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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- Balance Sheet: Assets
- Cash Flow Statement
- Common-Size Balance Sheet: Assets
- Analysis of Long-term (Investment) Activity Ratios
- Analysis of Reportable Segments
- Enterprise Value to FCFF (EV/FCFF)
- Capital Asset Pricing Model (CAPM)
- Dividend Discount Model (DDM)
- Selected Financial Data since 2005
- Aggregate Accruals
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Solvency Ratios (Summary)
Eaton Corp. plc, 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 Ratios
- The debt to equity ratio shows a gradual decline from 0.54 in 2020 to 0.49 in 2023, before slightly increasing to 0.50 in 2024. When including operating lease liability, a similar trend is observed with a decrease from 0.57 in 2020 to 0.52 in 2023, followed by a slight rise to 0.54 in 2024. This indicates a modest reduction in reliance on debt financing relative to equity over the initial years with a small uptick in the most recent year.
- Debt to Capital Ratios
- The debt to capital ratio remains relatively stable, declining slightly from 0.35 in 2020 to 0.33 by 2023 and maintaining that level in 2024. Including operating lease liability, the ratio follows a similar pattern, decreasing from 0.36 in 2020 to 0.34 in 2023 and rising marginally to 0.35 in 2024. This stability suggests consistent capital structure management with minor reductions in debt proportion over time.
- Debt to Assets Ratios
- The debt to assets ratio remains steady at 0.25 from 2020 through 2022, then decreases slightly to 0.24 from 2023 onwards. When factoring in operating lease liability, the ratio declines from 0.27 in 2020 to 0.26 by 2022 and stays stable thereafter. This points to a minor reduction in the proportion of assets financed through debt, supporting a relatively conservative asset financing structure.
- Financial Leverage
- Financial leverage trends downward from 2.13 in 2020 to 2.02 in 2023, indicating a gradual reduction in the company's use of debt relative to equity to finance its assets. However, in 2024, financial leverage increases slightly to 2.08, which aligns with the small rises observed in debt-related ratios in the latest period.
- Interest Coverage
- Interest coverage demonstrates a strong and consistent improvement, rising sharply from 12.72 in 2020 to 36.12 in 2024. This substantial increase suggests a significant enhancement in the company's ability to meet interest obligations from operating earnings, reflecting improved profitability or reduced interest expenses over the period.
- Fixed Charge Coverage
- Fixed charge coverage also shows marked improvement, increasing from 6.24 in 2020 to 13.79 in 2024. This trend complements the interest coverage ratio, indicating an enhanced capacity to cover fixed financial obligations, further supporting the company's financial strength and operational efficiency improvements.
Debt Ratios
Coverage Ratios
Debt to Equity
Eaton Corp. plc, 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) | ||||||
| Short-term debt | ||||||
| Current portion of long-term debt | ||||||
| Long-term debt, excluding current portion | ||||||
| Total debt | ||||||
| Total Eaton shareholders’ equity | ||||||
| Solvency Ratio | ||||||
| Debt to equity1 | ||||||
| Benchmarks | ||||||
| Debt to Equity, Competitors2 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| GE Aerospace | ||||||
| Honeywell International Inc. | ||||||
| Lockheed Martin Corp. | ||||||
| RTX Corp. | ||||||
| Debt to Equity, Sector | ||||||
| Capital Goods | ||||||
| Debt to Equity, Industry | ||||||
| Industrials | ||||||
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 Eaton shareholders’ equity
= ÷ =
2 Click competitor name to see calculations.
- Total Debt
- The total debt showed a generally upward trend from 8058 million US dollars at the end of 2020 to a peak of 9269 million US dollars in 2023. However, it slightly decreased to 9152 million US dollars by the end of 2024, indicating a modest reduction in indebtedness after sustained increases over multiple years.
- Total Eaton Shareholders' Equity
- Shareholders' equity demonstrated consistent growth throughout the period analyzed, rising from 14930 million US dollars at the end of 2020 to a high of 19036 million US dollars in 2023. A slight decline to 18488 million US dollars was observed in 2024, yet the overall trend remains strongly positive, suggesting accumulation of retained earnings or capital injections over the years.
