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)
Air Products & Chemicals Inc., solvency ratios (quarterly data)
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).
The analysis of the financial ratios over the examined periods reveals notable fluctuations and overarching trends related to the company’s leverage and interest coverage.
- Debt to Equity
- The debt to equity ratio demonstrated a general decline from a higher level of 0.79 at the end of 2015 to a low near 0.29 during early 2020, indicating a reduction in financial leverage relative to equity. However, a notable increase occurred starting mid-2020, peaking at 0.7 by September 2020 before gradually decreasing again to 0.59 by mid-2021. This suggests a period of increased borrowing relative to equity amid the market disruptions of 2020, followed by some deleveraging.
- Debt to Capital
- Debt to capital mirrored the trend of debt to equity, decreasing steadily from 0.44 at the end of 2015 to approximately 0.22 in the first quarter of 2020. Subsequently, it rose sharply to 0.41 in the third quarter of 2020 and then declined to 0.37 by mid-2021. This pattern confirms a temporary increase in debt financing as a proportion of total capital during the disruptive period of 2020, followed by stabilization.
- Debt to Assets
- This ratio declined from 0.34 in late 2015 to a low near 0.17 in early 2020, indicating a reduction in the portion of assets funded by debt. Similar to other leverage measures, a marked increase to 0.33 occurred by mid-2020, subsequently trending downward to 0.29 by mid-2021. This behavior reflects increased leverage on the asset base during the turbulent market conditions of 2020, followed by gradual improvement.
- Financial Leverage
- The financial leverage ratio showed a declining trend from 2.34 at the end of 2015, reaching lows near 1.7 by early 2020, indicative of better capital structure health or reduced debt reliance. Nevertheless, a rebound to around 2.13 occurred in mid-2020, then slightly decreased to approximately 2.01 by mid-2021, indicating a transient rise in leverage coinciding with the pandemic period and subsequent partial recovery.
- Interest Coverage
- The interest coverage ratio experienced a decline from a peak near 20 in 2016 to around 12.74 in the third quarter of 2017, suggesting a diminished ability to cover interest expenses during that period. Following this, the ratio improved progressively, reaching a high of approximately 25.74 by mid-2020, indicating enhanced capacity to meet interest obligations despite the increased leverage. In the subsequent quarters, a gradual decline to roughly 17.33 by mid-2021 was observed, though remaining at a level reflecting comfortable coverage.
In summary, the company’s leverage ratios displayed a downward trend leading up to early 2020, indicating deleveraging and improved financial health over those years. The onset of global market stresses around 2020 corresponded with a notable rise in all leverage metrics, reflecting increased borrowing. Despite this, the interest coverage ratio improved during the same period, suggesting that profitability or earnings strength remained adequate to service debt obligations comfortably. Following this period, some normalization of leverage ratios occurred, alongside a modest decline in interest coverage, highlighting a recalibration of financial posture amid evolving market conditions.
Debt Ratios
Coverage Ratios
Debt to Equity
Air Products & Chemicals Inc., debt to equity calculation (quarterly data)
| 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 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||||||||||||||||||||||||||
| Short-term borrowings | ||||||||||||||||||||||||||||||
| Current portion of long-term debt | ||||||||||||||||||||||||||||||
| Long-term debt, excluding current portion | ||||||||||||||||||||||||||||||
| Long-term debt, related party | ||||||||||||||||||||||||||||||
| Total debt | ||||||||||||||||||||||||||||||
| Total Air Products shareholders’ equity | ||||||||||||||||||||||||||||||
| Solvency Ratio | ||||||||||||||||||||||||||||||
| Debt to equity1 | ||||||||||||||||||||||||||||||
| Benchmarks | ||||||||||||||||||||||||||||||
| Debt to Equity, Competitors2 | ||||||||||||||||||||||||||||||
| Linde plc | ||||||||||||||||||||||||||||||
| Sherwin-Williams Co. | ||||||||||||||||||||||||||||||
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).
1 Q3 2021 Calculation
Debt to equity = Total debt ÷ Total Air Products shareholders’ equity
= ÷ =
2 Click competitor name to see calculations.
The analysis of the financial trends reveals significant developments in the company's capital structure over the examined periods.
- Total Debt
- Initially, total debt showed fluctuations between approximately 3.3 billion and 6.2 billion US dollars in the earlier years. Notably, a marked decline occurred from late 2016 through 2019, reaching a low point near 3.3 billion US dollars. However, beginning in early 2020, there was a substantial increase, with debt levels rising sharply to over 8.1 billion US dollars by mid-2020. This elevated level was largely maintained through early 2021, with a slight reduction towards mid-2021.
