Stock Analysis on Net

Air Products & Chemicals Inc. (NYSE:APD)

This company has been moved to the archive! The financial data has not been updated since August 9, 2021.

Analysis of Solvency Ratios 
Quarterly Data

Microsoft Excel

Solvency Ratios (Summary)

Air Products & Chemicals Inc., solvency ratios (quarterly data)

Microsoft Excel
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 Dec 31, 2018 Sep 30, 2018 Jun 30, 2018 Mar 31, 2018 Dec 31, 2017 Sep 30, 2017 Jun 30, 2017 Mar 31, 2017 Dec 31, 2016 Sep 30, 2016 Jun 30, 2016 Mar 31, 2016 Dec 31, 2015 Sep 30, 2015 Jun 30, 2015 Mar 31, 2015 Dec 31, 2014
Debt Ratios
Debt to equity 0.59 0.63 0.63 0.65 0.70 0.29 0.29 0.30 0.34 0.34 0.35 0.35 0.37 0.34 0.34 0.39 0.42 0.41 0.60 0.88 0.81 0.84 0.79 0.81 0.77 0.81 0.83
Debt to capital 0.37 0.39 0.39 0.40 0.41 0.23 0.22 0.23 0.25 0.25 0.26 0.26 0.27 0.25 0.26 0.28 0.29 0.29 0.38 0.47 0.45 0.46 0.44 0.45 0.44 0.45 0.45
Debt to assets 0.29 0.31 0.31 0.31 0.33 0.17 0.17 0.18 0.20 0.20 0.20 0.20 0.20 0.19 0.19 0.21 0.22 0.22 0.27 0.34 0.33 0.35 0.34 0.34 0.33 0.34 0.35
Financial leverage 2.01 2.06 2.06 2.08 2.13 1.71 1.70 1.71 1.72 1.72 1.76 1.77 1.83 1.75 1.78 1.83 1.90 1.92 2.23 2.55 2.42 2.43 2.34 2.41 2.33 2.39 2.40
Coverage Ratios
Interest coverage 17.33 17.31 19.89 23.18 25.74 25.65 21.35 17.71 16.24 15.76 15.85 16.44 16.61 14.32 13.69 12.74 13.13 15.35 16.85 19.46 20.43 20.69 19.75 17.75

Based on: 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-Q (reporting date: 2020-12-31), 10-K (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-Q (reporting date: 2019-12-31), 10-K (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-Q (reporting date: 2018-12-31), 10-K (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-Q (reporting date: 2017-12-31), 10-K (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-Q (reporting date: 2016-12-31), 10-K (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-Q (reporting date: 2015-12-31), 10-K (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-Q (reporting date: 2014-12-31).


The analyzed financial ratios over the examined quarterly periods indicate notable trends in the company's leverage and ability to cover interest expenses.

Debt to Equity
This ratio exhibited a gradual decline from 0.83 at the end of 2014 to a low of approximately 0.29 by the first quarter of 2020, suggesting a reduction in the reliance on debt relative to shareholders' equity over this timeframe. Subsequently, there was an increase to around 0.7 by the third quarter of 2020, followed by a slight decrease to approximately 0.59 by mid-2021. This pattern may reflect temporary changes in financing strategy or balance sheet restructuring during 2020.
Debt to Capital
The ratio followed a similar downward trend from 0.45 at the end of 2014 to about 0.22 in early 2020, indicating an overall decrease in the proportion of debt within the company’s capital structure. The sharp rise to 0.41 in the third quarter of 2020, with a slight decline to 0.37 thereafter, mirrors movements observed in the debt to equity ratio, reinforcing the indication of increased leverage during late 2020.
Debt to Assets
A decline from 0.35 at the end of 2014 to 0.17 in early 2020 was observed, demonstrating a reduction in the company's debt relative to total assets. Similar to other leverage ratios, this dipped briefly to 0.33 in the third quarter of 2020, then decreased again to around 0.29 by mid-2021. The temporary increase in this ratio during 2020 could be associated with heightened borrowing or asset base adjustments.
Financial Leverage
The financial leverage ratio decreased steadily from a high of 2.4 in late 2014 to approximately 1.7 in early 2020, suggesting a more conservative capital structure with increased equity buffer. This ratio rose notably to about 2.13 in the third quarter of 2020 before falling slightly to around 2.01 by the middle of 2021. These movements are consistent with the observed changes in debt-related ratios, indicating fluctuations in the overall use of debt financing.
Interest Coverage
Starting from the fourth quarter of 2014 where data first appears, the interest coverage ratio showed strong performance, peaking around 25.74 in the second quarter of 2020, pointing to a robust ability to meet interest obligations through earnings. After reaching this peak, the ratio experienced a decline to approximately 17.33 by mid-2021, though it remained at a level indicative of comfortable interest coverage. This suggests sustained earnings strength despite increased leverage during 2020.

