Analysis of Solvency Ratios
Solvency ratios also known as long-term debt ratios measure a company ability to meet long-term obligations.
Solvency Ratios (Summary)
Debt Ratios
Coverage Ratios
Corning Inc., solvency ratios
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
The solvency profile from 2019 to 2023 is characterized by a period of relative stability in capital structure followed by a notable increase in leverage and a decline in coverage capacity in the final year of the period.
- Leverage and Capital Structure
- Debt to equity ratios remained consistent between 0.57 and 0.60 from 2019 through 2022, before increasing to 0.65 in 2023. When operating lease liabilities are incorporated, the debt to equity ratio rose from 0.64 in 2019 to a peak of 0.73 in 2023. A similar trend is observed in the debt to capital and debt to assets ratios, which remained largely flat for four years before ticking upward in 2023. Furthermore, financial leverage shows a steady and uninterrupted upward trend, increasing from 2.24 in 2019 to 2.47 in 2023, indicating a progressive increase in the use of debt to finance assets.
- Coverage Ratios
- The ability to service debt has exhibited significant volatility. Interest coverage fluctuated sharply, falling from 6.59 in 2019 to 3.30 in 2020, peaking at 9.09 in 2021, and subsequently declining to 3.48 by 2023. Fixed charge coverage mirrored this instability, reaching a high of 5.09 in 2022 before dropping to 2.63 in 2023. This volatility suggests that the company's capacity to meet fixed financial obligations has been sensitive to annual earnings fluctuations.
In summary, while the solvency ratios were well-managed for the majority of the period, the convergence of rising leverage ratios and falling coverage ratios in 2023 indicates a trend toward a more leveraged position with reduced margins for debt servicing.
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Debt to Equity
Corning Inc., debt to equity calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current portion of long-term debt and short-term borrowings | 320) | 224) | 55) | 156) | 11) | |
| Long-term debt, excluding current portion | 7,206) | 6,687) | 6,989) | 7,816) | 7,729) | |
| Total debt | 7,526) | 6,911) | 7,044) | 7,972) | 7,740) | |
| Total Corning Incorporated shareholders’ equity | 11,551) | 12,008) | 12,333) | 13,257) | 12,907) | |
| Solvency Ratio | ||||||
| Debt to equity1 | 0.65 | 0.58 | 0.57 | 0.60 | 0.60 | |
| Benchmarks | ||||||
| Debt to Equity, Competitors2 | ||||||
| Apple Inc. | 1.80 | 2.39 | 1.99 | — | — | |
| Arista Networks Inc. | 0.00 | 0.00 | 0.00 | — | — | |
| Cisco Systems Inc. | 0.19 | 0.24 | 0.28 | — | — | |
| Dell Technologies Inc. | — | — | 19.36 | — | — | |
| Lumentum Holdings Inc. | 2.07 | 1.00 | 0.60 | — | — | |
| Super Micro Computer Inc. | 0.15 | 0.42 | 0.09 | — | — | |
| Debt to Equity, Sector | ||||||
| Technology Hardware & Equipment | 1.34 | 1.65 | 1.64 | — | — | |
| Debt to Equity, Industry | ||||||
| Information Technology | 0.66 | 0.70 | 0.83 | — | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Debt to equity = Total debt ÷ Total Corning Incorporated shareholders’ equity
= 7,526 ÷ 11,551 = 0.65
2 Click competitor name to see calculations.
The analysis of solvency metrics from 2019 to 2023 reveals a period of relative stability followed by a moderate increase in financial leverage. A convergence of rising total debt and declining shareholders' equity in the final year resulted in the highest debt-to-equity ratio observed over the five-year period.
- Total Debt Trends
- Total debt exhibited volatility throughout the period, peaking at US$ 7,972 million in 2020 before declining to a low of US$ 6,911 million by 2022. A reversal is observed in 2023, where total debt increased to US$ 7,526 million, indicating an uptick in borrowing or a reduction in debt repayments.
