Analysis of Solvency Ratios
Quarterly Data
Solvency ratios also known as long-term debt ratios measure a company ability to meet long-term obligations.
Solvency Ratios (Summary)
Roper Technologies Inc., solvency ratios (quarterly data)
Based on: 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).
The financial leverage ratios of the company exhibit notable variations throughout the periods analyzed. The debt to equity ratio shows an overall declining trend from 0.55 at the beginning of 2019 down to 0.40 by the third quarter of 2023, with some fluctuations in between. This indicates a gradual reduction in reliance on equity to finance debt over time. The debt to capital and debt to assets ratios follow a similar downward trajectory, decreasing from approximately 0.36 and 0.29 respectively in early 2019 to roughly 0.29 and 0.24 by the latest periods. These trends suggest enhancements in the company’s capital structure with a relatively lower proportion of debt used compared to the total capital and assets.
The financial leverage ratio, which measures the extent of assets financed by equity, initially rose from approximately 1.89 to a peak of 2.33 around the third quarter of 2020. After this peak, it steadily declined to about 1.65 by the third quarter of 2023. This shift indicates the company initially increased asset acquisition funded by debt but eventually moved towards a more conservative leverage position.
The interest coverage ratio demonstrates considerable volatility over the periods. Starting at 8.46, it reached a high of 12.94 at the end of 2019, then sharply declined to a low of 6.43 at the end of 2021, before steadily improving to 10.35 by the third quarter of 2023. These variations likely reflect changes in operating earnings relative to interest expenses, with recent periods showing improved ability to cover interest payments, indicating strengthening operational profitability or reduced interest expenses.
Overall, the analysis of leverage and coverage ratios reveals a strategic move towards lower debt reliance and stronger capacity to service interest expenses. This denotes enhanced financial stability and potentially reduced financial risk over the observed timeframe.
- Debt to Equity Ratio
- Generally decreasing from 0.55 in early 2019 to 0.40 by late 2023, indicating reduced debt reliance relative to equity.
- Debt to Capital Ratio
- Declining trend from around 0.36 to 0.29, signaling a lower proportion of debt within the capital structure.
- Debt to Assets Ratio
- Dropping from 0.29 to 0.24, reflecting decreased leverage relative to total assets.
- Financial Leverage
- Rising to a maximum in 2020 followed by a steady decline to 1.65, suggesting an initial increase and subsequent reduction of leveraged asset financing.
- Interest Coverage Ratio
- Fluctuated significantly, peaking at nearly 13 in late 2019, falling to around 6.4 in late 2021, then improving to over 10 by late 2023, indicating variable but recent improvement in interest payment capacity.
Debt Ratios
Coverage Ratios
Debt to Equity
Roper Technologies Inc., debt to equity calculation (quarterly data)
| Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||||||
| Other short-term debt | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | 14,100) | ||||||
| Current portion of long-term debt, net | 499,300) | 699,800) | 699,500) | 699,200) | 698,900) | 799,900) | 799,500) | 799,200) | 799,200) | 502,400) | 502,100) | 502,000) | 602,800) | 602,600) | 602,400) | 602,200) | 2,900) | 2,100) | 1,700) | ||||||
| Long-term debt, net of current portion | 6,379,000) | 5,966,300) | 5,964,400) | 5,962,500) | 5,960,600) | 6,657,100) | 6,654,800) | 7,122,600) | 7,529,900) | 8,199,500) | 8,571,800) | 9,064,500) | 9,101,200) | 5,263,800) | 4,674,200) | 4,673,100) | 6,195,100) | 4,718,900) | 4,487,000) | ||||||