Overall, the financial data reveal a clear trend of decreasing leverage from late 2014 through early 2020, followed by a significant but temporary increase during 2020, likely reflecting external factors or strategic financing decisions. Concurrently, the company's capacity to cover interest expenses remained strong throughout, with notable resilience despite fluctuations in leverage ratios.


Debt Ratios


Coverage Ratios


Debt to Equity

Air Products & Chemicals Inc., debt to equity calculation (quarterly data)

Microsoft Excel
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 Dec 31, 2018 Sep 30, 2018 Jun 30, 2018 Mar 31, 2018 Dec 31, 2017 Sep 30, 2017 Jun 30, 2017 Mar 31, 2017 Dec 31, 2016 Sep 30, 2016 Jun 30, 2016 Mar 31, 2016 Dec 31, 2015 Sep 30, 2015 Jun 30, 2015 Mar 31, 2015 Dec 31, 2014
Selected Financial Data (US$ in thousands)
Short-term borrowings 14,300 15,400 9,200 7,700 14,300 29,000 36,500 58,200 79,900 54,100 23,000 54,300 90,400 112,500 87,100 144,000 143,400 122,300 156,100 935,800 1,043,000 1,480,900 1,539,400 1,494,300 1,087,800 1,261,000 1,283,500
Current portion of long-term debt 485,600 873,100 906,100 470,000 824,600 38,400 39,100 40,400 466,500 434,500 430,300 406,600 5,000 11,600 11,300 416,400 416,000 420,500 873,300 371,300 715,100 763,900 407,900 435,600 84,900 157,700 54,200
Long-term debt, excluding current portion 6,892,200 6,804,600 6,779,100 7,132,900 7,073,200 2,922,100 2,937,000 2,907,300 2,951,700 2,933,000 2,954,400 2,967,400 3,377,100 3,442,400 3,414,900 3,402,400 3,366,600 3,300,400 3,289,000 4,918,100 3,925,600 3,573,200 3,870,500 3,949,100 4,690,500 4,511,500 4,751,300
Long-term debt, related party 274,000 311,300 312,500 297,200 285,600 323,100 328,600 320,100 321,600 369,200 360,200 384,300 398,700
Total debt 7,666,100 8,004,400 8,006,900 7,907,800 8,197,700 3,312,600 3,341,200 3,326,000 3,819,700 3,790,800 3,767,900 3,812,600 3,871,200 3,566,500 3,513,300 3,962,800 3,926,000 3,843,200 4,318,400 6,225,200 5,683,700 5,818,000 5,817,800 5,879,000 5,863,200 5,930,200 6,089,000
 
Total Air Products shareholders’ equity 13,082,900 12,726,200 12,683,600 12,079,800 11,659,300 11,371,900 11,556,000 11,053,600 11,386,100 11,165,700 10,882,900 10,857,500 10,486,000 10,580,800 10,215,300 10,086,200 9,412,400 9,317,400 7,161,500 7,079,600 7,045,400 6,916,600 7,367,100 7,249,000 7,586,000 7,332,500 7,351,500
Solvency Ratio
Debt to equity1 0.59 0.63 0.63 0.65 0.70 0.29 0.29 0.30 0.34 0.34 0.35 0.35 0.37 0.34 0.34 0.39 0.42 0.41 0.60 0.88 0.81 0.84 0.79 0.81 0.77 0.81 0.83
Benchmarks
Debt to Equity, Competitors2
Linde plc 0.38 0.34 0.34 0.34 0.39 0.38 0.38
Sherwin-Williams Co. 3.34 3.19 2.96 2.30 1.97 2.29 2.97

Based on: 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-Q (reporting date: 2020-12-31), 10-K (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-Q (reporting date: 2019-12-31), 10-K (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-Q (reporting date: 2018-12-31), 10-K (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-Q (reporting date: 2017-12-31), 10-K (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-Q (reporting date: 2016-12-31), 10-K (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-Q (reporting date: 2015-12-31), 10-K (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-Q (reporting date: 2014-12-31).

