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)
Eaton Corp. plc, solvency ratios (quarterly data)
Based on: 10-Q (reporting date: 2026-03-31), 10-K (reporting date: 2025-12-31), 10-Q (reporting date: 2025-09-30), 10-Q (reporting date: 2025-06-30), 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).
The solvency profile exhibits a period of consistent stability from March 2022 through December 2025, followed by a significant structural shift in the final quarter ending March 31, 2026. Throughout the majority of the observed timeline, the company maintained disciplined leverage levels, though a marked increase in debt-related ratios is evident in the most recent reporting period.
- Leverage Ratios
- The debt-to-equity ratio remained relatively constant, fluctuating between 0.48 and 0.62 for nearly four years. However, a sharp escalation occurred on March 31, 2026, where the ratio rose to 1.07, indicating a substantial increase in debt relative to shareholder equity. A similar pattern is observed in the debt-to-capital ratio, which remained within a tight range of 0.32 to 0.38 until jumping to 0.52 in the final quarter.
- Asset-Based Solvency and Financial Leverage
- Debt to assets remained stable between 0.24 and 0.29 for the bulk of the period, eventually climbing to 0.38 by March 31, 2026. This trend is mirrored in the financial leverage ratio, which maintained a steady range of 2.00 to 2.18 before surging to 2.79 in the final reporting period, suggesting a higher reliance on borrowed funds to finance the asset base.
- Interest Coverage and Debt Serviceability
- Interest coverage demonstrated a strong upward trajectory during 2023 and 2024, peaking at 40.37 in September 2024. This indicates a significant improvement in the capacity to meet interest obligations through operating earnings during that window. Following this peak, a consistent decline is observed, with the ratio falling to 16.48 by March 31, 2026, which coincides with the broader increase in leverage and debt obligations.
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Debt Ratios
Coverage Ratios
Debt to Equity
Eaton Corp. plc, debt to equity calculation (quarterly data)
| Mar 31, 2026 | Dec 31, 2025 | Sep 30, 2025 | Jun 30, 2025 | 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 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||
| Short-term debt | 2,510) | 1) | 761) | 1,111) | 805) | —) | 3) | 4) | 1) | 8) | 24) | 94) | 87) | 324) | 903) | 1,392) | 1,116) | ||||||
| Current portion of long-term debt | 84) | 1,136) | 1,136) | 1,134) | 1,666) | 674) | 714) | 1,278) | 994) | 1,017) | 975) | 402) | 8) | 10) | 23) | 2,030) | 1,728) | ||||||
| Long-term debt, excluding current portion | 18,535) | 8,758) | 8,756) | 8,751) | 7,609) | 8,478) | 8,678) | 8,555) | 8,192) | 8,244) | 8,150) | 8,804) | 8,701) | 8,321) | 8,082) | 6,277) | 6,763) | ||||||
| Total debt | 21,129) | 9,895) | 10,653) | 10,996) | 10,080) | 9,152) | 9,395) | 9,837) | 9,187) | 9,269) | 9,149) | 9,300) | 8,796) | 8,655) | 9,008) | 9,699) | 9,607) | ||||||
| Total Eaton shareholders’ equity | 19,721) | 19,425) | 18,843) | 18,606) | 18,506) | 18,488) | 19,117) | 19,219) | 19,292) | 19,036) | 18,383) | 17,953) | 17,449) | 17,038) | 16,068) | 16,380) | 16,620) | ||||||
| Solvency Ratio | |||||||||||||||||||||||
| Debt to equity1 | 1.07 | 0.51 | 0.57 | 0.59 | 0.54 | 0.50 | 0.49 | 0.51 | 0.48 | 0.49 | 0.50 | 0.52 | 0.50 | 0.51 | 0.56 | 0.59 | 0.58 | ||||||
| Benchmarks | |||||||||||||||||||||||
| Debt to Equity, Competitors2 | |||||||||||||||||||||||
| Boeing Co. | 7.89 | 9.92 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Caterpillar Inc. | 2.31 | 2.03 | 2.01 | 2.18 | 2.14 | 1.97 | 1.95 | 2.18 | 2.15 | 1.94 | 1.81 | 2.07 | 2.04 | 2.33 | 2.34 | 2.35 | 2.20 | ||||||
| GE Aerospace | 1.12 | 1.10 | 1.11 | 0.99 | 1.02 | 1.00 | 1.06 | 1.06 | 0.69 | 0.77 | 0.73 | 0.70 | 0.71 | 0.89 | 0.97 | 0.94 | 0.86 | ||||||
| Honeywell International Inc. | 2.70 | 2.49 | 2.21 | 2.27 | 1.88 | 1.67 | 1.77 | 1.65 | 1.53 | 1.29 | 1.18 | 1.24 | 1.13 | 1.17 | 0.96 | 1.09 | 1.05 | ||||||
| Lockheed Martin Corp. | 2.76 | 3.23 | 3.59 | 4.06 | 3.04 | 3.20 | 2.68 | 3.12 | 2.92 | 2.55 | 1.88 | 1.90 | 1.62 | 1.68 | 0.96 | 1.02 | 1.16 | ||||||
| RTX Corp. | 0.56 | 0.58 | 0.61 | 0.67 | 0.67 | 0.69 | 0.69 | 0.71 | 0.71 | 0.73 | 0.51 | 0.49 | 0.47 | 0.44 | 0.48 | 0.45 | 0.43 | ||||||
Based on: 10-Q (reporting date: 2026-03-31), 10-K (reporting date: 2025-12-31), 10-Q (reporting date: 2025-09-30), 10-Q (reporting date: 2025-06-30), 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).