- Shareholders' Equity Trends
- Shareholders' equity followed a consistent downward trajectory after reaching a peak of US$ 13,257 million in 2020. This decline persisted through 2021, 2022, and 2023, concluding the period at US$ 11,551 million. The steady contraction of the equity base has served as a primary driver for the increase in the solvency ratio.
- Debt to Equity Ratio Analysis
- The debt-to-equity ratio remained constant at 0.60 during 2019 and 2020, with a slight improvement to 0.57 and 0.58 in 2021 and 2022, respectively. In 2023, the ratio rose to 0.65, reflecting a shift in the capital structure toward higher leverage. This increase suggests a diminished equity cushion relative to total debt obligations compared to previous years.
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Debt to Equity (including Operating Lease Liability)
Corning Inc., debt to equity (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current portion of long-term debt and short-term borrowings | 320) | 224) | 55) | 156) | 11) | |
| Long-term debt, excluding current portion | 7,206) | 6,687) | 6,989) | 7,816) | 7,729) | |
| Total debt | 7,526) | 6,911) | 7,044) | 7,972) | 7,740) | |
| Short-term operating lease liabilities | 112) | 111) | 94) | 96) | 62) | |
| Long-term operating lease liabilities | 846) | 795) | 691) | 633) | 450) | |
| Total debt (including operating lease liability) | 8,484) | 7,817) | 7,829) | 8,701) | 8,252) | |
| Total Corning Incorporated shareholders’ equity | 11,551) | 12,008) | 12,333) | 13,257) | 12,907) | |
| Solvency Ratio | ||||||
| Debt to equity (including operating lease liability)1 | 0.73 | 0.65 | 0.63 | 0.66 | 0.64 | |
| Benchmarks | ||||||
| Debt to Equity (including Operating Lease Liability), Competitors2 | ||||||
| Apple Inc. | 1.99 | 2.61 | 2.16 | — | — | |
| Arista Networks Inc. | 0.01 | 0.01 | 0.02 | — | — | |
| Cisco Systems Inc. | 0.21 | 0.27 | 0.31 | — | — | |
| Dell Technologies Inc. | — | — | 20.25 | — | — | |
| Lumentum Holdings Inc. | 2.12 | 1.03 | 0.63 | — | — | |
| Super Micro Computer Inc. | 0.16 | 0.44 | 0.11 | — | — | |
| Debt to Equity (including Operating Lease Liability), Sector | ||||||
| Technology Hardware & Equipment | 1.47 | 1.79 | 1.76 | — | — | |
| Debt to Equity (including Operating Lease Liability), Industry | ||||||
| Information Technology | 0.72 | 0.76 | 0.90 | — | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Debt to equity (including operating lease liability) = Total debt (including operating lease liability) ÷ Total Corning Incorporated shareholders’ equity
= 8,484 ÷ 11,551 = 0.73
2 Click competitor name to see calculations.
The analysis of solvency indicators for the period between 2019 and 2023 reveals a shifting balance between liabilities and shareholders' equity, culminating in a higher reliance on debt by the end of the period.
- Total Debt Trends
- Total debt, including operating lease liabilities, exhibited fluctuations throughout the five-year period. After an initial increase to US$ 8,701 million in 2020, debt levels declined and stabilized around US$ 7,800 million between 2021 and 2022. However, a subsequent increase occurred in 2023, bringing the total debt to US$ 8,484 million.
- Shareholders' Equity Evolution
- A consistent downward trend in total shareholders' equity is observed following a peak of US$ 13,257 million in 2020. Equity decreased annually thereafter, reaching US$ 11,551 million by December 31, 2023, representing a steady reduction in the equity base over the final three years of the period.
- Debt to Equity Ratio Analysis
- The debt to equity ratio remained relatively stable from 2019 through 2022, fluctuating within a narrow range between 0.63 and 0.66. A notable shift occurred in 2023, where the ratio rose to 0.73. This increase is attributable to the simultaneous rise in total debt and the continued contraction of shareholders' equity, indicating an increased leverage position.
