Stock Analysis on Net

Apple Inc. (NASDAQ:AAPL)

$24.99

Analysis of Solvency Ratios

Microsoft Excel

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Solvency Ratios (Summary)

Apple Inc., solvency ratios

Microsoft Excel
Sep 28, 2024 Sep 30, 2023 Sep 24, 2022 Sep 25, 2021 Sep 26, 2020 Sep 28, 2019
Debt Ratios
Debt to equity
Debt to equity (including operating lease liability)
Debt to capital
Debt to capital (including operating lease liability)
Debt to assets
Debt to assets (including operating lease liability)
Financial leverage
Coverage Ratios
Interest coverage
Fixed charge coverage

Based on: 10-K (reporting date: 2024-09-28), 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-09-24), 10-K (reporting date: 2021-09-25), 10-K (reporting date: 2020-09-26), 10-K (reporting date: 2019-09-28).


Debt to Equity Ratio Trends
The debt to equity ratio increased steadily from 1.19 in 2019 to a peak of 2.39 in 2022, indicating a rising reliance on debt financing relative to equity over this period. However, from 2022 to 2024, this ratio decreased to 1.89, suggesting some deleveraging or increased equity levels more recently.
When including operating lease liabilities, the ratio follows a similar pattern but consistently shows slightly higher values, peaking at 2.61 in 2022 and moderating to 2.09 in 2024. This indicates that operating lease obligations contribute meaningfully to the company's overall leverage.
Debt to Capital Ratio Patterns
The debt to capital ratio rose from 0.54 in 2019 to 0.70 in 2022, reflecting increased debt relative to the combined debt and equity base. This upward movement suggests a higher proportion of debt in the capital structure over these years.
The inclusion of operating lease liabilities results in a higher debt to capital ratio, peaking at 0.72 in 2022 before easing to 0.68 by 2024. The trend mirrors that seen in the debt to equity ratios, reinforcing the impact of leases on the debt profile.
Debt to Assets Ratio Development
The debt to assets ratio shows a moderate increase from 0.32 in 2019 to 0.36 in 2021, followed by a decline to 0.29 in 2024. This indicates that the proportion of debt financing relative to total assets initially rose but then decreased, suggesting improvements in asset base or debt management.
Including operating lease liabilities, the ratio is higher, starting at 0.32 and rising to 0.39 in 2021 before easing to 0.33 in 2024, consistent with other debt metrics.
Financial Leverage
Financial leverage increased significantly over the observed periods, from 3.74 in 2019 to a high of 6.96 in 2022, reflecting increasing use of debt relative to equity in the capital structure. It then decreased slightly to 6.41 in 2024, but remains elevated compared to earlier years, suggesting a higher risk profile or strategic leverage use.
Interest Coverage Ratio
The interest coverage ratio improved substantially from 19.38 in 2019 to 42.29 in 2021, demonstrating a strong ability to meet interest obligations with operating earnings. It remained high at 41.64 in 2022 before declining to 29.92 in 2023. The data for 2024 is missing, preventing further analysis. Despite the decrease in 2023, the ratio remains healthy, indicating solid interest payment capacity.
Fixed Charge Coverage Ratio
The fixed charge coverage ratio also shows notable improvement, rising from 14.48 in 2019 to 26.13 in 2021 and maintaining a similar level in 2022. It decreased to 20.17 in 2023 but sharply increased to 62.74 in 2024, indicating a significantly enhanced ability to cover fixed charges such as interest and lease expenses in the most recent year.
Overall Interpretation
The data exhibits an upward trend in leverage metrics through 2022, indicating increased debt dependence. However, some measures show a slight reduction in leverage by 2024, suggesting efforts to stabilize or reduce debt levels. The strong interest and fixed charge coverage ratios throughout most periods infer robust earnings relative to debt servicing obligations. The spike in fixed charge coverage in 2024 may signal improved operational efficiency or reduced fixed costs. Inclusion of operating lease liabilities consistently elevates leverage ratios, underscoring the material impact of lease obligations on the financial structure.