1 Q1 2026 Calculation
Debt to equity = Total debt ÷ Total Eaton shareholders’ equity
= 21,129 ÷ 19,721 = 1.07
2 Click competitor name to see calculations.
The solvency profile of the entity remained relatively stable between March 2022 and December 2025, characterized by a gradual strengthening of the equity base and a consistent debt-to-equity ratio. However, a significant shift in capital structure is observed in the first quarter of 2026.
- Shareholders' Equity Growth
- A consistent upward trajectory in total shareholders' equity is evident, rising from 16,620 million USD in March 2022 to 19,721 million USD by March 2026. This steady growth suggests a sustained accumulation of retained earnings or capital contributions over the observed period.
- Debt Level Stability and Volatility
- Total debt exhibited a range-bound pattern for the majority of the period, fluctuating primarily between 8,655 million USD and 10,996 million USD from March 2022 through December 2025. This stability was abruptly interrupted in March 2026, where total debt increased sharply to 21,129 million USD, representing a more than 100% increase from the previous quarter.
- Debt to Equity Ratio Trends
- From March 2022 to December 2025, the debt-to-equity ratio remained conservative, fluctuating within a narrow band between 0.48 and 0.59. A period of gradual deleveraging is noted from March 2022 (0.58) to a low of 0.48 in March 2024. This trend indicates a period of improved solvency and reduced reliance on borrowed funds relative to equity.
- Capital Structure Shift in Q1 2026
- The debt-to-equity ratio experienced a dramatic spike to 1.07 in March 2026. This change is driven by the substantial increase in total debt, which offset the marginal gains in shareholders' equity. This shift indicates a fundamental change in the financing strategy or a significant capital expenditure event, resulting in a leverage position where total debt exceeds total equity for the first time in the recorded period.
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Debt to Equity (including Operating Lease Liability)
Eaton Corp. plc, debt to equity (including operating lease liability) calculation (quarterly data)
| Mar 31, 2026 | Dec 31, 2025 | Sep 30, 2025 | Jun 30, 2025 | 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 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||
| Short-term debt | 2,510) | 1) | 761) | 1,111) | 805) | —) | 3) | 4) | 1) | 8) | 24) | 94) | 87) | 324) | 903) | 1,392) | 1,116) | ||||||
| Current portion of long-term debt | 84) | 1,136) | 1,136) | 1,134) | 1,666) | 674) | 714) | 1,278) | 994) | 1,017) | 975) | 402) | 8) | 10) | 23) | 2,030) | 1,728) | ||||||
| Long-term debt, excluding current portion | 18,535) | 8,758) | 8,756) | 8,751) | 7,609) | 8,478) | 8,678) | 8,555) | 8,192) | 8,244) | 8,150) | 8,804) | 8,701) | 8,321) | 8,082) | 6,277) | 6,763) | ||||||
| Total debt | 21,129) | 9,895) | 10,653) | 10,996) | 10,080) | 9,152) | 9,395) | 9,837) | 9,187) | 9,269) | 9,149) | 9,300) | 8,796) | 8,655) | 9,008) | 9,699) | 9,607) | ||||||
| Noncurrent operating lease liabilities | 704) | 637) | 568) | 587) | 669) | 669) | 681) | 656) | 601) | 533) | 486) | 482) | 466) | 459) | 447) | 386) | 342) | ||||||
| Total debt (including operating lease liability) | 21,833) | 10,532) | 11,221) | 11,583) | 10,749) | 9,821) | 10,076) | 10,493) | 9,788) | 9,802) | 9,635) | 9,782) | 9,262) | 9,114) | 9,455) | 10,085) | 9,949) | ||||||
| Total Eaton shareholders’ equity | 19,721) | 19,425) | 18,843) | 18,606) | 18,506) | 18,488) | 19,117) | 19,219) | 19,292) | 19,036) | 18,383) | 17,953) | 17,449) | 17,038) | 16,068) | 16,380) | 16,620) | ||||||
| Solvency Ratio | |||||||||||||||||||||||
| Debt to equity (including operating lease liability)1 | 1.11 | 0.54 | 0.60 | 0.62 | 0.58 | 0.53 | 0.53 | 0.55 | 0.51 | 0.51 | 0.52 | 0.54 | 0.53 | 0.53 | 0.59 | 0.62 | 0.60 | ||||||
| Benchmarks | |||||||||||||||||||||||
| Debt to Equity (including Operating Lease Liability), Competitors2 | |||||||||||||||||||||||
| RTX Corp. | 0.59 | 0.61 | 0.63 | 0.70 | 0.70 | 0.71 | 0.72 | 0.74 | 0.73 | 0.76 | 0.53 | 0.51 | 0.50 | 0.46 | 0.50 | 0.47 | 0.46 | ||||||
Based on: 10-Q (reporting date: 2026-03-31), 10-K (reporting date: 2025-12-31), 10-Q (reporting date: 2025-09-30), 10-Q (reporting date: 2025-06-30), 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).
1 Q1 2026 Calculation
Debt to equity (including operating lease liability) = Total debt (including operating lease liability) ÷ Total Eaton shareholders’ equity
= 21,833 ÷ 19,721 = 1.11
2 Click competitor name to see calculations.
The solvency profile of the entity remained relatively stable with a general trend toward deleveraging from March 2022 through December 2025, followed by a significant increase in leverage in the first quarter of 2026.
