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: 2026-06-30), 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 reflects a period of stability from early 2022 through late 2025, followed by a significant shift in capital structure during the first half of 2026. For most of the analyzed period, leverage ratios remained consistent, suggesting a disciplined approach to debt management, before experiencing a sharp increase in the final two quarters.
- Debt to Equity and Capital Ratios
- From March 2022 to December 2025, the debt to equity ratio remained largely range-bound between 0.48 and 0.60. Similarly, debt to capital ratios fluctuated minimally between 0.32 and 0.38. However, a substantial increase occurred in March 2026, where the debt to equity ratio rose to 1.07 and debt to capital increased to 0.52. This suggests a pivot toward higher leverage or a significant reduction in equity during the first quarter of 2026, though a slight moderation was observed by June 2026.
- Asset-Based Solvency and Financial Leverage
- Debt to assets remained stable between 0.24 and 0.29 for nearly four years. This stability was mirrored in the financial leverage ratio, which hovered between 2.00 and 2.18. A pronounced upward trend emerged in early 2026, with debt to assets peaking at 0.38 and financial leverage reaching 2.79. The inclusion of operating lease liabilities consistently adds a marginal increase to these ratios, indicating that lease obligations represent a small but steady portion of the total liability structure.
- Interest Coverage and Debt Servicing
- Interest coverage ratios exhibited a strong upward trajectory through 2024, peaking at 40.37 in September 2024, which indicates an exceptional capacity to service interest payments. This trend reversed starting in 2025, with a sharp decline observed in the first half of 2026. The ratio fell to 16.48 in March 2026 and further to 11.86 by June 2026. While the coverage remains well above critical levels, the rapid decline correlates with the spike in overall leverage ratios seen during the same period.
In summary, the financial position was characterized by low volatility and strong coverage for the majority of the period. The transition in early 2026 represents a material change in the solvency outlook, characterized by a doubling of the debt-to-equity ratio and a significant compression of the interest coverage margin.
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Debt Ratios
Coverage Ratios
Debt to Equity
Eaton Corp. plc, debt to equity calculation (quarterly data)
| Jun 30, 2026 | 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 | 2,091) | 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 | 11) | 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 | 18,509) | 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 | 20,611) | 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 | 20,254) | 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 | 1.02 | 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. | 7.52 | 7.89 | 9.92 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Caterpillar Inc. | 2.33 | 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 | 1.09 | 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. | 1.83 | 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. | 2.34 | 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 | 0.56 | 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: 2026-06-30), 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 Q2 2026 Calculation
Debt to equity = Total debt ÷ Total Eaton shareholders’ equity
= 20,611 ÷ 20,254 = 1.02
2 Click competitor name to see calculations.
The financial trajectory between March 2022 and June 2026 reveals a period of sustained solvency stability followed by a significant shift in capital structure during the first half of 2026. For the majority of the observed period, the company maintained a conservative leverage profile, characterized by equity levels that consistently exceeded total debt.
- Debt to Equity Ratio Trends
- From March 2022 through December 2025, the debt to equity ratio remained within a narrow range of 0.48 to 0.59. The ratio reached its lowest point of 0.48 in March 2024, indicating a period of minimized financial leverage. A sharp divergence occurred in March 2026, where the ratio surged to 1.07, before moderating slightly to 1.02 by June 2026. This shift marks a transition from a position where equity dominated the capital structure to one where debt and equity are nearly equal.
- Total Debt Analysis
- Debt levels exhibited minimal volatility from March 2022 to December 2025, fluctuating between a low of $8.65 billion and a peak of $10.99 billion. A substantial increase is observed in the first quarter of 2026, with total debt rising abruptly to $21.13 billion. This represents a more than 100% increase in total debt within a single quarter, although a slight reduction to $20.61 billion followed in June 2026.
- Shareholders' Equity Growth
- A consistent upward trend is observed in total shareholders' equity, which grew from $16.62 billion in March 2022 to $20.25 billion by June 2026. This steady accumulation of equity suggests a sustained increase in the company's net asset value over the analyzed timeframe, providing a partial offset to the increased leverage observed in 2026.