- Debt to Equity Ratio
- The debt to equity ratio exhibited a steady decrease from 0.54 in 2020 to 0.49 in 2023, before marginally increasing to 0.50 in 2024. This trend reflects an improved capital structure with relatively less reliance on debt financing compared to equity, enhancing financial stability.
Debt to Equity (including Operating Lease Liability)
Eaton Corp. plc, 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) | ||||||
| Short-term debt | ||||||
| Current portion of long-term debt | ||||||
| Long-term debt, excluding current portion | ||||||
| Total debt | ||||||
| Current operating lease liabilities (included in Other current liabilities) | ||||||
| Noncurrent operating lease liabilities | ||||||
| Total debt (including operating lease liability) | ||||||
| Total Eaton shareholders’ equity | ||||||
| Solvency Ratio | ||||||
| Debt to equity (including operating lease liability)1 | ||||||
| Benchmarks | ||||||
| Debt to Equity (including Operating Lease Liability), Competitors2 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| GE Aerospace | ||||||
| Honeywell International Inc. | ||||||
| Lockheed Martin Corp. | ||||||
| RTX Corp. | ||||||
| Debt to Equity (including Operating Lease Liability), Sector | ||||||
| Capital Goods | ||||||
| Debt to Equity (including Operating Lease Liability), Industry | ||||||
| Industrials | ||||||
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 Eaton shareholders’ equity
= ÷ =
2 Click competitor name to see calculations.
- Total debt (including operating lease liability)
- The total debt has shown a gradual increase over the five-year period. Starting at $8,500 million in 2020, it rose to $9,984 million by the end of 2024. The most notable increases occurred between 2022 and 2023, with debt growing by approximately $696 million, followed by a smaller increase of $47 million from 2023 to 2024. This suggests a consistent, yet controlled, increase in debt levels over time.
- Total Eaton shareholders’ equity
- Shareholders' equity has generally increased from $14,930 million in 2020 to a peak of $19,036 million in 2023. However, it experienced a slight decline to $18,488 million by the end of 2024. The steady growth until 2023 indicates strengthening equity and potentially retained earnings or capital inflows, while the decrease in 2024 may reflect distributions, losses, or other equity transactions.
- Debt to equity (including operating lease liability)
- The debt to equity ratio exhibits a modest downward trend from 0.57 in 2020 to a low of 0.52 in 2023, followed by a slight increase to 0.54 in 2024. This pattern indicates an improvement in the company’s leverage position through 2023, driven by faster growth in equity relative to debt. The increase in the ratio in 2024 aligns with the observed decrease in equity and continued growth in debt, suggesting a slight return to higher leverage.
Debt to Capital
Eaton Corp. plc, debt to capital calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term debt | ||||||
| Current portion of long-term debt | ||||||
| Long-term debt, excluding current portion | ||||||
| Total debt | ||||||
| Total Eaton shareholders’ equity | ||||||
| Total capital | ||||||
| Solvency Ratio | ||||||
| Debt to capital1 | ||||||
| Benchmarks | ||||||
| Debt to Capital, Competitors2 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| GE Aerospace | ||||||
| Honeywell International Inc. | ||||||
| Lockheed Martin Corp. | ||||||
| RTX Corp. | ||||||
| Debt to Capital, Sector | ||||||
| Capital Goods | ||||||
| Debt to Capital, Industry | ||||||
| Industrials | ||||||
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.
- Total debt
- The total debt showed a general increasing trend from 2020 to 2023, rising from 8,058 million US dollars in 2020 to a peak of 9,269 million US dollars in 2023. However, there was a slight decline in 2024, with total debt decreasing to 9,152 million US dollars. This indicates a cautious approach towards debt management in the latest year after a consistent build-up.
- Total capital
- Total capital consistently increased over the period from 22,988 million US dollars in 2020 to a high of 28,305 million US dollars in 2023. In 2024, total capital saw a minor reduction to 27,640 million US dollars. Despite this slight dip, the long-term trend depicts a strengthening capital base, suggesting growth and reinvestment.