| Total debt | 6,878,300) | 6,666,100) | 6,663,900) | 6,661,700) | 6,659,500) | 7,457,000) | 7,454,300) | 7,921,800) | 8,329,100) | 8,701,900) | 9,073,900) | 9,566,500) | 9,704,000) | 5,866,400) | 5,276,600) | 5,275,300) | 6,198,000) | 4,721,000) | 4,502,800) | ||||||
| Stockholders’ equity | 17,038,700) | 16,745,900) | 16,332,700) | 16,037,800) | 13,857,800) | 13,726,500) | 13,551,900) | 11,563,800) | 11,342,300) | 11,089,200) | 10,765,700) | 10,479,800) | 10,160,900) | 9,879,700) | 9,591,300) | 9,491,900) | 8,571,300) | 8,351,000) | 8,137,400) | ||||||
| Solvency Ratio | |||||||||||||||||||||||||
| Debt to equity1 | 0.40 | 0.40 | 0.41 | 0.42 | 0.48 | 0.54 | 0.55 | 0.69 | 0.73 | 0.78 | 0.84 | 0.91 | 0.96 | 0.59 | 0.55 | 0.56 | 0.72 | 0.57 | 0.55 | ||||||
| Benchmarks | |||||||||||||||||||||||||
| Debt to Equity, Competitors2 | |||||||||||||||||||||||||
| Apple Inc. | 1.81 | 1.76 | 1.96 | 2.37 | 2.06 | 1.78 | 1.71 | 1.98 | 1.89 | 1.76 | 1.69 | 1.72 | 1.56 | 1.40 | 1.21 | — | — | — | — | ||||||
| Arista Networks Inc. | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | — | — | — | — | — | — | — | — | ||||||
| Cisco Systems Inc. | 0.20 | 0.21 | 0.22 | 0.24 | 0.23 | 0.29 | 0.22 | 0.28 | 0.29 | 0.37 | 0.38 | — | — | — | — | — | — | — | — | ||||||
| Dell Technologies Inc. | — | — | — | — | 5.36 | 9.04 | 13.39 | 19.36 | 56.47 | — | — | — | — | — | — | — | — | — | — | ||||||
| Super Micro Computer Inc. | 0.11 | 0.09 | 0.15 | 0.42 | 0.43 | 0.27 | 0.25 | 0.09 | 0.08 | 0.04 | 0.03 | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).
1 Q3 2023 Calculation
Debt to equity = Total debt ÷ Stockholders’ equity
= 6,878,300 ÷ 17,038,700 = 0.40
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals several key trends in the company's capital structure over the observed periods.
- Total Debt
- Total debt exhibited a notable increase between early 2019 and late 2020, peaking around September 2020 at approximately 9.7 billion USD. This represents a sharp rise from about 4.5 billion USD in March 2019. Following this peak, total debt steadily declined through the end of 2022, reaching roughly 6.6 billion USD by December 2022. In early 2023, total debt stabilized slightly above 6.8 billion USD, indicating a modest uptick compared to the previous quarter but remaining well below the earlier peak.
- Stockholders’ Equity
- Stockholders’ equity displayed consistent growth throughout the entire timeframe. Starting from approximately 8.1 billion USD in March 2019, equity increased steadily, surpassing 10 billion USD by the end of 2020. This upward trend continued strongly through 2021 and 2022, culminating in a value exceeding 16 billion USD by March 2023. The growth in equity suggests sustained profitability and/or equity financing efforts.
- Debt to Equity Ratio
- The debt to equity ratio closely mirrors the movements in debt and equity levels, reflecting fluctuations in leverage. Initially, the ratio was relatively moderate, around 0.55 to 0.72 in 2019. It peaked significantly in late 2020, approaching a value of 0.96, corresponding with the maximum debt levels. Subsequently, the ratio shows a marked decline from 2021 onwards, dropping to approximately 0.4 by mid-2023. This indicates a reduction in financial leverage and a stronger equity base relative to debt, signifying an improvement in the company's capital structure stability.
Overall, the data suggests that the company experienced a period of increased borrowing up to late 2020, followed by deleveraging efforts and robust growth in equity. The improving debt to equity ratio points to enhanced financial health and a lower risk profile in recent periods.
