Analysis of Solvency Ratios
Solvency ratios also known as long-term debt ratios measure a company ability to meet long-term obligations.
Solvency Ratios (Summary)
Express Scripts Holding Co., solvency ratios
Based on: 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31).
- Debt to Equity
- The debt to equity ratio exhibited a rising trend from 0.64 at the end of 2013, reaching a peak of 0.96 in 2016, followed by a slight decrease to 0.88 in 2017. This suggests an increasing reliance on debt relative to equity over the first four years, with a modest reduction in the final year.
- Debt to Capital
- This ratio increased from 0.39 in 2013 to 0.49 in 2016, indicating a growing proportion of debt in the company's capital structure. In 2017, the ratio slightly decreased to 0.47, signaling a minor shift towards less debt usage in capital financing.
- Debt to Assets
- The debt to assets ratio remained relatively stable, fluctuating slightly between 0.25 and 0.3 over the entire period. This stability indicates a consistent level of debt financing relative to total assets.
- Financial Leverage
- Financial leverage increased from 2.45 in 2013 to a high of 3.19 in 2016, then declined to 2.99 in 2017. The rise indicates that the company used more debt relative to equity over time, with a modest reduction at the end of the period.
- Interest Coverage
- The interest coverage ratio showed overall improvement, starting at 6.08 in 2013 and increasing to 9.11 in 2017, despite a dip in 2016 to 7.37. This suggests enhanced ability to service interest expenses through earnings over time.
- Fixed Charge Coverage
- This ratio followed a similar pattern to interest coverage, increasing from 5.46 in 2013 to a peak in 2015 at 7.87, decreasing somewhat in 2016 to 6.84, then rising again in 2017 to 8.28. The increasing trend implies stronger coverage of fixed charges by operating earnings.
Debt Ratios
Coverage Ratios
Debt to Equity
Express Scripts Holding Co., 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 (US$ in thousands) | ||||||
| Short-term debt and current maturities of long-term debt | 1,032,900) | 722,300) | 1,646,400) | 2,555,300) | 1,584,000) | |
| Long-term debt, excluding current maturities | 14,981,500) | 14,846,000) | 13,946,300) | 11,012,700) | 12,363,000) | |
| Total debt | 16,014,400) | 15,568,300) | 15,592,700) | 13,568,000) | 13,947,000) | |
| Total Express Scripts stockholders’ equity | 18,119,600) | 16,236,000) | 17,372,800) | 20,054,200) | 21,837,400) | |
| Solvency Ratio | ||||||
| Debt to equity1 | 0.88 | 0.96 | 0.90 | 0.68 | 0.64 | |
| Benchmarks | ||||||
| Debt to Equity, Competitors2 | ||||||
| Abbott Laboratories | — | — | — | — | — | |
| CVS Health Corp. | — | — | — | — | — | |
| Elevance Health Inc. | — | — | — | — | — | |
| Intuitive Surgical Inc. | — | — | — | — | — | |
| Medtronic PLC | — | — | — | — | — | |
| UnitedHealth Group Inc. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31).
1 2017 Calculation
Debt to equity = Total debt ÷ Total Express Scripts stockholders’ equity
= 16,014,400 ÷ 18,119,600 = 0.88
2 Click competitor name to see calculations.
- Total Debt
-
The total debt showed a fluctuating trend over the five-year period. It initially decreased slightly from 13,947 million USD in 2013 to 13,568 million USD in 2014. However, it then increased significantly in 2015 to 15,593 million USD and remained relatively stable in 2016 at 15,568 million USD. By 2017, the total debt rose further to 16,014 million USD, marking the highest level within the timeframe.
- Total Express Scripts Stockholders’ Equity
-
The stockholders’ equity displayed a consistent downward trend from 2013 to 2016, declining from 21,837 million USD to 16,236 million USD. In 2017, there was a moderate recovery with equity increasing to 18,120 million USD. Despite this rebound, the 2017 equity level remained below the initial 2013 value.