- Total Shareholders’ Equity
- Shareholders' equity demonstrated a generally upward trend throughout the periods, growing from approximately 7.4 billion US dollars at the end of 2015 to nearly 13.1 billion US dollars by mid-2021. This growth was relatively steady, though some periods, particularly around 2016, showed more pronounced increases. The equity base displayed resilience, consistently expanding even during times when total debt rose sharply.
- Debt to Equity Ratio
- The debt to equity ratio exhibited notable volatility. During the earlier period, the ratio fluctuated between 0.79 and 0.88, indicating a relatively higher leverage position. Following this, there was a discernible decline in leverage to a range around 0.29 to 0.35 across 2017 to 2019, reflective of debt reduction and equity growth. However, starting in early 2020, the ratio more than doubled to approximately 0.7, driven by the surge in debt levels while equity increased only modestly. It then slightly decreased to around 0.59 by mid-2021, indicating some deleveraging but still elevated compared to the pre-2020 period.
Overall, the company experienced a significant deleveraging phase from 2016 to 2019, characterized by declining debt and growing equity. This pattern was dramatically altered in 2020, with a sharp escalation in debt levels resulting in increased leverage ratios, likely reflecting borrowing to address external challenges or strategic investments. Despite this increase in leverage, the equity base continued to grow, suggesting ongoing value creation or retained earnings contributing to shareholders' equity. The financial structure as of the most recent periods remains more leveraged than in the immediate pre-2020 years, reflecting a changed capital risk profile.
Debt to Capital
Air Products & Chemicals Inc., debt to capital calculation (quarterly data)
| 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 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||||||||||||||||||||||||||
| Short-term borrowings | ||||||||||||||||||||||||||||||
| Current portion of long-term debt | ||||||||||||||||||||||||||||||
| Long-term debt, excluding current portion | ||||||||||||||||||||||||||||||
| Long-term debt, related party | ||||||||||||||||||||||||||||||
| Total debt | ||||||||||||||||||||||||||||||
| Total Air Products shareholders’ equity | ||||||||||||||||||||||||||||||
| Total capital | ||||||||||||||||||||||||||||||
| Solvency Ratio | ||||||||||||||||||||||||||||||
| Debt to capital1 | ||||||||||||||||||||||||||||||
| Benchmarks | ||||||||||||||||||||||||||||||
| Debt to Capital, Competitors2 | ||||||||||||||||||||||||||||||
| Linde plc | ||||||||||||||||||||||||||||||
| Sherwin-Williams Co. | ||||||||||||||||||||||||||||||
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).
1 Q3 2021 Calculation
Debt to capital = Total debt ÷ Total capital
= ÷ =
2 Click competitor name to see calculations.
The analysis of the quarterly financial ratios and capital structure reveals notable developments over the observed periods.
- Total Debt
- Total debt exhibited an overall declining trend from the end of 2015 through the first quarter of 2020, decreasing from approximately 5.82 billion USD to around 3.31 billion USD. This decline indicates a deliberate reduction in debt levels. However, starting in the second quarter of 2020, there was a sharp increase in total debt, reaching a peak near 8.20 billion USD by the end of 2020, and remaining elevated above 7.6 billion USD through mid-2021. This surge may reflect strategic borrowing or increased financial obligations during that period.
- Total Capital
- Total capital showed moderate fluctuations but generally remained within a range of approximately 11.48 billion USD to 14.65 billion USD between 2015 and 2019. From early 2020 onward, total capital rose significantly, surpassing 19.85 billion USD and reaching over 20.7 billion USD by mid-2021. This growth suggests an expansion of the company's overall capital base in the recent years, possibly linked to the increase in debt and other financing activities.
- Debt to Capital Ratio
- The debt to capital ratio decreased steadily from 0.44 at the end of 2015 to a low around 0.22-0.23 by early 2019-2020, indicating a strengthening equity position or a reduction in leverage during that time frame. However, this ratio rose sharply to above 0.40 starting mid-2020, reflecting increased leverage coinciding with the rise in total debt and capital. Though it slightly declined thereafter, the ratio remained close to 0.37 as of mid-2021, considerably higher than the lows seen before 2020, signaling a reversal in the deleveraging trend.
In summary, the company experienced a period of deleveraging and stable capital levels until early 2020, followed by a pronounced increase in both total debt and total capital amid a higher debt-to-capital ratio. This pattern suggests a strategic shift or response to external conditions that prompted greater use of debt financing and an expanded capital structure during 2020-2021.