- Debt to Equity Ratio Trends (2022–2025)
- Between March 2022 and December 2023, the debt to equity ratio experienced a consistent decline, moving from 0.60 to 0.51. This improvement in solvency was supported by a reduction in total debt combined with a steady increase in shareholders' equity. Throughout 2024 and 2025, the ratio remained largely stable, fluctuating between 0.51 and 0.62, indicating a maintained balance between borrowed capital and equity financing.
- Equity Growth Analysis
- Total shareholders' equity exhibited a consistent upward trajectory over the analyzed period. Starting at US$ 16,620 million in March 2022, equity grew to US$ 19,721 million by March 2026. This steady accumulation of equity served as a buffer for the entity's solvency until the significant debt increase in early 2026.
- Significant Leverage Event (Q1 2026)
- A sharp inflection point occurred on March 31, 2026, where the debt to equity ratio spiked to 1.11. This was driven by a substantial increase in total debt, which rose to US$ 21,833 million from US$ 10,532 million in the preceding quarter. This more than twofold increase in debt liabilities suggests a major financing activity or capital restructuring that shifted the company's solvency position from a conservative to a more highly leveraged state.
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Debt to Capital
Eaton Corp. plc, debt to capital calculation (quarterly data)
| Mar 31, 2026 | Dec 31, 2025 | Sep 30, 2025 | Jun 30, 2025 | 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 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||
| Short-term debt | 2,510) | 1) | 761) | 1,111) | 805) | —) | 3) | 4) | 1) | 8) | 24) | 94) | 87) | 324) | 903) | 1,392) | 1,116) | ||||||
| Current portion of long-term debt | 84) | 1,136) | 1,136) | 1,134) | 1,666) | 674) | 714) | 1,278) | 994) | 1,017) | 975) | 402) | 8) | 10) | 23) | 2,030) | 1,728) | ||||||
| Long-term debt, excluding current portion | 18,535) | 8,758) | 8,756) | 8,751) | 7,609) | 8,478) | 8,678) | 8,555) | 8,192) | 8,244) | 8,150) | 8,804) | 8,701) | 8,321) | 8,082) | 6,277) | 6,763) | ||||||
| Total debt | 21,129) | 9,895) | 10,653) | 10,996) | 10,080) | 9,152) | 9,395) | 9,837) | 9,187) | 9,269) | 9,149) | 9,300) | 8,796) | 8,655) | 9,008) | 9,699) | 9,607) | ||||||
| Total Eaton shareholders’ equity | 19,721) | 19,425) | 18,843) | 18,606) | 18,506) | 18,488) | 19,117) | 19,219) | 19,292) | 19,036) | 18,383) | 17,953) | 17,449) | 17,038) | 16,068) | 16,380) | 16,620) | ||||||
| Total capital | 40,850) | 29,320) | 29,496) | 29,602) | 28,586) | 27,640) | 28,512) | 29,056) | 28,479) | 28,305) | 27,532) | 27,253) | 26,245) | 25,693) | 25,076) | 26,079) | 26,227) | ||||||
| Solvency Ratio | |||||||||||||||||||||||
| Debt to capital1 | 0.52 | 0.34 | 0.36 | 0.37 | 0.35 | 0.33 | 0.33 | 0.34 | 0.32 | 0.33 | 0.33 | 0.34 | 0.34 | 0.34 | 0.36 | 0.37 | 0.37 | ||||||
| Benchmarks | |||||||||||||||||||||||
| Debt to Capital, Competitors2 | |||||||||||||||||||||||
| Boeing Co. | 0.89 | 0.91 | 1.18 | 1.07 | 1.07 | 1.08 | 1.69 | 1.45 | 1.55 | 1.49 | 1.47 | 1.42 | 1.39 | 1.39 | 1.45 | 1.35 | 1.36 | ||||||
| Caterpillar Inc. | 0.70 | 0.67 | 0.67 | 0.69 | 0.68 | 0.66 | 0.66 | 0.69 | 0.68 | 0.66 | 0.64 | 0.67 | 0.67 | 0.70 | 0.70 | 0.70 | 0.69 | ||||||
| GE Aerospace | 0.53 | 0.52 | 0.53 | 0.50 | 0.50 | 0.50 | 0.51 | 0.51 | 0.41 | 0.43 | 0.42 | 0.41 | 0.41 | 0.47 | 0.49 | 0.48 | 0.46 | ||||||
| Honeywell International Inc. | 0.73 | 0.71 | 0.69 | 0.69 | 0.65 | 0.63 | 0.64 | 0.62 | 0.61 | 0.56 | 0.54 | 0.55 | 0.53 | 0.54 | 0.49 | 0.52 | 0.51 | ||||||
| Lockheed Martin Corp. | 0.73 | 0.76 | 0.78 | 0.80 | 0.75 | 0.76 | 0.73 | 0.76 | 0.74 | 0.72 | 0.65 | 0.66 | 0.62 | 0.63 | 0.49 | 0.50 | 0.54 | ||||||
| RTX Corp. | 0.36 | 0.37 | 0.38 | 0.40 | 0.40 | 0.41 | 0.41 | 0.42 | 0.41 | 0.42 | 0.34 | 0.33 | 0.32 | 0.31 | 0.32 | 0.31 | 0.30 | ||||||
Based on: 10-Q (reporting date: 2026-03-31), 10-K (reporting date: 2025-12-31), 10-Q (reporting date: 2025-09-30), 10-Q (reporting date: 2025-06-30), 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).
