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)
Based on: 10-Q (reporting date: 2022-03-31), 10-Q (reporting date: 2021-12-31), 10-K (reporting date: 2021-09-30), 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 financial ratios over the examined periods demonstrate several noteworthy trends in the company's capital structure and debt management.
- Debt to Equity Ratio
- This ratio shows a generally declining trend from 1.77 at the end of 2015 to around 0.72-0.76 in early 2022. The ratio decreased consistently, reflecting a reduction in debt relative to shareholders' equity over time. The decline was particularly marked from late 2016 onward, suggesting the company improved its equity base or reduced debt levels.
- Debt to Capital Ratio
- The debt to capital ratio similarly declined from 0.64 at the end of 2015 to a range near 0.42-0.43 by 2022. The downward trend denotes a decreasing reliance on debt within the company’s capital structure, consistent with the debt to equity ratio trend. The ratio stabilized somewhat from 2019 onwards but maintained a lower level than in previous years.
- Debt to Assets Ratio
- This ratio decreased from 0.49 to approximately 0.33-0.34 over the stated periods, with minor fluctuations. This indicates that the proportion of assets financed by debt diminished over time. The ratio dipped notably in late 2019 and early 2020, which may indicate increased asset base or retirement of debt.
- Financial Leverage Ratio
- Financial leverage dropped from a high of 3.61 in late 2015 to a range around 2.2-2.3 by early 2022. This decline suggests that the company became less dependent on debt to finance its assets relative to equity. The ratio showed relative stability from mid-2017 onward, but at a noticeably lower level than the initial periods.
- Interest Coverage Ratio
- Data for this ratio begins in mid-2016. After an initial peak around 4.9, the interest coverage ratio declined to as low as 1.05 in late 2017, indicating a period of reduced ability to cover interest expenses from earnings. However, this ratio recovered steadily, reaching values of approximately 5.0 to 5.7 during 2021 and early 2022, reflecting improved earnings relative to interest obligations and enhanced financial health.
Overall, these trends collectively indicate a strategic move to reduce financial risk by lowering debt levels relative to equity and assets, while concurrently improving the capacity to service debt. The company’s leverage has been managed downward consistently, and the improved interest coverage ratio in recent periods highlights stronger earnings performance or more favorable interest expense conditions.
Debt Ratios
Coverage Ratios
Debt to Equity
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 | 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 | |||||||||
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Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||||||||||||
Current debt obligations | ||||||||||||||||||||||||||||||||||
Long-term debt, excluding current portion | ||||||||||||||||||||||||||||||||||
Total debt | ||||||||||||||||||||||||||||||||||
Shareholders’ equity | ||||||||||||||||||||||||||||||||||
Solvency Ratio | ||||||||||||||||||||||||||||||||||
Debt to equity1 | ||||||||||||||||||||||||||||||||||
Benchmarks | ||||||||||||||||||||||||||||||||||
Debt to Equity, Competitors2 | ||||||||||||||||||||||||||||||||||
Abbott Laboratories | ||||||||||||||||||||||||||||||||||
CVS Health Corp. | ||||||||||||||||||||||||||||||||||
Elevance Health Inc. | ||||||||||||||||||||||||||||||||||
Intuitive Surgical Inc. | ||||||||||||||||||||||||||||||||||
Medtronic PLC | ||||||||||||||||||||||||||||||||||
UnitedHealth Group Inc. |
Based on: 10-Q (reporting date: 2022-03-31), 10-Q (reporting date: 2021-12-31), 10-K (reporting date: 2021-09-30), 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 Q2 2022 Calculation
Debt to equity = Total debt ÷ Shareholders’ equity
= ÷ =
2 Click competitor name to see calculations.
The total debt of the company shows a generally declining trend from December 2015 through March 2019, decreasing from approximately $12.8 billion to around $20.6 billion with some fluctuations. However, there is a significant spike in total debt during 2017, where debt nearly doubles compared to previous periods, peaking at around $22.8 billion by the end of 2017. Following this peak, total debt gradually decreases again through to early 2022, ending at approximately $18.6 billion in March 2022.
Shareholders’ equity demonstrates a steady increase over the observed periods. Starting at $7.2 billion at the end of 2015, it rises consistently and more prominently from 2017 onwards, reaching above $24.5 billion by March 2022. The most notable growth in equity is observed between late 2016 and early 2018, coinciding with the period of elevated total debt.
The debt to equity ratio corroborates these observations, reflecting the interplay between debt and equity levels. Initially, the ratio decreases from 1.77 at the end of 2015 to about 1.29 by the first quarter of 2017, indicative of either increasing equity or decreasing debt. A sharp rise in debt during 2017 causes a temporary increase in the ratio, reaching 1.51 by mid-2017. Subsequently, the ratio steadily declines, falling below 1.0 by the end of 2018 and reaching its lowest values around 0.71 to 0.75 during 2021, implying a comparatively stronger equity base versus debt. A slight uptick to 0.76 is observed in early 2022.
