Emerson Electric Co. (EMR)


Analysis of Solvency Ratios
Quarterly Data

Beginner level

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 (quarterly data)

Microsoft Excel LibreOffice Calc
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 Sep 30, 2014 Jun 30, 2014 Mar 31, 2014 Dec 31, 2013
Debt Ratios
Debt to equity 0.69 0.71 0.74 0.72 0.53 0.71 0.61 0.65 0.53 0.65 0.51 0.53 0.88 0.92 0.95 1.00 0.85 0.85 0.74 0.71 0.60 0.60 0.62 0.54
Debt to capital 0.41 0.42 0.43 0.42 0.35 0.42 0.38 0.40 0.35 0.39 0.34 0.35 0.47 0.48 0.49 0.50 0.46 0.46 0.43 0.42 0.37 0.38 0.38 0.35
Debt to assets 0.28 0.29 0.30 0.29 0.23 0.29 0.26 0.28 0.24 0.27 0.24 0.23 0.31 0.33 0.34 0.35 0.31 0.32 0.29 0.29 0.25 0.26 0.27 0.24
Financial leverage 2.49 2.43 2.47 2.48 2.28 2.44 2.33 2.38 2.25 2.44 2.16 2.27 2.87 2.79 2.83 2.89 2.73 2.68 2.58 2.49 2.39 2.32 2.32 2.25
Coverage Ratios
Interest coverage 15.22 14.39 14.46 14.71 14.20 14.20 13.46 12.99 12.62 12.28 12.23 11.96 11.77 13.62 14.55 20.15 21.81 20.51 21.47 17.52 16.36

Based on: 10-K (filing date: 2019-11-18), 10-Q (filing date: 2019-08-07), 10-Q (filing date: 2019-05-09), 10-Q (filing date: 2019-02-06), 10-K (filing date: 2018-11-19), 10-Q (filing date: 2018-08-08), 10-Q (filing date: 2018-05-02), 10-Q (filing date: 2018-02-07), 10-K (filing date: 2017-11-20), 10-Q (filing date: 2017-08-02), 10-Q (filing date: 2017-05-04), 10-Q (filing date: 2017-02-08), 10-K (filing date: 2016-11-16), 10-Q (filing date: 2016-08-03), 10-Q (filing date: 2016-05-05), 10-Q (filing date: 2016-02-03), 10-K (filing date: 2015-11-18), 10-Q (filing date: 2015-08-05), 10-Q (filing date: 2015-05-06), 10-Q (filing date: 2015-02-04), 10-K (filing date: 2014-11-19), 10-Q (filing date: 2014-08-06), 10-Q (filing date: 2014-05-07), 10-Q (filing date: 2014-02-05).

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 Q2 2019 to Q3 2019 and from Q3 2019 to Q4 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 Q2 2019 to Q3 2019 and from Q3 2019 to Q4 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 Q2 2019 to Q3 2019 and from Q3 2019 to Q4 2019.
Financial leverage ratio A solvency ratio calculated as total assets divided by total shareholders’ equity. Emerson Electric Co.’s financial leverage ratio decreased from Q2 2019 to Q3 2019 but then increased from Q3 2019 to Q4 2019 exceeding Q2 2019 level.

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 deteriorated from Q2 2019 to Q3 2019 but then improved from Q3 2019 to Q4 2019 exceeding Q2 2019 level.

Debt to Equity

Emerson Electric Co., debt to equity calculation (quarterly data)

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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 Sep 30, 2014 Jun 30, 2014 Mar 31, 2014 Dec 31, 2013
Selected Financial Data (US$ in millions)
Short-term borrowings and current maturities of long-term debt 1,444  1,877  2,551  3,320  1,623  2,862  1,833  2,093  862  1,363  252  254  2,584  3,220  3,232  3,409  2,553  3,179  3,358  3,484  2,465  2,975  2,661  1,958 
Long-term debt, excluding current maturities 4,277  4,336  3,786  2,641  3,137  3,126  3,357  3,375  3,794  3,797  3,816  3,815  4,062  4,062  4,062  4,043  4,289  4,290  3,272  3,289  3,559  3,565  3,836  3,834 
Total debt 5,721  6,213  6,337  5,961  4,760  5,988  5,190  5,468  4,656  5,160  4,068  4,069  6,646  7,282  7,294  7,452  6,842  7,469  6,630  6,773  6,024  6,540  6,497  5,792 
 
