Microsoft Excel LibreOffice Calc

Long-term Debt and Solvency Analysis

Difficulty: Beginner


Ratios (Summary)

Apple Inc., debt and solvency ratios

Microsoft Excel LibreOffice Calc
Sep 30, 2017 Sep 24, 2016 Sep 26, 2015 Sep 27, 2014 Sep 28, 2013 Sep 29, 2012
Debt to equity 0.86 0.68 0.54 0.32 0.14
Debt to capital 0.46 0.40 0.35 0.24 0.12
Interest coverage 28.59 43.15 99.93 140.28 369.79

Source: Based on data from Apple Inc. Annual Reports

Ratio Description The company
Debt-to-equity ratio A solvency ratio calculated as total debt divided by total shareholders' equity. Apple Inc.'s debt-to-equity ratio deteriorated 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. Apple Inc.'s debt-to-capital ratio deteriorated from 2015 to 2016 and from 2016 to 2017.
Interest coverage ratio A solvency ratio calculated as EBIT divided by interest payments. Apple Inc.'s interest coverage ratio deteriorated from 2015 to 2016 and from 2016 to 2017.

Debt to Equity

Apple Inc., debt to equity calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Sep 30, 2017 Sep 24, 2016 Sep 26, 2015 Sep 27, 2014 Sep 28, 2013 Sep 29, 2012
Selected Financial Data (USD $ in millions)
Commercial paper 11,977  8,105  8,499  6,308 
Current portion of long-term debt 6,496  3,500  2,500 
Long-term debt, excluding current portion 97,207  75,427  53,463  28,987  16,960 
Total debt 115,680  87,032  64,462  35,295  16,960 
Shareholders' equity 134,047  128,249  119,355  111,547  123,549  118,210 
Ratio
Debt to equity1 0.86 0.68 0.54 0.32 0.14
Benchmarks
Debt to Equity, Competitors
Applied Materials Inc. 0.57 0.46 0.60 0.25 0.27 0.27
Broadcom Inc. 0.87 0.72 0.84 1.70
Cisco Systems Inc. 0.51 0.45 0.42 0.37 0.27
HP Inc. 0.89 0.73 0.83 1.27
Intel Corp. 0.39 0.38 0.37 0.25 0.23
NVIDIA Corp. 0.48 0.32 0.32 0.31 0.00
Qualcomm Inc. 0.71 0.37 0.35 0.00 0.00
Texas Instruments Inc. 0.39 0.34 0.41 0.45 0.48
Debt to Equity, Sector
Technology Hardware & Equipment 0.69 0.56 0.50 0.33 0.23
Debt to Equity, Industry
Technology 0.60 0.49 0.45 0.32 0.27

Source: Based on data from Apple Inc. Annual Reports

2017 Calculations

1 Debt to equity = Total debt ÷ Shareholders' equity
= 115,680 ÷ 134,047 = 0.86

Ratio Description The company
Debt-to-equity ratio A solvency ratio calculated as total debt divided by total shareholders' equity. Apple Inc.'s debt-to-equity ratio deteriorated from 2015 to 2016 and from 2016 to 2017.

Debt to Capital

Apple Inc., debt to capital calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Sep 30, 2017 Sep 24, 2016 Sep 26, 2015 Sep 27, 2014 Sep 28, 2013 Sep 29, 2012
Selected Financial Data (USD $ in millions)
Commercial paper 11,977  8,105  8,499  6,308 
Current portion of long-term debt 6,496  3,500  2,500 
Long-term debt, excluding current portion 97,207  75,427  53,463  28,987  16,960 
Total debt 115,680  87,032  64,462  35,295  16,960 
Shareholders' equity 134,047  128,249  119,355  111,547  123,549  118,210 
Total capital 249,727  215,281  183,817  146,842  140,509  118,210 
Ratio
Debt to capital1 0.46 0.40 0.35 0.24 0.12
Benchmarks
Debt to Capital, Competitors
Applied Materials Inc. 0.36 0.32 0.37 0.20 0.22 0.21
Broadcom Inc. 0.46 0.42 0.46 0.63
Cisco Systems Inc. 0.34 0.31 0.30 0.27 0.22
HP Inc. 1.77 2.32 0.47 0.42 0.45 0.56
Intel Corp. 0.28 0.28 0.27 0.20 0.19
NVIDIA Corp. 0.33 0.24 0.24 0.24 0.00
Qualcomm Inc. 0.42 0.27 0.26 0.00 0.00
Texas Instruments Inc. 0.28 0.26 0.29 0.31 0.32
Debt to Capital, Sector
Technology Hardware & Equipment 0.41 0.36 0.33 0.25 0.19
Debt to Capital, Industry
Technology 0.37 0.33 0.31 0.24 0.21

Source: Based on data from Apple Inc. Annual Reports

2017 Calculations

1 Debt to capital = Total debt ÷ Total capital
= 115,680 ÷ 249,727 = 0.46

Ratio Description The company
Debt-to-capital ratio A solvency ratio calculated as total debt divided by total debt plus shareholders' equity. Apple Inc.'s debt-to-capital ratio deteriorated from 2015 to 2016 and from 2016 to 2017.

Interest Coverage

Apple Inc., interest coverage calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Sep 30, 2017 Sep 24, 2016 Sep 26, 2015 Sep 27, 2014 Sep 28, 2013 Sep 29, 2012
Selected Financial Data (USD $ in millions)
Net income 48,351  45,687  53,394  39,510  37,037  41,733 
Add: Income tax expense 15,738  15,685  19,121  13,973  13,118  14,030 
Add: Interest expense 2,323  1,456  733  384  136 
Earnings before interest and tax (EBIT) 66,412  62,828  73,248  53,867  50,291  55,763 
Ratio
Interest coverage1 28.59 43.15 99.93 140.28 369.79
Benchmarks
Interest Coverage, Competitors
Applied Materials Inc. 19.84 13.99 16.51 16.24 4.68 4.33
Broadcom Inc. 5.02 -0.89 8.68 4.11 285.00 586.00
Cisco Systems Inc. 15.27 20.11 20.79 18.23 20.26
HP Inc. 11.60 14.78 15.47 20.06 16.28 -20.78
Intel Corp. 32.50 18.65 43.17 83.30 52.68
NVIDIA Corp. 33.84 16.81 17.36 49.86 201.98
Qualcomm Inc. 7.11 24.01 63.38 1,756.60 357.26 73.91
Texas Instruments Inc. 78.95 62.63 47.84 42.21 29.99
Interest Coverage, Sector
Technology Hardware & Equipment 22.50 25.27 47.93 56.89 58.88
Interest Coverage, Industry
Technology 21.58 24.52 38.08 46.46 50.27

Source: Based on data from Apple Inc. Annual Reports

2017 Calculations

1 Interest coverage = EBIT ÷ Interest expense
= 66,412 ÷ 2,323 = 28.59

Ratio Description The company
Interest coverage ratio A solvency ratio calculated as EBIT divided by interest payments. Apple Inc.'s interest coverage ratio deteriorated from 2015 to 2016 and from 2016 to 2017.