Long-term Debt and Solvency Analysis Quarterly Data

Difficulty: Beginner

Solvency ratios also known as long-term debt ratios measure a company's ability to meet long-term obligations.


Ratios (Summary)

Caterpillar Inc., debt and solvency ratios (quarterly data)

 
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 Sep 30, 2014 Jun 30, 2014 Mar 31, 2014 Dec 31, 2013 Sep 30, 2013 Jun 30, 2013 Mar 31, 2013
Debt to equity 2.32 2.55 2.30 2.65 2.82 2.80 2.37 2.52 2.45 2.57 2.36 2.24 2.29 2.35 2.09 1.93 1.88 1.81 2.18 2.24 2.22
Debt to capital 0.70 0.72 0.70 0.73 0.74 0.74 0.70 0.72 0.71 0.72 0.70 0.69 0.70 0.70 0.68 0.66 0.65 0.64 0.69 0.69 0.69
Interest coverage 12.70 8.72 4.39 1.98 1.11 1.26 3.48 3.74 4.28 6.63 8.91 10.60 11.55 11.52 12.84 12.88 12.73 12.02
Source: Based on data from Caterpillar Inc. Quarterly and Annual Reports
Ratio Description The company
Debt-to-equity ratio A solvency ratio calculated as total debt divided by total shareholders' equity. Caterpillar Inc.'s debt-to-equity ratio deteriorated from Q3 2017 to Q4 2017 but then improved from Q4 2017 to Q1 2018 not reaching Q3 2017 level.
Debt-to-capital ratio A solvency ratio calculated as total debt divided by total debt plus shareholders' equity. Caterpillar Inc.'s debt-to-capital ratio deteriorated from Q3 2017 to Q4 2017 but then improved from Q4 2017 to Q1 2018 not reaching Q3 2017 level.
Interest coverage ratio A solvency ratio calculated as EBIT divided by interest payments. Caterpillar Inc.'s interest coverage ratio improved from Q3 2017 to Q4 2017 and from Q4 2017 to Q1 2018.

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Debt to Equity

Caterpillar Inc., debt to equity calculation (quarterly data)

 
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 Sep 30, 2014 Jun 30, 2014 Mar 31, 2014 Dec 31, 2013 Sep 30, 2013 Jun 30, 2013 Mar 31, 2013
Selected Financial Data (USD $ in millions)
Short-term borrowings 5,733  4,837  5,470  6,780  7,821  7,303  6,965  7,483  7,817  6,967  6,080  6,240  5,267  4,708  4,436  5,554  4,515  3,679  5,847  5,511  4,982 
Long-term debt due within one year 6,417  6,194  5,619  6,597  6,736  6,662  6,523  6,860  6,076  5,879  6,255  4,635  6,705  6,793  6,666  7,382  6,775  7,352  7,675  8,360  8,264 
Long-term debt due after one year 23,165  23,847  24,835  23,815  23,725  22,818  23,622  23,980  24,470  25,247  25,208  27,445  26,803  27,784  28,180  27,307  26,801  26,719  26,015  25,680  27,240 
Total debt 35,315  34,878  35,924  37,192  38,282  36,783  37,110  38,323  38,363  38,093  37,543  38,320  38,775  39,285  39,282  40,243  38,091  37,750  39,537  39,551  40,486 
Shareholders' equity attributable to common shareholders 15,206  13,697  15,627  14,009  13,588  13,137  15,645  15,232  15,676  14,809  15,896  17,092  16,962  16,746  18,823  20,856  20,305  20,811  18,110  17,621  18,274 
Ratio
Debt to equity1 2.32 2.55 2.30 2.65 2.82 2.80 2.37 2.52 2.45 2.57 2.36 2.24 2.29 2.35 2.09 1.93 1.88 1.81 2.18 2.24 2.22
Source: Based on data from Caterpillar Inc. Quarterly and Annual Reports

Q1 2018 Calculations

1 Debt to equity = Total debt ÷ Shareholders' equity attributable to common shareholders
= 35,315 ÷ 15,206 = 2.32

Ratio Description The company
Debt-to-equity ratio A solvency ratio calculated as total debt divided by total shareholders' equity. Caterpillar Inc.'s debt-to-equity ratio deteriorated from Q3 2017 to Q4 2017 but then improved from Q4 2017 to Q1 2018 not reaching Q3 2017 level.