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Debt to Equity (including Operating Lease Liability)
Eaton Corp. plc, debt to equity (including operating lease liability) calculation (quarterly data)
| Jun 30, 2026 | Mar 31, 2026 | Dec 31, 2025 | Sep 30, 2025 | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||
| Short-term debt | 2,091) | 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 | 11) | 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 | 18,509) | 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 | 20,611) | 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 | 715) | 704) | 637) | 568) | 587) | 669) | 669) | 681) | 656) | 601) | 533) | 486) | 482) | 466) | 459) | 447) | 386) | 342) | ||||||
| Total debt (including operating lease liability) | 21,326) | 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 | 20,254) | 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 | 1.05 | 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 | 0.59 | 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: 2026-06-30), 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 Q2 2026 Calculation
Debt to equity (including operating lease liability) = Total debt (including operating lease liability) ÷ Total Eaton shareholders’ equity
= 21,326 ÷ 20,254 = 1.05
2 Click competitor name to see calculations.
The solvency profile of the organization remained relatively stable from March 2022 through December 2025, followed by a significant structural shift in leverage during the first half of 2026. For the majority of the period, the company maintained a conservative capital structure characterized by equity growth and controlled debt levels.
- Total Debt Trends
- Between March 2022 and December 2023, total debt, including operating lease liabilities, fluctuated within a narrow range between 9.1 billion and 10.1 billion US dollars. A gradual increase was observed throughout 2024 and early 2025, with debt peaking at 11.6 billion US dollars in June 2025. However, a substantial increase occurred in March 2026, where total debt rose sharply to 21.8 billion US dollars, representing more than a 100% increase from the preceding quarter.
- Shareholders' Equity Growth
- Total shareholders' equity demonstrated a consistent long-term upward trajectory, rising from 16.6 billion US dollars in March 2022 to 20.3 billion US dollars by June 2026. This steady growth in the equity base provided a buffer against leverage for several years, although the rate of equity accumulation was outpaced by the debt expansion seen in 2026.
- Debt to Equity Ratio Interpretation
- The debt to equity ratio exhibited a downward trend during the first two years, improving from 0.60 in March 2022 to a low of 0.51 by December 2023. This improvement was driven by equity growth outpacing debt accumulation. From January 2024 to December 2025, the ratio remained largely range-bound between 0.51 and 0.62. A critical inflection point occurred in March 2026, where the ratio spiked to 1.11, indicating that total liabilities now exceed total equity. This ratio moderated slightly to 1.05 by June 2026, but remains significantly higher than the historical average of the preceding four years.
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Debt to Capital
Eaton Corp. plc, debt to capital calculation (quarterly data)
| Jun 30, 2026 | 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 | 2,091) | 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 | 11) | 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 | 18,509) | 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 | 20,611) | 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 | 20,254) | 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 | 40,865) | 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 | 0.50 | 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. | 0.88 | 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 | 0.70 | 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 | 0.52 | 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. | 0.65 | 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. | 0.70 | 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 | 0.36 | 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: 2026-06-30), 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 Q2 2026 Calculation
Debt to capital = Total debt ÷ Total capital
= 20,611 ÷ 40,865 = 0.50
2 Click competitor name to see calculations.
Between March 2022 and December 2025, a period of relative stability in the capital structure is observed. The debt-to-capital ratio exhibited a gradual downward trend, moving from 0.37 in early 2022 to a low of 0.32 by March 2024, indicating a phase of moderate deleveraging or capital growth that outpaced debt accumulation.
- Total Debt Trends
- Total debt remained largely range-bound between approximately $8.6 billion and $11 billion for nearly four years. A significant inflection point occurred in the first quarter of 2026, where total debt increased abruptly from $9.895 billion in December 2025 to $21.129 billion in March 2026, representing a substantial increase in borrowed funds.
- Total Capital Trends
- Total capital demonstrated a steady upward trajectory from $26.227 billion in March 2022 to $29.320 billion by December 2025. Concurrent with the surge in debt, total capital rose sharply to $40.850 billion in March 2026, reflecting a massive expansion of the overall capital base.