Debt to Assets
Air Products & Chemicals Inc., debt to assets calculation (quarterly data)
| 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 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||||||||||||||||||||||||||
| Short-term borrowings | ||||||||||||||||||||||||||||||
| Current portion of long-term debt | ||||||||||||||||||||||||||||||
| Long-term debt, excluding current portion | ||||||||||||||||||||||||||||||
| Long-term debt, related party | ||||||||||||||||||||||||||||||
| Total debt | ||||||||||||||||||||||||||||||
| Total assets | ||||||||||||||||||||||||||||||
| Solvency Ratio | ||||||||||||||||||||||||||||||
| Debt to assets1 | ||||||||||||||||||||||||||||||
| Benchmarks | ||||||||||||||||||||||||||||||
| Debt to Assets, Competitors2 | ||||||||||||||||||||||||||||||
| Linde plc | ||||||||||||||||||||||||||||||
| Sherwin-Williams Co. | ||||||||||||||||||||||||||||||
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).
1 Q3 2021 Calculation
Debt to assets = Total debt ÷ Total assets
= ÷ =
2 Click competitor name to see calculations.
The financial data reveals notable fluctuations in key balance sheet components over the observed periods, with trends indicating shifts in leverage and asset base size.
- Total Debt
- Total debt demonstrates considerable variation during the period. Initially, it hovers around the range of approximately 5.8 billion US dollars, before trending downward through late 2016 and into 2019, reaching lows near 3.3 billion US dollars. This reduction suggests active debt management or repayments during this timeframe. However, starting from early 2020, total debt displays a significant increase, more than doubling in some quarters to a peak close to 8.2 billion US dollars before a slight decline towards mid-2021. This spike could be attributed to increased borrowing possibly in response to external economic conditions or strategic investments.
- Total Assets
- Total assets show an overall upward trajectory across the time span. After some fluctuations in the earlier periods, the asset base increases substantially from around 17 billion to over 26 billion US dollars by mid-2021. This growth reflects an expansion in the company’s resource base, which may include acquisitions, capital expenditures, or revaluation effects.
- Debt to Assets Ratio
- The debt to assets ratio tracks the company's leverage relative to its asset size. Initially, the ratio remains relatively stable around the low to mid-30% range. Throughout 2016 to 2019, there is a clear downward trend, declining steadily to approximately 17-20%, indicating a reduction in leverage as debt levels decrease faster than asset growth. However, in 2020 this ratio reverses sharply upward to above 30%, corresponding with the increase in debt and the rapid asset growth, suggesting higher leveraged exposure during this period. By mid-2021, the ratio slightly declines but remains elevated compared to the pre-2020 period.
In summary, the company's financial position reflects strategic reductions in leverage up until 2019, improving its financial stability. The period beginning in 2020 shows a marked increase in debt and assets, leading to elevated leverage levels. These changes likely reflect responses to market conditions or strategic initiatives undertaken during that time, warranting monitoring of debt servicing capability and asset utilization in subsequent periods.
Financial Leverage
Air Products & Chemicals Inc., financial leverage calculation (quarterly data)
| 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 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||||||||||||||||||||||||||
| Total assets | ||||||||||||||||||||||||||||||
| Total Air Products shareholders’ equity | ||||||||||||||||||||||||||||||
| Solvency Ratio | ||||||||||||||||||||||||||||||
| Financial leverage1 | ||||||||||||||||||||||||||||||
| Benchmarks | ||||||||||||||||||||||||||||||
| Financial Leverage, Competitors2 | ||||||||||||||||||||||||||||||
| Linde plc | ||||||||||||||||||||||||||||||
| Sherwin-Williams Co. | ||||||||||||||||||||||||||||||
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).
1 Q3 2021 Calculation
Financial leverage = Total assets ÷ Total Air Products shareholders’ equity
= ÷ =
2 Click competitor name to see calculations.
- Total Assets
- The total assets demonstrate variability throughout the periods analyzed. Starting at approximately 17.26 billion USD at the end of 2015, the value decreases slightly in early 2016 before gradually increasing to a range between 18 and 19 billion USD through 2018 and 2019. A notable increase occurs in 2020, with total assets rising sharply to surpass 24 billion USD by mid-2020, continuing to grow steadily to approximately 26.25 billion USD by mid-2021. This upward trend in assets towards the later periods indicates significant expansion or acquisition activities.
