Analysis of Solvency Ratios
Solvency ratios also known as long-term debt ratios measure a company ability to meet long-term obligations.
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- Cash Flow Statement
- Analysis of Liquidity Ratios
- Analysis of Short-term (Operating) Activity Ratios
- Enterprise Value to FCFF (EV/FCFF)
- Dividend Discount Model (DDM)
- Net Profit Margin since 2005
- Operating Profit Margin since 2005
- Current Ratio since 2005
- Debt to Equity since 2005
- Price to Earnings (P/E) since 2005
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Solvency Ratios (Summary)
Danaher Corp., solvency ratios
Based on: 10-K (reporting date: 2024-12-31), 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).
- Debt to Equity
- The debt to equity ratio shows a consistent downward trend from 0.53 in 2020 to 0.32 in 2024, indicating a gradual reduction in the reliance on debt relative to equity. This decline conveys a strengthening equity base or a reduction in debt levels over the period.
- Debt to Equity (including operating lease liability)
- This ratio follows a similar decreasing pattern, starting at 0.56 in 2020 and falling to 0.35 in 2024. The inclusion of operating lease liabilities slightly raises the ratio values, but the consistent downward trend reflects overall reduced financial leverage related to both debts and lease obligations.
- Debt to Capital
- The debt to capital ratio decreases steadily from 0.35 in 2020 to 0.24 in 2024, suggesting an ongoing reduction in debt as a proportion of total capital, which may imply improved capital structure and reduced financial risk.
- Debt to Capital (including operating lease liability)
- Including operating lease liabilities, this ratio declines from 0.36 to 0.26 over the examined period. This trend parallels the basic debt to capital metric, indicating improved debt management and potentially stronger capital adequacy.
- Debt to Assets
- Debt to assets ratio decreases gradually from 0.28 in 2020 to 0.21 in 2024, demonstrating a reduction in debt relative to total assets, which suggests an improvement in asset financing and possibly a more conservative debt position.
- Debt to Assets (including operating lease liability)
- This ratio also declines over time, from 0.29 to 0.22, reflecting the same trend as the basic debt to assets ratio but adjusted for lease-related obligations. The decreasing trend consistently points to lower leverage load relative to asset base.
- Financial Leverage
- The financial leverage ratio shows a steady decrease from 1.92 in 2020 to 1.57 in 2024, indicating reduced use of debt in the company’s capital structure. This reduction may also imply a lower risk profile and improved balance sheet strength.
- Interest Coverage
- Interest coverage displays a significant increase during 2021 and 2022, peaking at 40.3, indicating strong earnings relative to interest expense for these years. However, it declines sharply in 2023 to 18.64 and slightly decreases again in 2024 to 17.71. Despite the decline, these values still suggest a comfortable ability to cover interest obligations.
- Fixed Charge Coverage
- The fixed charge coverage ratio also increases from 7.1 in 2020 to a peak of 13.41 in 2022, before declining to 9.05 by 2024. This trend indicates initially improving capacity to meet fixed charges, followed by a moderate reduction in coverage, though the ratio remains at a healthy level.
Debt Ratios
Coverage Ratios
Debt to Equity
Danaher Corp., debt to equity calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Notes payable and current portion of long-term debt | ||||||
| Long-term debt, excluding current portion | ||||||
| Total debt | ||||||
| Total Danaher stockholders’ equity | ||||||
| Solvency Ratio | ||||||
| Debt to equity1 | ||||||
| Benchmarks | ||||||
| Debt to Equity, Competitors2 | ||||||
| AbbVie Inc. | ||||||
| Amgen Inc. | ||||||
| Bristol-Myers Squibb Co. | ||||||
| Eli Lilly & Co. | ||||||
| Gilead Sciences Inc. | ||||||
| Johnson & Johnson | ||||||
| Merck & Co. Inc. | ||||||
| Pfizer Inc. | ||||||
| Regeneron Pharmaceuticals Inc. | ||||||
| Thermo Fisher Scientific Inc. | ||||||
| Vertex Pharmaceuticals Inc. | ||||||
| Debt to Equity, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | ||||||
| Debt to Equity, Industry | ||||||
| Health Care | ||||||
Based on: 10-K (reporting date: 2024-12-31), 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).