- Debt to Capital Ratio Analysis
- The solvency ratio remained conservative for the majority of the analyzed period, oscillating between 0.32 and 0.37. This stability was disrupted in March 2026, when the ratio spiked to 0.52, the highest level recorded in the period. Although the ratio decreased slightly to 0.50 by June 2026, the leverage profile remained significantly elevated compared to the 2022–2025 baseline.
The simultaneous and sharp increase in both total debt and total capital in early 2026 suggests a major corporate event, such as a significant acquisition or a strategic recapitalization, which fundamentally shifted the company's solvency position toward a more leveraged structure.
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Debt to Capital (including Operating Lease Liability)
Eaton Corp. plc, debt to capital (including operating lease liability) calculation (quarterly data)
| Jun 30, 2026 | Mar 31, 2026 | Dec 31, 2025 | Sep 30, 2025 | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||
| Short-term debt | 2,091) | 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 | 11) | 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 | 18,509) | 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 | 20,611) | 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 | 715) | 704) | 637) | 568) | 587) | 669) | 669) | 681) | 656) | 601) | 533) | 486) | 482) | 466) | 459) | 447) | 386) | 342) | ||||||
| Total debt (including operating lease liability) | 21,326) | 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 | 20,254) | 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) | 41,580) | 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 | 0.51 | 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 | 0.37 | 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: 2026-06-30), 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 Q2 2026 Calculation
Debt to capital (including operating lease liability) = Total debt (including operating lease liability) ÷ Total capital (including operating lease liability)
= 21,326 ÷ 41,580 = 0.51
2 Click competitor name to see calculations.
The company maintained a highly stable solvency profile from March 2022 through December 2025, characterized by a debt to capital ratio that fluctuated within a narrow band between 0.34 and 0.38. During this period, the organization demonstrated a consistent approach to its capital structure, with total debt remaining relatively flat between US$ 9.1 billion and US$ 11.6 billion, while total capital grew moderately from US$ 26.6 billion to US$ 30.0 billion.
- Debt to Capital Ratio Stability (2022-2025)
- A period of low volatility is observed between Q1 2022 and Q4 2025. The ratio reached a minimum of 0.34 in the latter half of 2023 and peaked at 0.38 in June 2022 and June 2025. This stability indicates a disciplined management of leverage relative to the total capital base over these four years.
- Significant Structural Shift (2026)
- A substantial increase in both absolute debt and the leverage ratio is evident starting in March 2026. Total debt increased sharply from US$ 10.53 billion in December 2025 to US$ 21.83 billion in March 2026, more than doubling the previous debt load. Consequently, the debt to capital ratio rose to 0.53 in March 2026 and remained elevated at 0.51 in June 2026.
- Capital Base Expansion
- The expansion of total debt in early 2026 was accompanied by a significant increase in total capital, which jumped from US$ 29.96 billion in December 2025 to US$ 41.55 billion in March 2026. While the total capital base grew, the pace of debt accumulation exceeded the growth of other capital components, resulting in the aforementioned increase in the overall solvency ratio.
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Debt to Assets
Eaton Corp. plc, debt to assets calculation (quarterly data)
| Jun 30, 2026 | 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 | 2,091) | 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 | 11) | 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 | 18,509) | 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 | 20,611) | 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 | 56,181) | 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 | 0.37 | 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. | 0.28 | 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. | 0.44 | 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 | 0.15 | 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. | 0.44 | 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. | 0.33 | 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. | 0.21 | 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: 2026-06-30), 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 Q2 2026 Calculation
Debt to assets = Total debt ÷ Total assets
= 20,611 ÷ 56,181 = 0.37
2 Click competitor name to see calculations.
The solvency profile exhibits a prolonged period of stability followed by a significant structural shift in the first half of 2026. From March 2022 through December 2025, the company maintained a consistent leverage posture, with debt and asset levels fluctuating within narrow margins. However, a substantial increase in both total debt and total assets is observed starting in March 2026, indicating a major capital event or strategic expansion.
