Analysis of Solvency Ratios
Quarterly Data
Solvency ratios also known as long-term debt ratios measure a company ability to meet long-term obligations.
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- Balance Sheet: Liabilities and Stockholders’ Equity
- Common-Size Balance Sheet: Assets
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Profitability Ratios
- Analysis of Reportable Segments
- Analysis of Geographic Areas
- Common Stock Valuation Ratios
- Debt to Equity since 2005
- Price to Earnings (P/E) since 2005
- Price to Book Value (P/BV) since 2005
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Solvency Ratios (Summary)
Emerson Electric Co., solvency ratios (quarterly data)
Based on: 10-Q (reporting date: 2020-03-31), 10-Q (reporting date: 2019-12-31), 10-K (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-Q (reporting date: 2018-12-31), 10-K (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-Q (reporting date: 2017-12-31), 10-K (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-Q (reporting date: 2016-12-31), 10-K (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-Q (reporting date: 2015-12-31), 10-K (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-Q (reporting date: 2014-12-31).
The financial leverage ratios of the company show notable fluctuations over the observed quarters. The debt to equity ratio increased from 0.71 at the end of 2014 to a peak of 1.00 by the end of 2015, indicating a rise in reliance on debt financing relative to shareholders' equity during this period. This was followed by a decline back to approximately 0.53 by the third quarter of 2016, suggesting a deleveraging phase. From late 2016 through early 2020, the debt to equity ratio remained relatively stable, fluctuating in a moderate range mostly between 0.61 and 0.74, before a notable increase to 1.02 at the end of the first quarter of 2020.
The debt to capital ratio mirrors this pattern to some extent. It rose steadily from 0.42 at the end of 2014 to 0.50 at the end of 2015, then declined to 0.35 in the third quarter of 2016. Afterward, it ranged between 0.38 and 0.43 until the end of 2019, before increasing to 0.51 in the first quarter of 2020. This suggests that the proportion of debt financing in the company’s overall capital structure increased notably at two different intervals: late 2014 to 2015 and early 2020.
Similarly, the debt to assets ratio followed a comparable trajectory, increasing from 0.29 at the end of 2014 to a high of 0.35 in late 2015, then dipping to 0.23 in the third quarter of 2016. This ratio remained relatively steady between 0.26 and 0.30 for the following periods, until it rose again to 0.35 at the beginning of 2020. This again supports the observation of increased debt usage relative to total assets during these time frames.
Financial leverage, expressed as a ratio, started at 2.49 in late 2014 and climbed moderately to 2.89 at the end of 2015. It then decreased to 2.16 by the first quarter of 2017 and hovered around the 2.3 to 2.5 range through 2019, before rising again to 2.89 by March 2020. This pattern aligns with the debt-related ratios, reflecting changes in the company’s capital structure leverage over time.
The interest coverage ratio, which measures the ability to service interest expenses, showed significant variability. Starting at a strong 17.52 in late 2014, it increased to a peak of 21.81 by the third quarter of 2015, indicating an enhanced capacity to cover interest. However, this ratio declined considerably to approximately 11.77 in the third quarter of 2016, marking a weakened ability to cover interest despite the reduction in leverage at that time. From late 2016 onward, the interest coverage ratio gradually improved, maintaining values mostly above 12, and reaching 15.94 by the first quarter of 2020. This suggests a generally stable interest expense coverage in the later periods despite increases in debt levels.
In summary, the company experienced periods of increased leverage in late 2015 and early 2020, as evidenced by higher debt-related ratios. During these times, the capacity to cover interest initially rose but later exhibited a decline before stabilizing. The overall financial leverage followed similar patterns, showing increases in times of more aggressive debt usage and reductions when the company deleveraged. The interest coverage ratio remained healthy throughout, though it displayed a noticeable dip during periods of debt increase, highlighting the need for careful management of debt obligations during times of rising leverage.
Debt Ratios
Coverage Ratios
Debt to Equity
Emerson Electric Co., debt to equity calculation (quarterly data)
| Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | Dec 31, 2014 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 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, Competitors2 | |||||||||||||||||||||||||||||
| Boeing Co. | |||||||||||||||||||||||||||||
| Caterpillar Inc. | |||||||||||||||||||||||||||||
| Eaton Corp. plc | |||||||||||||||||||||||||||||
| GE Aerospace | |||||||||||||||||||||||||||||
| Honeywell International Inc. | |||||||||||||||||||||||||||||
| Lockheed Martin Corp. | |||||||||||||||||||||||||||||
| RTX Corp. | |||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2020-03-31), 10-Q (reporting date: 2019-12-31), 10-K (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-Q (reporting date: 2018-12-31), 10-K (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-Q (reporting date: 2017-12-31), 10-K (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-Q (reporting date: 2016-12-31), 10-K (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-Q (reporting date: 2015-12-31), 10-K (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-Q (reporting date: 2014-12-31).