1 2024 Calculation
Debt to equity = Total debt ÷ Total Danaher stockholders’ equity
= ÷ =
2 Click competitor name to see calculations.
- Total Debt
-
The total debt shows a decreasing trend over the five-year period. From US$21,204 million at the end of 2020, it slightly increased to US$22,176 million in 2021, after which it consistently declined each year to reach US$16,005 million by the end of 2024. This decline suggests a reduction in leverage or a strategic effort to pay down debt.
- Total Danaher Stockholders’ Equity
-
The stockholders’ equity has generally increased over the period from US$39,766 million in 2020 to a peak of US$53,486 million in 2023. However, there is a noticeable decrease in 2024, where equity falls to US$49,543 million. Despite this dip in the final year, the overall trend over the four years prior indicates growth in equity, which could be indicative of retained earnings growth or capital infusion.
- Debt to Equity Ratio
-
The debt to equity ratio has steadily decreased from 0.53 in 2020 to 0.32 in 2024. This ratio decline aligns with the observed patterns in debt reduction and equity growth. The consistent reduction in this ratio points to an improving capital structure, with the company relying less on debt relative to equity financing over time.
- Summary
-
Overall, the financial data reflects a notable deleveraging strategy, with total debt reducing significantly while equity increases until 2023 before experiencing a slight drop in 2024. The declining debt to equity ratio confirms an improved balance sheet strength and potentially lower financial risk. The slight equity decline in the last period warrants further observation but does not detract from the general positive trend towards a more robust equity base relative to debt.
Debt to Equity (including Operating Lease Liability)
Danaher Corp., debt to equity (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Notes payable and current portion of long-term debt | ||||||
| Long-term debt, excluding current portion | ||||||
| Total debt | ||||||
| Current operating lease liabilities | ||||||
| Long-term operating lease liabilities | ||||||
| Total debt (including operating lease liability) | ||||||
| Total Danaher stockholders’ equity | ||||||
| Solvency Ratio | ||||||
| Debt to equity (including operating lease liability)1 | ||||||
| Benchmarks | ||||||
| Debt to Equity (including Operating Lease Liability), Competitors2 | ||||||
| AbbVie Inc. | ||||||
| Amgen Inc. | ||||||
| Bristol-Myers Squibb Co. | ||||||
| Eli Lilly & Co. | ||||||
| Gilead Sciences Inc. | ||||||
| Johnson & Johnson | ||||||
| Merck & Co. Inc. | ||||||
| Pfizer Inc. | ||||||
| Regeneron Pharmaceuticals Inc. | ||||||
| Thermo Fisher Scientific Inc. | ||||||
| Vertex Pharmaceuticals Inc. | ||||||
| Debt to Equity (including Operating Lease Liability), Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | ||||||
| Debt to Equity (including Operating Lease Liability), Industry | ||||||
| Health Care | ||||||
Based on: 10-K (reporting date: 2024-12-31), 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).
1 2024 Calculation
Debt to equity (including operating lease liability) = Total debt (including operating lease liability) ÷ Total Danaher stockholders’ equity
= ÷ =
2 Click competitor name to see calculations.
- Total Debt (including operating lease liability)
-
The total debt shows a consistent downward trend over the five-year period. Starting from US$22,178 million in 2020, the debt increased slightly to US$23,272 million in 2021, but then steadily declined to US$20,739 million in 2022, US$19,536 million in 2023, and further to US$17,146 million in 2024. This indicates a deliberate reduction in leverage or improved debt management over time.
