Honda Motor Co. Ltd. (HMC) | 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)
Honda Motor Co. Ltd., debt and solvency ratios
| Mar 31, 2012 | Mar 31, 2011 | Mar 31, 2010 | Mar 31, 2009 | Mar 31, 2008 | Mar 31, 2007 | ||
|---|---|---|---|---|---|---|---|
| Debt to equity | 0.93 | 0.92 | 0.95 | 1.15 | 0.97 | 0.88 | |
| Debt to capital | 0.48 | 0.48 | 0.49 | 0.54 | 0.49 | 0.47 | |
| Interest coverage | 35.48 | 91.90 | 35.22 | 12.57 | 62.05 | 70.41 |
Source: Based on data from Honda Motor Co. Ltd. Annual Reports
| Ratio | Description | The company |
|---|---|---|
| Debt-to-equity ratio | A solvency ratio calculated as total debt divided by total shareholders' equity. | Honda Motor Co. Ltd.'s debt-to-equity ratio improved from 2010 to 2011 but then slightly deteriorated from 2011 to 2012. |
| Debt-to-capital ratio | A solvency ratio calculated as total debt divided by total debt plus shareholders' equity. | Honda Motor Co. Ltd.'s debt-to-capital ratio improved from 2010 to 2011 but then slightly deteriorated from 2011 to 2012. |
| Interest coverage ratio | A solvency ratio calculated as EBIT divided by interest payments. | Honda Motor Co. Ltd.'s interest coverage ratio improved from 2010 to 2011 but then slightly deteriorated from 2011 to 2012 not reaching 2010 level. |
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Debt to Equity
| Mar 31, 2012 | Mar 31, 2011 | Mar 31, 2010 | Mar 31, 2009 | Mar 31, 2008 | Mar 31, 2007 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (USD $ in millions, translated from JPY ¥) | |||||||
| Short-term debt | 11,739 | 13,166 | 11,461 | 17,376 | 16,839 | 10,723 | |
| Current portion of long-term debt | 11,089 | 11,575 | 7,763 | 9,951 | 8,694 | 6,568 | |
| Long-term debt, excluding current portion | 27,193 | 24,573 | 24,861 | 19,675 | 18,332 | 16,144 | |
| Total debt | 50,021 | 49,314 | 44,085 | 47,002 | 43,865 | 33,435 | |
| Honda Motor Co., Ltd. shareholders’ equity | 53,566 | 53,517 | 46,525 | 40,795 | 45,356 | 37,972 | |
| Debt to Equity, Comparison to Industry | |||||||
| Honda Motor Co. Ltd.1 | 0.93 | 0.92 | 0.95 | 1.15 | 0.97 | 0.88 | |
| Industry, Consumer Goods | 1.02 | 1.01 | 0.97 | 0.97 | 0.87 | – | |
Source: Based on data from Honda Motor Co. Ltd. Annual Reports
2012 Calculations
1 Debt to equity = Total debt ÷ Honda Motor Co., Ltd. shareholders’ equity
= 50,021 ÷ 53,566 = 0.93
| Ratio | Description | The company |
|---|---|---|
| Debt-to-equity ratio | A solvency ratio calculated as total debt divided by total shareholders' equity. | Honda Motor Co. Ltd.'s debt-to-equity ratio improved from 2010 to 2011 but then slightly deteriorated from 2011 to 2012. |
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Debt to Capital
| Mar 31, 2012 | Mar 31, 2011 | Mar 31, 2010 | Mar 31, 2009 | Mar 31, 2008 | Mar 31, 2007 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (USD $ in millions, translated from JPY ¥) | |||||||
| Short-term debt | 11,739 | 13,166 | 11,461 | 17,376 | 16,839 | 10,723 | |
| Current portion of long-term debt | 11,089 | 11,575 | 7,763 | 9,951 | 8,694 | 6,568 | |
| Long-term debt, excluding current portion | 27,193 | 24,573 | 24,861 | 19,675 | 18,332 | 16,144 | |
| Total debt | 50,021 | 49,314 | 44,085 | 47,002 | 43,865 | 33,435 | |
| Honda Motor Co., Ltd. shareholders’ equity | 53,566 | 53,517 | 46,525 | 40,795 | 45,356 | 37,972 | |
| Total capital | 103,588 | 102,831 | 90,610 | 87,797 | 89,221 | 71,407 | |
| Debt to Capital, Comparison to Industry | |||||||
| Honda Motor Co. Ltd.1 | 0.48 | 0.48 | 0.49 | 0.54 | 0.49 | 0.47 | |
| Industry, Consumer Goods | 0.50 | 0.50 | 0.49 | 0.49 | 0.47 | – | |
Source: Based on data from Honda Motor Co. Ltd. Annual Reports
2012 Calculations
1 Debt to capital = Total debt ÷ Total capital
= 50,021 ÷ 103,588 = 0.48
| Ratio | Description | The company |
|---|---|---|
| Debt-to-capital ratio | A solvency ratio calculated as total debt divided by total debt plus shareholders' equity. | Honda Motor Co. Ltd.'s debt-to-capital ratio improved from 2010 to 2011 but then slightly deteriorated from 2011 to 2012. |
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Interest Coverage
| Mar 31, 2012 | Mar 31, 2011 | Mar 31, 2010 | Mar 31, 2009 | Mar 31, 2008 | Mar 31, 2007 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (USD $ in millions, translated from JPY ¥) | |||||||
| Net income attributable to Honda Motor Co., Ltd. | 2,573 | 6,423 | 2,885 | 1,395 | 5,989 | 5,018 | |
| Add: Net income attributable to noncontrolling interests | 129 | 353 | 153 | 142 | 273 | 170 | |
| Add: Interest expense | 126 | 102 | 135 | 229 | 166 | 109 | |
| Add: Income tax expense (benefit) | 1,651 | 2,487 | 1,579 | 1,118 | 3,867 | 2,404 | |
| Earnings before interest and tax (EBIT) | 4,480 | 9,366 | 4,751 | 2,884 | 10,295 | 7,702 | |
| Interest Coverage, Comparison to Industry | |||||||
| Honda Motor Co. Ltd.1 | 35.48 | 91.90 | 35.22 | 12.57 | 62.05 | 70.41 | |
| Industry, Consumer Goods | 14.33 | 14.76 | 12.20 | 10.17 | 20.33 | – | |
Source: Based on data from Honda Motor Co. Ltd. Annual Reports
2012 Calculations
1 Interest coverage = EBIT ÷ Interest expense
= 4,480 ÷ 126 = 35.48
| Ratio | Description | The company |
|---|---|---|
| Interest coverage ratio | A solvency ratio calculated as EBIT divided by interest payments. | Honda Motor Co. Ltd.'s interest coverage ratio improved from 2010 to 2011 but then slightly deteriorated from 2011 to 2012 not reaching 2010 level. |
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