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Debt to Capital
Corning Inc., debt to capital calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current portion of long-term debt and short-term borrowings | 320) | 224) | 55) | 156) | 11) | |
| Long-term debt, excluding current portion | 7,206) | 6,687) | 6,989) | 7,816) | 7,729) | |
| Total debt | 7,526) | 6,911) | 7,044) | 7,972) | 7,740) | |
| Total Corning Incorporated shareholders’ equity | 11,551) | 12,008) | 12,333) | 13,257) | 12,907) | |
| Total capital | 19,077) | 18,919) | 19,377) | 21,229) | 20,647) | |
| Solvency Ratio | ||||||
| Debt to capital1 | 0.39 | 0.37 | 0.36 | 0.38 | 0.37 | |
| Benchmarks | ||||||
| Debt to Capital, Competitors2 | ||||||
| Apple Inc. | 0.64 | 0.70 | 0.67 | — | — | |
| Arista Networks Inc. | 0.00 | 0.00 | 0.00 | — | — | |
| Cisco Systems Inc. | 0.16 | 0.19 | 0.22 | — | — | |
| Dell Technologies Inc. | 1.12 | 1.07 | 0.95 | — | — | |
| Lumentum Holdings Inc. | 0.67 | 0.50 | 0.37 | — | — | |
| Super Micro Computer Inc. | 0.13 | 0.30 | 0.08 | — | — | |
| Debt to Capital, Sector | ||||||
| Technology Hardware & Equipment | 0.57 | 0.62 | 0.62 | — | — | |
| Debt to Capital, Industry | ||||||
| Information Technology | 0.40 | 0.41 | 0.45 | — | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Debt to capital = Total debt ÷ Total capital
= 7,526 ÷ 19,077 = 0.39
2 Click competitor name to see calculations.
The solvency profile exhibits a state of relative stability over the five-year period from 2019 to 2023. While absolute values for debt and capital fluctuated, the proportionality of the capital structure remained consistent, indicating a disciplined approach to leverage management.
- Debt to Capital Ratio
- The ratio remained within a narrow corridor, oscillating between 0.36 and 0.39. A slight increase occurred from 0.37 in 2019 to 0.38 in 2020, followed by a contraction to 0.36 in 2021. The ratio then trended upward over the subsequent two years, reaching its five-year peak of 0.39 by December 31, 2023.
- Total Debt Trends
- Total debt experienced a period of volatility, rising from 7,740 million USD in 2019 to a peak of 7,972 million USD in 2020. This was followed by a two-year period of deleveraging, where debt decreased to 7,044 million USD in 2021 and further to 6,911 million USD in 2022. However, this downward trend reversed in 2023, with total debt increasing to 7,526 million USD.
- Total Capital Dynamics
- Total capital followed a trajectory similar to total debt, peaking in 2020 at 21,229 million USD. A subsequent decline was observed through 2022, with capital reaching a low of 18,919 million USD. A marginal recovery occurred in 2023, bringing the total capital to 19,077 million USD.
The alignment between the movement of total debt and total capital explains the stability of the debt-to-capital ratio. The simultaneous decrease in both debt and total capital between 2020 and 2022 prevented significant shifts in the solvency ratio, while the 2023 increase in debt outpaced the growth in total capital, resulting in the observed rise to 0.39.