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Debt to Capital

Caterpillar Inc., debt to capital calculation (quarterly data)

 
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 Sep 30, 2014 Jun 30, 2014 Mar 31, 2014 Dec 31, 2013 Sep 30, 2013 Jun 30, 2013 Mar 31, 2013
Selected Financial Data (USD $ in millions)
Short-term borrowings 5,733  4,837  5,470  6,780  7,821  7,303  6,965  7,483  7,817  6,967  6,080  6,240  5,267  4,708  4,436  5,554  4,515  3,679  5,847  5,511  4,982 
Long-term debt due within one year 6,417  6,194  5,619  6,597  6,736  6,662  6,523  6,860  6,076  5,879  6,255  4,635  6,705  6,793  6,666  7,382  6,775  7,352  7,675  8,360  8,264 
Long-term debt due after one year 23,165  23,847  24,835  23,815  23,725  22,818  23,622  23,980  24,470  25,247  25,208  27,445  26,803  27,784  28,180  27,307  26,801  26,719  26,015  25,680  27,240 
Total debt 35,315  34,878  35,924  37,192  38,282  36,783  37,110  38,323  38,363  38,093  37,543  38,320  38,775  39,285  39,282  40,243  38,091  37,750  39,537  39,551  40,486 
Shareholders' equity attributable to common shareholders 15,206  13,697  15,627  14,009  13,588  13,137  15,645  15,232  15,676  14,809  15,896  17,092  16,962  16,746  18,823  20,856  20,305  20,811  18,110  17,621  18,274 
Total capital 50,521  48,575  51,551  51,201  51,870  49,920  52,755  53,555  54,039  52,902  53,439  55,412  55,737  56,031  58,105  61,099  58,396  58,561  57,647  57,172  58,760 
Ratio
Debt to capital1 0.70 0.72 0.70 0.73 0.74 0.74 0.70 0.72 0.71 0.72 0.70 0.69 0.70 0.70 0.68 0.66 0.65 0.64 0.69 0.69 0.69
Source: Based on data from Caterpillar Inc. Quarterly and Annual Reports

Q1 2018 Calculations

1 Debt to capital = Total debt ÷ Total capital
= 35,315 ÷ 50,521 = 0.70

Ratio Description The company
Debt-to-capital ratio A solvency ratio calculated as total debt divided by total debt plus shareholders' equity. Caterpillar Inc.'s debt-to-capital ratio deteriorated from Q3 2017 to Q4 2017 but then improved from Q4 2017 to Q1 2018 not reaching Q3 2017 level.

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Interest Coverage

Caterpillar Inc., interest coverage calculation (quarterly data)

 
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 Sep 30, 2014 Jun 30, 2014 Mar 31, 2014 Dec 31, 2013 Sep 30, 2013 Jun 30, 2013 Mar 31, 2013
Selected Financial Data (USD $ in millions)
Profit (loss) attributable to common stockholders 1,665  (1,299) 1,059  802  192  (1,171) 283  550  271  (87) 368  710  1,111  757  1,017  999  922  1,003  946  960  880 
Add: Net income attributable to noncontrolling interest
Add: Income tax expense 472  2,418  470  361  90  (180) 96  184  92  (128) 144  283  443  179  364  419  418  376  310  387  246 
Add: Interest expense excluding Financial Products 101  169  118  121  123  120  126  130  129  126  127  125  129  126  128  120  110  109  116  120  120 
Earnings before interest and tax (EBIT) 2,240  1,288  1,649  1,285  407  (1,227) 505  867  493  (85) 642  1,119  1,686  1,068  1,513  1,541  1,453  1,491  1,376  1,472  1,248 
Ratio
Interest coverage1 12.70 8.72 4.39 1.98 1.11 1.26 3.48 3.74 4.28 6.63 8.91 10.60 11.55 11.52 12.84 12.88 12.73 12.02
Source: Based on data from Caterpillar Inc. Quarterly and Annual Reports

Q1 2018 Calculations

1 Interest coverage = (EBITQ1 2018 + EBITQ4 2017 + EBITQ3 2017 + EBITQ2 2017) ÷ (Interest expenseQ1 2018 + Interest expenseQ4 2017 + Interest expenseQ3 2017 + Interest expenseQ2 2017)
= (2,240 + 1,288 + 1,649 + 1,285) ÷ (101 + 169 + 118 + 121) = 12.70

Ratio Description The company
Interest coverage ratio A solvency ratio calculated as EBIT divided by interest payments. Caterpillar Inc.'s interest coverage ratio improved from Q3 2017 to Q4 2017 and from Q4 2017 to Q1 2018.

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