1 Q3 2021 Calculation
Debt to equity = Total debt ÷ Total Air Products shareholders’ equity
= 7,666,100 ÷ 13,082,900 = 0.59

2 Click competitor name to see calculations.


The data reflects the financial leverage position based on total debt and shareholders' equity over multiple quarters. A clear overall trend is observed in both debt levels and equity values, as well as the resulting debt-to-equity ratio.

Total Debt
Total debt initially demonstrates a generally stable to slightly declining pattern from December 2014 through the latter part of 2019, dropping from approximately 6.1 billion USD to around 3.3 billion USD, suggesting a reduction in overall debt obligations over this period. However, starting around mid-2020, total debt experiences a marked increase, rising sharply from 3.3 billion USD to a peak near 8.2 billion USD by September 2020, followed by relatively high levels remaining near 7.7 to 8 billion USD through mid-2021. This indicates a significant increase in borrowing or financing activity in the later periods.
Total Shareholders’ Equity
Shareholders' equity shows a consistent increasing trend throughout the timeframe. Beginning at approximately 7.35 billion USD in December 2014, equity grows with some fluctuations but maintains an upward trajectory, reaching about 13.1 billion USD by mid-2021. The steady growth implies retained earnings accumulation, capital infusion, or appreciation in asset values contributing positively to equity.
Debt to Equity Ratio
The debt-to-equity ratio decreases substantially from around 0.83 in late 2014 to a low near 0.29 in early 2020, reflecting a strengthening equity base combined with falling relative debt levels, thus indicating an improving balance sheet and lower leverage risk. However, from early 2020 onwards, this ratio climbs back up sharply to about 0.7 by September 2020 and stays elevated near 0.6 into 2021. This increase corresponds with the spike in total debt during the same period and suggests a reversal in recent deleveraging trends, potentially due to increased capital needs or external factors necessitating higher borrowing.

In summary, the company displayed a disciplined deleveraging approach for much of the five-year span, improving its capital structure by reducing debt while growing equity. This resulted in declining leverage ratios indicative of enhanced financial stability. The exceptional increase in debt and leverage ratio beginning in 2020 marks a significant shift, likely driven by strategic investments, operational needs, or external economic conditions impacting financing requirements. Monitoring subsequent quarters will be important to assess whether leverage levels stabilize or revert to prior lower levels.


Debt to Capital

Air Products & Chemicals Inc., debt to capital calculation (quarterly data)