- Debt to capital ratio
- The debt to capital ratio gradually declined over the five-year period. Starting at 0.35 in 2020, it decreased to 0.33 by 2023 and remained stable at that level in 2024. This trend reflects a modest improvement in the company’s leverage position, indicating a relatively lower reliance on debt compared to total capital as time progressed.
Debt to Capital (including Operating Lease Liability)
Eaton Corp. plc, 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) | ||||||
| Short-term debt | ||||||
| Current portion of long-term debt | ||||||
| Long-term debt, excluding current portion | ||||||
| Total debt | ||||||
| Current operating lease liabilities (included in Other current liabilities) | ||||||
| Noncurrent operating lease liabilities | ||||||
| Total debt (including operating lease liability) | ||||||
| Total Eaton shareholders’ 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 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| GE Aerospace | ||||||
| Honeywell International Inc. | ||||||
| Lockheed Martin Corp. | ||||||
| RTX Corp. | ||||||
| Debt to Capital (including Operating Lease Liability), Sector | ||||||
| Capital Goods | ||||||
| Debt to Capital (including Operating Lease Liability), Industry | ||||||
| Industrials | ||||||
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 steady increase over the five-year period, rising from $8,500 million in 2020 to $9,984 million in 2024. The growth is gradual, with a notable acceleration between 2022 and 2023, where the debt increased by approximately $696 million. From 2023 to 2024, the increase slows significantly.
- Total Capital (including operating lease liability)
- Total capital also exhibits an upward trend from $23,430 million in 2020 to $28,472 million in 2024. The increase is consistent year-over-year, peaking in 2023 at $28,973 million before slightly declining in 2024. This indicates that while the capital base has generally expanded, there is a minor contraction in the most recent year.
- Debt to Capital Ratio (including operating lease liability)
- The debt to capital ratio remains relatively stable throughout the period, hovering between 0.34 and 0.36. It starts at 0.36 in 2020 and 2021, decreases to the lowest point of 0.34 in 2023, and then slightly increases to 0.35 in 2024. This suggests that although total debt and capital are increasing, the proportion of debt within the total capital structure remains fairly consistent, indicating controlled leverage levels.
- Overall Insights
- The financial data reflect stable leverage management, with incremental growth in both debt and capital. The decline in the debt to capital ratio up to 2023 followed by a slight increase may imply strategic adjustments in financing or capital structure. The slight decline in total capital in the final period could warrant further investigation to understand its impact on the company's financial health.
Debt to Assets
Eaton Corp. plc, debt to assets calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term debt | ||||||
| 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 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| GE Aerospace | ||||||
| Honeywell International Inc. | ||||||
| Lockheed Martin Corp. | ||||||
| RTX Corp. | ||||||
| Debt to Assets, Sector | ||||||
| Capital Goods | ||||||
| Debt to Assets, Industry | ||||||
| Industrials | ||||||
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 several key trends regarding the company's balance sheet components, particularly total debt, total assets, and the debt to assets ratio, over the five-year period ending in 2024.
- Total Debt
- Total debt shows an overall increasing trend from 2020 through 2023, rising from US$8,058 million to US$9,269 million. However, in 2024, there is a slight decrease to US$9,152 million, indicating a modest reduction in leverage or debt levels compared to the previous year.
- Total Assets
- Total assets consistently increase year-over-year, growing from US$31,824 million in 2020 to US$38,432 million in 2023, before experiencing a minor decline to US$38,381 million in 2024. Despite this small decrease in the final year, the asset base has expanded significantly over the period, reflecting growth in the company's resource base.
- Debt to Assets Ratio
- The debt to assets ratio remains relatively stable throughout the period, fluctuating marginally between 0.24 and 0.25. Starting at 0.25 in 2020, the ratio holds steady around that level through 2022, then slightly decreases to 0.24 in 2023 and 2024. This indicates that despite increases in both debt and assets, the proportion of debt used to finance assets has remained controlled, with a slight improvement in leverage position in the latest years.