- Debt to Equity Ratio
-
The debt to equity ratio exhibited an overall upward trend during the period, reflecting a gradual increase in leverage. Starting at 0.64 in 2013, the ratio rose to 0.68 in 2014, followed by a sharper increase to 0.90 in 2015. The ratio peaked at 0.96 in 2016 before slightly decreasing to 0.88 in 2017. This indicates a higher reliance on debt financing relative to equity over the years, with a modest improvement in the last year.
- Summary Insights
-
Over the five-year span, the company increased its total debt while experiencing a decline in stockholders’ equity, particularly between 2013 and 2016. The rising debt levels combined with decreasing equity caused the debt to equity ratio to escalate, signifying an increase in financial leverage and possibly higher financial risk. The slight improvement in equity and a moderated ratio in 2017 suggest some stabilization but do not fully reverse the prior trend. Overall, the financial structure points toward a growing dependence on debt financing during this period.
Debt to Capital
Express Scripts Holding Co., 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 (US$ in thousands) | ||||||
| Short-term debt and current maturities of long-term debt | 1,032,900) | 722,300) | 1,646,400) | 2,555,300) | 1,584,000) | |
| Long-term debt, excluding current maturities | 14,981,500) | 14,846,000) | 13,946,300) | 11,012,700) | 12,363,000) | |
| Total debt | 16,014,400) | 15,568,300) | 15,592,700) | 13,568,000) | 13,947,000) | |
| Total Express Scripts stockholders’ equity | 18,119,600) | 16,236,000) | 17,372,800) | 20,054,200) | 21,837,400) | |
| Total capital | 34,134,000) | 31,804,300) | 32,965,500) | 33,622,200) | 35,784,400) | |
| Solvency Ratio | ||||||
| Debt to capital1 | 0.47 | 0.49 | 0.47 | 0.40 | 0.39 | |
| Benchmarks | ||||||
| Debt to Capital, Competitors2 | ||||||
| Abbott Laboratories | — | — | — | — | — | |
| CVS Health Corp. | — | — | — | — | — | |
| Elevance Health Inc. | — | — | — | — | — | |
| Intuitive Surgical Inc. | — | — | — | — | — | |
| Medtronic PLC | — | — | — | — | — | |
| UnitedHealth Group Inc. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31).
1 2017 Calculation
Debt to capital = Total debt ÷ Total capital
= 16,014,400 ÷ 34,134,000 = 0.47
2 Click competitor name to see calculations.
- Total Debt
- The total debt exhibited a fluctuating trend over the five-year period. Initially, there was a slight decrease from approximately 13.95 billion US dollars at the end of 2013 to around 13.57 billion at the end of 2014. This was followed by a significant increase in 2015, reaching about 15.59 billion, which remained relatively stable through 2016 and 2017, with a minor increase to approximately 16.01 billion by the end of 2017.
- Total Capital
- Total capital showed a general declining trend from 2013 to 2016. It decreased from roughly 35.78 billion US dollars at the end of 2013 to about 31.80 billion by the end of 2016. However, in 2017, total capital reversed this trend and increased to approximately 34.13 billion, though it remained below the initial 2013 level.
- Debt to Capital Ratio
- The debt to capital ratio followed an upward trajectory over the period, indicating an increasing reliance on debt financing relative to total capital. It rose from 0.39 at the end of 2013 to a peak of 0.49 in 2016. In 2017, the ratio slightly decreased to 0.47, but stayed above the levels observed in the early years. This suggests that while total capital decreased over most of the period, debt levels either increased or remained high, increasing the proportion of debt in the capital structure.
- Overall Analysis
- The data indicates a strategic shift toward higher leverage, particularly noticeable from 2014 to 2016. The increase in total debt coupled with a decline in total capital until 2016 contributed to a higher debt to capital ratio, implying greater financial risk. However, the partial recovery in total capital and slight reduction in the debt to capital ratio in 2017 might suggest an effort to rebalance the capital structure. These trends reflect changing financing strategies that could impact the company's financial stability and risk profile.
