Analysis of Solvency Ratios
Quarterly Data
Solvency ratios also known as long-term debt ratios measure a company ability to meet long-term obligations.
Solvency Ratios (Summary)
DuPont de Nemours Inc., solvency ratios (quarterly data)
Based on: 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31).
- Debt to Equity Ratio
- The debt to equity ratio demonstrated a declining trend from early 2016 through the end of 2017, decreasing from 0.66 to a low of 0.34. This indicates a reduction in the company’s reliance on debt financing relative to equity during this period. From 2018 onward, there was a gradual increase in this ratio, reaching 0.45 by mid-2019 before stabilizing around 0.43 by the end of 2019, suggesting a moderate rise in leverage compared to the trough observed in 2017.
- Debt to Capital Ratio
- This ratio followed a similar pattern to the debt to equity ratio. Starting at 0.40 in early 2016, it grew slightly to 0.45 by the end of 2016, then sharply declined to about 0.25 by the third quarter of 2017. After this low point, the ratio slowly increased again to peak near 0.31 in mid-2019, ending around 0.30 towards late 2019. The fluctuations indicate changing capital structure dynamics with periods of deleveraging followed by incremental increases in debt financing.
- Debt to Assets Ratio
- This ratio showed a slight but consistent rise from 0.25 in the first quarter of 2016 to 0.27 by early 2017. A sharp decline followed in the third quarter of 2017, dropping to 0.18, where it remained relatively stable throughout the rest of 2017 and much of 2018. Thereafter, the ratio trended upward again, reaching 0.25 by the end of 2019, signaling a renewed increase in debt relative to total assets.
- Financial Leverage Ratio
- The financial leverage ratio increased steadily from 2.67 in early 2016, peaking at 3.06 at year-end 2016, reflecting higher leverage. A pronounced reduction occurred in 2017, with the ratio falling to approximately 1.90 by late 2017 and remaining near this level through 2018. In 2019, moderate fluctuations were observed, with the ratio rising to around 2.05 mid-year before declining again to about 1.69 by the end of the year. These movements suggest varying use of debt relative to equity and assets over the observed period.
- Interest Coverage Ratio
- The interest coverage ratio started strong at 9.71 in the first quarter of 2016, increasing to a peak of 12.04 by mid-2016, showing robust ability to meet interest obligations. However, this ratio declined sharply through 2016 and 2017, falling to 2.10 by year-end 2017. Although slight improvements were noted in 2018, reaching 4.65 in the fourth quarter, the ratio declined substantially again during 2019, ultimately falling to a very low 0.29 by the end of the year. This indicates a significant weakening in the company’s capacity to cover interest expenses, which could signal increased financial stress or lower earnings relative to debt costs.
Debt Ratios
Coverage Ratios
Debt to Equity
DuPont de Nemours Inc., debt to equity calculation (quarterly data)
| 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 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||
| Short-term borrowings and finance lease obligations | 3,830) | 1,975) | 1,621) | 7,004) | 2,802) | 7,875) | 7,400) | 5,118) | 4,015) | 7,082) | 1,435) | 999) | 907) | 869) | 494) | 747) | |||||
| Long-term debt, excluding due within one year | 13,617) | 15,610) | 15,608) | 34,966) | 37,662) | 27,293) | 26,850) | 29,343) | 30,056) | 29,819) | 20,072) | 20,471) | 20,456) | 20,423) | 20,852) | 16,229) | |||||
| Total debt | 17,447) | 17,585) | 17,229) | 41,970) | 40,464) | 35,168) | 34,250) | 34,461) | 34,071) | 36,901) | 21,507) | 21,470) | 21,363) | 21,292) | 21,346) | 16,976) | |||||
| Total DuPont’s stockholders’ equity | 40,987) | 41,344) | 42,006) | 92,444) | 94,571) | 98,090) | 98,262) | 101,260) | 100,330) | 102,946) | 28,421) | 27,060) | 25,987) | 29,035) | 28,936) | 25,599) | |||||
| Solvency Ratio | |||||||||||||||||||||
| Debt to equity1 | 0.43 | 0.43 | 0.41 | 0.45 | 0.43 | 0.36 | 0.35 | 0.34 | 0.34 | 0.36 | 0.76 | 0.79 | 0.82 | 0.73 | 0.74 | 0.66 | |||||
| Benchmarks | |||||||||||||||||||||
| Debt to Equity, Competitors2 | |||||||||||||||||||||
| Linde plc | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||
| Sherwin-Williams Co. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||
Based on: 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31).
