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)
Time Warner Inc., solvency ratios
Based on: 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31).
| Solvency ratio | Description | The company |
|---|---|---|
| Debt to equity ratio | A solvency ratio calculated as total debt divided by total shareholders’ equity. | Time Warner Inc. debt to equity ratio improved from 2015 to 2016 and from 2016 to 2017. |
| Debt to capital ratio | A solvency ratio calculated as total debt divided by total debt plus shareholders’ equity. | Time Warner Inc. debt to capital ratio improved from 2015 to 2016 and from 2016 to 2017. |
| Debt to assets ratio | A solvency ratio calculated as total debt divided by total assets. | Time Warner Inc. debt to assets ratio improved from 2015 to 2016 and from 2016 to 2017. |
| Financial leverage ratio | A solvency ratio calculated as total assets divided by total shareholders’ equity. | Time Warner Inc. financial leverage ratio increased from 2015 to 2016 but then decreased significantly from 2016 to 2017. |
| Solvency ratio | Description | The company |
|---|---|---|
| Interest coverage ratio | A solvency ratio calculated as EBIT divided by interest payments. | Time Warner Inc. interest coverage ratio deteriorated from 2015 to 2016 but then improved from 2016 to 2017 exceeding 2015 level. |
| Fixed charge coverage ratio | A solvency ratio calculated as earnings before fixed charges and tax divided by fixed charges. | Time Warner Inc. fixed charge coverage ratio deteriorated from 2015 to 2016 but then improved from 2016 to 2017 exceeding 2015 level. |
Debt to Equity
Time Warner Inc., debt to equity calculation, comparison to benchmarks
| Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Debt due within one year | 5,450) | 1,947) | 198) | 1,118) | 66) | |
| Long-term debt, excluding due within one year | 18,294) | 22,392) | 23,594) | 21,376) | 20,099) | |
| Total debt | 23,744) | 24,339) | 23,792) | 22,494) | 20,165) | |
| Total Time Warner Inc. shareholders’ equity | 28,375) | 24,335) | 23,619) | 24,476) | 29,904) | |
| Solvency Ratio | ||||||
| Debt to equity1 | 0.84 | 1.00 | 1.01 | 0.92 | 0.67 | |
| Benchmarks | ||||||
| Debt to Equity, Competitors2 | ||||||
| Alphabet Inc. | — | — | — | — | — | |
| Comcast Corp. | — | — | — | — | — | |
| Meta Platforms Inc. | — | — | — | — | — | |
| Netflix Inc. | — | — | — | — | — | |
| Walt Disney Co. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31).
1 2017 Calculation
Debt to equity = Total debt ÷ Total Time Warner Inc. shareholders’ equity
= 23,744 ÷ 28,375 = 0.84
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. | Time Warner Inc. debt to equity ratio improved from 2015 to 2016 and from 2016 to 2017. |
Debt to Capital
Time Warner Inc., debt to capital calculation, comparison to benchmarks
| Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Debt due within one year | 5,450) | 1,947) | 198) | 1,118) | 66) | |
| Long-term debt, excluding due within one year | 18,294) | 22,392) | 23,594) | 21,376) | 20,099) | |
| Total debt | 23,744) | 24,339) | 23,792) | 22,494) | 20,165) | |
| Total Time Warner Inc. shareholders’ equity | 28,375) | 24,335) | 23,619) | 24,476) | 29,904) | |
| Total capital | 52,119) | 48,674) | 47,411) | 46,970) | 50,069) | |
| Solvency Ratio | ||||||
| Debt to capital1 | 0.46 | 0.50 | 0.50 | 0.48 | 0.40 | |
| Benchmarks | ||||||
| Debt to Capital, Competitors2 | ||||||
| Alphabet Inc. | — | — | — | — | — | |
| Comcast Corp. | — | — | — | — | — | |
| Meta Platforms Inc. | — | — | — | — | — | |
| Netflix Inc. | — | — | — | — | — | |
| Walt Disney Co. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31).
1 2017 Calculation
Debt to capital = Total debt ÷ Total capital
= 23,744 ÷ 52,119 = 0.46
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. | Time Warner Inc. debt to capital ratio improved from 2015 to 2016 and from 2016 to 2017. |
Debt to Assets
Time Warner Inc., debt to assets calculation, comparison to benchmarks
| Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Debt due within one year | 5,450) | 1,947) | 198) | 1,118) | 66) | |
| Long-term debt, excluding due within one year | 18,294) | 22,392) | 23,594) | 21,376) | 20,099) | |
| Total debt | 23,744) | 24,339) | 23,792) | 22,494) | 20,165) | |
| Total assets | 69,209) | 65,966) | 63,848) | 63,259) | 67,994) | |
| Solvency Ratio | ||||||
| Debt to assets1 | 0.34 | 0.37 | 0.37 | 0.36 | 0.30 | |
| Benchmarks | ||||||
| Debt to Assets, Competitors2 | ||||||
| Alphabet Inc. | — | — | — | — | — | |
| Comcast Corp. | — | — | — | — | — | |
| Meta Platforms Inc. | — | — | — | — | — | |
| Netflix Inc. | — | — | — | — | — | |
| Walt Disney Co. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31).