Overall, the data indicates a strategic management of capital structure with a notable debt increase during 2017, potentially linked to acquisitions or capital investments, followed by progressive reduction and stabilization. Concurrently, shareholders’ equity has grown steadily, improving the company's financial stability and reducing leverage over time as reflected in the decreasing debt to equity ratio.
- Total Debt
- Declined from 2015 to early 2017, spiked significantly in 2017, then gradually decreased through to 2022.
- Shareholders’ Equity
- Exhibited consistent growth across the entire period, with rapid increases between late 2016 and early 2018.
- Debt to Equity Ratio
- Decreased from 2015 to early 2017, rose temporarily during the 2017 debt spike, then declined steadily, indicating reduced leverage and improved equity position.
Debt to Capital
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 | 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 | |||||||||
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Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||||||||||||
Current debt obligations | ||||||||||||||||||||||||||||||||||
Long-term debt, excluding current portion | ||||||||||||||||||||||||||||||||||
Total debt | ||||||||||||||||||||||||||||||||||
Shareholders’ equity | ||||||||||||||||||||||||||||||||||
Total capital | ||||||||||||||||||||||||||||||||||
Solvency Ratio | ||||||||||||||||||||||||||||||||||
Debt to capital1 | ||||||||||||||||||||||||||||||||||
Benchmarks | ||||||||||||||||||||||||||||||||||
Debt to Capital, Competitors2 | ||||||||||||||||||||||||||||||||||
Abbott Laboratories | ||||||||||||||||||||||||||||||||||
CVS Health Corp. | ||||||||||||||||||||||||||||||||||
Elevance Health Inc. | ||||||||||||||||||||||||||||||||||
Intuitive Surgical Inc. | ||||||||||||||||||||||||||||||||||
Medtronic PLC | ||||||||||||||||||||||||||||||||||
UnitedHealth Group Inc. |
Based on: 10-Q (reporting date: 2022-03-31), 10-Q (reporting date: 2021-12-31), 10-K (reporting date: 2021-09-30), 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 Q2 2022 Calculation
Debt to capital = Total debt ÷ Total capital
= ÷ =
2 Click competitor name to see calculations.
The financial data shows the quarterly progression of total debt, total capital, and the debt-to-capital ratio over a period from December 31, 2015, to March 31, 2022.
- Total Debt
-
Total debt started at $12,809 million at the end of 2015 and experienced a gradual decline until March 31, 2017, reaching $10,306 million. A notable increase occurred in the following quarters, with debt peaking at $22,798 million by December 31, 2017. Subsequently, total debt demonstrated a gradual downward trend with some fluctuations, reaching a low of $17,424 million by March 31, 2022. Some volatility is observed in 2020, where total debt decreased sharply from $21,166 million in March to $17,931 million in June, followed by a mild fluctuation and a slight increase towards the beginning of 2022.
- Total Capital
-
Total capital remained relatively stable in the early part of the observed period, starting at $20,032 million at the end of 2015 and staying close to this figure until mid-2016. A sharp increase is observed in the second half of 2016 and into 2017, reaching a peak of $44,045 million at the end of 2017. After this peak, total capital followed a declining trend through 2018 and 2019, dropping to around $40,471 million by the end of 2019. The data shows stabilization and moderate fluctuations from 2020 to early 2022, with capital values oscillating around the $41,000 to $43,000 million range.
- Debt to Capital Ratio
-
The debt-to-capital ratio exhibited a decreasing trend overall, beginning at 0.64 in late 2015 and moving downward to 0.56 by March 2017, indicating a reduction in leverage relative to total capital. There was a temporary rise to 0.60 in mid-2017, followed by a steady reversal to a low of approximately 0.42–0.43 during the period from early 2020 through early 2022. This reduction in the ratio corresponds with the decreasing total debt and relatively stable total capital observed in the same periods, implying improved capitalization or lower leverage levels.
In summary, the data reveals an initial reduction in total debt and leverage, a pronounced increase in both debt and capital around 2017, and subsequent stabilization with a general trend toward lower relative debt load by early 2022. The company's capital structure appears to have undergone significant changes in the middle of the period, followed by a phase of deleveraging and stabilization.