Debt Ratios


Coverage Ratios


Debt to Equity

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

Microsoft Excel
Sep 28, 2024 Sep 30, 2023 Sep 24, 2022 Sep 25, 2021 Sep 26, 2020 Sep 28, 2019
Selected Financial Data (US$ in millions)
Current portion of finance leases
Commercial paper
Current portion of term debt
Non-current portion of term debt
Non-current portion of finance leases
Total debt
 
Shareholders’ equity
Solvency Ratio
Debt to equity1
Benchmarks
Debt to Equity, Competitors2
Arista Networks Inc.
Cisco Systems Inc.
Dell Technologies Inc.
Super Micro Computer Inc.
Debt to Equity, Sector
Technology Hardware & Equipment
Debt to Equity, Industry
Information Technology

Based on: 10-K (reporting date: 2024-09-28), 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-09-24), 10-K (reporting date: 2021-09-25), 10-K (reporting date: 2020-09-26), 10-K (reporting date: 2019-09-28).

1 2024 Calculation
Debt to equity = Total debt ÷ Shareholders’ equity
= ÷ =

2 Click competitor name to see calculations.


Total debt
The total debt shows an overall increasing trend from 2019 to 2021, rising from 108,047 million US dollars to a peak of 125,567 million US dollars in 2021. Following this peak, total debt decreases over the next three years, reaching 107,525 million US dollars by 2024, which is slightly below the 2019 level.
Shareholders’ equity
Shareholders' equity demonstrates a declining trend throughout the period. It starts at 90,488 million US dollars in 2019 and falls steadily to 50,672 million US dollars by 2022, showing a significant reduction. There is a modest recovery in 2023 to 62,146 million US dollars, but equity declines again to 56,950 million US dollars in 2024, remaining considerably lower than the initial value in 2019.
Debt to equity ratio
The debt to equity ratio exhibits a consistent increasing pattern from 1.19 in 2019 to its highest level at 2.39 in 2022, reflecting a rise in financial leverage over these years. In 2023, the ratio drops notably to 1.8, indicating some deleveraging or relative improvement in equity versus debt. However, in 2024, the ratio increases slightly to 1.89, suggesting a moderate rise in leverage compared to the previous year.

Debt to Equity (including Operating Lease Liability)

Apple Inc., debt to equity (including operating lease liability) calculation, comparison to benchmarks

Microsoft Excel
Sep 28, 2024 Sep 30, 2023 Sep 24, 2022 Sep 25, 2021 Sep 26, 2020 Sep 28, 2019
Selected Financial Data (US$ in millions)
Current portion of finance leases
Commercial paper
Current portion of term debt
Non-current portion of term debt
Non-current portion of finance leases
Total debt
Lease liabilities, operating leases (included in Other current liabilities)
Lease liabilities, operating leases (included in Other non-current liabilities)
Total debt (including operating lease liability)
 
Shareholders’ equity
Solvency Ratio
Debt to equity (including operating lease liability)1
Benchmarks
Debt to Equity (including Operating Lease Liability), Competitors2
Arista Networks Inc.
Cisco Systems Inc.
Dell Technologies Inc.
Super Micro Computer Inc.
Debt to Equity (including Operating Lease Liability), Sector
Technology Hardware & Equipment
Debt to Equity (including Operating Lease Liability), Industry
Information Technology

Based on: 10-K (reporting date: 2024-09-28), 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-09-24), 10-K (reporting date: 2021-09-25), 10-K (reporting date: 2020-09-26), 10-K (reporting date: 2019-09-28).