Microsoft Excel
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 Dec 31, 2018 Sep 30, 2018 Jun 30, 2018 Mar 31, 2018 Dec 31, 2017 Sep 30, 2017 Jun 30, 2017 Mar 31, 2017 Dec 31, 2016 Sep 30, 2016 Jun 30, 2016 Mar 31, 2016 Dec 31, 2015 Sep 30, 2015 Jun 30, 2015 Mar 31, 2015 Dec 31, 2014
Selected Financial Data (US$ in thousands)
Short-term borrowings 14,300 15,400 9,200 7,700 14,300 29,000 36,500 58,200 79,900 54,100 23,000 54,300 90,400 112,500 87,100 144,000 143,400 122,300 156,100 935,800 1,043,000 1,480,900 1,539,400 1,494,300 1,087,800 1,261,000 1,283,500
Current portion of long-term debt 485,600 873,100 906,100 470,000 824,600 38,400 39,100 40,400 466,500 434,500 430,300 406,600 5,000 11,600 11,300 416,400 416,000 420,500 873,300 371,300 715,100 763,900 407,900 435,600 84,900 157,700 54,200
Long-term debt, excluding current portion 6,892,200 6,804,600 6,779,100 7,132,900 7,073,200 2,922,100 2,937,000 2,907,300 2,951,700 2,933,000 2,954,400 2,967,400 3,377,100 3,442,400 3,414,900 3,402,400 3,366,600 3,300,400 3,289,000 4,918,100 3,925,600 3,573,200 3,870,500 3,949,100 4,690,500 4,511,500 4,751,300
Long-term debt, related party 274,000 311,300 312,500 297,200 285,600 323,100 328,600 320,100 321,600 369,200 360,200 384,300 398,700
Total debt 7,666,100 8,004,400 8,006,900 7,907,800 8,197,700 3,312,600 3,341,200 3,326,000 3,819,700 3,790,800 3,767,900 3,812,600 3,871,200 3,566,500 3,513,300 3,962,800 3,926,000 3,843,200 4,318,400 6,225,200 5,683,700 5,818,000 5,817,800 5,879,000 5,863,200 5,930,200 6,089,000
Total Air Products shareholders’ equity 13,082,900 12,726,200 12,683,600 12,079,800 11,659,300 11,371,900 11,556,000 11,053,600 11,386,100 11,165,700 10,882,900 10,857,500 10,486,000 10,580,800 10,215,300 10,086,200 9,412,400 9,317,400 7,161,500 7,079,600 7,045,400 6,916,600 7,367,100 7,249,000 7,586,000 7,332,500 7,351,500
Total capital 20,749,000 20,730,600 20,690,500 19,987,600 19,857,000 14,684,500 14,897,200 14,379,600 15,205,800 14,956,500 14,650,800 14,670,100 14,357,200 14,147,300 13,728,600 14,049,000 13,338,400 13,160,600 11,479,900 13,304,800 12,729,100 12,734,600 13,184,900 13,128,000 13,449,200 13,262,700 13,440,500
Solvency Ratio
Debt to capital1 0.37 0.39 0.39 0.40 0.41 0.23 0.22 0.23 0.25 0.25 0.26 0.26 0.27 0.25 0.26 0.28 0.29 0.29 0.38 0.47 0.45 0.46 0.44 0.45 0.44 0.45 0.45
Benchmarks
Debt to Capital, Competitors2
Linde plc 0.27 0.25 0.25 0.25 0.28 0.28 0.27
Sherwin-Williams Co. 0.77 0.76 0.75 0.70 0.66 0.70 0.75

Based on: 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-Q (reporting date: 2020-12-31), 10-K (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-Q (reporting date: 2019-12-31), 10-K (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-Q (reporting date: 2018-12-31), 10-K (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-Q (reporting date: 2017-12-31), 10-K (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-Q (reporting date: 2016-12-31), 10-K (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-Q (reporting date: 2015-12-31), 10-K (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-Q (reporting date: 2014-12-31).

1 Q3 2021 Calculation
Debt to capital = Total debt ÷ Total capital
= 7,666,100 ÷ 20,749,000 = 0.37

2 Click competitor name to see calculations.


The analysis of the quarterly financial data reveals several notable trends in the debt and capital structure over the observed periods.

Total Debt
Total debt demonstrated a general decline from the end of 2014 through early 2020, dropping from approximately $6.09 billion to about $3.31 billion by June 2020. However, a sharp increase is observed starting in the third quarter of 2020, with debt levels rising significantly to approximately $8.20 billion, and remaining elevated through mid-2021, stabilizing around $7.67 billion.
Total Capital
Total capital displayed moderate fluctuations but an overall upward trend from about $13.44 billion at the end of 2014 to over $20.74 billion by mid-2021. Despite some variability, particularly in late 2016 and late 2019, capital growth appears steady, reflecting potential accumulation of equity, reinvestments, or other capital enhancements.
Debt to Capital Ratio
The debt to capital ratio fell notably from 0.45 in late 2014 to a low near 0.22-0.23 in early 2020, consistent with the observed reduction in total debt relative to capital. This indicates a strengthening in the financial leverage position with less reliance on debt financing. Contrastingly, this ratio increased sharply in the latter half of 2020 to about 0.41 and maintained a higher level, around 0.37 by mid-2021, in line with the rise in total debt during this period.

Overall, the data illustrate a period of deleveraging and improved capital structure from 2014 through early 2020, followed by a considerable increase in debt levels and leverage ratios starting mid-2020. This shift suggests strategic changes in financing, potentially driven by external factors or corporate initiatives during that timeframe.