1 Q4 2019 Calculation
Debt to equity = Total debt ÷ Total DuPont’s stockholders’ equity
= 17,447 ÷ 40,987 = 0.43
2 Click competitor name to see calculations.
The company's financial leverage and capital structure exhibit notable fluctuations over the analyzed quarters. Total debt shows a rising trend from the beginning of 2016 through mid-2017, with a sharp increase peaking in the third quarter of 2017. Following this peak, there is a gradual decline in total debt levels until the end of 2019, indicating a potential deleveraging phase during this period.
Shareholders’ equity demonstrates a significant surge during the third quarter of 2017, nearly tripling compared to previous periods. This elevated level of equity remains relatively stable through the next several quarters before experiencing a marked decrease starting in early 2019 and continuing through the end of the reporting period. The substantial increase in equity followed by its decline suggests that a considerable event, such as a restructuring or revaluation, might have impacted equity balances.
The debt-to-equity ratio reflects these shifts in debt and equity. Initially, the ratio rises steadily from 0.66 in the first quarter of 2016 to 0.82 by the end of 2016, indicating increasing leverage. In the third quarter of 2017, there is a pronounced decrease in this ratio to approximately 0.36, aligning with the simultaneous spike in equity and debt adjustments. Subsequently, the ratio maintains a stable range from 0.34 to 0.43 until the end of 2019, suggesting a more balanced capital structure after the 2017 adjustments.
- Total Debt
- Increases significantly through early 2017, spikes in Q3 2017, then decreases steadily through 2019.
- Shareholders’ Equity
- Exhibits a sharp increase in Q3 2017, stable thereafter until a declining trend begins in early 2019.
- Debt to Equity Ratio
- Rises from 0.66 to 0.82 in 2016, drops notably in Q3 2017 to around 0.36, then remains stable around 0.34-0.43 through the end of 2019.
Overall, these patterns indicate a significant capital structure adjustment around mid-2017, followed by a more conservative leverage position. The data suggest strategic financial management to balance debt and equity levels after a period of heightened indebtedness and equity valuation changes.
Debt to Capital
DuPont de Nemours Inc., debt to capital calculation (quarterly data)
| 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 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||
| Short-term borrowings and finance lease obligations | 3,830) | 1,975) | 1,621) | 7,004) | 2,802) | 7,875) | 7,400) | 5,118) | 4,015) | 7,082) | 1,435) | 999) | 907) | 869) | 494) | 747) | |||||
| Long-term debt, excluding due within one year | 13,617) | 15,610) | 15,608) | 34,966) | 37,662) | 27,293) | 26,850) | 29,343) | 30,056) | 29,819) | 20,072) | 20,471) | 20,456) | 20,423) | 20,852) | 16,229) | |||||
| Total debt | 17,447) | 17,585) | 17,229) | 41,970) | 40,464) | 35,168) | 34,250) | 34,461) | 34,071) | 36,901) | 21,507) | 21,470) | 21,363) | 21,292) | 21,346) | 16,976) | |||||
| Total DuPont’s stockholders’ equity | 40,987) | 41,344) | 42,006) | 92,444) | 94,571) | 98,090) | 98,262) | 101,260) | 100,330) | 102,946) | 28,421) | 27,060) | 25,987) | 29,035) | 28,936) | 25,599) | |||||
| Total capital | 58,434) | 58,929) | 59,235) | 134,414) | 135,035) | 133,258) | 132,512) | 135,721) | 134,401) | 139,847) | 49,928) | 48,530) | 47,350) | 50,327) | 50,282) | 42,575) | |||||
| Solvency Ratio | |||||||||||||||||||||
| Debt to capital1 | 0.30 | 0.30 | 0.29 | 0.31 | 0.30 | 0.26 | 0.26 | 0.25 | 0.25 | 0.26 | 0.43 | 0.44 | 0.45 | 0.42 | 0.42 | 0.40 | |||||
| Benchmarks | |||||||||||||||||||||
| Debt to Capital, Competitors2 | |||||||||||||||||||||
| Linde plc | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||
| Sherwin-Williams Co. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||
Based on: 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31).
