Analysis of Solvency Ratios
Quarterly Data
Solvency ratios also known as long-term debt ratios measure a company ability to meet long-term obligations.
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Solvency Ratios (Summary)
NXP Semiconductors N.V., solvency ratios (quarterly data)
| Jul 3, 2022 | Apr 3, 2022 | Dec 31, 2021 | Oct 3, 2021 | Jul 4, 2021 | Apr 4, 2021 | ||||
|---|---|---|---|---|---|---|---|---|---|
| Debt Ratios | |||||||||
| Debt to equity | |||||||||
| Debt to capital | |||||||||
| Debt to assets | |||||||||
| Financial leverage | |||||||||
Based on: 10-Q (reporting date: 2022-07-03), 10-Q (reporting date: 2022-04-03), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-10-03), 10-Q (reporting date: 2021-07-04), 10-Q (reporting date: 2021-04-04).
The analysis of the debt-related financial ratios over the six consecutive quarterly periods reveals a consistent upward trend in leverage metrics, indicating an increasing reliance on debt financing.
- Debt to Equity Ratio
- The debt to equity ratio rose substantially from 0.92 to a peak of 1.62 over the span from April 2021 to December 2021, maintaining a level close to this peak (1.6) by July 2022. This signifies that for every unit of equity, the company is using approximately 1.6 units of debt, reflecting a marked increase in financial leverage relative to shareholders' equity over this period.
- Debt to Capital Ratio
- This ratio increased from 0.48 in April 2021 to 0.62 by December 2021 and remained stable at 0.62 through July 2022. The stabilization at this higher level indicates that debt comprises a greater proportion of the company's total capital structure compared to the initial period, reflecting sustained leverage.
- Debt to Assets Ratio
- The debt to assets ratio showed growth from 0.39 in April 2021 to 0.51 at the end of 2021, slightly declining to 0.5 by mid-2022. This ratio’s increase highlights that a larger share of the company's assets are financed through debt, although the slight reduction in the last quarter suggests a minor improvement or stabilization in asset financing mix.
- Financial Leverage Ratio
- Financial leverage steadily increased from 2.34 to a peak of 3.28 during the same timeframe before tapering slightly to 3.24. This upward movement aligns with the other ratios, indicating that the company is utilizing more debt relative to equity, potentially to finance growth or operations, which results in higher risk exposure but potentially increased returns.
Overall, the data indicates a clear trend of increasing financial leverage from early 2021 through late 2021, followed by a period of stabilization in the first half of 2022. These changes suggest the company adopted a more leveraged capital structure strategy, possibly aiming to enhance growth opportunities, though it maintains a relatively steady level of debt relative to capital and assets in recent quarters.
Debt Ratios
Debt to Equity
NXP Semiconductors N.V., debt to equity calculation (quarterly data)
| Jul 3, 2022 | Apr 3, 2022 | Dec 31, 2021 | Oct 3, 2021 | Jul 4, 2021 | Apr 4, 2021 | ||||
|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||
| Short-term debt | |||||||||
| Long-term debt | |||||||||
| Total debt | |||||||||
| Stockholders’ equity | |||||||||
| Solvency Ratio | |||||||||
| Debt to equity1 | |||||||||
| Benchmarks | |||||||||
| Debt to Equity, Competitors2 | |||||||||
| Advanced Micro Devices Inc. | |||||||||
| Analog Devices Inc. | |||||||||
| Applied Materials Inc. | |||||||||
| Broadcom Inc. | |||||||||
| Intel Corp. | |||||||||
| KLA Corp. | |||||||||
| Lam Research Corp. | |||||||||
| Micron Technology Inc. | |||||||||
| NVIDIA Corp. | |||||||||
| Qualcomm Inc. | |||||||||
| Texas Instruments Inc. | |||||||||
Based on: 10-Q (reporting date: 2022-07-03), 10-Q (reporting date: 2022-04-03), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-10-03), 10-Q (reporting date: 2021-07-04), 10-Q (reporting date: 2021-04-04).
1 Q2 2022 Calculation
Debt to equity = Total debt ÷ Stockholders’ equity
= ÷ =
2 Click competitor name to see calculations.
- Total Debt
- The total debt has shown a steady upward trend over the periods analyzed. Starting from 7,611 million US dollars in April 2021, it increased significantly to 9,591 million in July 2021 and remained relatively stable in October 2021. The upward trend continued, reaching 10,572 million by December 2021 and slightly increasing further to 11,160 million by July 2022. This indicates an expanding leverage or greater reliance on debt financing over the observed periods.
- Stockholders’ Equity
- Stockholders’ equity experienced a declining trend over the course of the periods. It decreased from 8,303 million US dollars in April 2021 to 6,528 million by December 2021. After this decline, it stabilized somewhat but remained lower, ending at 6,962 million in July 2022. This suggests a reduction in net assets available to shareholders which might be due to losses, dividends, or other equity-reducing factors.