Debt to Capital
Roper Technologies Inc., debt to capital calculation (quarterly data)
| Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||||||
| Other short-term debt | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | 14,100) | ||||||
| Current portion of long-term debt, net | 499,300) | 699,800) | 699,500) | 699,200) | 698,900) | 799,900) | 799,500) | 799,200) | 799,200) | 502,400) | 502,100) | 502,000) | 602,800) | 602,600) | 602,400) | 602,200) | 2,900) | 2,100) | 1,700) | ||||||
| Long-term debt, net of current portion | 6,379,000) | 5,966,300) | 5,964,400) | 5,962,500) | 5,960,600) | 6,657,100) | 6,654,800) | 7,122,600) | 7,529,900) | 8,199,500) | 8,571,800) | 9,064,500) | 9,101,200) | 5,263,800) | 4,674,200) | 4,673,100) | 6,195,100) | 4,718,900) | 4,487,000) | ||||||
| Total debt | 6,878,300) | 6,666,100) | 6,663,900) | 6,661,700) | 6,659,500) | 7,457,000) | 7,454,300) | 7,921,800) | 8,329,100) | 8,701,900) | 9,073,900) | 9,566,500) | 9,704,000) | 5,866,400) | 5,276,600) | 5,275,300) | 6,198,000) | 4,721,000) | 4,502,800) | ||||||
| Stockholders’ equity | 17,038,700) | 16,745,900) | 16,332,700) | 16,037,800) | 13,857,800) | 13,726,500) | 13,551,900) | 11,563,800) | 11,342,300) | 11,089,200) | 10,765,700) | 10,479,800) | 10,160,900) | 9,879,700) | 9,591,300) | 9,491,900) | 8,571,300) | 8,351,000) | 8,137,400) | ||||||
| Total capital | 23,917,000) | 23,412,000) | 22,996,600) | 22,699,500) | 20,517,300) | 21,183,500) | 21,006,200) | 19,485,600) | 19,671,400) | 19,791,100) | 19,839,600) | 20,046,300) | 19,864,900) | 15,746,100) | 14,867,900) | 14,767,200) | 14,769,300) | 13,072,000) | 12,640,200) | ||||||
| Solvency Ratio | |||||||||||||||||||||||||
| Debt to capital1 | 0.29 | 0.28 | 0.29 | 0.29 | 0.32 | 0.35 | 0.35 | 0.41 | 0.42 | 0.44 | 0.46 | 0.48 | 0.49 | 0.37 | 0.35 | 0.36 | 0.42 | 0.36 | 0.36 | ||||||
| Benchmarks | |||||||||||||||||||||||||
| Debt to Capital, Competitors2 | |||||||||||||||||||||||||
| Apple Inc. | 0.64 | 0.64 | 0.66 | 0.70 | 0.67 | 0.64 | 0.63 | 0.66 | 0.65 | 0.64 | 0.63 | 0.63 | 0.61 | 0.58 | 0.55 | — | — | — | — | ||||||
| Arista Networks Inc. | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | — | — | — | — | — | — | — | — | ||||||
| Cisco Systems Inc. | 0.17 | 0.18 | 0.18 | 0.19 | 0.19 | 0.23 | 0.18 | 0.22 | 0.22 | 0.27 | 0.28 | — | — | — | — | — | — | — | — | ||||||
| Dell Technologies Inc. | 1.15 | 1.12 | 1.10 | 1.07 | 0.84 | 0.90 | 0.93 | 0.95 | 0.98 | 1.01 | 1.03 | — | — | — | — | — | — | — | — | ||||||
| Super Micro Computer Inc. | 0.10 | 0.09 | 0.13 | 0.30 | 0.30 | 0.21 | 0.20 | 0.08 | 0.07 | 0.04 | 0.03 | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).
1 Q3 2023 Calculation
Debt to capital = Total debt ÷ Total capital
= 6,878,300 ÷ 23,917,000 = 0.29
2 Click competitor name to see calculations.
- Total Debt
- The total debt exhibited notable fluctuation throughout the observed quarters. Initially, it rose moderately from approximately 4.5 billion USD in early 2019 to a peak near 9.7 billion USD by the third quarter of 2020. Following this peak, a general downward trend is evident until the end of 2022, where debt declined to around 6.65 billion USD. However, in the first three quarters of 2023, total debt stabilized in the range of 6.66 to 6.88 billion USD, indicating a period of relative steadiness after the prior fluctuations.