Debt to Assets

Air Products & Chemicals Inc., debt to assets calculation (quarterly data)

Microsoft Excel
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 Dec 31, 2018 Sep 30, 2018 Jun 30, 2018 Mar 31, 2018 Dec 31, 2017 Sep 30, 2017 Jun 30, 2017 Mar 31, 2017 Dec 31, 2016 Sep 30, 2016 Jun 30, 2016 Mar 31, 2016 Dec 31, 2015 Sep 30, 2015 Jun 30, 2015 Mar 31, 2015 Dec 31, 2014
Selected Financial Data (US$ in thousands)
Short-term borrowings 14,300 15,400 9,200 7,700 14,300 29,000 36,500 58,200 79,900 54,100 23,000 54,300 90,400 112,500 87,100 144,000 143,400 122,300 156,100 935,800 1,043,000 1,480,900 1,539,400 1,494,300 1,087,800 1,261,000 1,283,500
Current portion of long-term debt 485,600 873,100 906,100 470,000 824,600 38,400 39,100 40,400 466,500 434,500 430,300 406,600 5,000 11,600 11,300 416,400 416,000 420,500 873,300 371,300 715,100 763,900 407,900 435,600 84,900 157,700 54,200
Long-term debt, excluding current portion 6,892,200 6,804,600 6,779,100 7,132,900 7,073,200 2,922,100 2,937,000 2,907,300 2,951,700 2,933,000 2,954,400 2,967,400 3,377,100 3,442,400 3,414,900 3,402,400 3,366,600 3,300,400 3,289,000 4,918,100 3,925,600 3,573,200 3,870,500 3,949,100 4,690,500 4,511,500 4,751,300
Long-term debt, related party 274,000 311,300 312,500 297,200 285,600 323,100 328,600 320,100 321,600 369,200 360,200 384,300 398,700
Total debt 7,666,100 8,004,400 8,006,900 7,907,800 8,197,700 3,312,600 3,341,200 3,326,000 3,819,700 3,790,800 3,767,900 3,812,600 3,871,200 3,566,500 3,513,300 3,962,800 3,926,000 3,843,200 4,318,400 6,225,200 5,683,700 5,818,000 5,817,800 5,879,000 5,863,200 5,930,200 6,089,000
 
Total assets 26,252,100 26,158,900 26,088,100 25,168,500 24,782,100 19,501,200 19,651,600 18,942,800 19,531,900 19,244,500 19,142,000 19,178,300 19,206,000 18,511,100 18,208,800 18,467,200 17,853,800 17,871,500 15,956,200 18,055,300 17,083,500 16,810,800 17,260,300 17,438,100 17,671,500 17,493,800 17,635,400
Solvency Ratio
Debt to assets1 0.29 0.31 0.31 0.31 0.33 0.17 0.17 0.18 0.20 0.20 0.20 0.20 0.20 0.19 0.19 0.21 0.22 0.22 0.27 0.34 0.33 0.35 0.34 0.34 0.33 0.34 0.35
Benchmarks
Debt to Assets, Competitors2
Linde plc 0.20 0.18 0.19 0.18 0.20 0.20 0.20
Sherwin-Williams Co. 0.43 0.44 0.45 0.41 0.40 0.43 0.47

Based on: 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-Q (reporting date: 2020-12-31), 10-K (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-Q (reporting date: 2019-12-31), 10-K (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-Q (reporting date: 2018-12-31), 10-K (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-Q (reporting date: 2017-12-31), 10-K (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-Q (reporting date: 2016-12-31), 10-K (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-Q (reporting date: 2015-12-31), 10-K (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-Q (reporting date: 2014-12-31).

1 Q3 2021 Calculation
Debt to assets = Total debt ÷ Total assets
= 7,666,100 ÷ 26,252,100 = 0.29

2 Click competitor name to see calculations.


The financial data indicates evolving trends in debt and assets over the analyzed periods. Total debt exhibited fluctuations, initially decreasing from approximately $6.1 billion to around $3.5 billion by late 2017, signaling a reduction strategy or debt repayment efforts. However, beginning in early 2020, total debt surged sharply to over $8.1 billion before slightly declining yet remaining elevated by mid-2021.