Debt to Assets
Express Scripts Holding Co., debt to assets calculation, comparison to benchmarks
| Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Short-term debt and current maturities of long-term debt | 1,032,900) | 722,300) | 1,646,400) | 2,555,300) | 1,584,000) | |
| Long-term debt, excluding current maturities | 14,981,500) | 14,846,000) | 13,946,300) | 11,012,700) | 12,363,000) | |
| Total debt | 16,014,400) | 15,568,300) | 15,592,700) | 13,568,000) | 13,947,000) | |
| Total assets | 54,255,800) | 51,744,900) | 53,243,300) | 53,798,900) | 53,548,200) | |
| Solvency Ratio | ||||||
| Debt to assets1 | 0.30 | 0.30 | 0.29 | 0.25 | 0.26 | |
| Benchmarks | ||||||
| Debt to Assets, Competitors2 | ||||||
| Abbott Laboratories | — | — | — | — | — | |
| CVS Health Corp. | — | — | — | — | — | |
| Elevance Health Inc. | — | — | — | — | — | |
| Intuitive Surgical Inc. | — | — | — | — | — | |
| Medtronic PLC | — | — | — | — | — | |
| UnitedHealth Group Inc. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31).
1 2017 Calculation
Debt to assets = Total debt ÷ Total assets
= 16,014,400 ÷ 54,255,800 = 0.30
2 Click competitor name to see calculations.
- Total Debt
- The total debt exhibited a fluctuating upward trajectory over the observed period. Starting at approximately $13.95 billion at the end of 2013, it decreased slightly in 2014. From 2014 onwards, total debt increased steadily each year, reaching about $16.01 billion by the end of 2017, indicating a rising leverage position over time.
- Total Assets
- Total assets remained relatively stable throughout the five-year span, showing minor fluctuations without a clear trend. The value hovered around the mid-$53 billion range, demonstrating slight declines in 2015 and 2016, followed by a recovery in 2017 that brought assets to their highest level in the period analyzed.
- Debt to Assets Ratio
- The ratio of debt to assets displayed a gradual increase over the reviewed years. Starting at 0.26 in 2013, the ratio dipped marginally to 0.25 in 2014 but then rose steadily to reach 0.30 by 2016 and sustained at that level in 2017. This trend suggests increasing leverage relative to asset base, implying potential changes in the company’s capital structure or financing strategy.
Financial Leverage
Express Scripts Holding Co., financial leverage calculation, comparison to benchmarks
| Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Total assets | 54,255,800) | 51,744,900) | 53,243,300) | 53,798,900) | 53,548,200) | |
| Total Express Scripts stockholders’ equity | 18,119,600) | 16,236,000) | 17,372,800) | 20,054,200) | 21,837,400) | |
| Solvency Ratio | ||||||
| Financial leverage1 | 2.99 | 3.19 | 3.06 | 2.68 | 2.45 | |
| Benchmarks | ||||||
| Financial Leverage, Competitors2 | ||||||
| Abbott Laboratories | — | — | — | — | — | |
| CVS Health Corp. | — | — | — | — | — | |
| Elevance Health Inc. | — | — | — | — | — | |
| Intuitive Surgical Inc. | — | — | — | — | — | |
| Medtronic PLC | — | — | — | — | — | |
| UnitedHealth Group Inc. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31).
1 2017 Calculation
Financial leverage = Total assets ÷ Total Express Scripts stockholders’ equity
= 54,255,800 ÷ 18,119,600 = 2.99
2 Click competitor name to see calculations.
- Total Assets
-
The total assets remained relatively stable during the period from 2013 to 2017, with values fluctuating within a narrow range. The asset base started at approximately 53.5 billion USD in 2013 and experienced minor decreases in 2015 and 2016, reaching a low point of about 51.7 billion USD. In 2017, total assets increased again to approximately 54.3 billion USD, nearly recovering to the 2013 level.