1 Q1 2026 Calculation
Debt to capital = Total debt ÷ Total capital
= 21,129 ÷ 40,850 = 0.52
2 Click competitor name to see calculations.
The solvency profile exhibited a period of stability and gradual deleveraging between March 2022 and December 2025, followed by a significant increase in leverage in the first quarter of 2026. Throughout the majority of the observed timeframe, the capital structure remained conservative, with total debt managed consistently relative to total capital.
- Debt to Capital Ratio Trend
- Between March 2022 and March 2024, a consistent downward trend was observed, with the ratio decreasing from 0.37 to a low of 0.32. This movement indicates a period of improved solvency and a reduction in the proportion of debt within the total capital structure. From March 2024 through December 2025, the ratio fluctuated within a narrow corridor between 0.33 and 0.37, reflecting a period of relative equilibrium in financing.
- Analysis of Capital and Debt Surges
- A sharp inflection point occurred on March 31, 2026. Total debt increased from 9,895 million USD in the previous quarter to 21,129 million USD, while total capital expanded from 29,320 million USD to 40,850 million USD. This simultaneous surge in both metrics resulted in the debt to capital ratio rising to 0.52, representing the highest level of leverage recorded in the provided period.
- Overall Solvency Interpretation
- Excluding the final quarterly spike, the entity maintained a stable solvency position with a ratio averaging approximately 0.34. The abrupt transition to a 0.52 ratio in March 2026 signifies a material shift in the capital structure, indicating a substantial increase in the reliance on debt financing relative to total capital.
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Debt to Capital (including Operating Lease Liability)
Eaton Corp. plc, debt to capital (including operating lease liability) calculation (quarterly data)
| Mar 31, 2026 | Dec 31, 2025 | Sep 30, 2025 | Jun 30, 2025 | 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 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||
| Short-term debt | 2,510) | 1) | 761) | 1,111) | 805) | —) | 3) | 4) | 1) | 8) | 24) | 94) | 87) | 324) | 903) | 1,392) | 1,116) | ||||||
| Current portion of long-term debt | 84) | 1,136) | 1,136) | 1,134) | 1,666) | 674) | 714) | 1,278) | 994) | 1,017) | 975) | 402) | 8) | 10) | 23) | 2,030) | 1,728) | ||||||
| Long-term debt, excluding current portion | 18,535) | 8,758) | 8,756) | 8,751) | 7,609) | 8,478) | 8,678) | 8,555) | 8,192) | 8,244) | 8,150) | 8,804) | 8,701) | 8,321) | 8,082) | 6,277) | 6,763) | ||||||
| Total debt | 21,129) | 9,895) | 10,653) | 10,996) | 10,080) | 9,152) | 9,395) | 9,837) | 9,187) | 9,269) | 9,149) | 9,300) | 8,796) | 8,655) | 9,008) | 9,699) | 9,607) | ||||||
| Noncurrent operating lease liabilities | 704) | 637) | 568) | 587) | 669) | 669) | 681) | 656) | 601) | 533) | 486) | 482) | 466) | 459) | 447) | 386) | 342) | ||||||
| Total debt (including operating lease liability) | 21,833) | 10,532) | 11,221) | 11,583) | 10,749) | 9,821) | 10,076) | 10,493) | 9,788) | 9,802) | 9,635) | 9,782) | 9,262) | 9,114) | 9,455) | 10,085) | 9,949) | ||||||
| Total Eaton shareholders’ equity | 19,721) | 19,425) | 18,843) | 18,606) | 18,506) | 18,488) | 19,117) | 19,219) | 19,292) | 19,036) | 18,383) | 17,953) | 17,449) | 17,038) | 16,068) | 16,380) | 16,620) | ||||||
| Total capital (including operating lease liability) | 41,554) | 29,957) | 30,064) | 30,189) | 29,255) | 28,309) | 29,193) | 29,712) | 29,080) | 28,838) | 28,018) | 27,735) | 26,711) | 26,152) | 25,523) | 26,465) | 26,569) | ||||||
| Solvency Ratio | |||||||||||||||||||||||
| Debt to capital (including operating lease liability)1 | 0.53 | 0.35 | 0.37 | 0.38 | 0.37 | 0.35 | 0.35 | 0.35 | 0.34 | 0.34 | 0.34 | 0.35 | 0.35 | 0.35 | 0.37 | 0.38 | 0.37 | ||||||
| Benchmarks | |||||||||||||||||||||||
| Debt to Capital (including Operating Lease Liability), Competitors2 | |||||||||||||||||||||||
| RTX Corp. | 0.37 | 0.38 | 0.39 | 0.41 | 0.41 | 0.42 | 0.42 | 0.42 | 0.42 | 0.43 | 0.35 | 0.34 | 0.33 | 0.32 | 0.33 | 0.32 | 0.31 | ||||||
Based on: 10-Q (reporting date: 2026-03-31), 10-K (reporting date: 2025-12-31), 10-Q (reporting date: 2025-09-30), 10-Q (reporting date: 2025-06-30), 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).
1 Q1 2026 Calculation
Debt to capital (including operating lease liability) = Total debt (including operating lease liability) ÷ Total capital (including operating lease liability)
= 21,833 ÷ 41,554 = 0.53
2 Click competitor name to see calculations.
The solvency profile exhibits a period of prolonged stability followed by a significant shift in the capital structure during the final quarter of the observed timeframe.