1 2024 Calculation
Debt to equity (including operating lease liability) = Total debt (including operating lease liability) ÷ Shareholders’ equity
= ÷ =

2 Click competitor name to see calculations.


Total Debt (including operating lease liability)
The total debt increased steadily from US$108,047 million in 2019 to a peak of US$136,522 million in 2021. Following this peak, there was a gradual decline in debt levels, reaching US$119,059 million by 2024. This trend indicates that while debt accumulation was significant in the earlier years, efforts to reduce total debt were evident in the more recent periods.
Shareholders’ Equity
Shareholders’ equity showed a declining trend from US$90,488 million in 2019 to US$50,672 million in 2022. Thereafter, there was a partial recovery, with equity increasing to US$62,146 million in 2023 before declining again to US$56,950 million in 2024. Overall, the equity base contracted substantially over the six-year period, reflecting potential impacts on the company's net asset position.
Debt to Equity Ratio (including operating lease liability)
The debt to equity ratio rose sharply from 1.19 in 2019 to 2.61 by 2022, indicating a growing reliance on debt financing relative to equity. Although the ratio decreased to 1.99 in 2023, it rose slightly again to 2.09 in 2024. This pattern highlights increased financial leverage over time, with some fluctuation in the most recent years but remaining above the initial level in 2019.

Debt to Capital

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

Microsoft Excel
Sep 28, 2024 Sep 30, 2023 Sep 24, 2022 Sep 25, 2021 Sep 26, 2020 Sep 28, 2019
Selected Financial Data (US$ in millions)
Current portion of finance leases
Commercial paper
Current portion of term debt
Non-current portion of term debt
Non-current portion of finance leases
Total debt
Shareholders’ equity
Total capital
Solvency Ratio
Debt to capital1
Benchmarks
Debt to Capital, Competitors2
Arista Networks Inc.
Cisco Systems Inc.
Dell Technologies Inc.
Super Micro Computer Inc.
Debt to Capital, Sector
Technology Hardware & Equipment
Debt to Capital, Industry
Information Technology

Based on: 10-K (reporting date: 2024-09-28), 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-09-24), 10-K (reporting date: 2021-09-25), 10-K (reporting date: 2020-09-26), 10-K (reporting date: 2019-09-28).

1 2024 Calculation
Debt to capital = Total debt ÷ Total capital
= ÷ =

2 Click competitor name to see calculations.


The financial data reveals several trends related to the company's debt and capital structure over a six-year period.

Total Debt
The total debt exhibits a fluctuating yet overall downward trajectory in recent years. Initially, there was an increase from 108,047 million US dollars in September 2019 to a peak of 125,567 million in September 2021. Following this peak, total debt decreased progressively to 107,525 million by September 2024. This suggests a consolidation or reduction effort in debt levels after 2021.
Total Capital
Total capital presents a less consistent trend with notable volatility. Starting at 198,535 million US dollars in September 2019, total capital decreased sharply to 178,436 million by September 2020. It then increased to 188,657 million in September 2021 before falling again to 171,682 million in September 2022. Subsequent years show slight recovery and decline with values of 174,258 million in 2023 and 164,475 million in 2024 respectively. The general trend points to a contraction in capital base over the period, particularly in the last two years.
Debt to Capital Ratio
The debt to capital ratio increased from 0.54 in 2019 to a peak of 0.7 in 2022, indicating a rise in financial leverage during this period. This increase reflects a growing proportion of debt relative to capital. After 2022, the ratio declined slightly to 0.64 in 2023 but rose again to 0.65 in 2024. Despite recent fluctuations, the ratio remains higher than the initial 2019 level, signaling persistently elevated leverage compared to the start of the analyzed period.

Overall, the analysis suggests a period of increasing leverage and volatility in capital levels up to 2022, followed by efforts to reduce debt and stabilize the capital structure. Nevertheless, the debt to capital ratio remains significantly above the 2019 baseline, indicating sustained reliance on debt financing.