Overall, the data suggest a pattern of measured growth in asset size alongside the maintenance of a consistent debt level relative to total assets. The small reduction in both total debt and the debt to assets ratio observed in 2024 could imply a strategic move towards lowering leverage or improving financial stability.
Debt to Assets (including Operating Lease Liability)
Eaton Corp. plc, debt to assets (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term debt | ||||||
| Current portion of long-term debt | ||||||
| Long-term debt, excluding current portion | ||||||
| Total debt | ||||||
| Current operating lease liabilities (included in Other current liabilities) | ||||||
| Noncurrent 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 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| GE Aerospace | ||||||
| Honeywell International Inc. | ||||||
| Lockheed Martin Corp. | ||||||
| RTX Corp. | ||||||
| Debt to Assets (including Operating Lease Liability), Sector | ||||||
| Capital Goods | ||||||
| Debt to Assets (including Operating Lease Liability), Industry | ||||||
| Industrials | ||||||
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 shows a consistent increase over the five-year period. Starting at $8,500 million in 2020, the debt rose to $9,036 million in 2021, continued growing to $9,241 million in 2022, then increased more noticeably to $9,937 million in 2023, before slightly increasing to $9,984 million in 2024. This upward trend suggests a gradual increase in the company's leverage or financing requirements over the analyzed period.
- Total Assets
- Total assets also exhibit a steady upward trend, increasing from $31,824 million in 2020 to $34,027 million in 2021, then to $35,014 million in 2022, followed by a more pronounced increase to $38,432 million in 2023. In 2024, total assets remain relatively stable at $38,381 million, indicating modest stabilization after significant growth the previous year. This growth in assets could be associated with expansion or investment activities.
- Debt to Assets Ratio (Including Operating Lease Liability)
- The debt to assets ratio remains relatively stable throughout the period, fluctuating slightly around 0.26 to 0.27. Starting at 0.27 in 2020 and 2021, it decreased marginally to 0.26 from 2022 onwards until 2024. This indicates that despite increases in both debt and assets, the proportion of debt relative to total assets has not changed materially, suggesting that asset growth has kept pace with debt accumulation, maintaining financial leverage at a consistent level.
Financial Leverage
Eaton Corp. plc, financial leverage calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Total assets | ||||||
| Total Eaton shareholders’ equity | ||||||
| Solvency Ratio | ||||||
| Financial leverage1 | ||||||
| Benchmarks | ||||||
| Financial Leverage, Competitors2 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| GE Aerospace | ||||||
| Honeywell International Inc. | ||||||
| Lockheed Martin Corp. | ||||||
| RTX Corp. | ||||||
| Financial Leverage, Sector | ||||||
| Capital Goods | ||||||
| Financial Leverage, Industry | ||||||
| Industrials | ||||||
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 Eaton shareholders’ equity
= ÷ =
2 Click competitor name to see calculations.
- Total Assets
- Total assets demonstrated a generally upward trajectory over the five-year period. Starting at 31,824 million US dollars at the end of 2020, assets increased steadily to reach a peak of 38,432 million US dollars in 2023. However, by the end of 2024, there was a slight decline to 38,381 million US dollars, indicating a near stabilization after continuous growth.
- Total Eaton Shareholders’ Equity
- Shareholders’ equity followed a positive growth trend from 14,930 million US dollars in 2020 to a high of 19,036 million US dollars in 2023. This reflects consistent strengthening of the company’s equity base. In 2024, equity experienced a marginal decrease to 18,488 million US dollars, suggesting a minor adjustment but maintaining a higher level than prior years.
- Financial Leverage
- The financial leverage ratio exhibited a gradual decline from 2.13 in 2020 to its lowest point of 2.02 in 2023. This trend indicates a slight reduction in reliance on debt relative to equity over this period. In 2024, the ratio increased slightly to 2.08, showing a modest reversal but still reflecting lower leverage compared to the start of the period.
