Analysis of Solvency Ratios
Quarterly Data
Solvency ratios also known as long-term debt ratios measure a company ability to meet long-term obligations.
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Solvency Ratios (Summary)
Eaton Corp. plc, solvency ratios (quarterly data)
Based on: 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31).
The analysis of the financial leverage and indebtedness ratios over the observed periods indicates several noteworthy trends. Most leverage ratios demonstrate moderate fluctuation, reflecting adjustments in the company's financing structure.
- Debt to equity
- The debt to equity ratio shows an initial slight decrease from 0.59 in March 2020 to 0.54 by the end of 2020, followed by a peak at 0.79 in June 2021. Subsequently, the ratio gradually declined, stabilizing between 0.48 and 0.54 from March 2023 onward, indicating a reduction in reliance on debt financing relative to equity after mid-2021.
- Debt to equity (including operating lease liability)
- This broader measure follows a similar pattern to the basic debt to equity ratio, with a peak at 0.81 in June 2021 and a gradual decrease to a range around 0.51 to 0.58 during recent periods, suggesting consistent treatment of lease obligations as financial liabilities.
- Debt to capital
- The debt to capital ratio remains relatively stable throughout the period, fluctuating modestly between 0.33 and 0.44. The highest point is observed mid-2021, after which a mild downtrend is observable, stabilizing near 0.33 to 0.35, suggesting consistent capitalization strategies.
- Debt to capital (including operating lease liability)
- This ratio mirrors the trend of the standard debt to capital measure, but with slightly elevated values due to the inclusion of lease liabilities. It shows a minor peak in mid-2021, followed by stabilization in the mid-0.30s range thereafter.
- Debt to assets
- The debt to assets ratio exhibits a marginal decrease from 0.27 in early 2020 to around 0.24-0.26 in the latest periods. This indicates a slight reduction in leverage relative to total assets over time.
- Debt to assets (including operating lease liability)
- The inclusion of lease liabilities results in a slightly higher ratio, maintaining around 0.26 to 0.28 initially, then slightly decreasing to near 0.25 to 0.27 in the most recent quarters, reflecting modest asset base growth and steady debt relative to assets.
- Financial leverage
- The financial leverage ratio remains fairly stable with slight downward movement from around 2.17 in early 2020 to about 2.00 to 2.12 in recent quarters, implying a mild decrease in total assets relative to equity over time.
- Interest coverage
- This ratio, which measures the company's ability to meet interest obligations from operating earnings, shows strong improvement. Starting at 12.72 in December 2020, it steadily rises to a peak above 40 in December 2024, before a slight decline to approximately 36 in March 2025. This upward trend indicates significantly enhanced earnings relative to interest expenses, reflecting improved operational profitability or reduced financing costs.
In summary, the company's financial leverage and debt ratios experienced a peak in mid-2021, after which there was a gradual reduction and stabilization in indebtedness relative to equity, capital, and assets. Additionally, the substantial improvement in interest coverage ratio over the later periods suggests increased capacity to service debt, enhancing financial stability and flexibility. Overall, these trends point to prudent financial management with a focus on maintaining sound capital structure and improving earnings resilience.
Debt Ratios
Coverage Ratios
Debt to Equity
Eaton Corp. plc, debt to equity calculation (quarterly data)
| Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 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. | ||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31).
1 Q1 2025 Calculation
Debt to equity = Total debt ÷ Total Eaton shareholders’ equity
= ÷ =
2 Click competitor name to see calculations.
- Total Debt
-
Total debt exhibited notable fluctuations over the observed periods. Initially, from March 31, 2020 to December 31, 2020, total debt decreased gradually from $8,429 million to $8,058 million. However, a sharp increase occurred at March 31, 2021, reaching $10,158 million, followed by a peak at June 30, 2021 with $12,102 million. Afterward, the debt declined significantly to $8,579 million by December 31, 2021.
In 2022, total debt remained relatively stable with moderate fluctuations, ranging between approximately $8,655 million and $9,699 million. In 2023, a gradual increase was observed, culminating at $9,269 million by December 31, 2023. The early quarters of 2024 show variability again, reaching a high of $10,080 million by March 31, 2025, indicating a rising trend in total debt at the end of the period.
