Analysis of Solvency Ratios
Solvency ratios also known as long-term debt ratios measure a company ability to meet long-term obligations.
Solvency Ratios (Summary)
Emerson Electric Co., solvency ratios
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).
| Solvency ratio | Description | The company |
|---|---|---|
| Debt to equity ratio | A solvency ratio calculated as total debt divided by total shareholders’ equity. | Emerson Electric Co. 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. 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. 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. 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. 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. 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
| Sep 30, 2019 | Sep 30, 2018 | Sep 30, 2017 | Sep 30, 2016 | Sep 30, 2015 | Sep 30, 2014 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Short-term borrowings and current maturities of long-term debt | 1,444) | 1,623) | 862) | 2,584) | 2,553) | 2,465) | |
| Long-term debt, excluding current maturities | 4,277) | 3,137) | 3,794) | 4,062) | 4,289) | 3,559) | |
| Total debt | 5,721) | 4,760) | 4,656) | 6,646) | 6,842) | 6,024) | |
| Common stockholders’ equity | 8,233) | 8,947) | 8,718) | 7,568) | 8,081) | 10,119) | |
| Solvency Ratio | |||||||
| Debt to equity1 | 0.69 | 0.53 | 0.53 | 0.88 | 0.85 | 0.60 | |
| Benchmarks | |||||||
| Debt to Equity, Competitors2 | |||||||
| Boeing Co. | — | — | — | — | — | — | |
| Caterpillar Inc. | 2.58 | — | — | — | — | — | |
| Cummins Inc. | 0.32 | — | — | — | — | — | |
| Eaton Corp. plc | 0.52 | — | — | — | — | — | |
| General Electric Co. | 3.21 | — | — | — | — | — | |
| Honeywell International Inc. | 0.87 | — | — | — | — | — | |
| Lockheed Martin Corp. | 4.05 | — | — | — | — | — | |
| RTX Corp. | 1.04 | — | — | — | — | — | |
| Debt to Equity, Sector | |||||||
| Capital Goods | 1.97 | — | — | — | — | — | |
| Debt to Equity, Industry | |||||||
| Industrials | 1.79 | — | — | — | — | — | |
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).
1 2019 Calculation
Debt to equity = Total debt ÷ Common stockholders’ equity
= 5,721 ÷ 8,233 = 0.69
2 Click competitor name to see calculations.
| Solvency ratio | Description | The company |
|---|---|---|
| Debt to equity ratio | A solvency ratio calculated as total debt divided by total shareholders’ equity. | Emerson Electric Co. 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
| Sep 30, 2019 | Sep 30, 2018 | Sep 30, 2017 | Sep 30, 2016 | Sep 30, 2015 | Sep 30, 2014 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Short-term borrowings and current maturities of long-term debt | 1,444) | 1,623) | 862) | 2,584) | 2,553) | 2,465) | |
| Long-term debt, excluding current maturities | 4,277) | 3,137) | 3,794) | 4,062) | 4,289) | 3,559) | |
| Total debt | 5,721) | 4,760) | 4,656) | 6,646) | 6,842) | 6,024) | |
| Common stockholders’ equity | 8,233) | 8,947) | 8,718) | 7,568) | 8,081) | 10,119) | |
| Total capital | 13,954) | 13,707) | 13,374) | 14,214) | 14,923) | 16,143) | |
| Solvency Ratio | |||||||
| Debt to capital1 | 0.41 | 0.35 | 0.35 | 0.47 | 0.46 | 0.37 | |
| Benchmarks | |||||||
| Debt to Capital, Competitors2 | |||||||
| Boeing Co. | 1.46 | — | — | — | — | — | |
| Caterpillar Inc. | 0.72 | — | — | — | — | — | |
| Cummins Inc. | 0.24 | — | — | — | — | — | |
| Eaton Corp. plc | 0.34 | — | — | — | — | — | |
| General Electric Co. | 0.76 | — | — | — | — | — | |
| Honeywell International Inc. | 0.46 | — | — | — | — | — | |
| Lockheed Martin Corp. | 0.80 | — | — | — | — | — | |
| RTX Corp. | 0.51 | — | — | — | — | — | |
| Debt to Capital, Sector | |||||||
| Capital Goods | 0.66 | — | — | — | — | — | |
| Debt to Capital, Industry | |||||||
| Industrials | 0.64 | — | — | — | — | — | |
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).
