.Long-term Debt and Solvency Analysis
Difficulty: Beginner
Solvency ratios also known as long-term debt ratios measure a company's ability to meet long-term obligations.
Ratios (Summary)
Alphabet Inc., debt and solvency ratios
| Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | ||
|---|---|---|---|---|---|---|
| | Debt to equity | |||||
| | Debt to capital | |||||
| | Interest coverage |
Source: Based on data from Alphabet Inc. Annual Reports
| Ratio | Description | The company |
|---|---|---|
| Debt-to-equity ratio | A solvency ratio calculated as total debt divided by total shareholders' equity. | Alphabet Inc.'s 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. | Alphabet Inc.'s debt-to-capital ratio improved from 2015 to 2016 and from 2016 to 2017. |
| Interest coverage ratio | A solvency ratio calculated as EBIT divided by interest payments. | Alphabet Inc.'s interest coverage ratio improved from 2015 to 2016 and from 2016 to 2017. |
Debt to Equity
Alphabet 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 (USD $ in millions) | ||||||
| | Short-term debt | |||||
| | Long-term debt, excluding short-term portion | |||||
| | Total debt | |||||
| | Stockholders' equity | |||||
| Ratio | ||||||
| | Debt to equity1 | |||||
| Benchmarks | ||||||
| Debt to Equity, Competitors | ||||||
| Adobe Systems Inc. | ||||||
| Facebook Inc. | ||||||
| International Business Machines Corp. | ||||||
| Microsoft Corp. | ||||||
| Oracle Corp. | ||||||
| salesforce.com inc. | ||||||
| Debt to Equity, Sector | ||||||
| Software & Computer Services | ||||||
| Debt to Equity, Industry | ||||||
| Technology | ||||||
Source: Based on data from Alphabet Inc. Annual Reports
2017 Calculations
1 Debt to equity = Total debt ÷ Stockholders' equity
= ÷ =
| Ratio | Description | The company |
|---|---|---|
| Debt-to-equity ratio | A solvency ratio calculated as total debt divided by total shareholders' equity. | Alphabet Inc.'s debt-to-equity ratio improved from 2015 to 2016 and from 2016 to 2017. |
Debt to Capital
Alphabet 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 (USD $ in millions) | ||||||
| | Short-term debt | |||||
| | Long-term debt, excluding short-term portion | |||||
| | Total debt | |||||
| | Stockholders' equity | |||||
| | Total capital | |||||
| Ratio | ||||||
| | Debt to capital1 | |||||
| Benchmarks | ||||||
| Debt to Capital, Competitors | ||||||
| Adobe Systems Inc. | ||||||
| Facebook Inc. | ||||||
| International Business Machines Corp. | ||||||
| Microsoft Corp. | ||||||
| Oracle Corp. | ||||||
| salesforce.com inc. | ||||||
| Debt to Capital, Sector | ||||||
| Software & Computer Services | ||||||
| Debt to Capital, Industry | ||||||
| Technology | ||||||
Source: Based on data from Alphabet Inc. Annual Reports
2017 Calculations
1 Debt to capital = Total debt ÷ Total capital
= ÷ =
| Ratio | Description | The company |
|---|---|---|
| Debt-to-capital ratio | A solvency ratio calculated as total debt divided by total debt plus shareholders' equity. | Alphabet Inc.'s debt-to-capital ratio improved from 2015 to 2016 and from 2016 to 2017. |
Interest Coverage
Alphabet 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 (USD $ in millions) | ||||||
| | Net income | |||||
| | Less: Net income from discontinued operations | |||||
| | Add: Income tax expense | |||||
| | Add: Interest expense | |||||
| | Earnings before interest and tax (EBIT) | |||||
| Ratio | ||||||
| | Interest coverage1 | |||||
| Benchmarks | ||||||
| Interest Coverage, Competitors | ||||||
| Adobe Systems Inc. | ||||||
| Facebook Inc. | ||||||
| International Business Machines Corp. | ||||||
| Microsoft Corp. | ||||||
| Oracle Corp. | ||||||
| salesforce.com inc. | ||||||
| Interest Coverage, Sector | ||||||
| Software & Computer Services | ||||||
| Interest Coverage, Industry | ||||||
| Technology | ||||||
Source: Based on data from Alphabet Inc. Annual Reports
2017 Calculations
1 Interest coverage = EBIT ÷ Interest expense
= ÷ =
| Ratio | Description | The company |
|---|---|---|
| Interest coverage ratio | A solvency ratio calculated as EBIT divided by interest payments. | Alphabet Inc.'s interest coverage ratio improved from 2015 to 2016 and from 2016 to 2017. |