Debt to Capital (including Operating Lease Liability)

Apple Inc., debt to capital (including operating lease liability) calculation, comparison to benchmarks

Microsoft Excel
Sep 28, 2024 Sep 30, 2023 Sep 24, 2022 Sep 25, 2021 Sep 26, 2020 Sep 28, 2019
Selected Financial Data (US$ in millions)
Current portion of finance leases
Commercial paper
Current portion of term debt
Non-current portion of term debt
Non-current portion of finance leases
Total debt
Lease liabilities, operating leases (included in Other current liabilities)
Lease liabilities, operating leases (included in Other non-current liabilities)
Total debt (including operating lease liability)
Shareholders’ equity
Total capital (including operating lease liability)
Solvency Ratio
Debt to capital (including operating lease liability)1
Benchmarks
Debt to Capital (including Operating Lease Liability), Competitors2
Arista Networks Inc.
Cisco Systems Inc.
Dell Technologies Inc.
Super Micro Computer Inc.
Debt to Capital (including Operating Lease Liability), Sector
Technology Hardware & Equipment
Debt to Capital (including Operating Lease Liability), Industry
Information Technology

Based on: 10-K (reporting date: 2024-09-28), 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-09-24), 10-K (reporting date: 2021-09-25), 10-K (reporting date: 2020-09-26), 10-K (reporting date: 2019-09-28).

1 2024 Calculation
Debt to capital (including operating lease liability) = Total debt (including operating lease liability) ÷ Total capital (including operating lease liability)
= ÷ =

2 Click competitor name to see calculations.


The financial data reveals significant trends in the company's capital structure over the assessed periods.

Total Debt (including operating lease liability)
The total debt exhibits an overall increasing trend from 108,047 million US dollars in 2019 to a peak of 136,522 million in 2021. Subsequently, a decline is observed, with debt decreasing to 119,059 million by 2024. This pattern indicates a rise in leverage early on, followed by efforts to reduce or manage debt levels in recent years.
Total Capital (including operating lease liability)
Total capital shows fluctuations with no clear upward or downward trajectory. Starting at 198,535 million in 2019, total capital decreased to 187,617 million in 2020 before recovering to 199,612 million in 2021. Then it declined again to 176,009 million in 2024. These variations suggest changes in equity and debt financing or asset base adjustments that affect the overall capital employed.
Debt to Capital Ratio (including operating lease liability)
The debt to capital ratio increased from 0.54 in 2019 to a high of 0.72 in 2022, reflecting a higher proportion of debt relative to total capital during this period. After 2022, the ratio declined slightly but remained elevated around 0.67 to 0.68 through 2023 and 2024. This indicates the company maintained a relatively higher leverage position compared to the beginning of the period, even after some reduction.

In summary, the company's capital structure experienced an increase in leverage through 2021 and 2022, characterized by rising debt and an increased debt-to-capital ratio. Subsequently, debt levels and the leverage ratio have been moderately reduced, though they remain higher than the initial levels in 2019. The fluctuations in total capital suggest active management of financing sources and possibly asset base changes influencing overall capital employed.


Debt to Assets

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

Microsoft Excel
Sep 28, 2024 Sep 30, 2023 Sep 24, 2022 Sep 25, 2021 Sep 26, 2020 Sep 28, 2019
Selected Financial Data (US$ in millions)
Current portion of finance leases
Commercial paper
Current portion of term debt
Non-current portion of term debt
Non-current portion of finance leases
Total debt
 
Total assets
Solvency Ratio
Debt to assets1
Benchmarks
Debt to Assets, Competitors2
Arista Networks Inc.
Cisco Systems Inc.
Dell Technologies Inc.
Super Micro Computer Inc.
Debt to Assets, Sector
Technology Hardware & Equipment
Debt to Assets, Industry
Information Technology

Based on: 10-K (reporting date: 2024-09-28), 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-09-24), 10-K (reporting date: 2021-09-25), 10-K (reporting date: 2020-09-26), 10-K (reporting date: 2019-09-28).

1 2024 Calculation
Debt to assets = Total debt ÷ Total assets
= ÷ =

2 Click competitor name to see calculations.


The financial data reveals several notable trends over the six-year period under review. Total debt experienced a general increase from 108,047 million USD in 2019 to a peak of 125,567 million USD in 2021, followed by a consistent decline, reaching 107,525 million USD by 2024. This indicates a strategic reduction in leverage after 2021.