- Total Eaton Shareholders’ Equity
-
Shareholders’ equity showed a consistent upward trend across the entire timeframe. Starting at $14,245 million as of March 31, 2020, equity rose steadily each quarter, reaching $16,413 million by December 31, 2021. Minor fluctuations occurred in 2022, with equity levels oscillating slightly but maintaining overall growth, peaking at $17,038 million by December 31, 2022.
From 2023 through early 2024, equity continued to increase, reaching $19,292 million by June 30, 2024. A slight dip was observed afterwards, with the most recent figure at $18,506 million by March 31, 2025, suggesting stabilization after a period of steady growth.
- Debt to Equity Ratio
-
The debt to equity ratio experienced considerable volatility corresponding to movements in both debt and equity. It started at 0.59 on March 31, 2020, and declined steadily to 0.54 by December 31, 2020, reflecting a decrease in leverage relative to equity.
A marked increase to 0.79 was observed in June 30, 2021, coinciding with the peak in total debt. Following this peak, the ratio dropped sharply to 0.52 by December 31, 2021. From 2022 through early 2023, the ratio remained in a narrow range around 0.5 to 0.56, indicative of relatively stable leverage.
In the later periods through March 31, 2025, the debt to equity ratio remained near 0.5 with minor variations, rising slightly to 0.54 at the end of the reported quarter. This suggests that despite some increases in total debt, the overall leverage relative to equity was managed within a consistent band, reflecting ongoing balance sheet management efforts.
Debt to Equity (including Operating Lease Liability)
Eaton Corp. plc, debt to equity (including operating lease liability) calculation (quarterly data)
| Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||||||
| Short-term debt | ||||||||||||||||||||||||||||
| Current portion of long-term debt | ||||||||||||||||||||||||||||
| Long-term debt, excluding current portion | ||||||||||||||||||||||||||||
| Total debt | ||||||||||||||||||||||||||||
| 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 | ||||||||||||||||||||||||||||
| RTX Corp. | ||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31).
1 Q1 2025 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.
The financial data reveals notable fluctuations and trends in the debt levels, equity, and leverage ratios over the observed periods. Total debt, inclusive of operating lease liabilities, shows variability with periods of both increase and decline. Notably, total debt rose significantly from the first quarter of 2020 through mid-2021, peaking around June 2021, followed by a general downward trend toward the end of 2021. Subsequently, it exhibits cyclical movements with appreciable increases in the first quarter of 2024 and the last quarter of 2024.
In contrast, shareholders’ equity consistently increases across the time span, indicating a steady strengthening of the company’s equity base. The progression is gradual but mostly uninterrupted, reflecting either retained earnings growth or equity infusions contributing to the company’s net worth. The equity reached its highest levels toward the end of 2023 and maintained elevated levels into early 2024, albeit with slight diminutions toward the end of the series.
The debt-to-equity ratio fluctuates alongside the variations in debt and equity but manifests an overall tendency to stabilize in the range of approximately 0.5 to 0.6 in recent periods after a peak around mid-2021. This ratio indicates moderate leverage, with the company managing to reduce its relative debt burden following the mid-2021 increase before experiencing some renewed leverage pressures in the last quarters. The ratio's decline from a high of 0.81 in June 2021 to values near 0.5 in subsequent quarters suggests an effort to deleverage or improved equity growth outpacing debt accumulation.
- Total Debt
- Experiences periods of growth and reduction, with notable peaks in mid-2021 and early to late 2024, reflecting possible financing activities or changes in operational liabilities.
- Total Shareholders’ Equity
- Displays a consistent upward trend throughout, suggesting solid equity growth and financial strengthening over time.
- Debt-to-Equity Ratio
- Shows variability with a peak in mid-2021 followed by a reduction and stabilization, indicating efforts toward balanced leverage and financial risk management.