1 Q4 2019 Calculation
Debt to capital = Total debt ÷ Total capital
= 17,447 ÷ 58,434 = 0.30
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals notable fluctuations and trends in the company's debt levels, capital structure, and leverage ratios over the observed periods.
- Total Debt
- Total debt exhibited a general upward trend from early 2016 through mid-2017, increasing from approximately $17 billion to over $21.5 billion. A sharp surge occurred in the third quarter of 2017, with total debt rising significantly to nearly $37 billion. Subsequently, total debt decreased gradually through 2018 and into early 2019, before stabilizing near $17.5 billion by the end of 2019.
- Total Capital
- Total capital followed a somewhat variable path. Initial growth occurred during 2016 into mid-2017, culminating at around $50 billion to $52 billion. A dramatic increase to over $130 billion was observed in the third quarter of 2017, maintaining similar levels through 2018. However, total capital dropped sharply in 2019, returning closer to the $58 billion range by year-end, indicating significant capital structure changes.
- Debt to Capital Ratio
- The debt-to-capital ratio, reflecting leverage, started near 0.40 at the beginning of 2016 and rose to approximately 0.45 by year-end 2016, indicating increasing reliance on debt financing. Notably, this ratio dropped substantially to around 0.26 in late 2017, coinciding with the peak in total capital and the spike in total debt, suggesting capital increases outpaced debt growth. Throughout 2018, the ratio remained relatively stable in the mid-0.20s, before a moderate rise to about 0.30 was recorded in 2019, reflecting a slight increase in leverage.
Overall, the data indicates a period of considerable change in the company’s financing strategy, particularly in late 2017, marked by both substantial growth in total capital and fluctuating total debt. Following this period, a reversion towards more moderate levels of debt and capital was apparent, with the leverage ratio stabilizing around 0.30 by the end of 2019. These patterns suggest strategic shifts in capital management, likely influenced by significant financing or restructuring events.
Debt to Assets
DuPont de Nemours Inc., debt to assets calculation (quarterly data)
| Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||
| Short-term borrowings and finance lease obligations | 3,830) | 1,975) | 1,621) | 7,004) | 2,802) | 7,875) | 7,400) | 5,118) | 4,015) | 7,082) | 1,435) | 999) | 907) | 869) | 494) | 747) | |||||
| Long-term debt, excluding due within one year | 13,617) | 15,610) | 15,608) | 34,966) | 37,662) | 27,293) | 26,850) | 29,343) | 30,056) | 29,819) | 20,072) | 20,471) | 20,456) | 20,423) | 20,852) | 16,229) | |||||
| Total debt | 17,447) | 17,585) | 17,229) | 41,970) | 40,464) | 35,168) | 34,250) | 34,461) | 34,071) | 36,901) | 21,507) | 21,470) | 21,363) | 21,292) | 21,346) | 16,976) | |||||
| Total assets | 69,396) | 70,119) | 70,843) | 189,785) | 188,030) | 184,453) | 187,367) | 192,441) | 192,164) | 198,527) | 82,247) | 80,828) | 79,511) | 80,624) | 81,524) | 68,440) | |||||
| Solvency Ratio | |||||||||||||||||||||
| Debt to assets1 | 0.25 | 0.25 | 0.24 | 0.22 | 0.22 | 0.19 | 0.18 | 0.18 | 0.18 | 0.19 | 0.26 | 0.27 | 0.27 | 0.26 | 0.26 | 0.25 | |||||
| Benchmarks | |||||||||||||||||||||
| Debt to Assets, Competitors2 | |||||||||||||||||||||
| Linde plc | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||
| Sherwin-Williams Co. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||
Based on: 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31).
1 Q4 2019 Calculation
Debt to assets = Total debt ÷ Total assets
= 17,447 ÷ 69,396 = 0.25
2 Click competitor name to see calculations.
The financial data reflects the company's indebtedness and asset base over a series of quarterly periods from March 2016 through December 2019. Observing the total debt figures, there is a notable upward trend between early 2016 and late 2017, with total debt increasing from approximately $17 billion to over $34 billion. This sharp rise peaks around September 2017, followed by some fluctuations but generally maintaining a higher level through 2018. However, in 2019, a significant reduction in total debt is observed, with values declining steadily to approximately $17.4 billion by the end of the year, returning close to the 2016 levels.