Total assets showed a more steady upward trend overall. After minor fluctuations in the middle years, assets increased notably starting in early 2020 from roughly $19.5 billion to over $26 billion by mid-2021, reflecting asset growth amid the same period when debt increased significantly.

Total Debt
From December 2014 to September 2017, total debt generally declined from $6.1 billion to approximately $3.5 billion, indicating substantial debt reduction. This trend reversed abruptly in March 2020 with total debt jumping to nearly $8.2 billion, likely linked to financing actions during that period, then stabilizing near $7.7 billion by mid-2021.
Total Assets
Total assets fluctuated moderately around $17-$19 billion for much of the period from 2014 through 2019. Starting with the first quarter of 2020, assets showed marked growth, increasing to about $26 billion by mid-2021. This increase correlates temporally with the rise in total debt during the same timeframe.
Debt to Assets Ratio
The debt to assets ratio decreased steadily from roughly 0.35 in late 2014 to a low of approximately 0.17 by early 2020, reflecting an improved balance sheet with less leverage relative to asset base. Following this period, the ratio increased sharply to over 0.3 starting mid-2020, consistent with the marked increase in total debt relative to assets. By mid-2021, the ratio slightly decreased to around 0.29, but remains higher than pre-2020 levels.

In summary, the data reflects a significant deleveraging trend in the earlier periods through 2019, with both declining debt and relatively stable asset levels leading to an improved debt to assets ratio. Conversely, starting in 2020, there is a pronounced increase in both total debt and total assets, with leverage rising accordingly. This pattern points to a strategic or reactive shift in capital structure and asset management beginning in early 2020.


Financial Leverage

Air Products & Chemicals Inc., financial leverage calculation (quarterly data)

Microsoft Excel
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 Dec 31, 2018 Sep 30, 2018 Jun 30, 2018 Mar 31, 2018 Dec 31, 2017 Sep 30, 2017 Jun 30, 2017 Mar 31, 2017 Dec 31, 2016 Sep 30, 2016 Jun 30, 2016 Mar 31, 2016 Dec 31, 2015 Sep 30, 2015 Jun 30, 2015 Mar 31, 2015 Dec 31, 2014
Selected Financial Data (US$ in thousands)
Total assets 26,252,100 26,158,900 26,088,100 25,168,500 24,782,100 19,501,200 19,651,600 18,942,800 19,531,900 19,244,500 19,142,000 19,178,300 19,206,000 18,511,100 18,208,800 18,467,200 17,853,800 17,871,500 15,956,200 18,055,300 17,083,500 16,810,800 17,260,300 17,438,100 17,671,500 17,493,800 17,635,400
Total Air Products shareholders’ equity 13,082,900 12,726,200 12,683,600 12,079,800 11,659,300 11,371,900 11,556,000 11,053,600 11,386,100 11,165,700 10,882,900 10,857,500 10,486,000 10,580,800 10,215,300 10,086,200 9,412,400 9,317,400 7,161,500 7,079,600 7,045,400 6,916,600 7,367,100 7,249,000 7,586,000 7,332,500 7,351,500
Solvency Ratio
Financial leverage1 2.01 2.06 2.06 2.08 2.13 1.71 1.70 1.71 1.72 1.72 1.76 1.77 1.83 1.75 1.78 1.83 1.90 1.92 2.23 2.55 2.42 2.43 2.34 2.41 2.33 2.39 2.40
Benchmarks
Financial Leverage, Competitors2
Linde plc 1.90 1.84 1.84 1.86 1.89 1.89 1.88
Sherwin-Williams Co. 7.71 7.22 6.64 5.65 4.95 5.30 6.25

Based on: 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-Q (reporting date: 2020-12-31), 10-K (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-Q (reporting date: 2019-12-31), 10-K (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-Q (reporting date: 2018-12-31), 10-K (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-Q (reporting date: 2017-12-31), 10-K (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-Q (reporting date: 2016-12-31), 10-K (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-Q (reporting date: 2015-12-31), 10-K (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-Q (reporting date: 2014-12-31).

