Name: Emerson Electric Co. (NYSE:EMR) | Liabilities and Stockholders’ Equity
Creator: Stock Analysis on Net

Balance Sheet: Liabilities and Stockholders’ Equity

The balance sheet provides creditors, investors, and analysts with information on company resources (assets) and its sources of capital (its equity and liabilities). It normally also provides information about the future earnings capacity of a company assets as well as an indication of cash flows that may come from receivables and inventories.

Liabilities represents obligations of a company arising from past events, the settlement of which is expected to result in an outflow of economic benefits from the entity.

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Emerson Electric Co., consolidated balance sheet: liabilities and stockholders’ equity

US$ in millions

	Sep 30, 2019	Sep 30, 2018	Sep 30, 2017	Sep 30, 2016	Sep 30, 2015	Sep 30, 2014
Short-term borrowings and current maturities of long-term debt	1,444)	1,623)	862)	2,584)	2,553)	2,465)
Accounts payable	1,874)	1,943)	1,776)	1,517)	2,358)	2,951)
Employee compensation	606)	629)	531)	431)	597)	705)
Customer advances (contract liabilities)	519)	453)	505)	433)	450)	455)
Product warranty	140)	124)	120)	106)	167)	193)
Other	1,393)	1,392)	1,251)	2,937)	1,675)	1,685)
Accrued expenses	2,658)	2,598)	2,407)	3,907)	2,889)	3,038)
Current liabilities	5,976)	6,164)	5,045)	8,008)	7,800)	8,454)
Long-term debt, excluding current maturities	4,277)	3,137)	3,794)	4,062)	4,289)	3,559)
Pension and postretirement liabilities	775)	625)	664)	1,037)	861)	797)
Deferred income taxes	327)	484)	425)	210)	408)	572)
Asbestos litigation	313)	334)	340)	52)	—)	—)
Other	556)	656)	551)	756)	602)	628)
Other liabilities	1,971)	2,099)	1,980)	2,055)	1,871)	1,997)
Noncurrent liabilities	6,248)	5,236)	5,774)	6,117)	6,160)	5,556)
Total liabilities	12,224)	11,400)	10,819)	14,125)	13,960)	14,010)
Common stock, $0.50 par value	477)	477)	477)	477)	477)	477)
Additional paid-in capital	393)	348)	297)	205)	170)	161)
Retained earnings	24,199)	23,072)	21,995)	21,716)	21,308)	19,867)
Accumulated other comprehensive loss	(1,722)	(1,015)	(1,019)	(1,999)	(1,617)	(575)
Cost of common stock in treasury	(15,114)	(13,935)	(13,032)	(12,831)	(12,257)	(9,811)
Common stockholders’ equity	8,233)	8,947)	8,718)	7,568)	8,081)	10,119)
Noncontrolling interests in subsidiaries	40)	43)	52)	50)	47)	48)
Total equity	8,273)	8,990)	8,770)	7,618)	8,128)	10,167)
Total liabilities and equity	20,497)	20,390)	19,589)	21,743)	22,088)	24,177)

Based on: 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30), 10-K (reporting date: 2016-09-30), 10-K (reporting date: 2015-09-30), 10-K (reporting date: 2014-09-30).

The financial position between 2014 and 2019 is characterized by a general reduction in total liabilities from 2014 levels, followed by a gradual increase toward the end of the period. Total liabilities and equity peaked in 2014 at 24,177 million US dollars and reached a low in 2017 at 19,589 million US dollars before stabilizing around 20,497 million US dollars by 2019.

Current Liability Trends: Current liabilities experienced a notable decline, falling from 8,454 million US dollars in 2014 to 5,045 million US dollars in 2017. This reduction was primarily driven by a sharp decrease in short-term borrowings and current maturities of long-term debt, which dropped from a peak of 2,584 million US dollars in 2016 to 862 million US dollars in 2017. Accounts payable also saw a downward trend, decreasing from 2,951 million US dollars in 2014 to 1,874 million US dollars by 2019.
Long-term Debt and Noncurrent Obligations: Noncurrent liabilities remained relatively stable, fluctuating between 5,236 million US dollars and 6,248 million US dollars. Long-term debt excluding current maturities showed volatility, decreasing to 3,137 million US dollars in 2018 before rising sharply to 4,277 million US dollars in 2019. Additionally, asbestos litigation emerged as a recorded liability starting in 2016, peaking at 340 million US dollars in 2017 and remaining steady through 2019.
Equity and Capital Management: A divergence is observed between retained earnings and the cost of treasury stock. Retained earnings grew consistently every year, rising from 19,867 million US dollars in 2014 to 24,199 million US dollars in 2019, indicating sustained profitability. However, this growth was offset by an aggressive increase in the cost of common stock in treasury, which expanded from 9,811 million US dollars in 2014 to 15,114 million US dollars in 2019. This suggests a significant commitment to share repurchases.
Overall Solvency and Equity Position: Total equity declined from 10,167 million US dollars in 2014 to 8,273 million US dollars in 2019. While retained earnings increased, the combination of treasury stock acquisitions and accumulated other comprehensive losses resulted in a lower overall equity base. Consequently, the ratio of total liabilities to total equity increased toward the end of the period, as liabilities rose to 12,224 million US dollars while equity declined.

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