- Total Express Scripts Stockholders’ Equity
-
There was a clear declining trend in stockholders' equity over the five-year period. Equity decreased from approximately 21.8 billion USD in 2013 to a low of around 16.2 billion USD in 2016, representing a significant reduction of nearly 26%. In 2017, however, equity increased modestly to approximately 18.1 billion USD, indicating some recovery but still below the 2013 level.
- Financial Leverage
-
The financial leverage ratio increased steadily during the five-year timeframe, starting at 2.45 in 2013 and reaching a peak of 3.19 in 2016. This upward trend indicates a rising proportion of debt relative to equity in the company's capital structure. In 2017, the ratio slightly decreased to 2.99 but remained elevated compared to the earlier years. The increasing leverage aligns with the declining equity values observed during the same period.
Interest Coverage
Express Scripts Holding Co., interest coverage calculation, comparison to benchmarks
| Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net income attributable to Express Scripts | 4,517,400) | 3,404,400) | 2,476,400) | 2,007,600) | 1,844,600) | |
| Add: Net income attributable to noncontrolling interest | 14,300) | 23,200) | 23,100) | 27,400) | 28,100) | |
| Less: Net loss from discontinued operations, net of tax | —) | —) | —) | —) | (53,600) | |
| Add: Income tax expense | 397,300) | 999,500) | 1,364,300) | 1,031,200) | 1,104,000) | |
| Add: Interest expense and other | 607,900) | 694,800) | 500,300) | 582,900) | 596,100) | |
| Earnings before interest and tax (EBIT) | 5,536,900) | 5,121,900) | 4,364,100) | 3,649,100) | 3,626,400) | |
| Solvency Ratio | ||||||
| Interest coverage1 | 9.11 | 7.37 | 8.72 | 6.26 | 6.08 | |
| Benchmarks | ||||||
| Interest Coverage, Competitors2 | ||||||
| Abbott Laboratories | — | — | — | — | — | |
| CVS Health Corp. | — | — | — | — | — | |
| Elevance Health Inc. | — | — | — | — | — | |
| Intuitive Surgical Inc. | — | — | — | — | — | |
| Medtronic PLC | — | — | — | — | — | |
| UnitedHealth Group Inc. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31).
1 2017 Calculation
Interest coverage = EBIT ÷ Interest expense
= 5,536,900 ÷ 607,900 = 9.11
2 Click competitor name to see calculations.
- Earnings Before Interest and Tax (EBIT)
-
The earnings before interest and tax demonstrate a consistent upward trend over the examined five-year period. Starting at 3,626,400 US$ thousands in 2013, the figure shows incremental increases annually, reaching 5,536,900 US$ thousands by the end of 2017. This indicates a growing operational profitability over time, with a particularly notable increase between 2015 and 2016, where EBIT rose by approximately 757,800 US$ thousands.
- Interest Expense and Other
-
The interest expense and other costs remain relatively stable, fluctuating within a narrow range. Beginning at 596,100 US$ thousands in 2013, the expense decreases slightly in 2015 to 500,300 US$ thousands, followed by a notable rise to 694,800 US$ thousands in 2016, before declining again to 607,900 US$ thousands in 2017. These variations suggest some volatility in financing costs but without a clear upward or downward trend.
- Interest Coverage Ratio
-
The interest coverage ratio exhibits an overall positive and improving trend, increasing from 6.08 times in 2013 to 9.11 times in 2017. This ratio experiences a peak in 2015 at 8.72, a slight decline in 2016 to 7.37, and then a recovery in 2017. The improving ratio indicates increasingly strong ability to cover interest obligations from operating earnings, reflecting enhanced financial health and reduced risk related to interest expenses.