- Total Danaher Stockholders’ Equity
-
Stockholders' equity experienced growth for the first four years, increasing from US$39,766 million in 2020 to US$53,486 million in 2023, reflecting accumulation of retained earnings or equity issuance. However, in 2024, there was a notable decline to US$49,543 million, suggesting a possible distribution to shareholders, asset revaluation, or other equity-reducing activities impacting the equity base.
- Debt to Equity Ratio (including operating lease liability)
-
The debt-to-equity ratio shows a clear improving trend, decreasing from 0.56 in 2020 to 0.35 in 2024. This consistent reduction corroborates the decline in total debt and growth in equity during most years, signaling enhanced financial stability and lower leverage. The ratio decline suggests the company is becoming less reliant on debt financing relative to equity.
- Summary of Financial Position Trends
-
Overall, the financial metrics indicate strengthening of the capital structure between 2020 and 2024. The company reduced its total debt level significantly after a minor increase in 2021, and equity mostly grew until a decline in the final year examined. The marked drop in debt-to-equity ratio reflects an improving risk profile and potentially stronger solvency. The equity decrease in the last year merits further investigation to understand the drivers behind this change, which may affect future leverage and financial flexibility.
Debt to Capital
Danaher Corp., debt to capital calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Notes payable and current portion of long-term debt | ||||||
| Long-term debt, excluding current portion | ||||||
| Total debt | ||||||
| Total Danaher stockholders’ equity | ||||||
| Total capital | ||||||
| Solvency Ratio | ||||||
| Debt to capital1 | ||||||
| Benchmarks | ||||||
| Debt to Capital, Competitors2 | ||||||
| AbbVie Inc. | ||||||
| Amgen Inc. | ||||||
| Bristol-Myers Squibb Co. | ||||||
| Eli Lilly & Co. | ||||||
| Gilead Sciences Inc. | ||||||
| Johnson & Johnson | ||||||
| Merck & Co. Inc. | ||||||
| Pfizer Inc. | ||||||
| Regeneron Pharmaceuticals Inc. | ||||||
| Thermo Fisher Scientific Inc. | ||||||
| Vertex Pharmaceuticals Inc. | ||||||
| Debt to Capital, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | ||||||
| Debt to Capital, Industry | ||||||
| Health Care | ||||||
Based on: 10-K (reporting date: 2024-12-31), 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).
1 2024 Calculation
Debt to capital = Total debt ÷ Total capital
= ÷ =
2 Click competitor name to see calculations.
The financial data reveals a clear trend in the company’s capital structure and debt levels over the five-year period ending December 31, 2024.
- Total Debt
- Total debt shows a consistent decline from US$21,204 million in 2020 to US$16,005 million in 2024. After a slight increase in 2021, debt levels reduce year over year, indicating a concerted effort to lower leverage and possibly improve financial stability or reduce interest expenses.
- Total Capital
- Total capital demonstrates an initial upward trend from US$60,970 million in 2020 to a peak of US$71,888 million in 2023. However, there is a noticeable reduction in 2024 to US$65,548 million. This fluctuation suggests active management of capital structure, with growth in capital base across several years followed by some contraction, possibly due to asset sales, capital returns, or changes in equity financing.
- Debt to Capital Ratio
- The debt to capital ratio steadily decreases over the years, moving from 0.35 in 2020 to 0.24 by 2024. This declining ratio aligns with the reduction in total debt and the mostly increasing total capital, indicating improved solvency and potentially lower financial risk. The ratio’s downward path reflects a stronger reliance on equity or other sources of capital relative to debt financing.
Overall, the company’s financial data illustrates a strategic trend towards deleveraging and optimizing its capital base, which could enhance its financial flexibility and creditworthiness over time.