1 Q2 2020 Calculation
Debt to equity = Total debt ÷ Common stockholders’ equity
= ÷ =
2 Click competitor name to see calculations.
- Total Debt
- The total debt exhibited noticeable fluctuations over the analyzed periods. It started at a high level of approximately 6.8 billion US dollars at the end of 2014, followed by an increase reaching peaks near 7.5 billion in mid-2015 and the end of 2015. From late 2015 to late 2016, the debt amount showed a general decreasing trend, hitting a low near 4.1 billion by the end of 2016. Subsequent quarters saw an oscillating but generally rising trend, culminating in a sharp increase to about 7.7 billion by the first quarter of 2020, indicating a renewed rise in leverage or financing activities.
- Common Stockholders’ Equity
- Equity levels started around 9.5 billion US dollars at the end of 2014, followed by a consistent decline through 2015, reaching a trough near 7.5 billion at year-end 2015. From 2016 to early 2018, equity levels recovered somewhat, fluctuating mostly between 7.5 and 8.9 billion. However, after the first quarter of 2018, equity experienced moderate volatility with some declines, ending lower at approximately 7.5 billion by the first quarter of 2020. This trend suggests periods of equity erosion offset at times by growth or retention of earnings, reflecting varying profitability or capital management strategies.
- Debt to Equity Ratio
- The debt to equity ratio tracked the inverse dynamics between debt and equity. Initially, the ratio increased from 0.71 at the end of 2014 to a peak of 1.00 by the end of 2015, coinciding with rising debt and declining equity. This was followed by a decrease to near 0.51 to 0.53 range by late 2016 and early 2017, corresponding with reduced debt and recovering equity. In subsequent years, the ratio fluctuated mostly between 0.6 and 0.7, indicating a moderate leverage level. By the first quarter of 2020, the ratio sharply increased to 1.02, reflecting the substantial rise in debt combined with reduced equity, which could imply increased financial risk or strategic financing decisions.
- Overall Insights
- The financial data shows a cyclical pattern of leverage adjustments, with significant debt issuance or reduction phases coinciding inversely with equity performance. The sharp increase in total debt and debt to equity ratio at the start of 2020 signals a notable shift in capital structure, possibly related to market conditions or company-specific investment or financing initiatives. The consistency in equity fluctuations suggests ongoing challenges in maintaining stable equity growth, which may affect the company’s financial stability and risk profile.
Debt to Capital
Emerson Electric Co., debt to capital calculation (quarterly data)
| Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | Dec 31, 2014 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 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, Competitors2 | |||||||||||||||||||||||||||||
| Boeing Co. | |||||||||||||||||||||||||||||
| Caterpillar Inc. | |||||||||||||||||||||||||||||
| Eaton Corp. plc | |||||||||||||||||||||||||||||
| GE Aerospace | |||||||||||||||||||||||||||||
| Honeywell International Inc. | |||||||||||||||||||||||||||||
| Lockheed Martin Corp. | |||||||||||||||||||||||||||||
| RTX Corp. | |||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2020-03-31), 10-Q (reporting date: 2019-12-31), 10-K (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-Q (reporting date: 2018-12-31), 10-K (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-Q (reporting date: 2017-12-31), 10-K (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-Q (reporting date: 2016-12-31), 10-K (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-Q (reporting date: 2015-12-31), 10-K (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-Q (reporting date: 2014-12-31).
1 Q2 2020 Calculation
Debt to capital = Total debt ÷ Total capital
= ÷ =
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals notable fluctuations in the company's leverage and capital structure over the observed periods. The data indicate varying levels of total debt, total capital, and the corresponding debt-to-capital ratio across multiple quarters, reflecting changes in financial strategy and market conditions.
- Total Debt
- The total debt exhibits considerable variation throughout the periods. Starting at 6,773 million US dollars as of December 31, 2014, it initially increases, peaking at 7,469 million in June 2015, before showing a gradual decline to 4,069 million by December 2016. Subsequently, there is a cyclical pattern with periods of increase and decrease, culminating in a significant rise to 7,701 million by March 31, 2020. This trend suggests episodic borrowing, possibly aligned with capital investments or refinancing activities, with a marked increase towards the latest quarter analyzed.
- Total Capital
- Total capital follows a broadly declining trajectory from 16,286 million US dollars in December 2014 to about 11,782 million by December 2016, indicating a contraction in the capital base. Thereafter, total capital gradually recovers and stabilizes between approximately 13,000 and 15,000 million in subsequent years, showing relative stability with slight fluctuations. The recovery phase aligns with the period where debt also begins to increase again, implying balanced growth in both debt and equity components of capital.
