Analysis of Solvency Ratios
Solvency ratios also known as long-term debt ratios measure a company ability to meet long-term obligations.
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- Common-Size Balance Sheet: Assets
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Common Stock Valuation Ratios
- Price to FCFE (P/FCFE)
- Dividend Discount Model (DDM)
- Present Value of Free Cash Flow to Equity (FCFE)
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- Price to Book Value (P/BV) since 2005
- Price to Sales (P/S) since 2005
- Analysis of Revenues
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Solvency Ratios (Summary)
Honeywell International Inc., solvency ratios
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
- Debt to Equity Ratio
- The debt to equity ratio showed a decline from 1.28 in 2020 to 1.06 in 2021, indicating a reduction in leverage relative to equity. However, from 2021 onwards, it exhibited an increasing trend, reaching 1.67 by the end of 2024. Including operating lease liabilities, the ratio followed a very similar pattern, rising from 1.32 in 2020 to 1.73 in 2024.
- Debt to Capital Ratio
- This ratio decreased from 0.56 in 2020 to 0.51 in 2021, then rose steadily to 0.63 by 2024. The ratio including operating lease liabilities mirrored this trend, starting at 0.57 in 2020 and increasing to 0.63 by 2024.
- Debt to Assets Ratio
- The debt to assets ratio experienced a slight decline from 0.35 in 2020 to 0.30 in 2021, followed by a gradual increase to 0.41 in 2024. When including operating lease liabilities, the increase over the period was slightly more pronounced, from 0.36 in 2020 to 0.43 in 2024.
- Financial Leverage
- The financial leverage ratio showed a general upward trend from 3.68 in 2020 to 4.04 in 2024, with a minor dip in 2021, indicating progressively greater use of debt in relation to equity financing over the period.
- Interest Coverage Ratio
- The interest coverage ratio peaked at 22.09 in 2021 after starting at 17.75 in 2020, reflecting strong ability to meet interest obligations. However, it declined sharply thereafter, falling to 7.82 by 2024, which may indicate growing challenges in covering interest expenses as leverage increased.
- Fixed Charge Coverage Ratio
- Similarly, fixed charge coverage ratio rose from 11.49 in 2020 to 13.67 in 2021 but experienced a steady decline through 2024, ending at 6.44. This suggests reduced capacity to cover fixed financial obligations and may reflect increased financial risk.
Debt Ratios
Coverage Ratios
Debt to Equity
Honeywell International Inc., debt to equity calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Commercial paper and other short-term borrowings | ||||||
| Current maturities of long-term debt | ||||||
| Long-term debt, excluding current maturities | ||||||
| Total debt | ||||||
| Total Honeywell shareowners’ equity | ||||||
| Solvency Ratio | ||||||
| Debt to equity1 | ||||||
| Benchmarks | ||||||
| Debt to Equity, Competitors2 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| Eaton Corp. plc | ||||||
| GE Aerospace | ||||||
| Lockheed Martin Corp. | ||||||
| RTX Corp. | ||||||
| Debt to Equity, Sector | ||||||
| Capital Goods | ||||||
| Debt to Equity, Industry | ||||||
| Industrials | ||||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Debt to equity = Total debt ÷ Total Honeywell shareowners’ equity
= ÷ =
2 Click competitor name to see calculations.
- Total Debt
- The total debt exhibited a decreasing trend from 2020 to 2022, dropping from $22,384 million to $19,570 million. However, in 2023, this figure slightly increased to $20,443 million, followed by a significant rise in 2024, reaching $31,099 million. This sharp increase in the last year indicates a notable change in the company's leverage position.
- Total Honeywell Shareowners’ Equity
- Equity showed a general decline from 2020 through 2023, decreasing from $17,549 million to $15,856 million. There was a rebound in 2024, with equity increasing to $18,619 million. Despite the recovery, the equity level in 2024 remains close to the 2020 starting point, suggesting some volatility over the period.
- Debt to Equity Ratio
- The debt to equity ratio declined from 1.28 in 2020 to 1.06 in 2021, reflecting a relative reduction in leverage. This ratio then rose progressively in 2022 and 2023, reaching 1.29, indicating increasing leverage. The most notable change occurred in 2024, with the ratio surging to 1.67, signaling a substantial increase in debt relative to equity, which aligns with the large jump in total debt during the same year.
Overall, the financial data reveals an initial effort to reduce debt levels and leverage up to 2021, followed by a period of rising debt and shrinking equity, culminating in a marked increase in leverage in 2024. This pattern suggests a shift in financial strategy or external factors impacting capital structure, with greater reliance on debt financing relative to shareholders' equity in the most recent year.