Debt to Capital (including Operating Lease Liability)
Danaher Corp., debt to capital (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Notes payable and current portion of long-term debt | ||||||
| Long-term debt, excluding current portion | ||||||
| Total debt | ||||||
| Current operating lease liabilities | ||||||
| Long-term operating lease liabilities | ||||||
| Total debt (including operating lease liability) | ||||||
| Total Danaher stockholders’ equity | ||||||
| Total capital (including operating lease liability) | ||||||
| Solvency Ratio | ||||||
| Debt to capital (including operating lease liability)1 | ||||||
| Benchmarks | ||||||
| Debt to Capital (including Operating Lease Liability), Competitors2 | ||||||
| AbbVie Inc. | ||||||
| Amgen Inc. | ||||||
| Bristol-Myers Squibb Co. | ||||||
| Eli Lilly & Co. | ||||||
| Gilead Sciences Inc. | ||||||
| Johnson & Johnson | ||||||
| Merck & Co. Inc. | ||||||
| Pfizer Inc. | ||||||
| Regeneron Pharmaceuticals Inc. | ||||||
| Thermo Fisher Scientific Inc. | ||||||
| Vertex Pharmaceuticals Inc. | ||||||
| Debt to Capital (including Operating Lease Liability), Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | ||||||
| Debt to Capital (including Operating Lease Liability), Industry | ||||||
| Health Care | ||||||
Based on: 10-K (reporting date: 2024-12-31), 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).
1 2024 Calculation
Debt to capital (including operating lease liability) = Total debt (including operating lease liability) ÷ Total capital (including operating lease liability)
= ÷ =
2 Click competitor name to see calculations.
- Total Debt (including operating lease liability)
-
The total debt shows a declining trend over the analyzed periods. From US$22,178 million at the end of 2020, it slightly increased to US$23,272 million in 2021 but then consistently decreased over the subsequent years, reaching US$17,146 million by the end of 2024. This indicates a deliberate effort to reduce the debt burden over time.
- Total Capital (including operating lease liability)
-
Total capital increased from US$61,944 million at the end of 2020 to a peak of US$73,022 million in 2023, before declining to US$66,689 million in 2024. This pattern suggests capital expansion through 2023, followed by a moderate reduction in the final year of the data set.
- Debt to Capital Ratio (including operating lease liability)
-
The debt to capital ratio demonstrates a consistent downward trend throughout the periods, moving from 0.36 in 2020 to 0.26 in 2024. This reflects an improving capital structure with a reduction in leverage, implying decreasing reliance on debt financing relative to the company's capital base.
Debt to Assets
Danaher Corp., debt to assets calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Notes payable and current portion of long-term debt | ||||||
| Long-term debt, excluding current portion | ||||||
| Total debt | ||||||
| Total assets | ||||||
| Solvency Ratio | ||||||
| Debt to assets1 | ||||||
| Benchmarks | ||||||
| Debt to Assets, Competitors2 | ||||||
| AbbVie Inc. | ||||||
| Amgen Inc. | ||||||
| Bristol-Myers Squibb Co. | ||||||
| Eli Lilly & Co. | ||||||
| Gilead Sciences Inc. | ||||||
| Johnson & Johnson | ||||||
| Merck & Co. Inc. | ||||||
| Pfizer Inc. | ||||||
| Regeneron Pharmaceuticals Inc. | ||||||
| Thermo Fisher Scientific Inc. | ||||||
| Vertex Pharmaceuticals Inc. | ||||||
| Debt to Assets, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | ||||||
| Debt to Assets, Industry | ||||||
| Health Care | ||||||
Based on: 10-K (reporting date: 2024-12-31), 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).
1 2024 Calculation
Debt to assets = Total debt ÷ Total assets
= ÷ =
2 Click competitor name to see calculations.
The financial data reveals a declining trend in total debt over the five-year period. The total debt decreased from $21,204 million in 2020 to $16,005 million in 2024, indicating a consistent reduction in leverage.
Total assets experienced growth from 2020 through 2023, increasing from $76,161 million to a peak of $84,488 million. However, in 2024, total assets decreased to $77,542 million, showing a notable decline from the prior year.
The debt to assets ratio steadily declined over the period, falling from 0.28 in 2020 to 0.21 in 2024. This decrease is aligned with the reduction in total debt and reflects an improvement in the company's capital structure, indicating a lower proportion of debt relative to assets.