- Debt to Capital Ratio Stability
- From March 31, 2022, through December 31, 2025, the debt to capital ratio remained remarkably consistent, fluctuating within a narrow corridor between 0.34 and 0.38. This suggests a disciplined maintenance of leverage levels and a stable relationship between debt obligations and the total capital base for nearly four years.
- Debt and Capital Volume Trends
- Total debt, including operating lease liabilities, generally trended between $9.1 billion and $11.6 billion from early 2022 through the end of 2025. During this same period, total capital expanded modestly from $26.6 billion to approximately $30.0 billion, indicating a gradual increase in the overall financial capacity of the entity.
- Q1 2026 Leverage Shift
- A substantial increase in leverage is observed as of March 31, 2026. Total debt surged to $21.8 billion, more than doubling the $10.5 billion reported in the preceding quarter. Total capital also increased significantly to $41.6 billion. This synchronized increase resulted in the debt to capital ratio rising sharply to 0.53, representing a material departure from the historical average and a significant increase in the proportion of debt relative to total capital.
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Debt to Assets
Eaton Corp. plc, debt to assets calculation (quarterly data)
| Mar 31, 2026 | Dec 31, 2025 | Sep 30, 2025 | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||
| Short-term debt | 2,510) | 1) | 761) | 1,111) | 805) | —) | 3) | 4) | 1) | 8) | 24) | 94) | 87) | 324) | 903) | 1,392) | 1,116) | ||||||
| Current portion of long-term debt | 84) | 1,136) | 1,136) | 1,134) | 1,666) | 674) | 714) | 1,278) | 994) | 1,017) | 975) | 402) | 8) | 10) | 23) | 2,030) | 1,728) | ||||||
| Long-term debt, excluding current portion | 18,535) | 8,758) | 8,756) | 8,751) | 7,609) | 8,478) | 8,678) | 8,555) | 8,192) | 8,244) | 8,150) | 8,804) | 8,701) | 8,321) | 8,082) | 6,277) | 6,763) | ||||||
| Total debt | 21,129) | 9,895) | 10,653) | 10,996) | 10,080) | 9,152) | 9,395) | 9,837) | 9,187) | 9,269) | 9,149) | 9,300) | 8,796) | 8,655) | 9,008) | 9,699) | 9,607) | ||||||
| Total assets | 55,085) | 41,251) | 40,650) | 40,507) | 39,206) | 38,381) | 39,236) | 39,381) | 38,535) | 38,432) | 37,289) | 36,772) | 35,517) | 35,014) | 34,364) | 35,153) | 35,208) | ||||||
| Solvency Ratio | |||||||||||||||||||||||
| Debt to assets1 | 0.38 | 0.24 | 0.26 | 0.27 | 0.26 | 0.24 | 0.24 | 0.25 | 0.24 | 0.24 | 0.25 | 0.25 | 0.25 | 0.25 | 0.26 | 0.28 | 0.27 | ||||||
| Benchmarks | |||||||||||||||||||||||
| Debt to Assets, Competitors2 | |||||||||||||||||||||||
| Boeing Co. | 0.29 | 0.32 | 0.36 | 0.34 | 0.34 | 0.34 | 0.42 | 0.41 | 0.36 | 0.38 | 0.39 | 0.39 | 0.41 | 0.42 | 0.42 | 0.42 | 0.43 | ||||||
| Caterpillar Inc. | 0.45 | 0.44 | 0.44 | 0.45 | 0.45 | 0.44 | 0.44 | 0.45 | 0.45 | 0.43 | 0.43 | 0.44 | 0.44 | 0.45 | 0.45 | 0.46 | 0.46 | ||||||
| GE Aerospace | 0.16 | 0.16 | 0.16 | 0.15 | 0.16 | 0.16 | 0.16 | 0.16 | 0.13 | 0.13 | 0.13 | 0.13 | 0.14 | 0.17 | 0.17 | 0.18 | 0.18 | ||||||
| Honeywell International Inc. | 0.50 | 0.47 | 0.46 | 0.47 | 0.44 | 0.41 | 0.42 | 0.40 | 0.38 | 0.33 | 0.33 | 0.34 | 0.32 | 0.31 | 0.28 | 0.31 | 0.31 | ||||||
| Lockheed Martin Corp. | 0.35 | 0.36 | 0.37 | 0.37 | 0.36 | 0.36 | 0.35 | 0.35 | 0.35 | 0.33 | 0.31 | 0.31 | 0.29 | 0.29 | 0.22 | 0.22 | 0.23 | ||||||
| RTX Corp. | 0.22 | 0.22 | 0.23 | 0.25 | 0.25 | 0.25 | 0.26 | 0.26 | 0.27 | 0.27 | 0.22 | 0.22 | 0.21 | 0.20 | 0.21 | 0.20 | 0.20 | ||||||
Based on: 10-Q (reporting date: 2026-03-31), 10-K (reporting date: 2025-12-31), 10-Q (reporting date: 2025-09-30), 10-Q (reporting date: 2025-06-30), 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).
1 Q1 2026 Calculation
Debt to assets = Total debt ÷ Total assets
= 21,129 ÷ 55,085 = 0.38
2 Click competitor name to see calculations.
An analysis of the solvency profile reveals a period of sustained stability followed by a substantial increase in leverage and asset base in the final quarter of the reporting period.