- Total Air Products Shareholders’ Equity
- Shareholders’ equity shows an overall positive trajectory across the examined quarters. Beginning near 7.37 billion USD at the end of 2015, the equity fell slightly by early 2016 but rebounded substantially to exceed 10 billion USD by the end of 2017. Throughout 2018 and 2019, shareholders' equity continued a moderate upward trend, reaching around 11.56 billion USD by early 2020. Beyond this, a consistent rise is observed, culminating in equity levels exceeding 13 billion USD by mid-2021. This steady increase reflects strengthening net assets and potentially improved retained earnings or capital infusion.
- Financial Leverage
- The financial leverage ratio illustrates a shift in the company's capital structure over the periods. Initially, the ratio fluctuates around 2.3 to 2.5 during 2015 and 2016, indicating relatively higher leverage. A marked decline in leverage occurs from late 2016 to early 2020, with ratios falling below 1.8 and hovering near 1.7, suggesting a reduction in reliance on debt relative to equity. However, from 2020 onwards, financial leverage increases again, rising to above 2.0 by mid-2020 and remaining slightly above 2.0 through mid-2021. This suggests a re-leveraging phase potentially linked to the increase in total assets during the same period.
Interest Coverage
Air Products & Chemicals Inc., interest coverage calculation (quarterly data)
| 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 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||||||||||||||||||||||||||
| Net income (loss) attributable to Air Products | ||||||||||||||||||||||||||||||
| Add: Net income attributable to noncontrolling interest | ||||||||||||||||||||||||||||||
| Less: Income (loss) from discontinued operations, net of tax | ||||||||||||||||||||||||||||||
| Add: Income tax expense | ||||||||||||||||||||||||||||||
| Add: Interest expense | ||||||||||||||||||||||||||||||
| Earnings before interest and tax (EBIT) | ||||||||||||||||||||||||||||||
| Solvency Ratio | ||||||||||||||||||||||||||||||
| Interest coverage1 | ||||||||||||||||||||||||||||||
| Benchmarks | ||||||||||||||||||||||||||||||
| Interest Coverage, Competitors2 | ||||||||||||||||||||||||||||||
| Sherwin-Williams Co. | ||||||||||||||||||||||||||||||
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).
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)
= ( + + + )
÷ ( + + + )
=
2 Click competitor name to see calculations.
- Earnings before interest and tax (EBIT)
- The EBIT figures show a relatively stable level from the end of 2015 through mid-2016, with values around the mid-500,000s (in thousands USD). However, a significant decline is observed at the end of 2016, dropping to approximately 366,100 before recovering partially in early 2017. Mid-2017 sees another decline to levels around the low 200,000s before increasing again in the latter part of 2017. Throughout 2018 and 2019, EBIT demonstrates a generally upward trend, peaking near 680,000 by late 2019. In 2020, EBIT fluctuates moderately, with values mostly ranging between 598,500 and 672,500, signaling some volatility during this period. The first half of 2021 indicates a slight increase with EBIT moving above 635,000.
- Interest expense
- Interest expense remains relatively steady in the range of approximately 22,000 to 35,000 (in thousands USD) during 2015 and 2016. In the early part of 2017, interest costs continue to hover around the 30,000 level. A noticeable decline in interest expense occurs from late 2019 through mid-2020, reaching lows near 18,700. However, in the latter part of 2020 and into 2021, interest expense rises again, fluctuating between roughly 35,600 and 39,200, indicating some upward pressure on financing costs in this timeframe.
- Interest coverage ratio
- The interest coverage ratio indicates how comfortably EBIT covers interest expenses. From late 2015 through mid-2016, coverage remains high, exceeding 19 times. There is a decline to levels between 12 and 16 times in late 2016 and early 2017, in line with lower EBIT and relatively stable interest expenses. The ratio then improves steadily through 2018 and 2019, reaching a high point above 21 times by early 2020. The first three quarters of 2020 display peak coverage ratios exceeding 25 times, reflective of reduced interest expenses and stable EBIT. However, the ratio begins to decline again in late 2020 and into 2021, falling to the mid-to-high teens range, indicating somewhat reduced but still comfortable coverage.
- Overall insights
- The financial data reflects cyclical patterns in EBIT, with a notable dip at the end of 2016 and mid-2017, followed by an overall upward trend through to 2019. Interest expenses remain relatively controlled with some volatility, particularly in 2020 and early 2021 where it first declines significantly and then rises. The interest coverage ratio generally tracks EBIT movements, showing strong ability to cover interest costs throughout the periods, with the highest coverage during mid-2020, likely tied to reduced interest expenses and steady earnings. The ratios towards 2021 suggest a slightly reduced margin of safety but remain at healthy levels. Overall, the company exhibits resilience and capacity to service debt through varying economic conditions reflected in the quarterly data.