1 Q3 2021 Calculation
Financial leverage = Total assets ÷ Total Air Products shareholders’ equity
= 26,252,100 ÷ 13,082,900 = 2.01

2 Click competitor name to see calculations.


Total assets

The total assets exhibit some variability over the analyzed periods, with values fluctuating between approximately 15.96 billion and 26.26 billion US dollars. Initially, total assets remain relatively stable around the 17.4 billion mark, with minor fluctuations up to late 2016. A noticeable dip occurs in December 2016, where total assets drop to approximately 15.96 billion. Following this trough, there is a general upward trend from early 2017 onwards, culminating in a significant increase by mid-2020 where total assets surpass 24.7 billion. The upward trajectory continues, reaching about 26.26 billion by the second quarter of 2021. This suggests a phase of asset growth primarily starting around 2017 through mid-2021, indicating possible expansion or acquisition activities.

Total Air Products shareholders’ equity

Shareholders’ equity also demonstrates increasing trends over the period, though with less volatility than total assets. From roughly 7.35 billion in late 2014, equity declines slightly until early 2016, reaching a low around 6.92 billion. Following this, equity levels steadily increase from 2016 through 2021, moving from about 7.07 billion to over 13 billion by mid-2021. This progression indicates sustained growth in the company's net worth, reflecting accumulated retained earnings, reduced losses, or capital infusions. Notably, the increase in equity appears relatively steady without abrupt fluctuations, suggesting consistent financial performance or strategic equity management during this timeframe.

Financial leverage

The financial leverage ratio shows a noticeable decline from approximately 2.4 in late 2014 to a low of around 1.7 between late 2018 and early 2020, indicating a reduction in the proportion of debt relative to equity during this period. This downward trend suggests the company was deleveraging, potentially using gains to reduce debt levels or increase equity base. However, from mid-2020 onwards, the leverage ratio rises again to about 2.13, before slightly moderating to around 2.01 by mid-2021. This increase in leverage could point to renewed borrowing or changes in capital structure corresponding with the concurrent rise in total assets during this period. Overall, the pattern reflects a phase of deleveraging followed by a return to higher leverage levels more recently.


Interest Coverage

Air Products & Chemicals Inc., interest coverage calculation (quarterly data)

Microsoft Excel
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 Dec 31, 2018 Sep 30, 2018 Jun 30, 2018 Mar 31, 2018 Dec 31, 2017 Sep 30, 2017 Jun 30, 2017 Mar 31, 2017 Dec 31, 2016 Sep 30, 2016 Jun 30, 2016 Mar 31, 2016 Dec 31, 2015 Sep 30, 2015 Jun 30, 2015 Mar 31, 2015 Dec 31, 2014
Selected Financial Data (US$ in thousands)
Net income (loss) attributable to Air Products 533,600 473,100 482,000 486,800 446,500 477,800 475,600 503,200 488,000 421,300 347,500 452,900 473,900 416,400 154,600 468,700 101,900 2,130,000 299,800 394,000 346,800 (473,300) 363,600 344,500 318,800 290,000 324,600
Add: Net income attributable to noncontrolling interest (1,300) 4,000 4,700 7,900 10,600 12,600 13,300 15,500 12,200 12,200 9,500 6,800 14,000 7,200 7,100 6,300 2,200 5,700 6,600 6,900 7,300 7,800 8,400 5,500 14,400 6,900 12,900
Less: Income (loss) from discontinued operations, net of tax 8,200 10,300 (14,300) 43,200 (1,000) (5,500) (2,300) 1,825,600 48,200 (8,000) (8,900) (853,100) (14,200)
Add: Income tax expense 101,700 121,900 113,900 99,900 109,300 148,500 120,700 131,200 109,300 107,500 132,100 69,200 107,100 56,200 291,800 (1,300) 89,300 94,500 78,400 138,600 179,500 132,500 135,900 118,800 103,500 87,100 106,500
Add: Interest expense 35,600 36,100 36,700 39,200 32,100 19,300 18,700 30,100 34,200 35,400 37,300 35,400 34,900 30,400 29,800 30,800 29,800 30,500 29,500 32,600 35,000 25,700 22,200 22,800 28,200 23,400 29,100
Earnings before interest and tax (EBIT) 661,400 635,100 627,000 633,800 598,500 672,500 628,300 680,000 643,700 576,400 526,400 564,300 586,700 510,200 484,300 510,000 225,500 435,100 366,100 580,100 577,500 545,800 544,300 491,600 464,900 407,400 473,100
Solvency Ratio
Interest coverage1 17.33 17.31 19.89 23.18 25.74 25.65 21.35 17.71 16.24 15.76 15.85 16.44 16.61 14.32 13.69 12.74 13.13 15.35 16.85 19.46 20.43 20.69 19.75 17.75
Benchmarks
Interest Coverage, Competitors2
Sherwin-Williams Co. 8.35 9.14 8.81 8.40