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Debt to Capital (including Operating Lease Liability)
Corning Inc., debt to capital (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current portion of long-term debt and short-term borrowings | 320) | 224) | 55) | 156) | 11) | |
| Long-term debt, excluding current portion | 7,206) | 6,687) | 6,989) | 7,816) | 7,729) | |
| Total debt | 7,526) | 6,911) | 7,044) | 7,972) | 7,740) | |
| Short-term operating lease liabilities | 112) | 111) | 94) | 96) | 62) | |
| Long-term operating lease liabilities | 846) | 795) | 691) | 633) | 450) | |
| Total debt (including operating lease liability) | 8,484) | 7,817) | 7,829) | 8,701) | 8,252) | |
| Total Corning Incorporated shareholders’ equity | 11,551) | 12,008) | 12,333) | 13,257) | 12,907) | |
| Total capital (including operating lease liability) | 20,035) | 19,825) | 20,162) | 21,958) | 21,159) | |
| Solvency Ratio | ||||||
| Debt to capital (including operating lease liability)1 | 0.42 | 0.39 | 0.39 | 0.40 | 0.39 | |
| Benchmarks | ||||||
| Debt to Capital (including Operating Lease Liability), Competitors2 | ||||||
| Apple Inc. | 0.67 | 0.72 | 0.68 | — | — | |
| Arista Networks Inc. | 0.01 | 0.01 | 0.02 | — | — | |
| Cisco Systems Inc. | 0.18 | 0.21 | 0.24 | — | — | |
| Dell Technologies Inc. | 1.11 | 1.06 | 0.95 | — | — | |
| Lumentum Holdings Inc. | 0.68 | 0.51 | 0.39 | — | — | |
| Super Micro Computer Inc. | 0.14 | 0.30 | 0.10 | — | — | |
| Debt to Capital (including Operating Lease Liability), Sector | ||||||
| Technology Hardware & Equipment | 0.59 | 0.64 | 0.64 | — | — | |
| Debt to Capital (including Operating Lease Liability), Industry | ||||||
| Information Technology | 0.42 | 0.43 | 0.47 | — | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Debt to capital (including operating lease liability) = Total debt (including operating lease liability) ÷ Total capital (including operating lease liability)
= 8,484 ÷ 20,035 = 0.42
2 Click competitor name to see calculations.
The analysis of solvency metrics from 2019 through 2023 reveals a period of relative stability in capital structure, concluding with a moderate increase in leverage in the final year.
- Total Debt Trends
- Total debt, including operating lease liabilities, experienced volatility over the five-year period. An initial increase occurred in 2020, reaching 8,701 million USD, followed by a two-year decline to a low of 7,817 million USD by December 31, 2022. However, 2023 saw a reversal of this trend, with debt rising to 8,484 million USD.
- Total Capital Evolution
- Total capital followed a similar trajectory to total debt but exhibited a more pronounced contraction after 2020. Following a peak of 21,958 million USD in 2020, total capital decreased consistently through 2022, falling to 19,825 million USD. A marginal recovery was observed in 2023, with capital increasing to 20,035 million USD.
- Debt to Capital Ratio Analysis
- The debt to capital ratio remained highly stable between 2019 and 2022, fluctuating minimally between 0.39 and 0.40. This suggests a consistent management of the balance between debt and equity throughout that interval. In 2023, however, the ratio rose to 0.42, the highest level in the period analyzed, reflecting a higher reliance on debt financing relative to total capital.
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Debt to Assets
Corning Inc., debt to assets calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current portion of long-term debt and short-term borrowings | 320) | 224) | 55) | 156) | 11) | |
| Long-term debt, excluding current portion | 7,206) | 6,687) | 6,989) | 7,816) | 7,729) | |
| Total debt | 7,526) | 6,911) | 7,044) | 7,972) | 7,740) | |
| Total assets | 28,500) | 29,499) | 30,154) | 30,775) | 28,898) | |
| Solvency Ratio | ||||||
| Debt to assets1 | 0.26 | 0.23 | 0.23 | 0.26 | 0.27 | |
| Benchmarks | ||||||
| Debt to Assets, Competitors2 | ||||||
| Apple Inc. | 0.32 | 0.34 | 0.36 | — | — | |
| Arista Networks Inc. | 0.00 | 0.00 | 0.00 | — | — | |
| Cisco Systems Inc. | 0.08 | 0.10 | 0.12 | — | — | |
| Dell Technologies Inc. | 0.33 | 0.29 | 0.39 | — | — | |
| Lumentum Holdings Inc. | 0.61 | 0.45 | 0.33 | — | — | |
| Super Micro Computer Inc. | 0.08 | 0.19 | 0.04 | — | — | |
| Debt to Assets, Sector | ||||||
| Technology Hardware & Equipment | 0.27 | 0.29 | 0.32 | — | — | |
| Debt to Assets, Industry | ||||||
| Information Technology | 0.26 | 0.26 | 0.29 | — | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Debt to assets = Total debt ÷ Total assets