- Stability and Maintenance (March 2022 – December 2024)
- Between March 2022 and December 2024, the debt to assets ratio remained remarkably consistent, fluctuating within a narrow range between 0.24 and 0.28. Total debt remained relatively flat, generally oscillating between $8.6 billion and $9.8 billion, while total assets grew moderately from $35.2 billion to approximately $38.4 billion. This pattern suggests a disciplined approach to maintaining a stable leverage ratio relative to asset growth during this timeframe.
- Moderate Expansion (March 2025 – December 2025)
- Throughout 2025, a slight upward trend in total debt was observed, peaking at $10.996 billion in June 2025 before returning to $9.895 billion by December. Total assets continued a steady upward trajectory, reaching $41.251 billion by the end of the year. Consequently, the debt to assets ratio remained stable, closing the year at 0.24, indicating that asset accumulation successfully offset the temporary increase in debt obligations.
- Significant Leverage Event (March 31, 2026)
- A sharp divergence from historical patterns occurred in the quarter ending March 31, 2026. Total debt experienced a significant surge, increasing to $21.129 billion, which represents more than a twofold increase over the previous quarter's balance. Concurrently, total assets rose sharply to $55.085 billion. This simultaneous expansion resulted in the debt to assets ratio increasing to 0.38, marking the highest level of leverage in the analyzed period and indicating a fundamental shift in the capital structure.
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Debt to Assets (including Operating Lease Liability)
Eaton Corp. plc, debt to assets (including operating lease liability) calculation (quarterly data)
| Mar 31, 2026 | Dec 31, 2025 | Sep 30, 2025 | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||
| Short-term debt | 2,510) | 1) | 761) | 1,111) | 805) | —) | 3) | 4) | 1) | 8) | 24) | 94) | 87) | 324) | 903) | 1,392) | 1,116) | ||||||
| Current portion of long-term debt | 84) | 1,136) | 1,136) | 1,134) | 1,666) | 674) | 714) | 1,278) | 994) | 1,017) | 975) | 402) | 8) | 10) | 23) | 2,030) | 1,728) | ||||||
| Long-term debt, excluding current portion | 18,535) | 8,758) | 8,756) | 8,751) | 7,609) | 8,478) | 8,678) | 8,555) | 8,192) | 8,244) | 8,150) | 8,804) | 8,701) | 8,321) | 8,082) | 6,277) | 6,763) | ||||||
| Total debt | 21,129) | 9,895) | 10,653) | 10,996) | 10,080) | 9,152) | 9,395) | 9,837) | 9,187) | 9,269) | 9,149) | 9,300) | 8,796) | 8,655) | 9,008) | 9,699) | 9,607) | ||||||
| Noncurrent operating lease liabilities | 704) | 637) | 568) | 587) | 669) | 669) | 681) | 656) | 601) | 533) | 486) | 482) | 466) | 459) | 447) | 386) | 342) | ||||||
| Total debt (including operating lease liability) | 21,833) | 10,532) | 11,221) | 11,583) | 10,749) | 9,821) | 10,076) | 10,493) | 9,788) | 9,802) | 9,635) | 9,782) | 9,262) | 9,114) | 9,455) | 10,085) | 9,949) | ||||||
| Total assets | 55,085) | 41,251) | 40,650) | 40,507) | 39,206) | 38,381) | 39,236) | 39,381) | 38,535) | 38,432) | 37,289) | 36,772) | 35,517) | 35,014) | 34,364) | 35,153) | 35,208) | ||||||
| Solvency Ratio | |||||||||||||||||||||||
| Debt to assets (including operating lease liability)1 | 0.40 | 0.26 | 0.28 | 0.29 | 0.27 | 0.26 | 0.26 | 0.27 | 0.25 | 0.26 | 0.26 | 0.27 | 0.26 | 0.26 | 0.28 | 0.29 | 0.28 | ||||||
| Benchmarks | |||||||||||||||||||||||
| Debt to Assets (including Operating Lease Liability), Competitors2 | |||||||||||||||||||||||
| RTX Corp. | 0.23 | 0.23 | 0.24 | 0.26 | 0.26 | 0.26 | 0.27 | 0.27 | 0.28 | 0.28 | 0.23 | 0.23 | 0.22 | 0.21 | 0.22 | 0.21 | 0.21 | ||||||
Based on: 10-Q (reporting date: 2026-03-31), 10-K (reporting date: 2025-12-31), 10-Q (reporting date: 2025-09-30), 10-Q (reporting date: 2025-06-30), 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).
1 Q1 2026 Calculation
Debt to assets (including operating lease liability) = Total debt (including operating lease liability) ÷ Total assets
= 21,833 ÷ 55,085 = 0.40
2 Click competitor name to see calculations.
The company maintained a highly stable solvency profile from March 2022 through December 2025, followed by a substantial increase in leverage in the first quarter of 2026.
- Leverage Stability (2022-2025)
- Between March 2022 and December 2025, the debt-to-assets ratio remained consistently low, fluctuating within a narrow band between 0.25 and 0.29. Total debt, including operating lease liabilities, generally stayed between $9.1 billion and $11.6 billion, while total assets grew steadily from $35.2 billion to $41.3 billion. This trend indicates a disciplined approach to leverage, where asset growth was not primarily fueled by increased borrowing.
- Debt and Asset Correlation
- For the majority of the analyzed timeframe, debt levels did not scale proportionally with asset growth. From March 2022 to December 2024, total assets increased by approximately $3.2 billion, while total debt remained relatively flat, ending the period nearly identical to its starting point. This suggests that the expansion of the balance sheet during this phase was supported by retained earnings or other non-debt financing sources.