- Total Capital
- Total capital showed a consistent upward trajectory over the entire period. Starting at approximately 12.6 billion USD at the beginning of 2019, it experienced steady growth with some acceleration from mid-2021 onwards. By the end of 2022 and into 2023, total capital reached nearly 24 billion USD. This sustained increase suggests ongoing investment or retention of earnings contributing to the growth of the capital base.
- Debt to Capital Ratio
- The debt to capital ratio demonstrated variability aligned with the changes in total debt and capital. It was relatively stable around 0.36 during the early part of 2019, then increased substantially to a peak of approximately 0.49 toward late 2020, coinciding with a surge in total debt. Subsequent quarters saw a consistent decrease in this ratio, reaching a low near 0.28–0.29 by mid to late 2023. This decline reflects both a reduction in debt levels and an increase in total capital, signaling a strengthening financial structure with lower leverage risk over time.
- Summary
- The data indicates that after a period of increased borrowing culminating in late 2020, the company actively reduced its leverage, improving its debt to capital ratio. Concurrent growth in total capital underlines a strengthening equity or invested base. The interplay of decreasing debt in the latter periods alongside consistent capital growth points to enhanced financial stability and a strategic focus on deleveraging following prior expansion. These trends suggest prudent financial management responding to earlier increased indebtedness.
Debt to Assets
Roper Technologies Inc., debt to assets calculation (quarterly data)
| Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||||||
| Other short-term debt | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | 14,100) | ||||||
| Current portion of long-term debt, net | 499,300) | 699,800) | 699,500) | 699,200) | 698,900) | 799,900) | 799,500) | 799,200) | 799,200) | 502,400) | 502,100) | 502,000) | 602,800) | 602,600) | 602,400) | 602,200) | 2,900) | 2,100) | 1,700) | ||||||
| Long-term debt, net of current portion | 6,379,000) | 5,966,300) | 5,964,400) | 5,962,500) | 5,960,600) | 6,657,100) | 6,654,800) | 7,122,600) | 7,529,900) | 8,199,500) | 8,571,800) | 9,064,500) | 9,101,200) | 5,263,800) | 4,674,200) | 4,673,100) | 6,195,100) | 4,718,900) | 4,487,000) | ||||||
| Total debt | 6,878,300) | 6,666,100) | 6,663,900) | 6,661,700) | 6,659,500) | 7,457,000) | 7,454,300) | 7,921,800) | 8,329,100) | 8,701,900) | 9,073,900) | 9,566,500) | 9,704,000) | 5,866,400) | 5,276,600) | 5,275,300) | 6,198,000) | 4,721,000) | 4,502,800) | ||||||
| Total assets | 28,188,000) | 27,460,400) | 27,134,800) | 26,980,800) | 24,397,200) | 25,350,300) | 25,635,800) | 23,713,900) | 23,728,100) | 23,833,700) | 23,871,100) | 24,024,800) | 23,652,000) | 19,142,300) | 18,137,800) | 18,108,900) | 17,819,100) | 15,908,300) | 15,414,100) | ||||||
| Solvency Ratio | |||||||||||||||||||||||||
| Debt to assets1 | 0.24 | 0.24 | 0.25 | 0.25 | 0.27 | 0.29 | 0.29 | 0.33 | 0.35 | 0.37 | 0.38 | 0.40 | 0.41 | 0.31 | 0.29 | 0.29 | 0.35 | 0.30 | 0.29 | ||||||
| Benchmarks | |||||||||||||||||||||||||
| Debt to Assets, Competitors2 | |||||||||||||||||||||||||
| Apple Inc. | 0.33 | 0.33 | 0.32 | 0.34 | 0.36 | 0.34 | 0.32 | 0.36 | 0.37 | 0.36 | 0.32 | 0.35 | 0.36 | 0.34 | 0.32 | — | — | — | — | ||||||
| Arista Networks Inc. | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | — | — | — | — | — | — | — | — | ||||||
| Cisco Systems Inc. | 0.09 | 0.09 | 0.10 | 0.10 | 0.10 | 0.12 | 0.10 | 0.12 | 0.12 | 0.15 | 0.15 | — | — | — | — | — | — | — | — | ||||||
| Dell Technologies Inc. | 0.32 | 0.30 | 0.31 | 0.29 | 0.35 | 0.36 | 0.38 | 0.39 | 0.42 | 0.44 | 0.47 | — | — | — | — | — | — | — | — | ||||||
| Super Micro Computer Inc. | 0.06 | 0.06 | 0.08 | 0.19 | 0.18 | 0.12 | 0.11 | 0.04 | 0.04 | 0.02 | 0.02 | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).