- Debt to Equity Ratio
- The debt to equity ratio increased markedly from 0.92 in April 2021 to a peak of 1.62 in both December 2021 and April 2022, then slightly decreased to 1.6 in July 2022. This rising ratio reflects an escalating proportion of debt relative to equity, indicating potential increases in financial risk and leverage. The stabilization near 1.6 suggests the company maintained this higher leverage level in the latter part of the period.
Debt to Capital
NXP Semiconductors N.V., debt to capital calculation (quarterly data)
| Jul 3, 2022 | Apr 3, 2022 | Dec 31, 2021 | Oct 3, 2021 | Jul 4, 2021 | Apr 4, 2021 | ||||
|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||
| Short-term debt | |||||||||
| Long-term debt | |||||||||
| Total debt | |||||||||
| Stockholders’ equity | |||||||||
| Total capital | |||||||||
| Solvency Ratio | |||||||||
| Debt to capital1 | |||||||||
| Benchmarks | |||||||||
| Debt to Capital, Competitors2 | |||||||||
| Advanced Micro Devices Inc. | |||||||||
| Analog Devices Inc. | |||||||||
| Applied Materials Inc. | |||||||||
| Broadcom Inc. | |||||||||
| Intel Corp. | |||||||||
| KLA Corp. | |||||||||
| Lam Research Corp. | |||||||||
| Micron Technology Inc. | |||||||||
| NVIDIA Corp. | |||||||||
| Qualcomm Inc. | |||||||||
| Texas Instruments Inc. | |||||||||
Based on: 10-Q (reporting date: 2022-07-03), 10-Q (reporting date: 2022-04-03), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-10-03), 10-Q (reporting date: 2021-07-04), 10-Q (reporting date: 2021-04-04).
1 Q2 2022 Calculation
Debt to capital = Total debt ÷ Total capital
= ÷ =
2 Click competitor name to see calculations.
- Total Debt
- The total debt exhibits a clear upward trend over the observed periods. Starting at approximately $7.6 billion in early April 2021, total debt increased significantly to about $9.6 billion by mid-2021, maintaining a similar level through October 2021. Subsequently, the debt continued to rise, reaching approximately $10.6 billion at the end of 2021 and further increasing to around $11.2 billion by mid-2022. This pattern indicates a consistent and substantial increase in debt over the course of one year.
- Total Capital
- Total capital experienced moderate fluctuations but generally showed a rising trend. From roughly $15.9 billion in early April 2021, it increased to about $17.0 billion by mid-2021, followed by a slight decline in the third quarter to approximately $16.3 billion. The capital base then grew again, reaching $17.1 billion at the end of 2021 and stabilizing around $17.1 billion in early April 2022, before rising notably to $18.1 billion mid-2022. These fluctuations reflect some variability but overall capital expansion during the year.
- Debt to Capital Ratio
- The debt-to-capital ratio reveals a steady increase, indicating a growing proportion of debt financing relative to total capital. Beginning at 0.48 in early April 2021, the ratio climbed to 0.56 by mid-2021 and further to 0.59 by October 2021. The ratio increased again to 0.62 by the end of 2021 and plateaued at this level through early and mid-2022. This suggests that debt has become a more dominant component of the company’s capital structure, stabilizing at just over 60% from the end of 2021 onwards.
- Overall Analysis
- The data indicates a strategic shift towards increased leverage, as evidenced by rising total debt and a higher debt-to-capital ratio. While total capital shows growth, it does not keep pace proportionally with the growth in debt, resulting in a higher reliance on debt financing. The stabilization of the debt-to-capital ratio around 0.62 in the latter periods suggests the company has reached a targeted or sustainable leverage level. This pattern may reflect initiatives to fuel growth or operational requirements through borrowing, but it also highlights increased financial risk associated with higher leverage.
Debt to Assets
NXP Semiconductors N.V., debt to assets calculation (quarterly data)
| Jul 3, 2022 | Apr 3, 2022 | Dec 31, 2021 | Oct 3, 2021 | Jul 4, 2021 | Apr 4, 2021 | ||||
|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||
| Short-term debt | |||||||||
| Long-term debt | |||||||||
| Total debt | |||||||||
| Total assets | |||||||||
| Solvency Ratio | |||||||||
| Debt to assets1 | |||||||||
| Benchmarks | |||||||||
| Debt to Assets, Competitors2 | |||||||||
| Advanced Micro Devices Inc. | |||||||||
| Analog Devices Inc. | |||||||||
| Applied Materials Inc. | |||||||||
| Broadcom Inc. | |||||||||
| Intel Corp. | |||||||||
| KLA Corp. | |||||||||
| Lam Research Corp. | |||||||||
| Micron Technology Inc. | |||||||||
| NVIDIA Corp. | |||||||||
| Qualcomm Inc. | |||||||||
| Texas Instruments Inc. | |||||||||
Based on: 10-Q (reporting date: 2022-07-03), 10-Q (reporting date: 2022-04-03), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-10-03), 10-Q (reporting date: 2021-07-04), 10-Q (reporting date: 2021-04-04).