- Q1 2026 Capitalization Shift
- A significant shift in the solvency structure is observed on March 31, 2026. Total debt increased by more than 100% in a single quarter, rising from $10.5 billion in December 2025 to $21.8 billion. Simultaneously, total assets expanded from $41.3 billion to $55.1 billion. This simultaneous surge in both liabilities and assets drove the debt-to-assets ratio to 0.40, the highest level recorded in the period. The magnitude of this change is indicative of a major strategic event, such as a large-scale acquisition or a significant debt-financed capital expenditure program.
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Financial Leverage
Eaton Corp. plc, financial leverage calculation (quarterly data)
| Mar 31, 2026 | Dec 31, 2025 | Sep 30, 2025 | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||
| Total assets | 55,085) | 41,251) | 40,650) | 40,507) | 39,206) | 38,381) | 39,236) | 39,381) | 38,535) | 38,432) | 37,289) | 36,772) | 35,517) | 35,014) | 34,364) | 35,153) | 35,208) | ||||||
| Total Eaton shareholders’ equity | 19,721) | 19,425) | 18,843) | 18,606) | 18,506) | 18,488) | 19,117) | 19,219) | 19,292) | 19,036) | 18,383) | 17,953) | 17,449) | 17,038) | 16,068) | 16,380) | 16,620) | ||||||
| Solvency Ratio | |||||||||||||||||||||||
| Financial leverage1 | 2.79 | 2.12 | 2.16 | 2.18 | 2.12 | 2.08 | 2.05 | 2.05 | 2.00 | 2.02 | 2.03 | 2.05 | 2.04 | 2.06 | 2.14 | 2.15 | 2.12 | ||||||
| Benchmarks | |||||||||||||||||||||||
| Financial Leverage, Competitors2 | |||||||||||||||||||||||
| Boeing Co. | 27.52 | 30.85 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Caterpillar Inc. | 5.12 | 4.62 | 4.54 | 4.84 | 4.70 | 4.50 | 4.45 | 4.86 | 4.75 | 4.49 | 4.24 | 4.68 | 4.61 | 5.16 | 5.19 | 5.16 | 4.82 | ||||||
| GE Aerospace | 7.11 | 6.97 | 6.82 | 6.55 | 6.45 | 6.37 | 6.71 | 6.62 | 5.49 | 5.96 | 5.47 | 5.23 | 5.20 | 5.16 | 5.75 | 5.35 | 4.92 | ||||||
| Honeywell International Inc. | 5.44 | 5.30 | 4.82 | 4.87 | 4.31 | 4.04 | 4.22 | 4.09 | 3.99 | 3.88 | 3.56 | 3.60 | 3.54 | 3.73 | 3.40 | 3.55 | 3.45 | ||||||
| Lockheed Martin Corp. | 7.91 | 8.90 | 9.75 | 11.04 | 8.48 | 8.78 | 7.71 | 8.92 | 8.27 | 7.67 | 6.11 | 6.17 | 5.66 | 5.71 | 4.35 | 4.53 | 5.15 | ||||||
| RTX Corp. | 2.57 | 2.62 | 2.61 | 2.68 | 2.68 | 2.71 | 2.70 | 2.73 | 2.65 | 2.71 | 2.33 | 2.24 | 2.22 | 2.19 | 2.25 | 2.26 | 2.20 | ||||||
Based on: 10-Q (reporting date: 2026-03-31), 10-K (reporting date: 2025-12-31), 10-Q (reporting date: 2025-09-30), 10-Q (reporting date: 2025-06-30), 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).
1 Q1 2026 Calculation
Financial leverage = Total assets ÷ Total Eaton shareholders’ equity
= 55,085 ÷ 19,721 = 2.79
2 Click competitor name to see calculations.
The financial leverage trajectory for the period between March 31, 2022, and March 31, 2026, is characterized by a prolonged phase of stability followed by a significant escalation in the final quarter. For the majority of the observed period, the leverage ratio remained within a tight range, indicating a disciplined approach to the balance sheet structure before a sharp increase occurred in early 2026.
- Asset Growth and Volatility
- Total assets exhibited a steady upward trend from March 2022, increasing from 35,208 million USD to 38,432 million USD by the end of 2023. While the growth remained moderate throughout 2024 and 2025, a substantial surge is observed in the final reporting period ending March 31, 2026, where assets jumped from 41,251 million USD to 55,085 million USD. This represents a significant expansion of the balance sheet in a single quarter.
- Shareholders' Equity Trends
- Equity demonstrated consistent, albeit slower, growth compared to assets. From March 2022 to December 2023, equity rose from 16,620 million USD to 19,036 million USD. Throughout 2024 and 2025, equity remained relatively stagnant, fluctuating between approximately 18,400 million USD and 19,400 million USD. By March 31, 2026, equity reached 19,721 million USD, failing to keep pace with the concurrent spike in total assets.
- Financial Leverage Analysis
- The financial leverage ratio initially trended downward, moving from 2.12 in March 2022 to a low of 2.00 by March 31, 2024, suggesting a period of deleveraging or equity-led growth. Between June 2024 and December 2025, the ratio remained stable, fluctuating narrowly between 2.05 and 2.18. However, the final quarter ending March 31, 2026, saw a sharp increase in the leverage ratio to 2.79. This spike is directly attributable to the disproportionate increase in total assets relative to shareholders' equity, indicating a substantial increase in liabilities or debt-funded expansion during this specific window.