Total assets display a somewhat similar pattern with an overall increase until the end of 2017, reaching nearly $198.5 billion, which signifies substantial growth compared to the initial $68.4 billion in early 2016. Subsequently, total assets experience a decline throughout 2018 and into 2019, settling around the $69 billion mark by the final quarter. This indicates a major contraction or asset divestiture during that period.
The debt to assets ratio provides insight into the company’s leverage over time. This ratio remains relatively stable around 0.25 to 0.27 during 2016 and early 2017, reflecting moderate leverage. A notable decrease then occurs in the latter half of 2017, when the ratio falls to approximately 0.18, indicating lower leverage, possibly as a consequence of the sharp asset growth outpacing the increase in debt. During 2018, this ratio rises gradually to about 0.22, suggesting an increase in leverage, which intensifies further in 2019, ultimately returning to around 0.25 at year-end. This restoration of the leverage ratio coincides with the reduction in total assets and total debt, suggesting a proportional decrease in both metrics.
In summary, the data reveals a cycle of increasing asset base and debt levels peaking in 2017, followed by a pronounced reduction in both assets and liabilities through 2019, with leverage ratios moving accordingly. Such shifts may indicate strategic restructuring, significant asset sales, or changes in financing approach within the company during this period.
Financial Leverage
DuPont de Nemours Inc., financial leverage calculation (quarterly data)
| Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||
| Total assets | 69,396) | 70,119) | 70,843) | 189,785) | 188,030) | 184,453) | 187,367) | 192,441) | 192,164) | 198,527) | 82,247) | 80,828) | 79,511) | 80,624) | 81,524) | 68,440) | |||||
| Total DuPont’s stockholders’ equity | 40,987) | 41,344) | 42,006) | 92,444) | 94,571) | 98,090) | 98,262) | 101,260) | 100,330) | 102,946) | 28,421) | 27,060) | 25,987) | 29,035) | 28,936) | 25,599) | |||||
| Solvency Ratio | |||||||||||||||||||||
| Financial leverage1 | 1.69 | 1.70 | 1.69 | 2.05 | 1.99 | 1.88 | 1.91 | 1.90 | 1.92 | 1.93 | 2.89 | 2.99 | 3.06 | 2.78 | 2.82 | 2.67 | |||||
| Benchmarks | |||||||||||||||||||||
| Financial Leverage, Competitors2 | |||||||||||||||||||||
| Linde plc | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||
| Sherwin-Williams Co. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||
Based on: 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31).
1 Q4 2019 Calculation
Financial leverage = Total assets ÷ Total DuPont’s stockholders’ equity
= 69,396 ÷ 40,987 = 1.69
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals several noteworthy trends in the company’s asset base, equity position, and financial leverage over the examined periods.
- Total Assets
-
Total assets demonstrated significant fluctuation throughout the periods. Starting from approximately $68.4 billion at the end of March 2016, assets increased steadily, peaking sharply around September 2017 at nearly $198.5 billion. This spike was followed by a gradual decline, with total assets falling to about $69.4 billion by the end of December 2019. This pattern indicates a period of either aggressive expansion or major acquisitions around late 2017, followed by divestitures or asset reductions in the subsequent years.
- Total Stockholders’ Equity
-
The equity base showed a generally increasing trend from March 2016 through September 2017, rising from roughly $25.6 billion to about $103 billion. Similarly to total assets, equity peaked sharply in the third quarter of 2017 but then entered a declining phase, falling to just under $41 billion by the end of 2019. This movement in equity mirrors the asset trend and suggests that changes in equity were aligned with the changes in asset size, possibly reflecting expanded capital investment during the growth phase followed by reductions that may have included distributions, losses, or other equity adjustments.
- Financial Leverage
-
The financial leverage ratio started at around 2.67 in early 2016 and showed variability over the quarters. It gradually increased, reaching a peak of approximately 3.06 by the end of 2016, indicating higher leverage and thus more debt relative to equity. Subsequently, leverage notably decreased to around 1.9 by late 2017 and remained relatively stable near this level through 2018, before dropping further to about 1.69 by 2019. This downward trend in leverage towards the end of the period suggests a reduction in financial risk, possibly through debt repayment or an increase in equity through retained earnings or capital injections relative to debt.
In summary, the company's total assets and equity experienced significant growth through mid-2017, followed by a marked decline through the end of 2019. The financial leverage ratio initially rose, indicating increased reliance on debt, but subsequently decreased substantially, reflecting a move towards a more conservative capital structure.
