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Alphabet Inc. (GOOG)
Analysis of Debt
Difficulty: Advanced
Total Debt (Carrying Amount)
Alphabet Inc., Statement of Financial Position, Debt
US$ in millions
| Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | ||
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| Short-term debt | |
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| Long-term debt, excluding short-term portion | |
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| Total debt and capital lease obligation (carrying amount) | |
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Based on: 10-K (filing date: 2019-02-05), 10-K (filing date: 2018-02-06), 10-K (filing date: 2017-02-03), 10-K (filing date: 2016-02-11), 10-K (filing date: 2015-02-09).
| Item | Description | The company |
|---|---|---|
| Total debt and capital lease obligation (carrying amount) | Sum of the carrying values as of the balance sheet date of all debt plus capital lease obligations. | Alphabet Inc.’s total debt increased from 2016 to 2017 and from 2017 to 2018. |
Total Debt (Fair Value)
| Dec 31, 2018 | |
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| Selected Financial Data (US$ in millions) | |
| Commercial paper | |
| Notes | |
| Capital lease obligation | |
| Total debt and capital lease obligation (fair value) | |
| Financial Ratio | |
| Debt, fair value to carrying amount ratio | |
Based on: 10-K (filing date: 2019-02-05).
Weighted-average Interest Rate on Debt
Weighted-average effective interest yield:
| Interest Rate | Debt Amount1 | Interest Rate × Debt Amount | Weighted-average Interest Rate2 |
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Based on: 10-K (filing date: 2019-02-05).
1 US$ in millions
2 Weighted-average interest rate = 100 × ÷ =
Interest Costs Incurred
Alphabet Inc., Interest Costs Incurred
US$ in millions
| 12 months ended | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | ||||||
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| Interest expense | |
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| Interest capitalized | |
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| Interest costs incurred | |
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Based on: 10-K (filing date: 2019-02-05), 10-K (filing date: 2018-02-06), 10-K (filing date: 2017-02-03), 10-K (filing date: 2016-02-11), 10-K (filing date: 2015-02-09).
| Item | Description | The company |
|---|---|---|
| Interest expense | Amount of the cost of borrowed funds accounted for as interest expense for debt. | Alphabet Inc.’s interest expense declined from 2016 to 2017 but then slightly increased from 2017 to 2018. |
| Interest capitalized | Amount of interest costs capitalized disclosed as an adjusting item to interest costs incurred. | Alphabet Inc.’s interest capitalized increased from 2016 to 2017 and from 2017 to 2018. |
| Interest costs incurred | Total interest costs incurred during the period and either capitalized or charged against earnings. | Alphabet Inc.’s interest costs incurred increased from 2016 to 2017 and from 2017 to 2018. |
Adjusted Interest Coverage Ratio
Based on: 10-K (filing date: 2019-02-05), 10-K (filing date: 2018-02-06), 10-K (filing date: 2017-02-03), 10-K (filing date: 2016-02-11), 10-K (filing date: 2015-02-09).
2018 Calculations
1 Interest coverage ratio (without capitalized interest) = EBIT ÷ Interest expense
= ÷ =
2 Adjusted interest coverage ratio (with capitalized interest) = EBIT ÷ Interest costs incurred
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| Financial Ratio | Description | The company |
|---|---|---|
| Adjusted interest coverage ratio | A solvency ratio calculated as EBIT divided by interest payments (including capitalized interest). | Alphabet Inc.’s adjusted interest coverage ratio deteriorated from 2016 to 2017 and from 2017 to 2018. |