Overall, the data reflects a company that has experienced fluctuations in debt levels but has maintained a stable and growing equity base, resulting in a manageable leverage profile in recent quarters. The trends suggest an ongoing focus on maintaining financial stability while navigating periods of increased debt. Regular monitoring of these metrics would be advisable to sustain this balance and to understand the impact of cyclical debt changes on the company's financial health.
Debt to Capital
Eaton Corp. plc, debt to capital calculation (quarterly data)
| Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 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. | ||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31).
1 Q1 2025 Calculation
Debt to capital = Total debt ÷ Total capital
= ÷ =
2 Click competitor name to see calculations.
- Total Debt
-
The total debt experienced significant fluctuations over the observed periods. Initially, it showed a gradual decline from 8,429 million US dollars at the end of Q1 2020 to 8,058 million by Q4 2020. This was followed by a sharp increase, peaking at 12,102 million in Q2 2021. After that spike, total debt decreased steadily and stabilized between the range of approximately 8,600 to 9,300 million through the subsequent quarters up to Q1 2024. In the final quarters up to Q1 2025, a modest rise occurred, reaching 10,080 million.
- Total Capital
-
Total capital showed an overall upward trajectory throughout the entire period. Starting at 22,674 million US dollars at the end of Q1 2020, total capital gradually increased to reach over 28,000 million by Q2 2024. Despite some minor volatility, the general trend was positive with periodic rises, particularly noticeable around mid-2023 to early 2024, where capital maintained levels above 27,000 million. Towards the end of the period, total capital slightly decreased to 28,586 million US dollars as of Q1 2025.
- Debt to Capital Ratio
-
The debt to capital ratio fluctuated within a relatively narrow range, reflecting a balanced capital structure with moderate leverage. Beginning at 0.37 in Q1 2020, the ratio decreased somewhat to 0.35 by Q4 2020, followed by an increase to a peak of 0.44 in Q2 2021, coinciding with the spike in total debt. After that, the ratio declined consistently to a low of 0.32 in Q2 2024, indicating a reduced proportion of debt relative to total capital. However, by Q1 2025, the ratio rose again to 0.35, suggesting a slight uptick in leverage. Overall, the ratio indicates the company managed to maintain moderate leverage despite some volatility.
Debt to Capital (including Operating Lease Liability)
Eaton Corp. plc, debt to capital (including operating lease liability) calculation (quarterly data)
| Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 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 | ||||||||||||||||||||||||||||
| 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 | ||||||||||||||||||||||||||||
| RTX Corp. | ||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31).
1 Q1 2025 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.
The financial data reveals several notable trends in debt, capital, and leverage ratios over the observed quarterly periods.
- Total Debt (including operating lease liability)
- The total debt exhibited fluctuations throughout the period starting at 8,763 million USD in early 2020, with a general upward movement visible towards the end of the timeline. The debt peaked near 12,468 million USD in mid-2021, followed by a decline to a low around 8,916 million USD by late 2021. From 2022 onwards, the debt amounts stabilized between roughly 9,000 million and 10,800 million USD, ending at approximately 10,749 million USD by the first quarter of 2025. This suggests an overall moderate increase in debt levels over the long term despite short-term volatility.
- Total Capital (including operating lease liability)
- Total capital demonstrated a consistent growth trajectory over the period, starting from about 23,008 million USD and increasing steadily to reach around 29,255 million USD by early 2025. Though the increments were generally steady, occasional smaller declines are observed, such as a dip in early 2022. The overall trend reflects a gradual expansion of the company’s capital base over the analyzed quarters.
- Debt to Capital Ratio (including operating lease liability)
- The debt to capital ratio followed a fluctuating yet relatively stable pattern. Initially, the ratio held steady near 0.38 in early 2020, then increased to a peak of 0.45 in mid-2021, coinciding with the peak in total debt. Afterward, this ratio declined and remained in a tighter range between 0.34 and 0.37 through the subsequent periods, indicating a slight improvement in capital structure leverage. The ratio hovered mostly around 0.35 from late 2021 to early 2025, suggesting a maintained balance between debt and capital levels without extreme deviations.