Debt to Equity (including Operating Lease Liability)
Honeywell International Inc., debt to equity (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Commercial paper and other short-term borrowings | ||||||
| Current maturities of long-term debt | ||||||
| Long-term debt, excluding current maturities | ||||||
| Total debt | ||||||
| Current operating lease liabilities | ||||||
| Non-current operating lease liabilities | ||||||
| Total debt (including operating lease liability) | ||||||
| Total Honeywell shareowners’ equity | ||||||
| Solvency Ratio | ||||||
| Debt to equity (including operating lease liability)1 | ||||||
| Benchmarks | ||||||
| Debt to Equity (including Operating Lease Liability), Competitors2 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| Eaton Corp. plc | ||||||
| GE Aerospace | ||||||
| Lockheed Martin Corp. | ||||||
| RTX Corp. | ||||||
| Debt to Equity (including Operating Lease Liability), Sector | ||||||
| Capital Goods | ||||||
| Debt to Equity (including Operating Lease Liability), Industry | ||||||
| Industrials | ||||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Debt to equity (including operating lease liability) = Total debt (including operating lease liability) ÷ Total Honeywell shareowners’ equity
= ÷ =
2 Click competitor name to see calculations.
- Total Debt (including operating lease liability)
- The total debt demonstrates fluctuations over the five-year period. It decreased from $23,212 million in 2020 to $20,631 million in 2021 and remained relatively stable at $20,537 million in 2022. However, it increased to $21,536 million in 2023 and then showed a significant rise to $32,225 million in 2024. This sharp increase in 2024 indicates a substantial increase in the company's leverage or borrowing during that year.
- Total Honeywell Shareowners’ Equity
- Shareowners’ equity initially experienced moderate growth, increasing from $17,549 million in 2020 to $18,569 million in 2021. Subsequently, equity declined steadily over the next two years, reaching $16,697 million in 2022 and further dropping to $15,856 million in 2023. There was a recovery in 2024, with equity rising back to $18,619 million, approaching the level observed in 2021. This pattern reflects some volatility in the equity base, with a notable rebound in the final year.
- Debt to Equity Ratio (including operating lease liability)
- The debt-to-equity ratio shows a downward trend from 1.32 in 2020 to a low of 1.11 in 2021, indicating a relative improvement in capital structure with less debt per unit of equity. However, this ratio increased again to 1.23 in 2022 and further to 1.36 in 2023, signifying a gradual rise in financial leverage. In 2024, the ratio rose sharply to 1.73, driven primarily by the notable increase in total debt combined with equity fluctuations. This elevated ratio suggests a considerably higher reliance on debt financing relative to equity at the end of the period.
Debt to Capital
Honeywell International Inc., debt to capital calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Commercial paper and other short-term borrowings | ||||||
| Current maturities of long-term debt | ||||||
| Long-term debt, excluding current maturities | ||||||
| Total debt | ||||||
| Total Honeywell shareowners’ equity | ||||||
| Total capital | ||||||
| Solvency Ratio | ||||||
| Debt to capital1 | ||||||
| Benchmarks | ||||||
| Debt to Capital, Competitors2 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| Eaton Corp. plc | ||||||
| GE Aerospace | ||||||
| Lockheed Martin Corp. | ||||||
| RTX Corp. | ||||||
| Debt to Capital, Sector | ||||||
| Capital Goods | ||||||
| Debt to Capital, Industry | ||||||
| Industrials | ||||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Debt to capital = Total debt ÷ Total capital
= ÷ =
2 Click competitor name to see calculations.
- Total Debt
- The total debt exhibited a decreasing trend from 22,384 million US dollars in 2020 to 19,570 million US dollars in 2022. However, there was a slight increase to 20,443 million in 2023, followed by a substantial rise to 31,099 million in 2024, indicating a significant increase in leverage during the last recorded year.
- Total Capital
- Total capital slightly declined from 39,933 million US dollars in 2020 to 36,267 million in 2022, remaining relatively stable around that level in 2023 at 36,299 million. In 2024, there was a pronounced increase to 49,718 million, suggesting an expansion in the company's capital base during the most recent period.
- Debt to Capital Ratio
- The debt to capital ratio showed a downward trend from 0.56 in 2020 to its lowest point of 0.51 in 2021, followed by a gradual rise to 0.56 in 2023. In 2024, the ratio sharply increased to 0.63, pointing to a higher proportion of debt financing relative to total capital, highlighting increased financial leverage and potential risk.