= 7,526 ÷ 28,500 = 0.26
2 Click competitor name to see calculations.
The solvency profile between 2019 and 2023 exhibits a period of relative stability with a temporary improvement in leverage followed by a recent increase in the debt-to-assets ratio. While the company maintained a conservative leverage position throughout the five-year period, the convergence of rising debt and a contracting asset base in 2023 has shifted the solvency trajectory.
- Total Debt Trajectory
- Total debt fluctuated over the analyzed period, peaking in 2020 at 7,972 million USD. A period of deleveraging followed, with debt levels decreasing for two consecutive years to reach a low of 6,911 million USD by December 31, 2022. However, this trend reversed in 2023, as total debt increased to 7,526 million USD.
- Total Asset Trends
- The asset base reached its maximum value in 2020 at 30,775 million USD. Since that peak, a steady and consistent decline in total assets has been observed, with values decreasing annually to end at 28,500 million USD in 2023. This sustained contraction in assets has placed upward pressure on the solvency ratio regardless of debt fluctuations.
- Debt to Assets Ratio Interpretation
- The debt to assets ratio showed an overall improvement from 0.27 in 2019 to a low of 0.23 in 2021 and 2022, indicating a stronger solvency position during that interval. By the end of 2023, the ratio rose to 0.26. This recent increase is attributable to the simultaneous occurrence of an increase in total debt and a reduction in total assets, returning the company's leverage to levels similar to those observed in 2020.
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Debt to Assets (including Operating Lease Liability)
Corning Inc., debt to assets (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current portion of long-term debt and short-term borrowings | 320) | 224) | 55) | 156) | 11) | |
| Long-term debt, excluding current portion | 7,206) | 6,687) | 6,989) | 7,816) | 7,729) | |
| Total debt | 7,526) | 6,911) | 7,044) | 7,972) | 7,740) | |
| Short-term operating lease liabilities | 112) | 111) | 94) | 96) | 62) | |
| Long-term operating lease liabilities | 846) | 795) | 691) | 633) | 450) | |
| Total debt (including operating lease liability) | 8,484) | 7,817) | 7,829) | 8,701) | 8,252) | |
| Total assets | 28,500) | 29,499) | 30,154) | 30,775) | 28,898) | |
| Solvency Ratio | ||||||
| Debt to assets (including operating lease liability)1 | 0.30 | 0.26 | 0.26 | 0.28 | 0.29 | |
| Benchmarks | ||||||
| Debt to Assets (including Operating Lease Liability), Competitors2 | ||||||
| Apple Inc. | 0.35 | 0.38 | 0.39 | — | — | |
| Arista Networks Inc. | 0.01 | 0.01 | 0.01 | — | — | |
| Cisco Systems Inc. | 0.09 | 0.11 | 0.13 | — | — | |
| Dell Technologies Inc. | 0.34 | 0.30 | 0.41 | — | — | |
| Lumentum Holdings Inc. | 0.62 | 0.47 | 0.35 | — | — | |
| Super Micro Computer Inc. | 0.08 | 0.19 | 0.05 | — | — | |
| Debt to Assets (including Operating Lease Liability), Sector | ||||||
| Technology Hardware & Equipment | 0.30 | 0.31 | 0.34 | — | — | |
| Debt to Assets (including Operating Lease Liability), Industry | ||||||
| Information Technology | 0.28 | 0.29 | 0.31 | — | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Debt to assets (including operating lease liability) = Total debt (including operating lease liability) ÷ Total assets
= 8,484 ÷ 28,500 = 0.30
2 Click competitor name to see calculations.
The solvency profile over the five-year period from 2019 to 2023 exhibits a period of relative stability followed by a notable increase in leverage in the final year. While the debt-to-assets ratio initially improved, the convergence of rising debt and a shrinking asset base in 2023 resulted in the highest leverage level of the period.
