Analysis of Solvency Ratios
Solvency ratios also known as long-term debt ratios measure a company’s ability to meet long-term obligations.
Solvency Ratios (Summary)
Emerson Electric Co., solvency ratios
Based on: 10-K (filing date: 2019-11-18), 10-K (filing date: 2018-11-19), 10-K (filing date: 2017-11-20), 10-K (filing date: 2016-11-16), 10-K (filing date: 2015-11-18), 10-K (filing date: 2014-11-19).
Solvency ratio | Description | The company |
---|---|---|
Debt to equity ratio | A solvency ratio calculated as total debt divided by total shareholders’ equity. | Emerson Electric Co.’s debt to equity ratio improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019. |
Debt to capital ratio | A solvency ratio calculated as total debt divided by total debt plus shareholders’ equity. | Emerson Electric Co.’s debt to capital ratio improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019. |
Debt to assets ratio | A solvency ratio calculated as total debt divided by total assets. | Emerson Electric Co.’s debt to assets ratio improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019. |
Financial leverage ratio | A solvency ratio calculated as total assets divided by total shareholders’ equity. | Emerson Electric Co.’s financial leverage ratio increased from 2017 to 2018 and from 2018 to 2019. |
Solvency ratio | Description | The company |
---|---|---|
Interest coverage ratio | A solvency ratio calculated as EBIT divided by interest payments. | Emerson Electric Co.’s interest coverage ratio improved from 2017 to 2018 and from 2018 to 2019. |
Fixed charge coverage ratio | A solvency ratio calculated as earnings before fixed charges and tax divided by fixed charges. | Emerson Electric Co.’s fixed charge coverage ratio improved from 2017 to 2018 and from 2018 to 2019. |
Debt to Equity
Emerson Electric Co., debt to equity calculation, comparison to benchmarks
Based on: 10-K (filing date: 2019-11-18), 10-K (filing date: 2018-11-19), 10-K (filing date: 2017-11-20), 10-K (filing date: 2016-11-16), 10-K (filing date: 2015-11-18), 10-K (filing date: 2014-11-19).
1 2019 Calculation
Debt to equity = Total debt ÷ Common stockholders’ equity
= 5,721 ÷ 8,233 = 0.69
Solvency ratio | Description | The company |
---|---|---|
Debt to equity ratio | A solvency ratio calculated as total debt divided by total shareholders’ equity. | Emerson Electric Co.’s debt to equity ratio improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019. |
Debt to Capital
Emerson Electric Co., debt to capital calculation, comparison to benchmarks
Based on: 10-K (filing date: 2019-11-18), 10-K (filing date: 2018-11-19), 10-K (filing date: 2017-11-20), 10-K (filing date: 2016-11-16), 10-K (filing date: 2015-11-18), 10-K (filing date: 2014-11-19).
1 2019 Calculation
Debt to capital = Total debt ÷ Total capital
= 5,721 ÷ 13,954 = 0.41
Solvency ratio | Description | The company |
---|---|---|
Debt to capital ratio | A solvency ratio calculated as total debt divided by total debt plus shareholders’ equity. | Emerson Electric Co.’s debt to capital ratio improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019. |
Debt to Assets
Emerson Electric Co., debt to assets calculation, comparison to benchmarks
Based on: 10-K (filing date: 2019-11-18), 10-K (filing date: 2018-11-19), 10-K (filing date: 2017-11-20), 10-K (filing date: 2016-11-16), 10-K (filing date: 2015-11-18), 10-K (filing date: 2014-11-19).
1 2019 Calculation
Debt to assets = Total debt ÷ Total assets
= 5,721 ÷ 20,497 = 0.28
Solvency ratio | Description | The company |
---|---|---|
Debt to assets ratio | A solvency ratio calculated as total debt divided by total assets. | Emerson Electric Co.’s debt to assets ratio improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019. |
Financial Leverage
Emerson Electric Co., financial leverage calculation, comparison to benchmarks
Based on: 10-K (filing date: 2019-11-18), 10-K (filing date: 2018-11-19), 10-K (filing date: 2017-11-20), 10-K (filing date: 2016-11-16), 10-K (filing date: 2015-11-18), 10-K (filing date: 2014-11-19).
1 2019 Calculation
Financial leverage = Total assets ÷ Common stockholders’ equity
= 20,497 ÷ 8,233 = 2.49
Solvency ratio | Description | The company |
---|---|---|
Financial leverage ratio | A solvency ratio calculated as total assets divided by total shareholders’ equity. | Emerson Electric Co.’s financial leverage ratio increased from 2017 to 2018 and from 2018 to 2019. |
Interest Coverage
Emerson Electric Co., interest coverage calculation, comparison to benchmarks
Based on: 10-K (filing date: 2019-11-18), 10-K (filing date: 2018-11-19), 10-K (filing date: 2017-11-20), 10-K (filing date: 2016-11-16), 10-K (filing date: 2015-11-18), 10-K (filing date: 2014-11-19).
1 2019 Calculation
Interest coverage = EBIT ÷ Interest expense
= 3,060 ÷ 201 = 15.22
Solvency ratio | Description | The company |
---|---|---|
Interest coverage ratio | A solvency ratio calculated as EBIT divided by interest payments. | Emerson Electric Co.’s interest coverage ratio improved from 2017 to 2018 and from 2018 to 2019. |
Fixed Charge Coverage
Emerson Electric Co., fixed charge coverage calculation, comparison to benchmarks
Based on: 10-K (filing date: 2019-11-18), 10-K (filing date: 2018-11-19), 10-K (filing date: 2017-11-20), 10-K (filing date: 2016-11-16), 10-K (filing date: 2015-11-18), 10-K (filing date: 2014-11-19).
1 2019 Calculation
Fixed charge coverage = Earnings before fixed charges and tax ÷ Fixed charges
= 3,345 ÷ 486 = 6.88
Solvency ratio | Description | The company |
---|---|---|
Fixed charge coverage ratio | A solvency ratio calculated as earnings before fixed charges and tax divided by fixed charges. | Emerson Electric Co.’s fixed charge coverage ratio improved from 2017 to 2018 and from 2018 to 2019. |