1 2019 Calculation
Debt to capital = Total debt ÷ Total capital
= 5,721 ÷ 13,954 = 0.41
2 Click competitor name to see calculations.
| 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. 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
| Sep 30, 2019 | Sep 30, 2018 | Sep 30, 2017 | Sep 30, 2016 | Sep 30, 2015 | Sep 30, 2014 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Short-term borrowings and current maturities of long-term debt | 1,444) | 1,623) | 862) | 2,584) | 2,553) | 2,465) | |
| Long-term debt, excluding current maturities | 4,277) | 3,137) | 3,794) | 4,062) | 4,289) | 3,559) | |
| Total debt | 5,721) | 4,760) | 4,656) | 6,646) | 6,842) | 6,024) | |
| Total assets | 20,497) | 20,390) | 19,589) | 21,743) | 22,088) | 24,177) | |
| Solvency Ratio | |||||||
| Debt to assets1 | 0.28 | 0.23 | 0.24 | 0.31 | 0.31 | 0.25 | |
| Benchmarks | |||||||
| Debt to Assets, Competitors2 | |||||||
| Boeing Co. | 0.20 | — | — | — | — | — | |
| Caterpillar Inc. | 0.48 | — | — | — | — | — | |
| Cummins Inc. | 0.12 | — | — | — | — | — | |
| Eaton Corp. plc | 0.25 | — | — | — | — | — | |
| General Electric Co. | 0.34 | — | — | — | — | — | |
| Honeywell International Inc. | 0.27 | — | — | — | — | — | |
| Lockheed Martin Corp. | 0.27 | — | — | — | — | — | |
| RTX Corp. | 0.31 | — | — | — | — | — | |
| Debt to Assets, Sector | |||||||
| Capital Goods | 0.31 | — | — | — | — | — | |
| Debt to Assets, Industry | |||||||
| Industrials | 0.32 | — | — | — | — | — | |
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).
1 2019 Calculation
Debt to assets = Total debt ÷ Total assets
= 5,721 ÷ 20,497 = 0.28
2 Click competitor name to see calculations.
| Solvency ratio | Description | The company |
|---|---|---|
| Debt to assets ratio | A solvency ratio calculated as total debt divided by total assets. | Emerson Electric Co. 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
| Sep 30, 2019 | Sep 30, 2018 | Sep 30, 2017 | Sep 30, 2016 | Sep 30, 2015 | Sep 30, 2014 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Total assets | 20,497) | 20,390) | 19,589) | 21,743) | 22,088) | 24,177) | |
| Common stockholders’ equity | 8,233) | 8,947) | 8,718) | 7,568) | 8,081) | 10,119) | |
| Solvency Ratio | |||||||
| Financial leverage1 | 2.49 | 2.28 | 2.25 | 2.87 | 2.73 | 2.39 | |
| Benchmarks | |||||||
| Financial Leverage, Competitors2 | |||||||
| Boeing Co. | — | — | — | — | — | — | |
| Caterpillar Inc. | 5.38 | — | — | — | — | — | |
| Cummins Inc. | 2.63 | — | — | — | — | — | |
| Eaton Corp. plc | 2.04 | — | — | — | — | — | |
| General Electric Co. | 9.40 | — | — | — | — | — | |
| Honeywell International Inc. | 3.17 | — | — | — | — | — | |
| Lockheed Martin Corp. | 15.20 | — | — | — | — | — | |
| RTX Corp. | 3.34 | — | — | — | — | — | |
| Financial Leverage, Sector | |||||||
| Capital Goods | 6.40 | — | — | — | — | — | |
| Financial Leverage, Industry | |||||||
| Industrials | 5.63 | — | — | — | — | — | |
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).