- Total Debt Obligations
- Total debt, including operating lease liabilities, experienced fluctuations between 2019 and 2023. An initial increase was observed in 2020, reaching 8,701 million USD. This was followed by a two-year period of reduction, with debt falling to 7,817 million USD by the end of 2022. However, this trend reversed in 2023, with debt increasing to 8,484 million USD.
- Total Asset Base
- The asset base peaked in 2020 at 30,775 million USD. Following this peak, a consistent downward trend occurred over the subsequent three years, with total assets declining annually to reach 28,500 million USD by December 31, 2023. This represents a contraction of approximately 7.4% from the 2020 peak.
- Debt to Assets Ratio
- The debt-to-assets ratio reflects an initial strengthening of the solvency position, moving from 0.29 in 2019 to a low of 0.26 in 2021 and 2022. This improvement was driven by a reduction in total debt that outpaced the decline in assets. In 2023, the ratio rose sharply to 0.30, as the company simultaneously increased its debt load and saw a further reduction in total assets, indicating a higher reliance on debt to finance the remaining asset base.
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Financial Leverage
Corning Inc., financial leverage calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Total assets | 28,500) | 29,499) | 30,154) | 30,775) | 28,898) | |
| Total Corning Incorporated shareholders’ equity | 11,551) | 12,008) | 12,333) | 13,257) | 12,907) | |
| Solvency Ratio | ||||||
| Financial leverage1 | 2.47 | 2.46 | 2.44 | 2.32 | 2.24 | |
| Benchmarks | ||||||
| Financial Leverage, Competitors2 | ||||||
| Apple Inc. | 5.67 | 6.96 | 5.56 | — | — | |
| Arista Networks Inc. | 1.38 | 1.39 | 1.44 | — | — | |
| Cisco Systems Inc. | 2.30 | 2.36 | 2.36 | — | — | |
| Dell Technologies Inc. | — | — | 49.78 | — | — | |
| Lumentum Holdings Inc. | 3.42 | 2.22 | 1.80 | — | — | |
| Super Micro Computer Inc. | 1.86 | 2.25 | 2.05 | — | — | |
| Financial Leverage, Sector | ||||||
| Technology Hardware & Equipment | 4.94 | 5.71 | 5.12 | — | — | |
| Financial Leverage, Industry | ||||||
| Information Technology | 2.53 | 2.65 | 2.87 | — | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Financial leverage = Total assets ÷ Total Corning Incorporated shareholders’ equity
= 28,500 ÷ 11,551 = 2.47
2 Click competitor name to see calculations.
The financial profile from 2019 to 2023 indicates a steady increase in financial leverage, reflecting a shift in the capital structure toward a higher proportion of liabilities relative to equity. This trend is characterized by a gradual contraction of the equity base and a moderate decline in total assets following a peak in 2020.
- Total Assets Trend
- Total assets experienced an initial increase, rising from 28,898 million US dollars in 2019 to a peak of 30,775 million US dollars in 2020. Subsequently, a consistent downward trajectory was observed, with assets decreasing annually to reach 28,500 million US dollars by December 31, 2023. This represents a slight net decrease compared to the 2019 baseline.
- Shareholders' Equity Analysis
- Shareholders' equity followed a similar initial growth pattern, peaking at 13,257 million US dollars in 2020. However, a sustained decline occurred over the following three years, with equity falling to 11,551 million US dollars by the end of 2023. The reduction in equity has been more pronounced than the reduction in total assets, contributing to the increase in the leverage ratio.