1 Q3 2023 Calculation
Debt to assets = Total debt ÷ Total assets
= 6,878,300 ÷ 28,188,000 = 0.24
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals several notable trends regarding the company's capital structure and asset base over the observed periods.
- Total Debt
- The total debt exhibited an overall fluctuating pattern. Beginning at approximately $4.5 billion in the first quarter of 2019, debt levels increased steadily through 2019 and peaked in the third quarter of 2020 at roughly $9.7 billion. Following this peak, there was a consistent and gradual decline in total debt through 2022, reaching around $6.6 billion by the end of that year. In the first three quarters of 2023, debt levels stabilized modestly, hovering just under $6.9 billion, reflecting a slight upward movement compared to late 2022.
- Total Assets
- Total assets showed a persistent upward trend throughout the entire period. Starting at about $15.4 billion in early 2019, assets increased significantly, surpassing $24 billion by the end of 2020 and continuing to expand steadily in subsequent years. By the third quarter of 2023, total assets reached approximately $28.2 billion, representing considerable growth and expansion of the asset base over the five-year span.
- Debt to Assets Ratio
- The debt to assets ratio highlights the relative leverage and risk profile of the company. Initially hovering around 0.29 to 0.30 in early 2019, the ratio spiked to a high of about 0.41 in the third quarter of 2020, corresponding with the peak in total debt. Thereafter, the ratio demonstrated a gradual and consistent decline, dropping to approximately 0.24 by the third quarter of 2023. This decline suggests an improvement in the capital structure, driven both by a reduction in debt levels after 2020 and strong growth in asset values.
Overall, the company increased its asset base considerably while managing to reduce and stabilize its leverage after a period of elevated debt in 2020. The declining debt to assets ratio in recent years indicates enhanced financial stability and potentially lower financial risk. The trends suggest a strategic shift toward deleveraging and asset growth following the peak debt period in 2020.
Financial Leverage
Roper Technologies Inc., financial leverage calculation (quarterly data)
| Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||||||
| Total assets | 28,188,000) | 27,460,400) | 27,134,800) | 26,980,800) | 24,397,200) | 25,350,300) | 25,635,800) | 23,713,900) | 23,728,100) | 23,833,700) | 23,871,100) | 24,024,800) | 23,652,000) | 19,142,300) | 18,137,800) | 18,108,900) | 17,819,100) | 15,908,300) | 15,414,100) | ||||||
| Stockholders’ equity | 17,038,700) | 16,745,900) | 16,332,700) | 16,037,800) | 13,857,800) | 13,726,500) | 13,551,900) | 11,563,800) | 11,342,300) | 11,089,200) | 10,765,700) | 10,479,800) | 10,160,900) | 9,879,700) | 9,591,300) | 9,491,900) | 8,571,300) | 8,351,000) | 8,137,400) | ||||||
| Solvency Ratio | |||||||||||||||||||||||||
| Financial leverage1 | 1.65 | 1.64 | 1.66 | 1.68 | 1.76 | 1.85 | 1.89 | 2.05 | 2.09 | 2.15 | 2.22 | 2.29 | 2.33 | 1.94 | 1.89 | 1.91 | 2.08 | 1.90 | 1.89 | ||||||
| Benchmarks | |||||||||||||||||||||||||
| Financial Leverage, Competitors2 | |||||||||||||||||||||||||
| Apple Inc. | 5.56 | 5.34 | 6.11 | 6.96 | 5.79 | 5.20 | 5.30 | 5.56 | 5.13 | 4.87 | 5.35 | 4.96 | 4.39 | 4.09 | 3.80 | — | — | — | — | ||||||
| Arista Networks Inc. | 1.39 | 1.40 | 1.42 | 1.39 | 1.41 | 1.45 | 1.47 | 1.44 | 1.41 | 1.41 | 1.42 | — | — | — | — | — | — | — | — | ||||||
| Cisco Systems Inc. | 2.31 | 2.31 | 2.31 | 2.36 | 2.30 | 2.39 | 2.25 | 2.36 | 2.34 | 2.44 | 2.49 | — | — | — | — | — | — | — | — | ||||||
| Dell Technologies Inc. | — | — | — | — | 15.15 | 25.43 | 34.92 | 49.78 | 134.71 | — | — | — | — | — | — | — | — | — | — | ||||||
| Super Micro Computer Inc. | 1.81 | 1.69 | 2.03 | 2.25 | 2.41 | 2.26 | 2.14 | 2.05 | 1.90 | 1.78 | 1.69 | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).