- Total Debt Trends
- Between March 2022 and December 2025, total debt remained relatively stable, fluctuating between a low of 8,655 million USD and a high of 10,996 million USD. A dramatic escalation occurred in March 2026, where total debt rose to 21,129 million USD, more than doubling the previous year-end figure. This elevated level persisted into June 2026 at 20,611 million USD.
- Total Asset Growth
- Assets showed a gradual and steady upward trajectory for the majority of the period, growing from 35,208 million USD in March 2022 to 41,251 million USD by December 2025. Parallel to the increase in debt, total assets experienced a sharp spike in March 2026, reaching 55,085 million USD, and further increasing to 56,181 million USD by June 2026.
- Debt to Assets Ratio Analysis
- The debt to assets ratio remained highly consistent from March 2022 to December 2025, oscillating within a tight range of 0.24 to 0.28, suggesting a disciplined approach to leverage. This stability was disrupted in March 2026, as the ratio climbed to 0.38, the highest point in the observed period. The ratio slightly moderated to 0.37 by June 2026, reflecting a fundamentally higher level of financial leverage compared to the preceding four years.
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Debt to Assets (including Operating Lease Liability)
Eaton Corp. plc, debt to assets (including operating lease liability) calculation (quarterly data)
| Jun 30, 2026 | 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 | 2,091) | 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 | 11) | 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 | 18,509) | 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 | 20,611) | 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 | 715) | 704) | 637) | 568) | 587) | 669) | 669) | 681) | 656) | 601) | 533) | 486) | 482) | 466) | 459) | 447) | 386) | 342) | ||||||
| Total debt (including operating lease liability) | 21,326) | 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 | 56,181) | 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 | 0.38 | 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. | 0.22 | 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: 2026-06-30), 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 Q2 2026 Calculation
Debt to assets (including operating lease liability) = Total debt (including operating lease liability) ÷ Total assets
= 21,326 ÷ 56,181 = 0.38
2 Click competitor name to see calculations.
The solvency profile demonstrates a prolonged period of stability followed by a significant structural shift in leverage starting in the first quarter of 2026.
- Leverage Stability (2022–2025)
- From March 31, 2022, through December 31, 2025, the debt-to-assets ratio remained highly consistent, fluctuating within a narrow corridor between 0.25 and 0.29. During this timeframe, total debt, including operating lease liabilities, generally ranged between 9.1 billion and 11.6 billion US dollars. Total assets grew steadily from 35.2 billion US dollars to 41.3 billion US dollars, indicating that debt levels were managed in alignment with asset expansion.
- Capital Structure Expansion (2026)
- A substantial increase in the balance sheet size is observed in the first half of 2026. Total debt rose sharply from 10.5 billion US dollars at the end of 2025 to 21.8 billion US dollars by March 31, 2026. In the same period, total assets increased from 41.3 billion to 55.1 billion US dollars. The magnitude of these increases suggests a significant corporate event, such as a major acquisition or a large-scale capital investment program funded by debt.
- Solvency Ratio Analysis
- The sharp increase in liabilities outpaced the growth in assets in early 2026, causing the debt-to-assets ratio to peak at 0.40 on March 31, 2026. Although the ratio decreased slightly to 0.38 by June 30, 2026, the organization's solvency position has shifted to a higher baseline of leverage compared to the previous four years of operational data.
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Financial Leverage
Eaton Corp. plc, financial leverage calculation (quarterly data)
| Jun 30, 2026 | 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 | 56,181) | 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 | 20,254) | 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 | 2.77 | 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. | 27.19 | 27.52 | 30.85 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Caterpillar Inc. | 5.29 | 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 | 7.24 | 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. | 4.17 | 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. | 7.12 | 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. | 2.62 | 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: 2026-06-30), 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 Q2 2026 Calculation
Financial leverage = Total assets ÷ Total Eaton shareholders’ equity
= 56,181 ÷ 20,254 = 2.77
2 Click competitor name to see calculations.
The analysis of the balance sheet and leverage ratios reveals a period of sustained stability followed by a significant expansion in the asset base and a corresponding increase in financial leverage during the first half of 2026.