Total assets showed variability but with an overall upward trend. From 338,516 million USD in 2019, assets slightly decreased in 2020 but then increased steadily, peaking at 364,980 million USD in 2024. This progressive growth in asset base suggests ongoing investment or accumulation of resources over the period.

The debt to assets ratio reflects the relationship between debt levels and asset base. This ratio increased from 0.32 in 2019 to a high of 0.36 in 2021, indicating a rise in leverage relative to assets. Subsequently, the ratio declined to 0.29 by 2024, reflecting a strengthening balance sheet with lower relative debt as assets grew and liabilities were reduced.

Total Debt
Initial increase through 2021, followed by reduction to levels below 2019.
Total Assets
Minor dip in 2020, overall moderate upward trajectory culminating in highest value in 2024.
Debt to Assets Ratio
Increment until 2021, then decline indicating decreased leverage and improved financial stability.

Debt to Assets (including Operating Lease Liability)

Apple Inc., debt to assets (including operating lease liability) calculation, comparison to benchmarks

Microsoft Excel
Sep 28, 2024 Sep 30, 2023 Sep 24, 2022 Sep 25, 2021 Sep 26, 2020 Sep 28, 2019
Selected Financial Data (US$ in millions)
Current portion of finance leases
Commercial paper
Current portion of term debt
Non-current portion of term debt
Non-current portion of finance leases
Total debt
Lease liabilities, operating leases (included in Other current liabilities)
Lease liabilities, operating leases (included in Other non-current liabilities)
Total debt (including operating lease liability)
 
Total assets
Solvency Ratio
Debt to assets (including operating lease liability)1
Benchmarks
Debt to Assets (including Operating Lease Liability), Competitors2
Arista Networks Inc.
Cisco Systems Inc.
Dell Technologies Inc.
Super Micro Computer Inc.
Debt to Assets (including Operating Lease Liability), Sector
Technology Hardware & Equipment
Debt to Assets (including Operating Lease Liability), Industry
Information Technology

Based on: 10-K (reporting date: 2024-09-28), 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-09-24), 10-K (reporting date: 2021-09-25), 10-K (reporting date: 2020-09-26), 10-K (reporting date: 2019-09-28).

1 2024 Calculation
Debt to assets (including operating lease liability) = Total debt (including operating lease liability) ÷ Total assets
= ÷ =

2 Click competitor name to see calculations.


Total Debt (including operating lease liability)
The total debt exhibited a rising trend from 2019 to 2021, increasing from approximately $108 billion to about $137 billion. Subsequently, the debt level declined each year, reaching roughly $119 billion in 2024. This indicates a peak in leverage in 2021 followed by a gradual reduction in debt levels over the following three years.
Total Assets
Total assets displayed some volatility but generally maintained an upward trajectory over the period. Starting at $339 billion in 2019, assets dipped slightly in 2020 to around $324 billion, then steadily increased in the subsequent years, culminating at nearly $365 billion in 2024. This overall growth suggests an expansion in asset base despite minor fluctuations.
Debt to Assets Ratio (including operating lease liability)
The debt to assets ratio showed an increase from 0.32 in 2019 to a peak of 0.39 in 2021, reflecting a period of increasing leverage. Following 2021, this ratio steadily decreased each year, falling to 0.33 by 2024. This trend illustrates a reduction in reliance on debt relative to the company's asset base after reaching elevated levels in 2021.
Summary of Trends
Overall, the financial data indicates a cycle where debt increased more rapidly than assets up to 2021, which elevated the leverage ratio. After 2021, the company appeared to prioritize debt reduction while continuing to grow its total assets, leading to a lower debt to assets ratio by 2024. This suggests a strategic shift towards strengthening the balance sheet and reducing financial risk in recent years.