1 Q3 2023 Calculation
Financial leverage = Total assets ÷ Stockholders’ equity
= 28,188,000 ÷ 17,038,700 = 1.65
2 Click competitor name to see calculations.
- Total Assets
- The total assets demonstrate a generally increasing trend over the analyzed periods. Starting from approximately 15.4 billion USD at the end of March 2019, the asset base grew steadily, reaching around 24 billion USD by the end of 2021. This growth continued into 2022 and the first three quarters of 2023, peaking at nearly 28.2 billion USD by September 2023. Although there were periods of slight decline or stabilization, the overall trajectory indicates consistent asset expansion, with notable acceleration between mid-2020 and early 2021 and again in 2022 to 2023.
- Stockholders’ Equity
- Stockholders’ equity exhibits a steady upward pattern throughout the periods. Beginning at approximately 8.1 billion USD in March 2019, it showed gradual increases each quarter, reaching about 11.6 billion USD by the end of 2021. From 2022 onwards, equity growth accelerated, attaining 16 billion USD by the end of 2022 and further increasing to around 17 billion USD by September 2023. This growth portrays a strengthening capital base, implying retained earnings accumulation, additional capital issuance, or both.
- Financial Leverage
- The financial leverage ratio fluctuated within a relatively narrow range but demonstrated an overall decreasing trend in recent years. The ratio started near 1.89 in early 2019, peaked above 2.3 during late 2020, and then steadily declined through 2021 and 2022, reaching a low of approximately 1.65 by September 2023. This downward movement suggests a reduction in reliance on debt financing relative to equity, reflecting a potential strategic shift toward strengthening the equity base or reducing liabilities.
- Summary of Trends
- Across the studied period, the company’s total assets and stockholders’ equity consistently grew, indicative of expansion and enhanced financial strength. The increase in equity has outpaced that of total assets in recent years, leading to a decline in the financial leverage ratio. This pattern may point to prudent financial management focusing on reducing leverage risk and maintaining a solid equity foundation. The stabilization and eventual modest decline in financial leverage alongside asset and equity growth are positive indicators of financial stability and conservative balance sheet management.