Interest Coverage
Eaton Corp. plc, 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 income attributable to Eaton ordinary shareholders | ||||||
| Add: Net income attributable to noncontrolling interest | ||||||
| Add: Income tax expense | ||||||
| Add: Interest expense, net | ||||||
| Earnings before interest and tax (EBIT) | ||||||
| Solvency Ratio | ||||||
| Interest coverage1 | ||||||
| Benchmarks | ||||||
| Interest Coverage, Competitors2 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| GE Aerospace | ||||||
| Honeywell International Inc. | ||||||
| Lockheed Martin Corp. | ||||||
| RTX Corp. | ||||||
| Interest Coverage, Sector | ||||||
| Capital Goods | ||||||
| Interest Coverage, Industry | ||||||
| Industrials | ||||||
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.
The financial data reflects consistent growth in earnings before interest and tax (EBIT) over the five-year period. EBIT increased steadily from $1,895 million in 2020 to $4,696 million in 2024, exhibiting a significant upward trend that suggests persistent operational improvement or expansion.
Interest expense, net, shows relative stability with minor fluctuations. It decreased slightly from $149 million in 2020 to $130 million in 2024, after a small increase in the intermediate years. This indicates effective control or reduction of financing costs over time.
The interest coverage ratio displays a strong and continuous improvement, rising from 12.72 in 2020 to 36.12 in 2024. This trend indicates an increasing ability to meet interest obligations from operating earnings, reflecting a strengthening financial position and reduced risk associated with debt servicing.
- EBIT Trend
- Continuous growth with a more than doubling from 2020 to 2024, suggesting enhanced profitability or scale.
- Interest Expense
- Relatively stable with a slight downward trend, indicating stable or improved management of interest costs.
- Interest Coverage Ratio
- Marked improvement suggesting greater earnings capacity relative to interest expense and improved financial health.
Fixed Charge Coverage
Eaton Corp. plc, fixed charge coverage calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income attributable to Eaton ordinary shareholders | ||||||
| Add: Net income attributable to noncontrolling interest | ||||||
| Add: Income tax expense | ||||||
| Add: Interest expense, net | ||||||
| Earnings before interest and tax (EBIT) | ||||||
| Add: Operating lease cost | ||||||
| Earnings before fixed charges and tax | ||||||
| Interest expense, net | ||||||
| Operating lease cost | ||||||
| Fixed charges | ||||||
| Solvency Ratio | ||||||
| Fixed charge coverage1 | ||||||
| Benchmarks | ||||||
| Fixed Charge Coverage, Competitors2 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| GE Aerospace | ||||||
| Honeywell International Inc. | ||||||
| Lockheed Martin Corp. | ||||||
| RTX Corp. | ||||||
| Fixed Charge Coverage, Sector | ||||||
| Capital Goods | ||||||
| Fixed Charge Coverage, Industry | ||||||
| Industrials | ||||||
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
Fixed charge coverage = Earnings before fixed charges and tax ÷ Fixed charges
= ÷ =
2 Click competitor name to see calculations.
- Earnings before fixed charges and tax
- The earnings before fixed charges and tax have shown a consistent upward trend from 2020 to 2024. Starting at 2,079 million USD in 2020, the figure increased significantly to 3,204 million USD in 2021 and then experienced a steady rise each year, reaching 4,923 million USD by 2024. This growth indicates improving profitability at the operating level before accounting for fixed charges and taxes.
- Fixed charges
- Fixed charges have remained relatively stable over the period, with minor fluctuations. The amount slightly decreased from 333 million USD in 2020 to 308 million USD in 2021, then gradually increased to 357 million USD in 2024. Despite the increase in earnings, fixed charges have not risen proportionally, maintaining moderate stability.
- Fixed charge coverage
- The fixed charge coverage ratio has exhibited a strong upward trend. Starting at 6.24 in 2020, it increased sharply to 10.4 in 2021 and maintained elevated levels through 2022 and 2023 before reaching 13.79 in 2024. This indicates a substantial improvement in the company’s ability to cover fixed charges with its earnings, reflecting enhanced financial strength and reduced risk related to fixed financial obligations.