Based on: 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-Q (reporting date: 2020-12-31), 10-K (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-Q (reporting date: 2019-12-31), 10-K (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-Q (reporting date: 2018-12-31), 10-K (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-Q (reporting date: 2017-12-31), 10-K (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-Q (reporting date: 2016-12-31), 10-K (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-Q (reporting date: 2015-12-31), 10-K (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-Q (reporting date: 2014-12-31).

1 Q3 2021 Calculation
Interest coverage = (EBITQ3 2021 + EBITQ2 2021 + EBITQ1 2021 + EBITQ4 2020) ÷ (Interest expenseQ3 2021 + Interest expenseQ2 2021 + Interest expenseQ1 2021 + Interest expenseQ4 2020)
= (661,400 + 635,100 + 627,000 + 633,800) ÷ (35,600 + 36,100 + 36,700 + 39,200) = 17.33

2 Click competitor name to see calculations.


The analysis of the quarterly financial metrics reveals several notable trends and shifts over the observed periods.

Earnings Before Interest and Tax (EBIT)
The EBIT figures demonstrate substantial fluctuations across the quarters. Initially, a general upward movement is observed from late 2014 through early 2016, with EBIT rising from 473,100 thousand US dollars to a peak around 580,100 thousand by September 2016. However, a sharp decline occurs towards the end of 2016, dropping to 366,100 thousand US dollars. Subsequently, the EBIT shows recovery and fluctuates with periods of both decline and growth. From 2017 onward, the EBIT mostly maintains values between approximately 484,300 and 680,000 thousand US dollars, with peaks near the end of 2019. Despite variability, the overall trend from 2017 to mid-2021 indicates relative stability with moderate fluctuations rather than dramatic increases or decreases.
Interest Expense
Interest expenses exhibit variation over time but reveal an overall modest increase when comparing the early data points to the later periods. Initial interest expenses fluctuate around 22,200 to 35,000 thousand US dollars from 2014 to mid-2016. From mid-2016 through 2019, the expense hovers primarily within the range of approximately 29,500 to 37,400 thousand US dollars, indicating a somewhat elevated cost relative to earlier periods. Notably, during the 2020 quarters, a sharp dip is seen in interest expense, decreasing to levels as low as 18,700 to 19,300 thousand US dollars, before rising again to around 35,600 to 39,200 thousand towards early to mid-2021. This temporary reduction may align with broader market conditions or financial strategies implemented during that timeframe.
Interest Coverage Ratio
The interest coverage ratio, which indicates the ability to service interest expenses through EBIT, shows a generally strong and improving capacity throughout the periods captured. Starting from a range roughly around 12.74 to 20.69 in the mid-2010s, the ratio experiences a temporary decline coinciding with the EBIT drop at the end of 2016, reaching a minimum in the low teens. Following this, a steady increase is observed, peaking impressively at values exceeding 25 during 2020. This improvement signals enhanced earnings relative to interest costs and a stronger financial position for meeting interest obligations. Nevertheless, a moderate decline in the ratio is recorded after these peaks, with values settling around 17 to 19 in the most recent quarters, indicating some easing from the peak levels but still maintaining a relatively healthy coverage.

In summary, the company's quarterly earnings before interest and taxes reflect cyclical variability with periods of recovery and strength following downturns. Interest expenses have fluctuated but suggest some periods of increased cost and temporary relief, particularly during 2020. The interest coverage ratio underscores a generally robust ability to cover interest payments, peaking notably in the early 2020 period, before slightly moderating but remaining at comfortable levels. These patterns collectively indicate an entity managing financial obligations prudently while experiencing the typical ebbs and flows of operating performance over time.