- Summary
- Overall, the data reflects initial efforts to reduce debt from 2020 through 2022, accompanied by a modest decrease in total capital. This was succeeded by a period of stability in 2023, after which both total debt and capital significantly increased in 2024. The rising debt to capital ratio in the last year indicates a strategic shift toward greater leverage, which may affect the company’s financial risk profile going forward.
Debt to Capital (including Operating Lease Liability)
Honeywell International Inc., debt to capital (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Commercial paper and other short-term borrowings | ||||||
| Current maturities of long-term debt | ||||||
| Long-term debt, excluding current maturities | ||||||
| Total debt | ||||||
| Current operating lease liabilities | ||||||
| Non-current operating lease liabilities | ||||||
| Total debt (including operating lease liability) | ||||||
| Total Honeywell shareowners’ 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 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| Eaton Corp. plc | ||||||
| GE Aerospace | ||||||
| Lockheed Martin Corp. | ||||||
| RTX Corp. | ||||||
| Debt to Capital (including Operating Lease Liability), Sector | ||||||
| Capital Goods | ||||||
| Debt to Capital (including Operating Lease Liability), Industry | ||||||
| Industrials | ||||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
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.
- Total Debt
- The total debt showed a general decrease from 23,212 million USD in 2020 to 20,537 million USD in 2022, followed by a slight increase to 21,536 million USD in 2023. However, in 2024, the total debt experienced a significant rise to 32,225 million USD.
- Total Capital
- Total capital demonstrated a declining trend from 40,761 million USD in 2020 to 37,234 million USD in 2022, with a marginal increase in 2023 to 37,392 million USD. In 2024, total capital increased substantially to 50,844 million USD, which is the highest in the period observed.
- Debt to Capital Ratio
- The debt to capital ratio decreased from 0.57 in 2020 to 0.53 in 2021, then increased slightly to 0.55 in 2022. It continued rising to 0.58 in 2023 and further to 0.63 in 2024, indicating a gradual increase in the proportion of debt relative to total capital over time, with a noticeable jump in 2024.
- Summary
- Over the observed period, total debt first declined and then sharply increased in the final year, reaching its peak in 2024. Total capital mirrored this pattern but with a less pronounced decline initially and a strong increase in 2024. The debt to capital ratio exhibited a downward trend initially but reversed course starting in 2021, increasing steadily and significantly by 2024. This suggests a growing reliance on debt financing relative to overall capital structure, particularly in the most recent year.
Debt to Assets
Honeywell International Inc., debt to assets calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Commercial paper and other short-term borrowings | ||||||
| Current maturities of long-term debt | ||||||
| Long-term debt, excluding current maturities | ||||||
| Total debt | ||||||
| Total assets | ||||||
| Solvency Ratio | ||||||
| Debt to assets1 | ||||||
| Benchmarks | ||||||
| Debt to Assets, Competitors2 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| Eaton Corp. plc | ||||||
| GE Aerospace | ||||||
| Lockheed Martin Corp. | ||||||
| RTX Corp. | ||||||
| Debt to Assets, Sector | ||||||
| Capital Goods | ||||||
| Debt to Assets, Industry | ||||||
| Industrials | ||||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Debt to assets = Total debt ÷ Total assets
= ÷ =
2 Click competitor name to see calculations.
- Total Debt
- The total debt experienced a decline from 22,384 million USD in 2020 to 19,570 million USD in 2022, indicating a reduction over the first three years. However, this trend reversed starting in 2023, with total debt increasing to 20,443 million USD and rising sharply to 31,099 million USD by the end of 2024. This substantial increase suggests a significant leveraging or borrowing activity in the most recent year.
- Total Assets
- Total assets showed a gradual decrease from 64,586 million USD in 2020 to 61,525 million USD in 2023, representing a downward trend over four years. In 2024, however, total assets surged to 75,196 million USD, marking a notable recovery and growth beyond prior levels. This abrupt rise in assets could indicate acquisitions, investments, or other asset increases.
- Debt to Assets Ratio
- The debt to assets ratio declined from 0.35 in 2020 to 0.30 in 2021, reflecting an improvement in the company's leverage position. It then slightly increased to 0.31 in 2022 and to 0.33 in 2023, demonstrating a modest rise in leverage. In 2024, the ratio surged to 0.41, corresponding with the sharp rise in debt relative to assets. This higher leverage level in the latest year signals increased financial risk or aggressive financing strategies.