Interest Coverage
DuPont de Nemours Inc., interest coverage calculation (quarterly data)
| Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||
| Net income (loss) available for DuPont | 177) | 372) | (571) | 520) | 475) | 497) | 1,768) | 1,104) | (1,263) | 514) | 1,321) | 888) | 52) | 804) | 3,208) | 254) | |||||
| Add: Net income attributable to noncontrolling interest | 12) | 5) | 34) | 51) | 38) | 38) | 35) | 44) | 47) | 20) | 38) | 27) | 32) | 14) | 19) | 21) | |||||
| Less: Income (loss) from discontinued operations, net of tax | 643) | 5) | 566) | —) | —) | —) | —) | (5) | (57) | (20) | —) | —) | —) | —) | —) | —) | |||||
| Add: Income tax expense | (302) | 78) | 155) | 209) | 215) | 320) | 565) | 389) | (1,715) | 571) | 455) | 213) | (282) | 271) | 130) | (110) | |||||
| Add: Interest expense | (128) | 177) | 165) | 454) | 432) | 362) | 360) | 350) | 354) | 283) | 226) | 219) | 229) | 220) | 208) | 201) | |||||
| Earnings before interest and tax (EBIT) | (884) | 627) | (783) | 1,234) | 1,160) | 1,217) | 2,728) | 1,892) | (2,520) | 1,408) | 2,040) | 1,347) | 31) | 1,309) | 3,565) | 366) | |||||
| Solvency Ratio | |||||||||||||||||||||
| Interest coverage1 | 0.29 | 1.82 | 2.00 | 3.94 | 4.65 | 2.33 | 2.60 | 2.32 | 2.10 | 5.04 | 5.29 | 7.14 | 6.14 | 11.08 | 12.04 | 9.71 | |||||
| Benchmarks | |||||||||||||||||||||
| Interest Coverage, Competitors2 | |||||||||||||||||||||
| Sherwin-Williams Co. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||
Based on: 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31).
1 Q4 2019 Calculation
Interest coverage
= (EBITQ4 2019
+ EBITQ3 2019
+ EBITQ2 2019
+ EBITQ1 2019)
÷ (Interest expenseQ4 2019
+ Interest expenseQ3 2019
+ Interest expenseQ2 2019
+ Interest expenseQ1 2019)
= (-884 + 627 + -783 + 1,234)
÷ (-128 + 177 + 165 + 454)
= 0.29
2 Click competitor name to see calculations.
- Earnings Before Interest and Tax (EBIT)
- Between the first quarter of 2016 and the end of 2019, EBIT exhibited significant volatility. Initially, EBIT increased sharply from 366 million USD in Q1 2016 to a peak of 3,565 million USD in Q2 2016. Subsequently, the figure fluctuated drastically with a notable sharp decline in Q4 2017, reaching -2,520 million USD, indicating a substantial operating loss during that period. Post this trough, EBIT recovered to positive territory, peaking again at 2,728 million USD in Q2 2018. However, a downward trend persisted thereafter, with EBIT declining to -884 million USD by Q4 2019, marking another period of negative operating performance.
- Interest Expense
- Interest expense demonstrated a generally upward trend over the monitored period. Starting at 201 million USD in Q1 2016, the expense increased steadily, reaching its highest value of 454 million USD in Q2 2019. A notable decline in interest expense was observed toward the end of the period, falling to -128 million USD by Q4 2019, which may suggest an anomalous or accounting adjustment.
- Interest Coverage Ratio
- The interest coverage ratio, which measures the company's ability to service its debt, showed a clear downward trajectory. Early in the period, the ratio was relatively strong, peaking at 12.04 in Q2 2016. This metric declined progressively, dropping below 3 by the end of 2017 and fluctuating near 2 throughout 2018 and 2019. The ratio further deteriorated significantly to a low of 0.29 in Q4 2019, indicative of severe challenges in covering interest obligations from operating earnings during the latter stages of the timeframe.
- Overall Insights
- The data reflects periods of substantial financial strain, with operating profitability suffering extreme fluctuations including multiple quarters with negative EBIT. Interest expenses generally increased, potentially elevating financial risk. The declining interest coverage ratio points to deteriorating debt servicing capacity, underscoring increased vulnerability in meeting interest payments from operating income. The financial performance from late 2017 through 2019 suggests operational and financial challenges that may have pressured liquidity and overall financial stability.