- Key observations:
- - Total debt consistently decreased, demonstrating prudent debt management or repayment strategies.
- - Total assets increased initially, suggesting asset growth or acquisitions, but experienced a downturn in the final year, which may warrant further investigation.
- - The declining debt to assets ratio signifies reduced financial leverage and potentially lower risk exposure over time.
Debt to Assets (including Operating Lease Liability)
Danaher Corp., debt to assets (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Notes payable and current portion of long-term debt | ||||||
| Long-term debt, excluding current portion | ||||||
| Total debt | ||||||
| Current operating lease liabilities | ||||||
| Long-term operating lease liabilities | ||||||
| Total debt (including operating lease liability) | ||||||
| Total assets | ||||||
| Solvency Ratio | ||||||
| Debt to assets (including operating lease liability)1 | ||||||
| Benchmarks | ||||||
| Debt to Assets (including Operating Lease Liability), Competitors2 | ||||||
| AbbVie Inc. | ||||||
| Amgen Inc. | ||||||
| Bristol-Myers Squibb Co. | ||||||
| Eli Lilly & Co. | ||||||
| Gilead Sciences Inc. | ||||||
| Johnson & Johnson | ||||||
| Merck & Co. Inc. | ||||||
| Pfizer Inc. | ||||||
| Regeneron Pharmaceuticals Inc. | ||||||
| Thermo Fisher Scientific Inc. | ||||||
| Vertex Pharmaceuticals Inc. | ||||||
| Debt to Assets (including Operating Lease Liability), Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | ||||||
| Debt to Assets (including Operating Lease Liability), Industry | ||||||
| Health Care | ||||||
Based on: 10-K (reporting date: 2024-12-31), 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).
1 2024 Calculation
Debt to assets (including operating lease liability) = Total debt (including operating lease liability) ÷ Total assets
= ÷ =
2 Click competitor name to see calculations.
- Total Debt (including operating lease liability)
-
The total debt of the company experienced a decreasing trend over the five-year period. Starting at US$22,178 million in 2020, it slightly increased in 2021 to US$23,272 million but then consistently declined in the subsequent years to US$17,146 million by 2024. This reflects a strategic reduction in liabilities over time.
- Total Assets
-
Total assets showed an overall increasing pattern from 2020 through 2023, rising from US$76,161 million to US$84,488 million. However, there was a noticeable decline in 2024, with total assets decreasing to US$77,542 million. This suggests that while asset growth was sustained for several years, 2024 represented a reversal in this trend.
- Debt to Assets Ratio (including operating lease liability)
-
The debt to assets ratio exhibited a steady downward movement throughout the period, starting at 0.29 in 2020 and gradually decreasing each year to reach 0.22 in 2024. This indicates an improving capital structure with a reduced proportion of debt relative to assets, reflecting better financial leverage management.
Financial Leverage
Danaher Corp., financial leverage calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Total assets | ||||||
| Total Danaher stockholders’ equity | ||||||
| Solvency Ratio | ||||||
| Financial leverage1 | ||||||
| Benchmarks | ||||||
| Financial Leverage, Competitors2 | ||||||
| AbbVie Inc. | ||||||
| Amgen Inc. | ||||||
| Bristol-Myers Squibb Co. | ||||||
| Eli Lilly & Co. | ||||||
| Gilead Sciences Inc. | ||||||
| Johnson & Johnson | ||||||
| Merck & Co. Inc. | ||||||
| Pfizer Inc. | ||||||
| Regeneron Pharmaceuticals Inc. | ||||||
| Thermo Fisher Scientific Inc. | ||||||
| Vertex Pharmaceuticals Inc. | ||||||
| Financial Leverage, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | ||||||
| Financial Leverage, Industry | ||||||
| Health Care | ||||||
Based on: 10-K (reporting date: 2024-12-31), 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).