- Debt to Capital Ratio
- The debt-to-capital ratio reflects the company's leverage and changes correspondingly with debt and capital movements. Initially, the ratio increases from 0.42 to 0.50 between December 2014 and December 2015, indicating rising leverage. This is followed by a decline to as low as 0.34 by March 2017, implying deleveraging or capital structure optimization. Subsequent periods show fluctuating leverage levels, mostly ranging between 0.35 and 0.42, suggesting a consistent approach to managing debt relative to capital. However, the final data point indicates a sharp increase to 0.51 in March 2020, signaling a substantial increase in leverage, possibly due to increased borrowing or reduced capital during that quarter.
Overall, the data suggest a dynamic financial management approach with phases of increased borrowing and deleveraging. The pronounced rise in debt and leverage ratio in the latest quarter could warrant further examination concerning the underlying reasons, such as funding requirements, market conditions, or strategic financial decisions. The relatively stable capital base after 2016 indicates sustained operational capacity and investor confidence during most of the analyzed period.
Debt to Assets
Emerson Electric Co., debt to assets calculation (quarterly data)
| Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | Dec 31, 2014 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 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, Competitors2 | |||||||||||||||||||||||||||||
| Boeing Co. | |||||||||||||||||||||||||||||
| Caterpillar Inc. | |||||||||||||||||||||||||||||
| Eaton Corp. plc | |||||||||||||||||||||||||||||
| GE Aerospace | |||||||||||||||||||||||||||||
| Honeywell International Inc. | |||||||||||||||||||||||||||||
| Lockheed Martin Corp. | |||||||||||||||||||||||||||||
| RTX Corp. | |||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2020-03-31), 10-Q (reporting date: 2019-12-31), 10-K (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-Q (reporting date: 2018-12-31), 10-K (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-Q (reporting date: 2017-12-31), 10-K (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-Q (reporting date: 2016-12-31), 10-K (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-Q (reporting date: 2015-12-31), 10-K (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-Q (reporting date: 2014-12-31).
1 Q2 2020 Calculation
Debt to assets = Total debt ÷ Total assets
= ÷ =
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals notable trends in the company’s debt and asset management over the observed periods.
- Total Debt
- Total debt exhibited fluctuations throughout the timeline. It initially increased from approximately $6,773 million to a peak near $7,469 million within the first half of 2015. Subsequently, debt decreased sharply towards the end of 2016, reaching a low of around $4,069 million. From 2017 to 2019, total debt rose again, with periodic oscillations, peaking near $6,213 million at the end of 2019. The latest data in March 2020 shows a significant increase in total debt to approximately $7,701 million.
- Total Assets
- Total assets demonstrated a generally downward trend from the beginning through late 2016, declining from roughly $23,724 million in late 2014 to about $17,471 million at the end of 2016. Following this, total assets showed recovery and modest growth, increasing to values around $21,711 million by March 2020. The overall pattern indicates a period of asset contraction followed by stabilization and gradual expansion.
- Debt to Assets Ratio
- The debt to assets ratio closely follows the movements in debt and assets. It started near 0.29 in late 2014, increased moderately to a peak of 0.35 around late 2015, and then declined to approximately 0.23 by late 2016, reflecting reduced leverage during that period. From 2017 onward, the ratio fluctuated between roughly 0.23 and 0.30, before a marked increase to 0.35 was observed in the first quarter of 2020. This suggests a recent rise in financial leverage.
In summary, the company experienced variability in its debt and asset levels, with a marked reduction in debt and assets through 2016, followed by a phase of asset growth and increasing debt levels. The debt to assets ratio illustrates a shift in leverage, with a notable peak in leverage occurring in early 2015 and another upsurge in early 2020. Close monitoring of the recent increase in debt relative to assets is advisable to assess the potential impact on financial risk and capital structure.
Financial Leverage
Emerson Electric Co., financial leverage calculation (quarterly data)
| Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | Dec 31, 2014 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||||||
| Total assets | |||||||||||||||||||||||||||||
| Common stockholders’ equity | |||||||||||||||||||||||||||||
| Solvency Ratio | |||||||||||||||||||||||||||||
| Financial leverage1 | |||||||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||||||
| Financial Leverage, Competitors2 | |||||||||||||||||||||||||||||
| Boeing Co. | |||||||||||||||||||||||||||||
| Caterpillar Inc. | |||||||||||||||||||||||||||||
| Eaton Corp. plc | |||||||||||||||||||||||||||||
| GE Aerospace | |||||||||||||||||||||||||||||
| Honeywell International Inc. | |||||||||||||||||||||||||||||
| Lockheed Martin Corp. | |||||||||||||||||||||||||||||
| RTX Corp. | |||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2020-03-31), 10-Q (reporting date: 2019-12-31), 10-K (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-Q (reporting date: 2018-12-31), 10-K (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-Q (reporting date: 2017-12-31), 10-K (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-Q (reporting date: 2016-12-31), 10-K (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-Q (reporting date: 2015-12-31), 10-K (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-Q (reporting date: 2014-12-31).