- Financial Leverage Progression
- The financial leverage ratio has demonstrated a continuous upward trend throughout the analyzed period. Starting at 2.24 in 2019, the ratio increased each year, reaching 2.47 by December 31, 2023. This progression indicates that the company is increasingly utilizing debt or other external liabilities to finance its asset base, as the growth in liabilities has outpaced the retention or growth of shareholders' equity.
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Interest Coverage
Corning Inc., interest coverage calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income attributable to Corning Incorporated | 581) | 1,316) | 1,906) | 512) | 960) | |
| Add: Net income attributable to noncontrolling interest | 67) | 70) | 29) | 11) | 19) | |
| Add: Income tax expense | 168) | 411) | 491) | 111) | 256) | |
| Add: Interest expense | 329) | 292) | 300) | 276) | 221) | |
| Earnings before interest and tax (EBIT) | 1,145) | 2,089) | 2,726) | 910) | 1,456) | |
| Solvency Ratio | ||||||
| Interest coverage1 | 3.48 | 7.15 | 9.09 | 3.30 | 6.59 | |
| Benchmarks | ||||||
| Interest Coverage, Competitors2 | ||||||
| Apple Inc. | 29.92 | 41.64 | 42.29 | — | — | |
| Arista Networks Inc. | — | — | — | — | — | |
| Cisco Systems Inc. | 36.87 | 41.21 | 31.56 | — | — | |
| Dell Technologies Inc. | 3.64 | 4.84 | 2.54 | — | — | |
| Lumentum Holdings Inc. | -1.88 | 3.93 | 7.94 | — | — | |
| Super Micro Computer Inc. | 72.55 | 53.71 | 48.81 | — | — | |
| Interest Coverage, Sector | ||||||
| Technology Hardware & Equipment | 25.05 | 29.79 | 24.05 | — | — | |
| Interest Coverage, Industry | ||||||
| Information Technology | 17.37 | 22.18 | 19.66 | — | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Interest coverage = EBIT ÷ Interest expense
= 1,145 ÷ 329 = 3.48
2 Click competitor name to see calculations.
The analysis of solvency indicators between 2019 and 2023 reveals a volatile capacity to service debt obligations. While the company remained solvent throughout the period, the margin of safety fluctuated significantly in alignment with operational earnings.
- Earnings before Interest and Tax (EBIT)
- Operating earnings showed substantial variance, declining to US$ 910 million in 2020 before reaching a peak of US$ 2,726 million in 2021. A subsequent downward trend is observed, with EBIT falling to US$ 1,145 million by December 31, 2023.
- Interest Expense
- A steady increase in interest obligations is evident, with expenses rising from US$ 221 million in 2019 to US$ 329 million in 2023. This upward trend indicates a growing cost of debt servicing over the five-year observation period.
- Interest Coverage Ratio
- The interest coverage ratio mirrored the volatility of EBIT, starting at 6.59 in 2019 and dropping to 3.30 in 2020. Despite a significant recovery to 9.09 in 2021, the ratio declined steadily over the following two years, ending at 3.48 in 2023. This suggests a compression of the safety buffer available to meet interest payments.