In summary, while total debt exhibited some volatility, especially a surge in mid-2021, it generally trended upward in line with total capital expansion. The debt to capital ratio reflects a cautious management of leverage, avoiding excessive indebtedness relative to capital growth. This pattern indicates a controlled and stable financial leverage position with an overall strengthening capital base over the timeframe assessed.
Debt to Assets
Eaton Corp. plc, debt to assets calculation (quarterly data)
| Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 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. | ||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31).
1 Q1 2025 Calculation
Debt to assets = Total debt ÷ Total assets
= ÷ =
2 Click competitor name to see calculations.
- Total Debt
- The total debt shows a fluctuating pattern over the observed periods. Beginning at 8,429 million US dollars in March 2020, the debt decreased gradually to 8,058 million by December 2020. This was followed by a sharp increase, reaching a peak of 12,102 million in June 2021. After this peak, debt levels generally declined, with minor fluctuations, moving to 8,655 million in December 2022. A slight upward trend can be observed again in 2023, with figures oscillating between approximately 8,796 million and 9,300 million before rising to 10,080 million by March 2025. This indicates intermittent borrowing increases, possibly reflecting changes in financing needs or market conditions.
- Total Assets
- Total assets demonstrate a moderate, steady growth trend overall. Starting from 30,845 million US dollars in March 2020, the asset base slightly increased and consistently rose through the subsequent years, peaking at 39,381 million in September 2024. There are minor short-term declines observed around late 2024 and early 2025, but the general progression is upward, suggesting growth in the company’s asset holdings over this timeframe.
- Debt to Assets Ratio
- The debt to assets ratio reveals variations that generally mirror the trends in total debt relative to assets. Initially stable around 0.25 to 0.27 between March and December 2020, this ratio increased notably to values between 0.30 and 0.33 during the first half of 2021, coinciding with the peak in total debt. Subsequently, the ratio declines back to approximately 0.24 to 0.26 from late 2021 through the end of the observed period, indicating an improved balance between debt levels and asset growth. The ratio’s decrease despite fluctuations in debt suggests asset growth and potentially better leverage management in the later years.
Debt to Assets (including Operating Lease Liability)
Eaton Corp. plc, debt to assets (including operating lease liability) calculation (quarterly data)
| Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 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 | ||||||||||||||||||||||||||||
| 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 | ||||||||||||||||||||||||||||
| RTX Corp. | ||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31).
1 Q1 2025 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 levels exhibited some volatility over the observed periods. Starting at 8,763 million USD in March 2020, debt peaked significantly at 12,468 million USD in June 2021 before decreasing to levels near 9,000 million USD by December 2021. After fluctuating moderately around 9,000 to 10,000 million USD through 2022 and 2023, the debt again showed an increasing trend in 2024, reaching 10,749 million USD in March 2025. This pattern indicates episodes of increased leverage followed by partial debt reduction, suggesting active management of debt obligations and possible refinancing or capital expenditures driving debt variations.
- Total assets
- Total assets demonstrated gradual overall growth throughout the timeframe. From 30,845 million USD in March 2020, assets increased steadily, reaching a higher base of 36,804 million USD by June 2021. Despite some fluctuations in subsequent quarters, the asset base maintained an upward trajectory, attaining approximately 39,206 million USD by March 2025. This consistent rise in assets highlights expansion or investment activities contributing to growth in the company’s asset base.
- Debt to assets ratio (including operating lease liability)
- The debt-to-assets ratio fluctuated modestly but remained within a relatively narrow range. Initially around 0.28 in early 2020, the ratio rose to a peak of 0.34 in June 2021, coinciding with the maximum observed total debt level. Thereafter, the ratio reverted to lower levels around 0.25 to 0.27 in more recent quarters. The general downward trend in this ratio post mid-2021 suggests an improvement in the company’s leverage position relative to asset size, reflecting either debt reduction, asset growth, or a combination of both. Overall, the leverage ratio remained moderate, indicating a balanced approach to debt financing compared to asset growth.
Financial Leverage
Eaton Corp. plc, financial leverage calculation (quarterly data)
| Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 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. | ||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31).
