.Analysis of Debt
Difficulty: Advanced
Total Debt (Carrying Amount)
Colgate-Palmolive Co., Statement of Financial Position, Debt
USD $ in millions
| Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | ||
|---|---|---|---|---|---|---|
| | Notes and loans payable | |||||
| | Current portion of long-term debt | |||||
| | Long-term debt, excluding current portion | |||||
| | Total debt (carrying amount) |
Source: Based on data from Colgate-Palmolive Co., Annual Reports
| Item | Description | The company |
|---|---|---|
| Total debt (carrying amount) | Sum of the carrying values as of the balance sheet date of all debt plus capital lease obligations. | Colgate-Palmolive Co.'s total debt declined from 2015 to 2016 but then increased from 2016 to 2017 exceeding 2015 level. |
Total Debt (Fair Value)
| Dec 31, 2017 | |
|---|---|
| Selected Financial Data (USD $ in millions) | |
| Short-term debt | |
| Long-term debt, including the current portion | |
| Total debt (fair value) | |
| Ratio | |
| Debt, fair value to carrying amount | |
Source: Based on data from Colgate-Palmolive Co., Annual Reports
Weighted-average Interest Rate on Debt
Weighted average interest rate on debt: %
| Interest Rate | Debt Amount1 | Interest Rate × Debt Amount | Weighted-average Interest Rate2 | |
|---|---|---|---|---|
| % | ||||
| % | ||||
| % | ||||
| Total | % |
Source: Based on data from Colgate-Palmolive Co., Annual Reports
1 USD $ in millions
2 Weighted-average interest rate = 100 × ÷ = %
Interest Costs Incurred
Colgate-Palmolive Co.
USD $ in millions
| 12 months ended | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | |
|---|---|---|---|---|---|---|
| | Interest incurred, less interest capitalized | |||||
| | Interest capitalized | |||||
| | Interest incurred |
Source: Based on data from Colgate-Palmolive Co., Annual Reports
| Item | Description | The company |
|---|---|---|
| Interest incurred, less interest capitalized | Represents the portion of interest incurred in the period on debt arrangements that was charged against earnings. | Colgate-Palmolive Co.'s interest incurred, less interest capitalized increased from 2015 to 2016 and from 2016 to 2017. |
| Interest capitalized | The amount of interest that was capitalized during the period. | |
| Interest incurred | Total interest costs incurred during the period and either capitalized or charged against earnings. | Colgate-Palmolive Co.'s interest incurred increased from 2015 to 2016 and from 2016 to 2017. |
Adjusted Interest Coverage Ratio
| Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (USD $ in millions) | ||||||
| | Net income attributable to Colgate-Palmolive Company | |||||
| | Add: Net income attributable to noncontrolling interest | |||||
| | Add: Income tax expense | |||||
| | Add: Interest expense | |||||
| | Earnings before interest and tax (EBIT) | |||||
| | Interest incurred | |||||
| Ratio With and Without Capitalized Interest | ||||||
| | Interest coverage ratio (excluding capitalized interest)1 | |||||
| | Adjusted interest coverage ratio (including capitalized interest)2 | |||||
2017 Calculations
1 Interest coverage ratio (excluding capitalized interest) = EBIT ÷ Interest expense
= ÷ =
2 Adjusted interest coverage ratio (including capitalized interest) = EBIT ÷ Interest incurred
= ÷ =
| Ratio | Description | The company |
|---|---|---|
| Adjusted interest coverage ratio | A solvency ratio calculated as EBIT divided by interest payments (including capitalized interest). | Colgate-Palmolive Co.'s adjusted interest coverage ratio improved from 2015 to 2016 but then slightly deteriorated from 2016 to 2017. |