1 Q2 2020 Calculation
Financial leverage = Total assets ÷ Common stockholders’ equity
= ÷ =
2 Click competitor name to see calculations.
- Total Assets
- The total assets demonstrated notable fluctuations over the observed periods. Initially, there was a gradual decline from the end of 2014 through 2015, with assets dropping from approximately 23.7 billion to about 21.6 billion US dollars. This was followed by a sharp decrease at the end of 2016 to approximately 17.5 billion US dollars. Subsequently, total assets recovered in the following quarters through to early 2019, peaking above 21 billion US dollars. A slight decline followed towards early 2020, with assets stabilizing around 21.7 billion US dollars. Overall, total assets showed periods of contraction, recovery, and stabilization within the timeframe.
- Common Stockholders’ Equity
- Common stockholders' equity also exhibited variability throughout the period. Equity decreased significantly from nearly 9.5 billion US dollars at the end of 2014 to around 7.5 billion US dollars by the end of 2015. It then experienced modest increases and decreases, peaking at approximately 8.9 billion in late 2018. Toward the end of the dataset, equity declined again, falling to roughly 7.5 billion US dollars by March 2020. These movements suggest periods of shareholder value contraction and partial recovery, with a downward trend apparent in the final quarters observed.
- Financial Leverage
- The financial leverage ratio started at 2.49 at the end of 2014 and generally increased during 2015, reaching as high as 2.89. The ratio then decreased notably in the late 2016 period, dipping to about 2.16, reflecting a reduction in leverage. A period of moderate fluctuation followed, with leverage ratios mostly remaining between 2.25 and 2.5. Toward early 2020, financial leverage showed an upward trend again, rising from 2.51 to 2.89. This pattern indicates shifting reliance on debt financing relative to equity, with peaks corresponding to lower equity or higher liabilities and troughs where leverage was more conservative.
Interest Coverage
Emerson Electric Co., interest coverage calculation (quarterly data)
| Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | Dec 31, 2014 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 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, Competitors2 | |||||||||||||||||||||||||||||
| Boeing Co. | |||||||||||||||||||||||||||||
| Caterpillar Inc. | |||||||||||||||||||||||||||||
| Eaton Corp. plc | |||||||||||||||||||||||||||||
| GE Aerospace | |||||||||||||||||||||||||||||
| Honeywell International Inc. | |||||||||||||||||||||||||||||
| Lockheed Martin Corp. | |||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2020-03-31), 10-Q (reporting date: 2019-12-31), 10-K (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-Q (reporting date: 2018-12-31), 10-K (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-Q (reporting date: 2017-12-31), 10-K (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-Q (reporting date: 2016-12-31), 10-K (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-Q (reporting date: 2015-12-31), 10-K (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-Q (reporting date: 2014-12-31).
1 Q2 2020 Calculation
Interest coverage
= (EBITQ2 2020
+ EBITQ1 2020
+ EBITQ4 2019
+ EBITQ3 2019)
÷ (Interest expenseQ2 2020
+ Interest expenseQ1 2020
+ Interest expenseQ4 2019
+ Interest expenseQ3 2019)
= ( + + + )
÷ ( + + + )
=
2 Click competitor name to see calculations.
- Earnings before interest and tax (EBIT)
- The EBIT values exhibit considerable volatility over the observed quarters. Initially, there is a notable peak at the beginning of 2015, reaching 1653 million USD, followed by a sharp decline to 845 million USD in the subsequent quarter. Post this substantial fluctuation, EBIT shows variation within a moderate range between approximately 487 million and 874 million USD. Toward the end of the data set, there is a discernible dip to 464 million USD in the first quarter of 2020, indicating a recent decrease in operational earnings before interest and taxes.
- Interest expense
- Interest expense maintains a relatively stable trend throughout the periods, fluctuating marginally around the 40 to 55 million USD range. There is no significant upward or downward trend, but a slight decrease is seen in the early months of 2020, dropping to 41 and 42 million USD, which represents a minor relief in interest costs.
- Interest coverage ratio
- The interest coverage ratio shows a decreasing trend from a high point of over 21 in early 2015 down to the range of 11.77 to approximately 15 in later years. After the initial decrease, the ratio stabilizes mostly between 12 and 16, signaling moderate but consistent capacity to meet interest obligations from operating earnings. The ratio ends on an improving note, reaching 15.94 in the first quarter of 2020, suggesting enhanced ability to cover interest expenses despite the recent EBIT decline.