | — | — | — | — | |
| Thermo Fisher Scientific Inc. | — | — | — | — | — | |
| Zoetis Inc. | — | — | — | — | — | |
Based on: 20-F (reporting date: 2014-12-31), 20-F (reporting date: 2013-12-31), 20-F (reporting date: 2012-12-31), 20-F (reporting date: 2011-12-31), 20-F (reporting date: 2010-12-31).
1 2014 Calculation
Debt to equity = Total debt ÷ Shareholders’ equity
= 31,724 ÷ 7,200 = 4.41
2 Click competitor name to see calculations.
| Solvency ratio | Description | The company |
|---|---|---|
| Debt to equity ratio | A solvency ratio calculated as total debt divided by total shareholders’ equity. | GlaxoSmithKline PLC debt to equity ratio improved from 2012 to 2013 but then deteriorated significantly from 2013 to 2014. |
Debt to Capital
GlaxoSmithKline PLC, debt to capital calculation, comparison to benchmarks
| Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | Dec 31, 2010 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions, translated from GBP £) | ||||||
| Short-term borrowings | 4,970) | 4,622) | 5,905) | 4,192) | 448) | |
| Long-term borrowings | 26,754) | 25,615) | 23,859) | 18,961) | 22,794) | |
| Total debt | 31,724) | 30,237) | 29,764) | 23,153) | 23,241) | |
| Shareholders’ equity | 7,200) | 11,596) | 9,449) | 12,480) | 13,679) | |
| Total capital | 38,924) | 41,833) | 39,213) | 35,632) | 36,920) | |
| Solvency Ratio | ||||||
| Debt to capital1 | 0.82 | 0.72 | 0.76 | 0.65 | 0.63 | |
| Benchmarks | ||||||
| Debt to Capital, Competitors2 | ||||||
| AbbVie Inc. | — | — | — | — | — | |
| Amgen Inc. | — | — | — | — | — | |
| Bristol-Myers Squibb Co. | — | — | — | — | — | |
| Danaher Corp. | — | — | — | — | — | |
| Eli Lilly & Co. | — | — | — | — | — | |
| Gilead Sciences Inc. | — | — | — | — | — | |
| Johnson & Johnson | — | — | — | — | — | |
| Merck & Co. Inc. | — | — | — | — | — | |
| Pfizer Inc. | — | — | — | — | — | |
| Regeneron Pharmaceuticals Inc. | — | — | — | — | — | |
| Thermo Fisher Scientific Inc. | — | — | — | — | — | |
| Zoetis Inc. | — | — | — | — | — | |
Based on: 20-F (reporting date: 2014-12-31), 20-F (reporting date: 2013-12-31), 20-F (reporting date: 2012-12-31), 20-F (reporting date: 2011-12-31), 20-F (reporting date: 2010-12-31).
1 2014 Calculation
Debt to capital = Total debt ÷ Total capital
= 31,724 ÷ 38,924 = 0.82
2 Click competitor name to see calculations.
| Solvency ratio | Description | The company |
|---|---|---|
| Debt to capital ratio | A solvency ratio calculated as total debt divided by total debt plus shareholders’ equity. | GlaxoSmithKline PLC debt to capital ratio improved from 2012 to 2013 but then deteriorated significantly from 2013 to 2014. |
Debt to Assets
GlaxoSmithKline PLC, debt to assets calculation, comparison to benchmarks
| Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | Dec 31, 2010 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions, translated from GBP £) | ||||||
| Short-term borrowings | 4,970) | 4,622) | 5,905) | 4,192) | 448) | |
| Long-term borrowings | 26,754) | 25,615) | 23,859) | 18,961) | 22,794) | |
| Total debt | 31,724) | 30,237) | 29,764) | 23,153) | 23,241) | |
| Total assets | 68,656) | 69,748) | 67,450) | 63,828) | 64,999) | |
| Solvency Ratio | ||||||
| Debt to assets1 | 0.46 | 0.43 | 0.44 | 0.36 | 0.36 | |
| Benchmarks | ||||||
| Debt to Assets, Competitors2 | ||||||
| AbbVie Inc. | — | — | — | — | — | |
| Amgen Inc. | — | — | — | — | — | |
| Bristol-Myers Squibb Co. | — | — | — | — | — | |
| Danaher Corp. | — | — | — | — | — | |
| Eli Lilly & Co. | — | — | — | — | — | |
| Gilead Sciences Inc. | — | — | — | — | — | |
| Johnson & Johnson | — | — | — | — | — | |
| Merck & Co. Inc. | — | — | — | — | — | |
| Pfizer Inc. | — | — | — | — | — | |
| Regeneron Pharmaceuticals Inc. | — | — | — | — | — | |
| Thermo Fisher Scientific Inc. | — | — | — | — | — | |
| Zoetis Inc. | — | — | — | — | — | |
Based on: 20-F (reporting date: 2014-12-31), 20-F (reporting date: 2013-12-31), 20-F (reporting date: 2012-12-31), 20-F (reporting date: 2011-12-31), 20-F (reporting date: 2010-12-31).