1 Q1 2025 Calculation
Financial leverage = Total assets ÷ Total Eaton shareholders’ equity
= ÷ =
2 Click competitor name to see calculations.
- Total Assets
- The total assets demonstrate an overall growth trend from March 2020 to March 2025. Starting at approximately 30.8 billion US dollars in March 2020, assets increased steadily, peaking near 39.4 billion by late 2024. Minor fluctuations are noted around late 2021 when assets slightly decreased compared to mid-2021 levels before resuming growth. Despite some short-term variability, the general pattern reflects asset expansion over the analyzed period.
- Total Eaton Shareholders’ Equity
- Shareholders’ equity shows consistent growth throughout the timeframe. Beginning at about 14.2 billion US dollars in March 2020, it rose steadily to reach approximately 19.3 billion by late 2024, before a slight reduction toward early 2025. The increase suggests strengthening equity base and capitalization. However, small declines again emerge towards the end of the period, potentially indicative of shifts in retained earnings or distribution policies.
- Financial Leverage Ratio
- The financial leverage ratio fluctuated within a relatively narrow band over the five-year period. Initially, the ratio was around 2.17 in early 2020. It reached a peak near 2.39 during mid-2021, indicating higher leverage during that period, possibly reflecting increased liabilities relative to equity. Subsequently, the ratio declined steadily to around 2.00 by mid-2024, suggesting a conservative shift in financial structure with somewhat reduced reliance on debt financing. Toward early 2025, the ratio reversed slightly upward again to approximately 2.12, signaling a modest increase in leverage.
- Overall Observations
- The data point towards a period of expansion in both the asset base and shareholders’ equity, accompanied by dynamic but controlled variations in leverage. The company's balance sheet indicates strengthened equity positions with cautious management of financial leverage. The temporary peak in leverage during mid-2021 could correspond to strategic financing activities, followed by disciplined deleveraging. The trends reflect an overall stable and upward financial trajectory with manageable risk exposure from leverage fluctuations.
Interest Coverage
Eaton Corp. plc, interest coverage calculation (quarterly data)
| Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 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. | ||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31).
1 Q1 2025 Calculation
Interest coverage
= (EBITQ1 2025
+ EBITQ4 2024
+ EBITQ3 2024
+ EBITQ2 2024)
÷ (Interest expenseQ1 2025
+ Interest expenseQ4 2024
+ Interest expenseQ3 2024
+ Interest expenseQ2 2024)
= ( + + + )
÷ ( + + + )
=
2 Click competitor name to see calculations.
- Earnings before interest and tax (EBIT)
- The EBIT figures exhibit considerable volatility from March 2020 through June 2020, with a dramatic drop from 655 million USD to 85 million USD. Following this trough, there is a robust recovery and consistent growth through the subsequent quarters, peaking at 1,150 million USD in September 2021. After a temporary decline in December 2021, EBIT stabilizes with a general upward trend from 2022 onwards, reaching values above 1,200 million USD by late 2024 and early 2025. This pattern suggests resilience and significant operational improvement after an initial sharp downturn.
- Interest expense, net
- Interest expense remains relatively stable throughout the periods, fluctuating modestly between 26 million and 50 million USD. There is a slight increase in mid-2023, peaking at 50 million USD in June 2023, followed by a decrease afterward. Overall, the interest expense does not exhibit a strong trend but shows minor volatility around an average range.
- Interest coverage ratio
- The interest coverage ratio data, available from December 2020 onward, shows a marked improvement across the periods. Starting at 12.72, the ratio steadily rises, indicating increasing ability to cover interest expenses through EBIT. It surpasses 20 in early 2021 and continues ascending to above 36 by 2024 and 2025, peaking at 40.37 in September 2024. The upward trajectory of this ratio reflects improving financial health and enhanced debt servicing capacity over time.
- Overall financial trends
- The analysis reveals an initial financial disruption around early 2020, followed by strong operational recovery and growth. EBIT growth outpaces changes in interest expense, contributing to a significant improvement in interest coverage ratio. This combination suggests strengthening profitability and reduced financial risk related to interest obligations during the observed period.