Fixed Charge Coverage
Express Scripts Holding Co., fixed charge coverage calculation, comparison to benchmarks
| Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net income attributable to Express Scripts | 4,517,400) | 3,404,400) | 2,476,400) | 2,007,600) | 1,844,600) | |
| Add: Net income attributable to noncontrolling interest | 14,300) | 23,200) | 23,100) | 27,400) | 28,100) | |
| Less: Net loss from discontinued operations, net of tax | —) | —) | —) | —) | (53,600) | |
| Add: Income tax expense | 397,300) | 999,500) | 1,364,300) | 1,031,200) | 1,104,000) | |
| Add: Interest expense and other | 607,900) | 694,800) | 500,300) | 582,900) | 596,100) | |
| Earnings before interest and tax (EBIT) | 5,536,900) | 5,121,900) | 4,364,100) | 3,649,100) | 3,626,400) | |
| Add: Rental expense under the office and distribution facilities leases | 69,300) | 62,900) | 62,500) | 59,700) | 83,800) | |
| Earnings before fixed charges and tax | 5,606,200) | 5,184,800) | 4,426,600) | 3,708,800) | 3,710,200) | |
| Interest expense and other | 607,900) | 694,800) | 500,300) | 582,900) | 596,100) | |
| Rental expense under the office and distribution facilities leases | 69,300) | 62,900) | 62,500) | 59,700) | 83,800) | |
| Fixed charges | 677,200) | 757,700) | 562,800) | 642,600) | 679,900) | |
| Solvency Ratio | ||||||
| Fixed charge coverage1 | 8.28 | 6.84 | 7.87 | 5.77 | 5.46 | |
| Benchmarks | ||||||
| Fixed Charge Coverage, Competitors2 | ||||||
| Abbott Laboratories | — | — | — | — | — | |
| CVS Health Corp. | — | — | — | — | — | |
| Elevance Health Inc. | — | — | — | — | — | |
| Intuitive Surgical Inc. | — | — | — | — | — | |
| Medtronic PLC | — | — | — | — | — | |
| UnitedHealth Group Inc. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31).
1 2017 Calculation
Fixed charge coverage = Earnings before fixed charges and tax ÷ Fixed charges
= 5,606,200 ÷ 677,200 = 8.28
2 Click competitor name to see calculations.
The financial data reveals several notable trends concerning earnings before fixed charges and taxes, fixed charges, and the fixed charge coverage ratio over the five-year period ending December 31, 2017.
- Earnings before Fixed Charges and Tax
- This metric exhibited a positive trajectory throughout the period. Beginning at approximately 3.71 billion US dollars in 2013, earnings remained relatively stable into 2014. From 2015 onward, there was a marked increase each year, culminating in roughly 5.61 billion US dollars by the end of 2017. This progression reflects a significant enhancement in core profitability prior to the impact of financing and fixed obligations.
- Fixed Charges
- The fixed charges demonstrated variability over the years without a clear consistent trend. Starting at around 680 million US dollars in 2013, fixed charges decreased somewhat in 2014 and further in 2015, reaching approximately 563 million US dollars. However, 2016 saw a notable increase to about 758 million US dollars, before declining again to approximately 677 million US dollars in 2017. This fluctuation suggests changes in interest expenses or other fixed financial obligations over the examined period.
- Fixed Charge Coverage Ratio
- This ratio, measuring the ability to cover fixed charges with earnings, showed improvement overall. The ratio started at 5.46 in 2013 and increased steadily to 5.77 in 2014, followed by a significant rise to 7.87 in 2015. After a slight decrease to 6.84 in 2016, the ratio improved again to a peak level of 8.28 in 2017. These values indicate an increasingly stronger capacity to meet fixed financial obligations through operating earnings, despite minor inter-year fluctuations.
In summary, the data points to growing operating earnings and improved coverage of fixed financial commitments over the analyzed timeframe, although fixed charges themselves showed some inconsistency. The overall financial position, as evidenced by these metrics, appears to be strengthening in regard to fixed cost coverage.