1 2014 Calculation
Debt to assets = Total debt ÷ Total assets
= 31,724 ÷ 68,656 = 0.46
2 Click competitor name to see calculations.
| Solvency ratio | Description | The company |
|---|---|---|
| Debt to assets ratio | A solvency ratio calculated as total debt divided by total assets. | GlaxoSmithKline PLC debt to assets ratio improved from 2012 to 2013 but then deteriorated significantly from 2013 to 2014. |
Financial Leverage
GlaxoSmithKline PLC, financial leverage calculation, comparison to benchmarks
| Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | Dec 31, 2010 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions, translated from GBP £) | ||||||
| Total assets | 68,656) | 69,748) | 67,450) | 63,828) | 64,999) | |
| Shareholders’ equity | 7,200) | 11,596) | 9,449) | 12,480) | 13,679) | |
| Solvency Ratio | ||||||
| Financial leverage1 | 9.54 | 6.01 | 7.14 | 5.11 | 4.75 | |
| Benchmarks | ||||||
| Financial Leverage, Competitors2 | ||||||
| AbbVie Inc. | — | — | — | — | — | |
| Amgen Inc. | — | — | — | — | — | |
| Bristol-Myers Squibb Co. | — | — | — | — | — | |
| Danaher Corp. | — | — | — | — | — | |
| Eli Lilly & Co. | — | — | — | — | — | |
| Gilead Sciences Inc. | — | — | — | — | — | |
| Johnson & Johnson | — | — | — | — | — | |
| Merck & Co. Inc. | — | — | — | — | — | |
| Pfizer Inc. | — | — | — | — | — | |
| Regeneron Pharmaceuticals Inc. | — | — | — | — | — | |
| Thermo Fisher Scientific Inc. | — | — | — | — | — | |
| Zoetis Inc. | — | — | — | — | — | |
Based on: 20-F (reporting date: 2014-12-31), 20-F (reporting date: 2013-12-31), 20-F (reporting date: 2012-12-31), 20-F (reporting date: 2011-12-31), 20-F (reporting date: 2010-12-31).
1 2014 Calculation
Financial leverage = Total assets ÷ Shareholders’ equity
= 68,656 ÷ 7,200 = 9.54
2 Click competitor name to see calculations.
| Solvency ratio | Description | The company |
|---|---|---|
| Financial leverage ratio | A solvency ratio calculated as total assets divided by total shareholders’ equity. | GlaxoSmithKline PLC financial leverage ratio decreased from 2012 to 2013 but then increased from 2013 to 2014 exceeding 2012 level. |
Interest Coverage
GlaxoSmithKline PLC, interest coverage calculation, comparison to benchmarks
| Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | Dec 31, 2010 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions, translated from GBP £) | ||||||
| Profit attributable to shareholders | 4,655) | 9,009) | 7,424) | 8,174) | 2,515) | |
| Add: Net income attributable to noncontrolling interest | 127) | 318) | 291) | 306) | 337) | |
| Add: Income tax expense | 231) | 1,689) | 3,168) | 3,480) | 2,007) | |
| Add: Interest expense | 1,162) | 1,203) | 1,212) | 1,156) | 1,181) | |
| Earnings before interest and tax (EBIT) | 6,175) | 12,219) | 12,095) | 13,117) | 6,040) | |
| Solvency Ratio | ||||||
| Interest coverage1 | 5.31 | 10.16 | 9.98 | 11.35 | 5.12 | |
| Benchmarks | ||||||
| Interest Coverage, Competitors2 | ||||||
| AbbVie Inc. | — | — | — | — | — | |
| Amgen Inc. | — | — | — | — | — | |
| Bristol-Myers Squibb Co. | — | — | — | — | — | |
| Danaher Corp. | — | — | — | — | — | |
| Eli Lilly & Co. | — | — | — | — | — | |
| Gilead Sciences Inc. | — | — | — | — | — | |
| Johnson & Johnson | — | — | — | — | — | |
| Merck & Co. Inc. | — | — | — | — | — | |
| Pfizer Inc. | — | — | — | — | — | |
| Regeneron Pharmaceuticals Inc. | — | — | — | — | — | |
| Thermo Fisher Scientific Inc. | — | — | — | — | — | |
| Zoetis Inc. | — | — | — | — | — | |
Based on: 20-F (reporting date: 2014-12-31), 20-F (reporting date: 2013-12-31), 20-F (reporting date: 2012-12-31), 20-F (reporting date: 2011-12-31), 20-F (reporting date: 2010-12-31).
1 2014 Calculation
Interest coverage = EBIT ÷ Interest expense
= 6,175 ÷ 1,162 = 5.31
2 Click competitor name to see calculations.
| Solvency ratio | Description | The company |
|---|---|---|
| Interest coverage ratio | A solvency ratio calculated as EBIT divided by interest payments. | GlaxoSmithKline PLC interest coverage ratio improved from 2012 to 2013 but then deteriorated significantly from 2013 to 2014. |