1 Q2 2022 Calculation
Debt to assets = Total debt ÷ Total assets
= ÷ =
2 Click competitor name to see calculations.
- Total Debt
- The total debt shows a clear upward trend over the examined periods, increasing from $7,611 million to $11,160 million. This represents a significant rise, especially notable between April 2021 and July 2021, and a steady increase thereafter. The data indicates a sustained increase in the company's leverage position.
- Total Assets
- Total assets have generally increased over the course of the periods, rising from $19,392 million to $22,539 million. Although there was a slight decrease observed in the third quarter of 2021, the overall trajectory is upward, reflecting growth or accumulation of resources and investments.
- Debt to Assets Ratio
- The debt to assets ratio increased from 0.39 to 0.51 by the end of 2021, indicating a rising leverage relative to asset base. Following this peak, the ratio stabilized around 0.50 in the subsequent quarters, suggesting that despite continued growth in both debt and assets, the company maintained a consistent leverage level relative to its total assets.
- Summary
- Overall, the company has shown an increasing reliance on debt financing alongside asset growth. The rising debt to assets ratio until the end of 2021, followed by a plateau, implies a controlled approach to leverage. The increase in asset base supports the additional debt, reflecting potential asset investments or acquisitions. These trends suggest a strategy oriented toward expansion funded through increased borrowing while maintaining a stable asset coverage ratio.
Financial Leverage
NXP Semiconductors N.V., financial leverage calculation (quarterly data)
| Jul 3, 2022 | Apr 3, 2022 | Dec 31, 2021 | Oct 3, 2021 | Jul 4, 2021 | Apr 4, 2021 | ||||
|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||
| Total assets | |||||||||
| Stockholders’ equity | |||||||||
| Solvency Ratio | |||||||||
| Financial leverage1 | |||||||||
| Benchmarks | |||||||||
| Financial Leverage, Competitors2 | |||||||||
| Advanced Micro Devices Inc. | |||||||||
| Analog Devices Inc. | |||||||||
| Applied Materials Inc. | |||||||||
| Broadcom Inc. | |||||||||
| Intel Corp. | |||||||||
| KLA Corp. | |||||||||
| Lam Research Corp. | |||||||||
| Micron Technology Inc. | |||||||||
| NVIDIA Corp. | |||||||||
| Qualcomm Inc. | |||||||||
| Texas Instruments Inc. | |||||||||
Based on: 10-Q (reporting date: 2022-07-03), 10-Q (reporting date: 2022-04-03), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-10-03), 10-Q (reporting date: 2021-07-04), 10-Q (reporting date: 2021-04-04).
1 Q2 2022 Calculation
Financial leverage = Total assets ÷ Stockholders’ equity
= ÷ =
2 Click competitor name to see calculations.
The financial data reveals several noteworthy trends over the six quarters ending July 3, 2022. Total assets exhibited an overall upward trajectory, increasing from $19,392 million in the quarter ending April 4, 2021, to $22,539 million by July 3, 2022. Although there was a slight dip in total assets between July 4, 2021 and October 3, 2021, the trend resumed its growth thereafter.
Conversely, stockholders' equity showed a declining pattern during the first five quarters, dropping from $8,303 million in April 2021 to $6,509 million by April 2022. However, in the most recent quarter, stockholders' equity increased to $6,962 million. This partial recovery may indicate changes in retained earnings, equity issuance, or other equity components.
The financial leverage ratio, defined as the ratio of total assets to stockholders' equity, consistently rose from 2.34 in April 2021 to a peak of 3.28 in April 2022, before slightly moderating to 3.24 in July 2022. The increasing leverage level over the observed periods suggests a growing reliance on debt financing or other liabilities relative to equity.
- Total Assets
- Overall increase of approximately 16.3% over the six quarters, indicating asset growth and potential expansion or investment activities.
- Stockholders’ Equity
- Decline of about 21.6% from April 2021 through April 2022, with a moderate recovery in the last quarter, indicating possible equity diminution followed by stabilization or improvement.
- Financial Leverage
- Rising trend to a high leverage condition peaking in April 2022, with a slight reduction thereafter, reflecting increased debt relative to equity with a recent minor deleveraging.
In summary, the company experienced growth in asset base while equity levels fell initially, which led to increased financial leverage, implying greater financial risk exposure. The recent uptick in equity and slight reduction in leverage may signal an initial step towards rebalancing the capital structure.