Debt to Assets
Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | |||||||||
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Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||||||||||||
Current debt obligations | ||||||||||||||||||||||||||||||||||
Long-term debt, excluding current portion | ||||||||||||||||||||||||||||||||||
Total debt | ||||||||||||||||||||||||||||||||||
Total assets | ||||||||||||||||||||||||||||||||||
Solvency Ratio | ||||||||||||||||||||||||||||||||||
Debt to assets1 | ||||||||||||||||||||||||||||||||||
Benchmarks | ||||||||||||||||||||||||||||||||||
Debt to Assets, Competitors2 | ||||||||||||||||||||||||||||||||||
Abbott Laboratories | ||||||||||||||||||||||||||||||||||
CVS Health Corp. | ||||||||||||||||||||||||||||||||||
Elevance Health Inc. | ||||||||||||||||||||||||||||||||||
Intuitive Surgical Inc. | ||||||||||||||||||||||||||||||||||
Medtronic PLC | ||||||||||||||||||||||||||||||||||
UnitedHealth Group Inc. |
Based on: 10-Q (reporting date: 2022-03-31), 10-Q (reporting date: 2021-12-31), 10-K (reporting date: 2021-09-30), 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 Q2 2022 Calculation
Debt to assets = Total debt ÷ Total assets
= ÷ =
2 Click competitor name to see calculations.
- Total Debt
- The total debt exhibited a general trend of decline from December 2015 through March 2017, dropping from approximately $12.8 billion to about $10.3 billion. However, a notable and sharp increase occurred in the subsequent quarters of 2017, with debt peaking at nearly $22.8 billion by the end of that year. Following this peak, the debt gradually decreased again over the next years, reaching around $17.4 billion by the end of 2021. A slight uptick is observed at the latest date in March 2022, with debt increasing to approximately $18.6 billion.
- Total Assets
- Total assets showed fluctuations initially, remaining relatively stable from late 2015 through early 2017 in the $24 billion to $26 billion range. A significant jump occurred in mid-2017, with assets rising sharply to over $37 billion, and then surging further beyond $55 billion by the end of 2017. This elevated level was sustained with minor declines and fluctuations in subsequent periods, generally hovering in the range of $52 billion to $54 billion. A modest increase is seen at the end of the available data in March 2022, with assets increasing again to nearly $54.8 billion.
- Debt to Assets Ratio
- The ratio of debt to assets decreased steadily from 0.49 at the end of 2015 to 0.43 by March 2017, indicating an improvement in leverage during this period. Following the mid-2017 period, this ratio increased slightly to above 0.5 but then began a consistent downward trend, reaching a low of approximately 0.32 by mid-2021. Small fluctuations occurred afterward, with the ratio settling around 0.33 to 0.34 by March 2022. This pattern reflects a general reduction in leverage relative to assets since the peak observed in 2017, suggesting a strengthening balance sheet.
Financial Leverage
Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | |||||||||
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Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||||||||||||
Total assets | ||||||||||||||||||||||||||||||||||
Shareholders’ equity | ||||||||||||||||||||||||||||||||||
Solvency Ratio | ||||||||||||||||||||||||||||||||||
Financial leverage1 | ||||||||||||||||||||||||||||||||||
Benchmarks | ||||||||||||||||||||||||||||||||||
Financial Leverage, Competitors2 | ||||||||||||||||||||||||||||||||||
Abbott Laboratories | ||||||||||||||||||||||||||||||||||
CVS Health Corp. | ||||||||||||||||||||||||||||||||||
Elevance Health Inc. | ||||||||||||||||||||||||||||||||||
Intuitive Surgical Inc. | ||||||||||||||||||||||||||||||||||
Medtronic PLC | ||||||||||||||||||||||||||||||||||
UnitedHealth Group Inc. |
Based on: 10-Q (reporting date: 2022-03-31), 10-Q (reporting date: 2021-12-31), 10-K (reporting date: 2021-09-30), 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 Q2 2022 Calculation
Financial leverage = Total assets ÷ Shareholders’ equity
= ÷ =
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals notable trends in total assets, shareholders’ equity, and financial leverage over the observed period.
- Total Assets
- Total assets displayed moderate fluctuations initially, declining from approximately 26,046 million US dollars at the end of 2015 to about 24,121 million US dollars by the end of March 2017. A significant increase followed, with total assets rising sharply to over 37,000 million US dollars from mid-2017 through late 2017. After this peak, total assets continued to grow, reaching highs above 54,000 million US dollars at the end of 2017, maintaining levels in the upper 53,000 to 54,000 million range through to the first quarter of 2022, albeit with small quarterly variations indicating a relatively stable asset base in the latter periods.