1 2017 Calculation
Debt to assets = Total debt ÷ Total assets
= 23,744 ÷ 69,209 = 0.34
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. | Time Warner Inc. debt to assets ratio improved from 2015 to 2016 and from 2016 to 2017. |
Financial Leverage
Time Warner Inc., financial leverage calculation, comparison to benchmarks
| Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Total assets | 69,209) | 65,966) | 63,848) | 63,259) | 67,994) | |
| Total Time Warner Inc. shareholders’ equity | 28,375) | 24,335) | 23,619) | 24,476) | 29,904) | |
| Solvency Ratio | ||||||
| Financial leverage1 | 2.44 | 2.71 | 2.70 | 2.58 | 2.27 | |
| Benchmarks | ||||||
| Financial Leverage, Competitors2 | ||||||
| Alphabet Inc. | — | — | — | — | — | |
| Comcast Corp. | — | — | — | — | — | |
| Meta Platforms Inc. | — | — | — | — | — | |
| Netflix Inc. | — | — | — | — | — | |
| Walt Disney Co. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31).
1 2017 Calculation
Financial leverage = Total assets ÷ Total Time Warner Inc. shareholders’ equity
= 69,209 ÷ 28,375 = 2.44
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. | Time Warner Inc. financial leverage ratio increased from 2015 to 2016 but then decreased significantly from 2016 to 2017. |
Interest Coverage
Time Warner Inc., interest coverage calculation, comparison to benchmarks
| Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income attributable to Time Warner Inc. shareholders | 5,247) | 3,926) | 3,833) | 3,827) | 3,691) | |
| Add: Net income attributable to noncontrolling interest | (3) | (1) | (1) | —) | —) | |
| Less: Discontinued operations, net of tax | —) | 11) | 37) | (67) | 137) | |
| Add: Income tax expense | 701) | 1,281) | 1,651) | 785) | 1,749) | |
| Add: Interest expense | 1,214) | 1,388) | 1,382) | 1,353) | 1,283) | |
| Earnings before interest and tax (EBIT) | 7,159) | 6,583) | 6,828) | 6,032) | 6,586) | |
| Solvency Ratio | ||||||
| Interest coverage1 | 5.90 | 4.74 | 4.94 | 4.46 | 5.13 | |
| Benchmarks | ||||||
| Interest Coverage, Competitors2 | ||||||
| Alphabet Inc. | — | — | — | — | — | |
| Comcast Corp. | — | — | — | — | — | |
| Meta Platforms Inc. | — | — | — | — | — | |
| Netflix Inc. | — | — | — | — | — | |
| Walt Disney Co. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31).
1 2017 Calculation
Interest coverage = EBIT ÷ Interest expense
= 7,159 ÷ 1,214 = 5.90
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. | Time Warner Inc. interest coverage ratio deteriorated from 2015 to 2016 but then improved from 2016 to 2017 exceeding 2015 level. |
Fixed Charge Coverage
Time Warner Inc., fixed charge coverage calculation, comparison to benchmarks
| Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income attributable to Time Warner Inc. shareholders | 5,247) | 3,926) | 3,833) | 3,827) | 3,691) | |
| Add: Net income attributable to noncontrolling interest | (3) | (1) | (1) | —) | —) | |
| Less: Discontinued operations, net of tax | —) | 11) | 37) | (67) | 137) | |
| Add: Income tax expense | 701) | 1,281) | 1,651) | 785) | 1,749) | |
| Add: Interest expense | 1,214) | 1,388) | 1,382) | 1,353) | 1,283) | |
| Earnings before interest and tax (EBIT) | 7,159) | 6,583) | 6,828) | 6,032) | 6,586) | |
| Add: Rent expense, excluding sublease income | 348) | 334) | 348) | 391) | 463) | |
| Earnings before fixed charges and tax | 7,507) | 6,917) | 7,176) | 6,423) | 7,049) | |
| Interest expense | 1,214) | 1,388) | 1,382) | 1,353) | 1,283) | |
| Rent expense, excluding sublease income | 348) | 334) | 348) | 391) | 463) | |
| Fixed charges | 1,562) | 1,722) | 1,730) | 1,744) | 1,746) | |
| Solvency Ratio | ||||||
| Fixed charge coverage1 | 4.81 | 4.02 | 4.15 | 3.68 | 4.04 | |
| Benchmarks | ||||||
| Fixed Charge Coverage, Competitors2 | ||||||
| Alphabet Inc. | — | — | — | — | — | |
| Comcast Corp. | — | — | — | — | — | |
| Meta Platforms Inc. | — | — | — | — | — | |
| Netflix Inc. | — | — | — | — | — | |
| Walt Disney Co. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31).
1 2017 Calculation
Fixed charge coverage = Earnings before fixed charges and tax ÷ Fixed charges
= 7,507 ÷ 1,562 = 4.81
2 Click competitor name to see calculations.
| Solvency ratio | Description | The company |
|---|---|---|
| Fixed charge coverage ratio | A solvency ratio calculated as earnings before fixed charges and tax divided by fixed charges. | Time Warner Inc. fixed charge coverage ratio deteriorated from 2015 to 2016 but then improved from 2016 to 2017 exceeding 2015 level. |