1 2024 Calculation
Financial leverage = Total assets ÷ Total Danaher stockholders’ equity
= ÷ =
2 Click competitor name to see calculations.
The data reveals several notable trends in the financial position over the five-year period ending December 31, 2024.
- Total Assets
- Total assets demonstrate a growth trend from 2020 to 2023, increasing from US$76,161 million to a peak of US$84,488 million. However, in the most recent period (2024), total assets declined significantly to US$77,542 million. This decrease suggests a contraction in the asset base, which may be indicative of asset sales, depreciation, or other balance sheet adjustments.
- Total Stockholders’ Equity
- Stockholders' equity has shown consistent growth from US$39,766 million in 2020 to US$53,486 million in 2023, reflecting an expansion of approximately 34.5% over these four years. In 2024, equity decreased to US$49,543 million, representing a reversal in the prior upward trend. This reduction might reflect changes in retained earnings, dividends paid, share repurchases, or other equity adjustments.
- Financial Leverage
- Financial leverage exhibited a steady decline over the period, moving from a ratio of 1.92 in 2020 to 1.57 in 2024. This decreasing leverage ratio denotes a lower reliance on debt relative to equity, aligning with the increases in equity and the eventual slight downturn in total assets. The consistent reduction in leverage suggests a conservative approach to financing, enhancing the company’s capital structure stability.
Overall, the data points to a phase of growth and strengthening equity through 2023, followed by a notable reduction in both total assets and equity in 2024. The continuous decrease in financial leverage throughout the period indicates an ongoing strategy to improve financial robustness, despite the recent contraction in the company's asset base and equity.
Interest Coverage
Danaher Corp., interest coverage calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net earnings | ||||||
| Less: Earnings from discontinued operations, net of income taxes | ||||||
| Add: Income tax expense | ||||||
| Add: Interest expense | ||||||
| Earnings before interest and tax (EBIT) | ||||||
| Solvency Ratio | ||||||
| Interest coverage1 | ||||||
| Benchmarks | ||||||
| Interest Coverage, Competitors2 | ||||||
| AbbVie Inc. | ||||||
| Amgen Inc. | ||||||
| Bristol-Myers Squibb Co. | ||||||
| Eli Lilly & Co. | ||||||
| Gilead Sciences Inc. | ||||||
| Johnson & Johnson | ||||||
| Merck & Co. Inc. | ||||||
| Pfizer Inc. | ||||||
| Regeneron Pharmaceuticals Inc. | ||||||
| Thermo Fisher Scientific Inc. | ||||||
| Vertex Pharmaceuticals Inc. | ||||||
| Interest Coverage, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | ||||||
| Interest Coverage, Industry | ||||||
| Health Care | ||||||
Based on: 10-K (reporting date: 2024-12-31), 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).
1 2024 Calculation
Interest coverage = EBIT ÷ Interest expense
= ÷ =
2 Click competitor name to see calculations.
- Earnings before Interest and Tax (EBIT)
- The EBIT experienced substantial growth from 2020 to 2022, rising from 4,770 million US dollars to a peak of 8,503 million US dollars in 2022. However, this upward trend reversed in the following years, with EBIT declining to 5,330 million in 2023 and further to 4,924 million in 2024. This indicates a significant decrease in operating profitability after 2022, nearly returning to the 2020 level by 2024.
- Interest Expense
- Interest expense showed a generally declining trend from 275 million US dollars in 2020 to 211 million in 2022, suggesting effective management of debt-related costs or lower interest rates during this period. However, in 2023 and 2024, interest expense increased again, reaching 286 million and 278 million respectively, which may reflect increased borrowing or rising interest rates in the latter years.
- Interest Coverage Ratio
- The interest coverage ratio, which measures the ability to cover interest expenses with EBIT, mirrored the fluctuations in EBIT. It rose markedly from 17.35 in 2020 to 40.3 in 2022, demonstrating an enhanced capability to meet interest obligations during this period. Nonetheless, it declined significantly to 18.64 in 2023 and remained at a similar level of 17.71 in 2024, suggesting a reduced margin of safety for interest payments compared to the peak years but still maintenance of coverage above the 2020 level.