Interest Coverage
Roper Technologies Inc., interest coverage calculation (quarterly data)
| Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||||||
| Net earnings | 347,200) | 364,900) | 283,100) | 1,928,400) | 327,000) | 268,800) | 2,020,500) | 287,800) | 289,500) | 286,300) | 289,000) | 255,800) | 234,400) | 219,200) | 240,300) | 871,100) | 277,500) | 249,700) | 369,600) | ||||||
| Less: Net earnings (loss) from discontinued operations | 1,600) | 3,900) | (1,200) | 1,681,100) | 50,100) | 43,800) | 1,784,100) | 87,900) | 29,700) | 33,300) | 19,100) | —) | —) | —) | —) | —) | —) | —) | —) | ||||||
| Add: Income tax expense | 97,000) | 102,700) | 75,800) | 61,100) | 78,600) | 91,900) | 64,800) | 60,300) | 83,800) | 73,100) | 71,200) | 61,700) | 68,700) | 64,900) | 64,300) | 276,900) | 60,400) | 72,600) | 49,600) | ||||||
| Add: Interest expense, net | 42,400) | 34,800) | 37,400) | 53,800) | 41,300) | 44,700) | 52,600) | 55,800) | 58,200) | 59,500) | 60,600) | 63,700) | 62,300) | 47,500) | 45,400) | 49,000) | 48,800) | 45,100) | 43,700) | ||||||
| Earnings before interest and tax (EBIT) | 485,000) | 498,500) | 397,500) | 362,200) | 396,800) | 361,600) | 353,800) | 316,000) | 401,800) | 385,600) | 401,700) | 381,200) | 365,400) | 331,600) | 350,000) | 1,197,000) | 386,700) | 367,400) | 462,900) | ||||||
| Solvency Ratio | |||||||||||||||||||||||||
| Interest coverage1 | 10.35 | 9.89 | 8.57 | 7.66 | 7.35 | 6.78 | 6.44 | 6.43 | 6.49 | 6.23 | 6.32 | 6.52 | 10.99 | 11.88 | 12.22 | 12.94 | 8.56 | 8.43 | 8.46 | ||||||
| Benchmarks | |||||||||||||||||||||||||
| Interest Coverage, Competitors2 | |||||||||||||||||||||||||
| Cisco Systems Inc. | 35.87 | 37.17 | 39.53 | 41.21 | 41.54 | 38.79 | 35.64 | 31.56 | 29.20 | 27.76 | 25.98 | — | — | — | — | — | — | — | — | ||||||
| Super Micro Computer Inc. | 70.87 | 68.85 | 56.79 | 53.71 | 51.73 | 42.94 | 45.86 | 48.81 | 38.80 | 38.83 | 36.02 | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).
1 Q3 2023 Calculation
Interest coverage
= (EBITQ3 2023
+ EBITQ2 2023
+ EBITQ1 2023
+ EBITQ4 2022)
÷ (Interest expenseQ3 2023
+ Interest expenseQ2 2023
+ Interest expenseQ1 2023
+ Interest expenseQ4 2022)
= (485,000 + 498,500 + 397,500 + 362,200)
÷ (42,400 + 34,800 + 37,400 + 53,800)
= 10.35
2 Click competitor name to see calculations.
The financial data reveals significant fluctuations and developments in the company's operating performance and financial costs over the analyzed periods.
- Earnings before interest and tax (EBIT)
-
EBIT exhibited notable variability across quarters, beginning with strong performance in early 2019, reaching a peak at the end of 2019. A sharp decline is evident in early 2020, coinciding with the onset of global economic disruptions, followed by a gradual recovery throughout the remainder of 2020 and 2021.
The EBIT figures in 2022 show a generally positive trend with increases in several quarters, though not returning to the peak levels seen at the end of 2019. The first three quarters of 2023 demonstrate a robust upward trajectory, with the highest EBIT values observed in the most recent quarter, suggesting improved profitability and operational efficiency.
- Interest expense, net
-
Interest expense showed relative stability through 2019 and 2020, albeit with some increases in the latter part of 2020. Thereafter, a steady decline in interest costs appears throughout 2022, reaching the lowest levels in mid-2023 before a slight uptick in the third quarter of 2023.
This reduction in interest expense over time may reflect improved debt management or refinancing activities that lower interest rates or principal amounts outstanding.
- Interest coverage ratio
-
The interest coverage ratio, representing the ability to cover interest expenses with EBIT, was strong throughout 2019, peaking at the end of that year. Although there was a dip in this ratio in the early part of 2020, it remained comfortably above 6 times, indicating adequate coverage.
From 2021 through 2023, the interest coverage ratio gradually improved, surpassing 10 times in the latest quarters. This trend suggests enhanced financial resilience and a strengthened capacity to meet interest obligations, supported by the combination of increasing EBIT and declining interest expenses.
Overall, the data indicates that the company has navigated through a period of operational pressure in early 2020 but has since achieved a recovery characterized by rising earnings and improved interest coverage. The decreasing interest expenses further support a stronger financial position, contributing to increased earnings sustainability and reduced financial risk.