- Total Asset Trends
- Assets demonstrated a gradual and consistent upward trajectory from US$ 35,208 million in March 2022 to US$ 41,251 million by December 2025. A substantial acceleration in growth is observed in the first quarter of 2026, where total assets increased to US$ 55,085 million, indicating a major expansion of the company's resource base.
- Shareholders' Equity Performance
- Total shareholders' equity grew steadily from US$ 16,620 million in March 2022 to US$ 20,254 million by June 2026. While the growth was generally linear, a slight contraction occurred in December 2024 before returning to an upward trend, suggesting a consistent strengthening of the equity cushion over the analyzed period.
- Financial Leverage Analysis
- The financial leverage ratio remained remarkably stable for nearly four years, fluctuating within a narrow range between 2.00 and 2.18 from March 2022 through December 2025. A sharp divergence from this trend occurred in March 2026, with the ratio rising to 2.79, and remaining elevated at 2.77 in June 2026. This spike indicates that the rapid increase in total assets during early 2026 was primarily funded through debt or other liabilities rather than equity, resulting in a higher degree of financial risk and increased leverage.
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Interest Coverage
Eaton Corp. plc, interest coverage calculation (quarterly data)
| Jun 30, 2026 | 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 | 821) | 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) | 2) | —) | —) | 1) | —) | 2) | 1) | 1) | 2) | 1) | 1) | 1) | 2) | 1) | —) | 1) | ||||||
| Add: Income tax expense | 321) | 239) | 161) | 265) | 204) | 212) | 195) | 193) | 201) | 179) | 141) | 187) | 153) | 123) | 128) | 112) | 119) | 86) | ||||||
| Add: Interest expense, net | 201) | 106) | 70) | 67) | 71) | 33) | 42) | 29) | 29) | 30) | 26) | 33) | 42) | 50) | 44) | 37) | 31) | 32) | ||||||
| Earnings before interest and tax (EBIT) | 1,345) | 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 | 11.86 | 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. | 2.08 | 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. | 27.68 | 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 | 12.27 | 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. | 8.13 | 4.32 | 5.07 | 6.61 | 6.54 | 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. | 7.68 | 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: 2026-06-30), 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 Q2 2026 Calculation
Interest coverage
= (EBITQ2 2026
+ EBITQ1 2026
+ EBITQ4 2025
+ EBITQ3 2025)
÷ (Interest expenseQ2 2026
+ Interest expenseQ1 2026
+ Interest expenseQ4 2025
+ Interest expenseQ3 2025)
= (1,345 + 1,213 + 1,364 + 1,342)
÷ (201 + 106 + 70 + 67)
= 11.86
2 Click competitor name to see calculations.
The interest coverage profile demonstrates a period of significant solvency improvement followed by a sharp decline in the most recent quarters. While operating profitability has maintained a consistent upward trajectory, a rapid escalation in net interest expenses has compressed the ratio, reducing the margin of safety available to service debt obligations.
- Earnings Before Interest and Tax (EBIT)
- A sustained growth pattern is observed in operating earnings, which rose from 651 million US dollars in March 2022 to 1,345 million US dollars by June 2026. This represents a substantial increase in the company's capacity to generate profits from core operations, with earnings more than doubling over the analyzed period.
- Net Interest Expense
- Interest costs remained relatively stable and low between March 2022 and March 2025, fluctuating generally between 26 million and 50 million US dollars. However, a critical inflection point occurred in June 2025, where expenses jumped to 71 million US dollars. This upward trend accelerated sharply in 2026, culminating in a peak of 201 million US dollars by June 2026, indicating a significant increase in debt load or a rise in applicable interest rates.
- Interest Coverage Ratio
- The solvency ratio experienced three distinct phases. Initially, the ratio remained stable between 19x and 26x through 2022 and early 2023. A second phase of optimization occurred from September 2023 to September 2024, where the ratio peaked at 40.37, driven by rising EBIT and controlled interest costs. The final phase, beginning in December 2024, shows a precipitous decline, falling to 11.86 by June 2026. This deterioration is directly attributable to the fact that interest expenses grew at a rate far exceeding the growth of operating earnings during the 2025-2026 period.
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