Fixed Charge Coverage
Danaher Corp., fixed charge coverage calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Statutory federal income tax rate | ||||||
| Selected Financial Data (US$ in millions) | ||||||
| Net earnings | ||||||
| Less: Earnings from discontinued operations, net of income taxes | ||||||
| Add: Income tax expense | ||||||
| Add: Interest expense | ||||||
| Earnings before interest and tax (EBIT) | ||||||
| Add: Operating lease expense | ||||||
| Earnings before fixed charges and tax | ||||||
| Interest expense | ||||||
| Operating lease expense | ||||||
| Mandatory convertible preferred stock dividends | ||||||
| Mandatory convertible preferred stock dividends, tax adjustment1 | ||||||
| Mandatory convertible preferred stock dividends, after tax adjustment | ||||||
| Fixed charges | ||||||
| Solvency Ratio | ||||||
| Fixed charge coverage2 | ||||||
| Benchmarks | ||||||
| Fixed Charge Coverage, Competitors3 | ||||||
| AbbVie Inc. | ||||||
| Amgen Inc. | ||||||
| Bristol-Myers Squibb Co. | ||||||
| Eli Lilly & Co. | ||||||
| Gilead Sciences Inc. | ||||||
| Johnson & Johnson | ||||||
| Merck & Co. Inc. | ||||||
| Pfizer Inc. | ||||||
| Regeneron Pharmaceuticals Inc. | ||||||
| Thermo Fisher Scientific Inc. | ||||||
| Vertex Pharmaceuticals Inc. | ||||||
| Fixed Charge Coverage, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | ||||||
| Fixed Charge Coverage, Industry | ||||||
| Health Care | ||||||
Based on: 10-K (reporting date: 2024-12-31), 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).
1 2024 Calculation
Mandatory convertible preferred stock dividends, tax adjustment = (Mandatory convertible preferred stock dividends × Statutory federal income tax rate) ÷ (1 − Statutory federal income tax rate)
= ( × ) ÷ (1 − ) =
2 2024 Calculation
Fixed charge coverage = Earnings before fixed charges and tax ÷ Fixed charges
= ÷ =
3 Click competitor name to see calculations.
The financial data reveals distinct trends in earnings before fixed charges and taxes, fixed charges, and fixed charge coverage ratios over the five-year period.
- Earnings before fixed charges and tax
- This metric showed a marked increase from 5,032 million USD in 2020 to a peak of 8,815 million USD in 2022. However, it then experienced a significant decline in the subsequent years, falling to 5,604 million USD in 2023 and further to 5,223 million USD in 2024. This pattern suggests volatility in the company's earnings capacity before fixed charges and taxes, with a noteworthy surge followed by a steady reduction.
- Fixed charges
- Fixed charges remained relatively stable across the period, fluctuating slightly between 577 million USD and 751 million USD. The highest value was observed in 2021 at 751 million USD, followed by a gradual decrease to 577 million USD by 2024. This stability indicates consistent obligations concerning fixed charges, with a mild downward trend in the latter years.
- Fixed charge coverage ratio
- This ratio increased substantially from 7.1 in 2020 to a peak of 13.41 in 2022, indicating an improved ability to cover fixed charges with earnings. After 2022, the ratio declined to 9.55 in 2023 and further to 9.05 in 2024. Although it remains above the 2020 level, the decrease from the peak suggests a weakening in the coverage ability in recent years compared to the highest point.
In summary, the company demonstrated significant growth in earnings before fixed charges and tax up to 2022, which positively impacted the fixed charge coverage ratio. However, the subsequent decline in earnings led to reduced coverage ratios, while fixed charges have remained relatively steady with a slight downward tendency. Overall, the financial indicators point toward a period of strong performance followed by contraction, affecting the company's capacity to cover fixed obligations.