1 2019 Calculation
Financial leverage = Total assets ÷ Common stockholders’ equity
= 20,497 ÷ 8,233 = 2.49
2 Click competitor name to see calculations.
| Solvency ratio | Description | The company |
|---|---|---|
| Financial leverage ratio | A solvency ratio calculated as total assets divided by total shareholders’ equity. | Emerson Electric Co. financial leverage ratio increased from 2017 to 2018 and from 2018 to 2019. |
Interest Coverage
Emerson Electric Co., interest coverage calculation, comparison to benchmarks
| Sep 30, 2019 | Sep 30, 2018 | Sep 30, 2017 | Sep 30, 2016 | Sep 30, 2015 | Sep 30, 2014 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Net earnings common stockholders | 2,306) | 2,203) | 1,518) | 1,635) | 2,710) | 2,147) | |
| Add: Net income attributable to noncontrolling interest | 22) | 21) | 32) | 29) | 23) | 37) | |
| Less: Discontinued operations, net of tax | —) | —) | (125) | 45) | —) | —) | |
| Add: Income tax expense | 531) | 443) | 660) | 697) | 1,428) | 1,164) | |
| Add: Interest expense | 201) | 202) | 201) | 215) | 200) | 218) | |
| Earnings before interest and tax (EBIT) | 3,060) | 2,869) | 2,536) | 2,531) | 4,361) | 3,566) | |
| Solvency Ratio | |||||||
| Interest coverage1 | 15.22 | 14.20 | 12.62 | 11.77 | 21.81 | 16.36 | |
| Benchmarks | |||||||
| Interest Coverage, Competitors2 | |||||||
| Boeing Co. | -2.19 | — | — | — | — | — | |
| Caterpillar Inc. | 19.62 | — | — | — | — | — | |
| Cummins Inc. | 27.00 | — | — | — | — | — | |
| Eaton Corp. plc | 11.98 | — | — | — | — | — | |
| General Electric Co. | 1.27 | — | — | — | — | — | |
| Honeywell International Inc. | 22.17 | — | — | — | — | — | |
| Lockheed Martin Corp. | 12.09 | — | — | — | — | — | |
| RTX Corp. | 5.65 | — | — | — | — | — | |
| Interest Coverage, Sector | |||||||
| Capital Goods | 5.14 | — | — | — | — | — | |
| Interest Coverage, Industry | |||||||
| Industrials | 4.59 | — | — | — | — | — | |
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).
1 2019 Calculation
Interest coverage = EBIT ÷ Interest expense
= 3,060 ÷ 201 = 15.22
2 Click competitor name to see calculations.
| Solvency ratio | Description | The company |
|---|---|---|
| Interest coverage ratio | A solvency ratio calculated as EBIT divided by interest payments. | Emerson Electric Co. 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
| Sep 30, 2019 | Sep 30, 2018 | Sep 30, 2017 | Sep 30, 2016 | Sep 30, 2015 | Sep 30, 2014 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Net earnings common stockholders | 2,306) | 2,203) | 1,518) | 1,635) | 2,710) | 2,147) | |
| Add: Net income attributable to noncontrolling interest | 22) | 21) | 32) | 29) | 23) | 37) | |
| Less: Discontinued operations, net of tax | —) | —) | (125) | 45) | —) | —) | |
| Add: Income tax expense | 531) | 443) | 660) | 697) | 1,428) | 1,164) | |
| Add: Interest expense | 201) | 202) | 201) | 215) | 200) | 218) | |
| Earnings before interest and tax (EBIT) | 3,060) | 2,869) | 2,536) | 2,531) | 4,361) | 3,566) | |
| Add: Rent expense | 285) | 279) | 289) | 273) | 391) | 411) | |
| Earnings before fixed charges and tax | 3,345) | 3,148) | 2,825) | 2,804) | 4,752) | 3,977) | |
| Interest expense | 201) | 202) | 201) | 215) | 200) | 218) | |
| Rent expense | 285) | 279) | 289) | 273) | 391) | 411) | |
| Fixed charges | 486) | 481) | 490) | 488) | 591) | 629) | |
| Solvency Ratio | |||||||
| Fixed charge coverage1 | 6.88 | 6.54 | 5.77 | 5.75 | 8.04 | 6.32 | |
| Benchmarks | |||||||
| Fixed Charge Coverage, Competitors2 | |||||||
| Boeing Co. | -1.19 | — | — | — | — | — | |
| Caterpillar Inc. | 13.01 | — | — | — | — | — | |
| Cummins Inc. | 9.94 | — | — | — | — | — | |
| Eaton Corp. plc | 7.45 | — | — | — | — | — | |
| General Electric Co. | 1.09 | — | — | — | — | — | |
| Honeywell International Inc. | 14.06 | — | — | — | — | — | |
| Lockheed Martin Corp. | 9.12 | — | — | — | — | — | |
| RTX Corp. | 4.31 | — | — | — | — | — | |
| Fixed Charge Coverage, Sector | |||||||
| Capital Goods | 3.80 | — | — | — | — | — | |
| Fixed Charge Coverage, Industry | |||||||
| Industrials | 3.07 | — | — | — | — | — | |
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).
1 2019 Calculation
Fixed charge coverage = Earnings before fixed charges and tax ÷ Fixed charges
= 3,345 ÷ 486 = 6.88
2 Click competitor name to see calculations.
| 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. fixed charge coverage ratio improved from 2017 to 2018 and from 2018 to 2019. |