Solvency ratios also known as long-term debt ratios measure a company’s ability to meet long-term obligations.

Emerson Electric Co., solvency ratios

Solvency ratio	Description	The company
Debt to equity ratio	A solvency ratio calculated as total debt divided by total shareholders’ equity.
Debt to capital ratio	A solvency ratio calculated as total debt divided by total debt plus shareholders’ equity.
Debt to assets ratio	A solvency ratio calculated as total debt divided by total assets.
Financial leverage ratio	A solvency ratio calculated as total assets divided by total shareholders’ equity.	Emerson Electric Co.’s financial leverage ratio declined from 2016 to 2017 but then slightly increased from 2017 to 2018.

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 2016 to 2017 and from 2017 to 2018.
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 2016 to 2017 and from 2017 to 2018.

Emerson Electric Co., debt to equity calculation, comparison to benchmarks

		Sep 30, 2018	Sep 30, 2017	Sep 30, 2016	Sep 30, 2015	Sep 30, 2014	Sep 30, 2013
	Selected Financial Data (US$ in millions)
	Short-term borrowings and current maturities of long-term debt
	Long-term debt, excluding current maturities
	Total debt

	Common stockholders’ equity
	Solvency Ratio
	Debt to equity¹
	Benchmarks
	Debt to Equity, Industry
	Industrials

¹ 2018 Calculation
Debt to equity = Total debt ÷ Common stockholders’ equity
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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 capital calculation, comparison to benchmarks

		Sep 30, 2018	Sep 30, 2017	Sep 30, 2016	Sep 30, 2015	Sep 30, 2014	Sep 30, 2013
	Selected Financial Data (US$ in millions)
	Short-term borrowings and current maturities of long-term debt
	Long-term debt, excluding current maturities
	Total debt
	Common stockholders’ equity
	Total capital
	Solvency Ratio
	Debt to capital¹
	Benchmarks
	Debt to Capital, Industry
	Industrials

¹ 2018 Calculation
Debt to capital = Total debt ÷ Total capital
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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 assets calculation, comparison to benchmarks

		Sep 30, 2018	Sep 30, 2017	Sep 30, 2016	Sep 30, 2015	Sep 30, 2014	Sep 30, 2013
	Selected Financial Data (US$ in millions)
	Short-term borrowings and current maturities of long-term debt
	Long-term debt, excluding current maturities
	Total debt

	Total assets
	Solvency Ratio
	Debt to assets¹
	Benchmarks
	Debt to Assets, Industry
	Industrials

¹ 2018 Calculation
Debt to assets = Total debt ÷ Total assets
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Solvency ratio	Description	The company
Debt to assets ratio	A solvency ratio calculated as total debt divided by total assets.

Emerson Electric Co., financial leverage calculation, comparison to benchmarks

		Sep 30, 2018	Sep 30, 2017	Sep 30, 2016	Sep 30, 2015	Sep 30, 2014	Sep 30, 2013
	Selected Financial Data (US$ in millions)
	Total assets
	Common stockholders’ equity
	Solvency Ratio
	Financial leverage¹
	Benchmarks
	Financial Leverage, Industry
	Industrials

¹ 2018 Calculation
Financial leverage = Total assets ÷ Common stockholders’ equity
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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 declined from 2016 to 2017 but then slightly increased from 2017 to 2018.

Emerson Electric Co., interest coverage calculation, comparison to benchmarks

		Sep 30, 2018	Sep 30, 2017	Sep 30, 2016	Sep 30, 2015	Sep 30, 2014	Sep 30, 2013
	Selected Financial Data (US$ in millions)
	Net earnings common stockholders
	Add: Net income attributable to noncontrolling interest
	Less: Discontinued operations, net of tax
	Add: Income tax expense
	Add: Interest expense
	Earnings before interest and tax (EBIT)
	Solvency Ratio
	Interest coverage¹
	Benchmarks
	Interest Coverage, Industry
	Industrials

¹ 2018 Calculation
Interest coverage = EBIT ÷ Interest expense
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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 2016 to 2017 and from 2017 to 2018.

Emerson Electric Co., fixed charge coverage calculation, comparison to benchmarks

		Sep 30, 2018	Sep 30, 2017	Sep 30, 2016	Sep 30, 2015	Sep 30, 2014	Sep 30, 2013
	Selected Financial Data (US$ in millions)
	Net earnings common stockholders
	Add: Net income attributable to noncontrolling interest
	Less: Discontinued operations, net of tax
	Add: Income tax expense
	Add: Interest expense
	Earnings before interest and tax (EBIT)
	Add: Rent expense
	Earnings before fixed charges and tax

	Interest expense
	Rent expense
	Fixed charges
	Solvency Ratio
	Fixed charge coverage¹
	Benchmarks
	Fixed Charge Coverage, Industry
	Industrials

¹ 2018 Calculation
Fixed charge coverage = Earnings before fixed charges and tax ÷ Fixed charges
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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 2016 to 2017 and from 2017 to 2018.

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Analysis
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Emerson Electric Co. (EMR)

Analysis of Solvency Ratios