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Fixed Charge Coverage
Corning Inc., fixed charge coverage calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Statutory U.S. federal income tax rate | 21.00% | 21.00% | 21.00% | 21.00% | 21.00% | |
| Selected Financial Data (US$ in millions) | ||||||
| Net income attributable to Corning Incorporated | 581) | 1,316) | 1,906) | 512) | 960) | |
| Add: Net income attributable to noncontrolling interest | 67) | 70) | 29) | 11) | 19) | |
| Add: Income tax expense | 168) | 411) | 491) | 111) | 256) | |
| Add: Interest expense | 329) | 292) | 300) | 276) | 221) | |
| Earnings before interest and tax (EBIT) | 1,145) | 2,089) | 2,726) | 910) | 1,456) | |
| Add: Operating lease cost | 171) | 147) | 139) | 133) | 110) | |
| Earnings before fixed charges and tax | 1,316) | 2,236) | 2,865) | 1,043) | 1,566) | |
| Interest expense | 329) | 292) | 300) | 276) | 221) | |
| Operating lease cost | 171) | 147) | 139) | 133) | 110) | |
| Series A convertible preferred stock dividend and excess consideration paid for redemption of preferred stock | —) | —) | 827) | 98) | 98) | |
| Series A convertible preferred stock dividend and excess consideration paid for redemption of preferred stock, tax adjustment1 | —) | —) | 220) | 26) | 26) | |
| Series A convertible preferred stock dividend and excess consideration paid for redemption of preferred stock, after tax adjustment | —) | —) | 1,047) | 124) | 124) | |
| Fixed charges | 500) | 439) | 1,486) | 533) | 455) | |
| Solvency Ratio | ||||||
| Fixed charge coverage2 | 2.63 | 5.09 | 1.93 | 1.96 | 3.44 | |
| Benchmarks | ||||||
| Fixed Charge Coverage, Competitors3 | ||||||
| Apple Inc. | 20.17 | 25.65 | 26.13 | — | — | |
| Arista Networks Inc. | 73.83 | 49.20 | 31.02 | — | — | |
| Cisco Systems Inc. | 18.98 | 20.30 | 16.92 | — | — | |
| Dell Technologies Inc. | 3.14 | 4.16 | 2.26 | — | — | |
| Lumentum Holdings Inc. | -1.05 | 3.52 | 6.73 | — | — | |
| Super Micro Computer Inc. | 40.95 | 24.03 | 12.52 | — | — | |
| Fixed Charge Coverage, Sector | ||||||
| Technology Hardware & Equipment | 17.13 | 19.64 | 16.52 | — | — | |
| Fixed Charge Coverage, Industry | ||||||
| Information Technology | 11.23 | 13.28 | 12.13 | — | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Series A convertible preferred stock dividend and excess consideration paid for redemption of preferred stock, tax adjustment = (Series A convertible preferred stock dividend and excess consideration paid for redemption of preferred stock × Statutory U.S. federal income tax rate) ÷ (1 − Statutory U.S. federal income tax rate)
= (0 × 21.00%) ÷ (1 − 21.00%) = 0
2 2023 Calculation
Fixed charge coverage = Earnings before fixed charges and tax ÷ Fixed charges
= 1,316 ÷ 500 = 2.63
3 Click competitor name to see calculations.
The solvency profile of the organization exhibits significant volatility between 2019 and 2023, characterized by fluctuating earnings and an anomalous spike in fixed obligations during the middle of the period. While the fixed charge coverage ratio remained consistently above 1.0, indicating a continuous ability to meet fixed obligations, the margin of safety has experienced substantial contractions and expansions.
- Earnings before fixed charges and tax
- A non-linear trend is observed in earnings, which decreased from 1,566 million in 2019 to 1,043 million in 2020 before reaching a five-year peak of 2,865 million in 2021. Following this peak, a sustained downward trajectory occurred, with earnings falling to 2,236 million in 2022 and further declining to 1,316 million by the end of 2023.
- Fixed charge obligations
- Fixed charges remained relatively stable between 439 million and 533 million for most of the period, with the exception of 2021. In 2021, there was a substantial increase in fixed charges to 1,486 million, representing a significant departure from the baseline before returning to 439 million in 2022 and 500 million in 2023.
- Fixed charge coverage ratio
- The coverage ratio reflects the interplay between volatile earnings and shifting obligations. The ratio declined from 3.44 in 2019 to a low of 1.93 in 2021, as the surge in fixed charges offset the increase in earnings. A sharp recovery occurred in 2022, with the ratio reaching a peak of 5.09 due to the normalization of fixed charges. However, by 2023, the ratio compressed to 2.63, driven primarily by the reduction in earnings before fixed charges and tax.
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