- Overall Analysis
- Between 2020 and 2023, the company showed a cautious deleveraging approach with declining debt and assets slightly contracting, resulting in a generally stable leverage profile. The year 2024 marked a significant shift; both total debt and total assets increased markedly, but debt grew at a faster pace, elevating the debt to assets ratio substantially. The company’s financial structure in 2024 reflects heightened indebtedness relative to its asset base, which may affect its credit risk and financial flexibility going forward.
Debt to Assets (including Operating Lease Liability)
Honeywell International Inc., debt to assets (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Commercial paper and other short-term borrowings | ||||||
| Current maturities of long-term debt | ||||||
| Long-term debt, excluding current maturities | ||||||
| Total debt | ||||||
| Current operating lease liabilities | ||||||
| Non-current operating lease 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 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| Eaton Corp. plc | ||||||
| GE Aerospace | ||||||
| Lockheed Martin Corp. | ||||||
| RTX Corp. | ||||||
| Debt to Assets (including Operating Lease Liability), Sector | ||||||
| Capital Goods | ||||||
| Debt to Assets (including Operating Lease Liability), Industry | ||||||
| Industrials | ||||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
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 declining trend from 23,212 million USD at the end of 2020 to 20,537 million USD by the end of 2022. This was followed by a slight increase to 21,536 million USD in 2023. A significant rise occurred in 2024, with debt climbing substantially to 32,225 million USD. This indicates a considerable increase in leverage or borrowing in the most recent year after a period of debt reduction and stability.
- Total Assets
- Total assets showed a mild downward trend from 64,586 million USD in 2020 to 61,525 million USD in 2023, reflecting a gradual contraction in asset base over those four years. However, in 2024, assets increased markedly to 75,196 million USD, reaching the highest level in the five-year period. This sharp growth in assets in the latest year contrasts with the prior trend of slight decline.
- Debt to Assets Ratio (Including Operating Lease Liability)
- The debt-to-assets ratio decreased steadily from 0.36 in 2020 to 0.32 in 2021, indicating improved asset coverage of debt. It then slightly increased to 0.33 in 2022 and further rose to 0.35 in 2023, suggesting a moderate rise in leverage relative to assets. A more pronounced increase occurred in 2024, where the ratio jumped to 0.43, signaling a significant increase in leverage relative to the asset base.
- Summary
- The data reveal a period of debt reduction and asset contraction from 2020 through 2023, accompanied by a generally stable or mildly improving leverage position. However, in 2024, both total debt and total assets increased sharply, with debt rising proportionally more, thereby increasing the debt-to-assets ratio markedly. This shift suggests a strategic change, potentially indicating increased borrowing to finance asset growth or other initiatives. The elevated leverage ratio in 2024 warrants closer monitoring regarding financial risk and capitalization structure moving forward.
Financial Leverage
Honeywell International Inc., financial leverage calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Total assets | ||||||
| Total Honeywell shareowners’ equity | ||||||
| Solvency Ratio | ||||||
| Financial leverage1 | ||||||
| Benchmarks | ||||||
| Financial Leverage, Competitors2 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| Eaton Corp. plc | ||||||
| GE Aerospace | ||||||
| Lockheed Martin Corp. | ||||||
| RTX Corp. | ||||||
| Financial Leverage, Sector | ||||||
| Capital Goods | ||||||
| Financial Leverage, Industry | ||||||
| Industrials | ||||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Financial leverage = Total assets ÷ Total Honeywell shareowners’ equity
= ÷ =
2 Click competitor name to see calculations.
- Total Assets
- The total assets showed a decreasing trend from 64,586 million US dollars in 2020 to 61,525 million US dollars in 2023, indicating a reduction over this period. However, there was a notable increase in 2024, with total assets rising sharply to 75,196 million US dollars, suggesting significant asset growth or acquisition activities in the latest year.
- Total Shareowners’ Equity
- Shareowners’ equity increased from 17,549 million US dollars in 2020 to a peak of 18,569 million US dollars in 2021. After this peak, equity declined steadily to 15,856 million US dollars in 2023. In 2024, it rebounded to 18,619 million US dollars, marginally surpassing the 2021 peak. This pattern implies fluctuations in retained earnings, stock issuance, or buybacks, with a recovery in equity in the most recent year.
- Financial Leverage
- The financial leverage ratio decreased from 3.68 in 2020 to 3.47 in 2021, indicating a reduction in the use of debt relative to equity during that period. From 2021 onwards, leverage increased steadily, reaching 4.04 in 2024. This rising leverage ratio points to an increasing proportion of debt financing compared to equity over the four-year span, particularly pronounced in the final year.