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Interest Coverage
Eaton Corp. plc, interest coverage calculation (quarterly data)
| Mar 31, 2026 | Dec 31, 2025 | Sep 30, 2025 | Jun 30, 2025 | 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 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||
| Net income attributable to Eaton ordinary shareholders | 866) | 1,131) | 1,010) | 982) | 964) | 971) | 1,009) | 993) | 821) | 945) | 891) | 744) | 638) | 722) | 607) | 601) | 532) | ||||||
| Add: Net income attributable to noncontrolling interest | 2) | 2) | —) | —) | 1) | —) | 2) | 1) | 1) | 2) | 1) | 1) | 1) | 2) | 1) | —) | 1) | ||||||
| Add: Income tax expense | 239) | 161) | 265) | 204) | 212) | 195) | 193) | 201) | 179) | 141) | 187) | 153) | 123) | 128) | 112) | 119) | 86) | ||||||
| Add: Interest expense, net | 106) | 70) | 67) | 71) | 33) | 42) | 29) | 29) | 30) | 26) | 33) | 42) | 50) | 44) | 37) | 31) | 32) | ||||||
| Earnings before interest and tax (EBIT) | 1,213) | 1,364) | 1,342) | 1,257) | 1,210) | 1,208) | 1,233) | 1,224) | 1,031) | 1,114) | 1,112) | 940) | 812) | 896) | 757) | 751) | 651) | ||||||
| Solvency Ratio | |||||||||||||||||||||||
| Interest coverage1 | 16.48 | 21.46 | 23.55 | 28.05 | 36.65 | 36.12 | 40.37 | 37.97 | 32.04 | 26.34 | 22.25 | 19.68 | 19.85 | 21.22 | 21.33 | 24.31 | 22.57 | ||||||
| Benchmarks | |||||||||||||||||||||||
| Interest Coverage, Competitors2 | |||||||||||||||||||||||
| Boeing Co. | 1.96 | 1.95 | -2.41 | -2.72 | -3.10 | -3.48 | -2.16 | -0.23 | 0.21 | 0.18 | -0.06 | -0.85 | -0.53 | -0.98 | -2.54 | -1.40 | -1.31 | ||||||
| Caterpillar Inc. | 24.64 | 24.21 | 25.46 | 25.81 | 26.67 | 27.21 | 26.28 | 26.88 | 27.68 | 26.66 | 24.81 | 23.80 | 21.33 | 20.80 | 22.05 | 20.08 | 19.10 | ||||||
| GE Aerospace | 12.53 | 12.86 | 12.56 | 11.46 | 9.44 | 8.73 | 7.93 | 6.25 | 6.11 | 10.12 | 9.41 | 8.49 | 6.73 | 1.88 | -1.66 | -1.16 | -1.49 | ||||||
| Honeywell International Inc. | 4.32 | 5.07 | 6.80 | 6.74 | 7.24 | 7.82 | 8.40 | 9.33 | 9.89 | 10.36 | 10.68 | 12.45 | 14.34 | 16.41 | 20.95 | 20.60 | 21.35 | ||||||
| Lockheed Martin Corp. | 6.06 | 6.30 | 5.50 | 5.60 | 7.12 | 7.00 | 8.65 | 8.83 | 9.19 | 9.84 | 10.42 | 11.74 | 10.58 | 11.72 | 13.31 | 10.88 | 14.12 | ||||||
Based on: 10-Q (reporting date: 2026-03-31), 10-K (reporting date: 2025-12-31), 10-Q (reporting date: 2025-09-30), 10-Q (reporting date: 2025-06-30), 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).
1 Q1 2026 Calculation
Interest coverage
= (EBITQ1 2026
+ EBITQ4 2025
+ EBITQ3 2025
+ EBITQ2 2025)
÷ (Interest expenseQ1 2026
+ Interest expenseQ4 2025
+ Interest expenseQ3 2025
+ Interest expenseQ2 2025)
= (1,213 + 1,364 + 1,342 + 1,257)
÷ (106 + 70 + 67 + 71)
= 16.48
2 Click competitor name to see calculations.
The analysis of interest coverage over the period from March 31, 2022, to March 31, 2026, reveals a period of operational expansion followed by a significant increase in financing costs, resulting in a fluctuating solvency profile.
- Earnings Before Interest and Tax (EBIT) Trends
- Operational profitability exhibited a consistent upward trajectory for the majority of the analyzed period. EBIT rose from 651 million in March 2022 to a peak of 1,364 million by December 2025. This growth reflects a strengthening of core operating income, which provided a substantial buffer for debt obligations through 2024 and most of 2025.
- Interest Expense Dynamics
- Net interest expenses remained relatively stable between March 2022 and December 2024, generally fluctuating between 26 million and 50 million. However, a sharp escalation in interest costs began in June 2025, with expenses rising to 71 million and peaking at 106 million by March 2026. This represents a significant increase in the cost of servicing debt toward the end of the period.
- Interest Coverage Ratio Analysis
- The interest coverage ratio followed a cyclical pattern. After a period of relative stability around 20.0x in early 2023, the ratio climbed significantly, reaching a peak of 40.37 in September 2024. This improvement was driven by EBIT growth occurring while interest expenses remained low. Subsequently, the ratio entered a period of steady decline throughout 2025 and early 2026, falling to 16.48 by March 31, 2026. This contraction is attributed to the simultaneous occurrence of peaking interest expenses and a slight softening of EBIT in the final quarter.
Overall, while the company maintained a strong ability to service its debt throughout the entire period, the trend toward the end of the series indicates a reduction in the margin of safety due to rising financial costs.
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