- Shareholders’ Equity
- Shareholders’ equity experienced a steady increase from approximately 7,223 million US dollars at the end of 2015 to around 7,963 million US dollars by early 2017. After this, a pronounced jump occurred, with equity levels nearing 12,587 million US dollars by mid-2017 and continuing to rise sharply, surpassing 21,000 million US dollars by the end of 2017. From this point onwards, equity remained relatively stable, fluctuating marginally around the 21,000 to 24,000 million US dollar range through to early 2022. This pattern indicates strong growth in equity between 2015 and 2017, followed by stabilization at elevated levels.
- Financial Leverage
- The financial leverage ratio showed a downward trend from 3.61 at the end of 2015 to about 3.03 by early 2017, reflecting a reduction in the ratio of total assets to equity. This decline continued, reaching approximately 2.61 by the end of 2017 and hovering in the low 2.2 to 2.5 range up until early 2022. The decrease in financial leverage suggests a gradual strengthening of the equity base relative to total assets, which may indicate reduced financial risk over time.
In summary, the data reflects a period of asset and equity growth culminating in a significant expansion phase around mid-2017, after which the company maintained a higher capital base with stable shareholders’ equity and total assets. Concurrently, the steady decline in financial leverage suggests improved financial stability and potentially lower reliance on debt financing during the later periods.
Interest Coverage
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 | 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 | |||||||||
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Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||||||||||||
Net income (loss) | ||||||||||||||||||||||||||||||||||
Add: Income tax expense | ||||||||||||||||||||||||||||||||||
Add: Interest expense | ||||||||||||||||||||||||||||||||||
Earnings before interest and tax (EBIT) | ||||||||||||||||||||||||||||||||||
Solvency Ratio | ||||||||||||||||||||||||||||||||||
Interest coverage1 | ||||||||||||||||||||||||||||||||||
Benchmarks | ||||||||||||||||||||||||||||||||||
Interest Coverage, Competitors2 | ||||||||||||||||||||||||||||||||||
Abbott Laboratories | ||||||||||||||||||||||||||||||||||
CVS Health Corp. | ||||||||||||||||||||||||||||||||||
Elevance Health Inc. | ||||||||||||||||||||||||||||||||||
Medtronic PLC | ||||||||||||||||||||||||||||||||||
UnitedHealth Group Inc. |
Based on: 10-Q (reporting date: 2022-03-31), 10-Q (reporting date: 2021-12-31), 10-K (reporting date: 2021-09-30), 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 Q2 2022 Calculation
Interest coverage
= (EBITQ2 2022
+ EBITQ1 2022
+ EBITQ4 2021
+ EBITQ3 2021)
÷ (Interest expenseQ2 2022
+ Interest expenseQ1 2022
+ Interest expenseQ4 2021
+ Interest expenseQ3 2021)
= ( + + + )
÷ ( + + + )
=
2 Click competitor name to see calculations.
The earnings before interest and tax (EBIT) demonstrates noticeable fluctuations over the observed quarters. Starting at 363 million USD in December 2015, EBIT generally increased through mid-2016, peaking at 519 million USD in June 2016. However, a sharp decline to 105 million USD occurred in September 2016, followed by a significant rebound to 787 million USD in December 2016. The subsequent quarters showed further volatility; a notable drop to negative EBIT (-220 million USD) was recorded in June 2017, indicating a period of operating losses. From this trough, the EBIT recovered, with periodic oscillations, reaching as high as 1275 million USD in March 2021, the highest value in the series. The trend from late 2019 to early 2022 reflects relative stabilization at higher EBIT levels compared to earlier periods.
Interest expense presents a relatively stable pattern, fluctuating mildly between 86 million USD and 185 million USD. The peak interest expense of 185 million USD was observed in March 2018, with the lowest values around 86 million USD in March 2017. Despite some variation, the overall interest expense remains within a moderate range over the years, showing no extreme spikes consistent with fluctuations in EBIT.
The interest coverage ratio, which relates EBIT to interest expense, follows a dynamic pattern, reflecting the interaction between operating profitability and debt servicing costs. Early in the data series, the ratio is notably absent but from mid-2016 onward, it varies from a low of 1.05 to a high of 5.78. Lower coverage ratios, such as 1.05 in June 2017, correspond with periods of diminished EBIT, including negative or near-negative values, indicating weaker ability to cover interest expenses from earnings. Conversely, higher ratios above 4.0, seen especially from early 2021 to early 2022, point to strengthened earnings capacity relative to interest obligations. This improvement suggests enhanced financial resilience and reduced credit risk in the latter periods.
In summary, the financial data reveals a company experiencing operational volatility with periods of reduced earnings capacity, including a significant loss in mid-2017. Over time, there is a general trajectory toward greater stability and improved operational results, as evidenced by increasing EBIT and higher interest coverage ratios in recent quarters. Interest expenses remain relatively steady, reinforcing that fluctuations in coverage are primarily driven by changes in operating profitability rather than borrowing costs.