Financial Leverage

Apple Inc., financial leverage calculation, comparison to benchmarks

Microsoft Excel
Sep 28, 2024 Sep 30, 2023 Sep 24, 2022 Sep 25, 2021 Sep 26, 2020 Sep 28, 2019
Selected Financial Data (US$ in millions)
Total assets
Shareholders’ equity
Solvency Ratio
Financial leverage1
Benchmarks
Financial Leverage, Competitors2
Arista Networks Inc.
Cisco Systems Inc.
Dell Technologies Inc.
Super Micro Computer Inc.
Financial Leverage, Sector
Technology Hardware & Equipment
Financial Leverage, Industry
Information Technology

Based on: 10-K (reporting date: 2024-09-28), 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-09-24), 10-K (reporting date: 2021-09-25), 10-K (reporting date: 2020-09-26), 10-K (reporting date: 2019-09-28).

1 2024 Calculation
Financial leverage = Total assets ÷ Shareholders’ equity
= ÷ =

2 Click competitor name to see calculations.


Total Assets
The total assets exhibited a variable trend over the evaluated period. Starting from US$338,516 million in 2019, assets decreased to US$323,888 million in 2020, suggesting a contraction possibly linked to operational or market conditions. Subsequently, total assets increased consistently from 2020 onwards, peaking at US$364,980 million in 2024, marking an overall growth of approximately 7% from 2019. This indicates a strategic asset accumulation or reinvestment over the latter years.
Shareholders’ Equity
Shareholders’ equity showed a declining trend across the period. Beginning at US$90,488 million in 2019, equity sharply dropped to US$65,339 million in 2020, and further diminished to US$50,672 million by 2022. A slight recovery was observed in 2023 with equity rising to US$62,146 million. However, a decrease followed in 2024, reaching US$56,950 million. Overall, the equity balance contracted significantly, potentially indicating increased liabilities or distribution of dividends surpassing net earnings retained.
Financial Leverage
The financial leverage ratio demonstrated a consistent upward trajectory, increasing from 3.74 in 2019 to a peak of 6.96 in 2022. This trend suggests a growing reliance on debt or liabilities relative to equity. Although there was a reduction to 5.67 in 2023, the ratio rose again to 6.41 in 2024. The overall increase in leverage implies a heightened financial risk profile, reflecting greater use of borrowed funds to finance assets.

Interest Coverage

Apple Inc., interest coverage calculation, comparison to benchmarks

Microsoft Excel
Sep 28, 2024 Sep 30, 2023 Sep 24, 2022 Sep 25, 2021 Sep 26, 2020 Sep 28, 2019
Selected Financial Data (US$ in millions)
Net income
Add: Income tax expense
Add: Interest expense
Earnings before interest and tax (EBIT)
Solvency Ratio
Interest coverage1
Benchmarks
Interest Coverage, Competitors2
Arista Networks Inc.
Cisco Systems Inc.
Dell Technologies Inc.
Super Micro Computer Inc.
Interest Coverage, Sector
Technology Hardware & Equipment
Interest Coverage, Industry
Information Technology

Based on: 10-K (reporting date: 2024-09-28), 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-09-24), 10-K (reporting date: 2021-09-25), 10-K (reporting date: 2020-09-26), 10-K (reporting date: 2019-09-28).

