.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)
Applied Materials Inc., debt and solvency ratios
| Oct 29, 2017 | Oct 30, 2016 | Oct 25, 2015 | Oct 26, 2014 | Oct 27, 2013 | Oct 28, 2012 | ||
|---|---|---|---|---|---|---|---|
| | Debt to equity | ||||||
| | Debt to capital | ||||||
| | Interest coverage |
Source: Based on data from Applied Materials Inc. Annual Reports
| Ratio | Description | The company |
|---|---|---|
| Debt-to-equity ratio | A solvency ratio calculated as total debt divided by total shareholders' equity. | Applied Materials Inc.'s debt-to-equity ratio improved from 2015 to 2016 but then slightly deteriorated from 2016 to 2017 not reaching 2015 level. |
| Debt-to-capital ratio | A solvency ratio calculated as total debt divided by total debt plus shareholders' equity. | Applied Materials Inc.'s debt-to-capital ratio improved from 2015 to 2016 but then slightly deteriorated from 2016 to 2017 not reaching 2015 level. |
| Interest coverage ratio | A solvency ratio calculated as EBIT divided by interest payments. | Applied Materials Inc.'s interest coverage ratio deteriorated from 2015 to 2016 but then improved from 2016 to 2017 exceeding 2015 level. |
Debt to Equity
Applied Materials Inc., debt to equity calculation, comparison to benchmarks
| Oct 29, 2017 | Oct 30, 2016 | Oct 25, 2015 | Oct 26, 2014 | Oct 27, 2013 | Oct 28, 2012 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (USD $ in millions) | |||||||
| | Notes payable, short-term | ||||||
| | Long-term debt | ||||||
| | Total debt | ||||||
| | Stockholders’ equity | ||||||
| Ratio | |||||||
| | Debt to equity1 | ||||||
| Benchmarks | |||||||
| Debt to Equity, Competitors | |||||||
| Apple Inc. | |||||||
| Broadcom Inc. | |||||||
| Cisco Systems Inc. | |||||||
| HP Inc. | |||||||
| Intel Corp. | |||||||
| NVIDIA Corp. | |||||||
| Qualcomm Inc. | |||||||
| Texas Instruments Inc. | |||||||
| Debt to Equity, Sector | |||||||
| Technology Hardware & Equipment | |||||||
| Debt to Equity, Industry | |||||||
| Technology | |||||||
Source: Based on data from Applied Materials 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. | Applied Materials Inc.'s debt-to-equity ratio improved from 2015 to 2016 but then slightly deteriorated from 2016 to 2017 not reaching 2015 level. |
Debt to Capital
Applied Materials Inc., debt to capital calculation, comparison to benchmarks
| Oct 29, 2017 | Oct 30, 2016 | Oct 25, 2015 | Oct 26, 2014 | Oct 27, 2013 | Oct 28, 2012 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (USD $ in millions) | |||||||
| | Notes payable, short-term | ||||||
| | Long-term debt | ||||||
| | Total debt | ||||||
| | Stockholders’ equity | ||||||
| | Total capital | ||||||
| Ratio | |||||||
| | Debt to capital1 | ||||||
| Benchmarks | |||||||
| Debt to Capital, Competitors | |||||||
| Apple Inc. | |||||||
| Broadcom Inc. | |||||||
| Cisco Systems Inc. | |||||||
| HP Inc. | |||||||
| Intel Corp. | |||||||
| NVIDIA Corp. | |||||||
| Qualcomm Inc. | |||||||
| Texas Instruments Inc. | |||||||
| Debt to Capital, Sector | |||||||
| Technology Hardware & Equipment | |||||||
| Debt to Capital, Industry | |||||||
| Technology | |||||||
Source: Based on data from Applied Materials 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. | Applied Materials Inc.'s debt-to-capital ratio improved from 2015 to 2016 but then slightly deteriorated from 2016 to 2017 not reaching 2015 level. |
Interest Coverage
Applied Materials Inc., interest coverage calculation, comparison to benchmarks
| Oct 29, 2017 | Oct 30, 2016 | Oct 25, 2015 | Oct 26, 2014 | Oct 27, 2013 | Oct 28, 2012 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (USD $ in millions) | |||||||
| | Net income | ||||||
| | Add: Income tax expense | ||||||
| | Add: Interest expense | ||||||
| | Earnings before interest and tax (EBIT) | ||||||
| Ratio | |||||||
| | Interest coverage1 | ||||||
| Benchmarks | |||||||
| Interest Coverage, Competitors | |||||||
| Apple Inc. | |||||||
| Broadcom Inc. | |||||||
| Cisco Systems Inc. | |||||||
| HP Inc. | |||||||
| Intel Corp. | |||||||
| NVIDIA Corp. | |||||||
| Qualcomm Inc. | |||||||
| Texas Instruments Inc. | |||||||
| Interest Coverage, Sector | |||||||
| Technology Hardware & Equipment | |||||||
| Interest Coverage, Industry | |||||||
| Technology | |||||||
Source: Based on data from Applied Materials 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. | Applied Materials Inc.'s interest coverage ratio deteriorated from 2015 to 2016 but then improved from 2016 to 2017 exceeding 2015 level. |