Interest Coverage
Honeywell International Inc., interest coverage calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income attributable to Honeywell | ||||||
| Add: Net income attributable to noncontrolling interest | ||||||
| Add: Income tax expense | ||||||
| Add: Interest and other financial charges | ||||||
| Earnings before interest and tax (EBIT) | ||||||
| Solvency Ratio | ||||||
| Interest coverage1 | ||||||
| Benchmarks | ||||||
| Interest Coverage, Competitors2 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| Eaton Corp. plc | ||||||
| GE Aerospace | ||||||
| Lockheed Martin Corp. | ||||||
| RTX Corp. | ||||||
| Interest Coverage, Sector | ||||||
| Capital Goods | ||||||
| Interest Coverage, Industry | ||||||
| Industrials | ||||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Interest coverage = EBIT ÷ Interest expense
= ÷ =
2 Click competitor name to see calculations.
- Earnings before interest and tax (EBIT)
- The EBIT values demonstrate a generally upward trend over the five-year period. Starting at 6,371 million US dollars in 2020, EBIT increased to 7,578 million in 2021, followed by a decline to 6,793 million in 2022. Thereafter, EBIT rose significantly to 7,924 million in 2023 and further to 8,271 million in 2024. This indicates overall growth in operational profitability despite the dip in 2022.
- Interest and other financial charges
- Interest and other financial charges have exhibited a steady increase throughout the period. Beginning at 359 million US dollars in 2020, the charges slightly decreased in 2021 to 343 million, then increased notably to 414 million in 2022, followed by sharper rises to 765 million in 2023 and 1,058 million in 2024. This trend suggests rising debt costs or increased borrowing over the analyzed years.
- Interest coverage ratio
- The interest coverage ratio, which measures the ability to meet interest obligations, shows a declining pattern across the years. It started robustly at 17.75 in 2020, peaked at 22.09 in 2021, then decreased to 16.41 in 2022, 10.36 in 2023, and further dropped to 7.82 in 2024. Despite growth in EBIT, the substantial rise in interest charges has weakened interest coverage, indicating reduced buffer to cover interest expenses.
Fixed Charge Coverage
Honeywell International Inc., fixed charge coverage calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income attributable to Honeywell | ||||||
| Add: Net income attributable to noncontrolling interest | ||||||
| Add: Income tax expense | ||||||
| Add: Interest and other financial charges | ||||||
| Earnings before interest and tax (EBIT) | ||||||
| Add: Operating lease cost | ||||||
| Earnings before fixed charges and tax | ||||||
| Interest and other financial charges | ||||||
| Operating lease cost | ||||||
| Fixed charges | ||||||
| Solvency Ratio | ||||||
| Fixed charge coverage1 | ||||||
| Benchmarks | ||||||
| Fixed Charge Coverage, Competitors2 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| Eaton Corp. plc | ||||||
| GE Aerospace | ||||||
| Lockheed Martin Corp. | ||||||
| RTX Corp. | ||||||
| Fixed Charge Coverage, Sector | ||||||
| Capital Goods | ||||||
| Fixed Charge Coverage, Industry | ||||||
| Industrials | ||||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Fixed charge coverage = Earnings before fixed charges and tax ÷ Fixed charges
= ÷ =
2 Click competitor name to see calculations.
- Earnings before fixed charges and tax
- The earnings before fixed charges and tax exhibit a generally positive trend from 2020 to 2024. Starting at 6,585 million US dollars in 2020, the figure rises significantly to 7,806 million in 2021, followed by a decrease to 7,017 million in 2022. Subsequently, the earnings increase again in 2023 to 8,163 million and further reach 8,538 million in 2024. This indicates overall growth with some volatility during the period.
- Fixed charges
- The fixed charges demonstrate a consistent upward trend throughout the years. Beginning at 573 million US dollars in 2020 and remaining relatively stable in 2021 at 571 million, the fixed charges increase to 638 million in 2022. A more pronounced rise is observed in 2023 and 2024, reaching 1,004 million and 1,325 million, respectively. The substantial increment in fixed charges in the later years may suggest increased financial obligations or interest expenses.
- Fixed charge coverage ratio
- The fixed charge coverage ratio shows a declining trend over the period analyzed. Starting at a high ratio of 11.49 in 2020, it improves further to 13.67 in 2021, indicating strong earnings relative to fixed charges. However, the ratio then decreases to 11 in 2022 and declines more sharply to 8.13 in 2023 and 6.44 in 2024. This decrease indicates that earnings before fixed charges and tax are becoming less sufficient to cover fixed charges, possibly due to the rising fixed charges outpacing earnings growth.