1 2024 Calculation
Interest coverage = EBIT ÷ Interest expense
= ÷ =

2 Click competitor name to see calculations.


Earnings before interest and tax (EBIT)
The EBIT shows an overall upward trend across the periods analyzed. Starting at 69,313 million USD in September 2019, it experienced a marginal increase in 2020, followed by a significant surge in 2021 reaching 111,852 million USD. This positive trajectory continued into 2022 with EBIT reaching 122,034 million USD. In 2023, there was a slight decline to 117,669 million USD, but the figure rebounded in 2024 to 123,485 million USD. This pattern indicates strong operational profitability with some fluctuations but a general increase over the six-year period.
Interest expense
The interest expense demonstrates some variability during the period under review. Initially, there was a decrease from 3,576 million USD in 2019 to 2,873 million USD in 2020, which continued to decline to 2,645 million USD in 2021. However, the interest expense increased in 2022 to 2,931 million USD and then more sharply to 3,933 million USD in 2023. Data for 2024 is not provided. The rise in interest expense in recent years could suggest increased borrowing or changes in interest rates affecting financing costs.
Interest coverage ratio
The interest coverage ratio, which measures the ability to meet interest obligations from EBIT, exhibits significant improvement from 2019 through 2021. It increased from 19.38 in 2019 to 42.29 in 2021, reflecting strengthened ability to cover interest expenses. In 2022, the ratio remained high at 41.64, before declining to 29.92 in 2023. Although this represents a decrease, the ratio remains considerably above the 2019 level, suggesting that despite increased interest expenses, the company's EBIT growth continues to support strong coverage of interest obligations. Data for 2024 is not available.

Fixed Charge Coverage

Apple Inc., fixed charge coverage calculation, comparison to benchmarks

Microsoft Excel
Sep 28, 2024 Sep 30, 2023 Sep 24, 2022 Sep 25, 2021 Sep 26, 2020 Sep 28, 2019
Selected Financial Data (US$ in millions)
Net income
Add: Income tax expense
Add: Interest expense
Earnings before interest and tax (EBIT)
Add: Lease costs associated with fixed payments on operating leases
Earnings before fixed charges and tax
 
Interest expense
Lease costs associated with fixed payments on operating leases
Fixed charges
Solvency Ratio
Fixed charge coverage1
Benchmarks
Fixed Charge Coverage, Competitors2
Arista Networks Inc.
Cisco Systems Inc.
Dell Technologies Inc.
Super Micro Computer Inc.
Fixed Charge Coverage, Sector
Technology Hardware & Equipment
Fixed Charge Coverage, Industry
Information Technology

Based on: 10-K (reporting date: 2024-09-28), 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-09-24), 10-K (reporting date: 2021-09-25), 10-K (reporting date: 2020-09-26), 10-K (reporting date: 2019-09-28).

1 2024 Calculation
Fixed charge coverage = Earnings before fixed charges and tax ÷ Fixed charges
= ÷ =

2 Click competitor name to see calculations.


The financial data reveals notable trends in earnings before fixed charges and taxes, fixed charges, and fixed charge coverage over the six-year period under review.

Earnings before fixed charges and tax
This metric exhibited a general upward trend, increasing from 70,613 million US dollars in 2019 to a peak of 123,934 million US dollars in 2022. There was a slight decline in 2023 to 119,669 million US dollars, followed by a rebound to 125,485 million US dollars in 2024. This demonstrates robust growth in operating earnings with minor fluctuations towards the end of the period.
Fixed charges
Fixed charges decreased from 4,876 million US dollars in 2019 to 4,345 million US dollars in 2021, indicating some reduction in fixed financial obligations during this period. However, fixed charges rose in 2022 and 2023, reaching 5,933 million US dollars. Notably, there was a significant drop to 2,000 million US dollars in 2024, which could indicate debt restructuring, refinancing, or other cost management activities reducing fixed financial commitments substantially.
Fixed charge coverage ratio
The fixed charge coverage ratio increased markedly throughout the period, starting at 14.48 in 2019 and peaking at an exceptionally high 62.74 in 2024. After a steady rise to over 25 by 2022 and a decline to 20.17 in 2023, the ratio surged substantially in 2024. This ratio reflects the company's improved ability to meet fixed financial obligations from its earnings, driven primarily by the combination of rising earnings and the notable reduction in fixed charges in 2024.

Overall, the data indicates strong earnings growth with effective management of fixed charges, culminating in significantly enhanced fixed charge coverage by the end of the period. This suggests improved financial stability and capacity to cover fixed financial costs, reflecting positively on financial health and risk profile.