Common stockholders’ equity 8,233  8,755  8,526  8,236  8,947  8,413  8,492  8,349  8,718  7,966  8,006  7,713  7,568  7,901  7,692  7,456  8,081  8,749  8,918  9,513  10,119  10,820  10,477  10,741 
Solvency Ratio
Debt to equity1 0.69 0.71 0.74 0.72 0.53 0.71 0.61 0.65 0.53 0.65 0.51 0.53 0.88 0.92 0.95 1.00 0.85 0.85 0.74 0.71 0.60 0.60 0.62 0.54

Based on: 10-K (filing date: 2019-11-18), 10-Q (filing date: 2019-08-07), 10-Q (filing date: 2019-05-09), 10-Q (filing date: 2019-02-06), 10-K (filing date: 2018-11-19), 10-Q (filing date: 2018-08-08), 10-Q (filing date: 2018-05-02), 10-Q (filing date: 2018-02-07), 10-K (filing date: 2017-11-20), 10-Q (filing date: 2017-08-02), 10-Q (filing date: 2017-05-04), 10-Q (filing date: 2017-02-08), 10-K (filing date: 2016-11-16), 10-Q (filing date: 2016-08-03), 10-Q (filing date: 2016-05-05), 10-Q (filing date: 2016-02-03), 10-K (filing date: 2015-11-18), 10-Q (filing date: 2015-08-05), 10-Q (filing date: 2015-05-06), 10-Q (filing date: 2015-02-04), 10-K (filing date: 2014-11-19), 10-Q (filing date: 2014-08-06), 10-Q (filing date: 2014-05-07), 10-Q (filing date: 2014-02-05).

1 Q4 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 Q2 2019 to Q3 2019 and from Q3 2019 to Q4 2019.

Debt to Capital

Emerson Electric Co., debt to capital calculation (quarterly data)

Microsoft Excel LibreOffice Calc
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 Sep 30, 2014 Jun 30, 2014 Mar 31, 2014 Dec 31, 2013
Selected Financial Data (US$ in millions)
Short-term borrowings and current maturities of long-term debt 1,444  1,877  2,551  3,320  1,623  2,862  1,833  2,093  862  1,363  252  254  2,584  3,220  3,232  3,409  2,553  3,179  3,358  3,484  2,465  2,975  2,661  1,958 
Long-term debt, excluding current maturities 4,277  4,336  3,786  2,641  3,137  3,126  3,357  3,375  3,794  3,797  3,816  3,815  4,062  4,062  4,062  4,043  4,289  4,290  3,272  3,289  3,559  3,565  3,836  3,834 
Total debt 5,721  6,213  6,337  5,961  4,760  5,988  5,190  5,468  4,656  5,160  4,068  4,069  6,646  7,282  7,294  7,452  6,842  7,469  6,630  6,773  6,024  6,540  6,497  5,792 
Common stockholders’ equity 8,233  8,755  8,526  8,236  8,947  8,413  8,492  8,349  8,718  7,966  8,006  7,713  7,568  7,901  7,692  7,456  8,081  8,749  8,918  9,513  10,119  10,820  10,477  10,741 
Total capital 13,954  14,968  14,863  14,197  13,707  14,401  13,682  13,817  13,374  13,126  12,074  11,782  14,214  15,183  14,986  14,908  14,923  16,218  15,548  16,286  16,143  17,360  16,974  16,533 
Solvency Ratio
Debt to capital1 0.41 0.42 0.43 0.42 0.35 0.42 0.38 0.40 0.35 0.39 0.34 0.35 0.47 0.48 0.49 0.50 0.46 0.46 0.43 0.42 0.37 0.38 0.38 0.35

Based on: 10-K (filing date: 2019-11-18), 10-Q (filing date: 2019-08-07), 10-Q (filing date: 2019-05-09), 10-Q (filing date: 2019-02-06), 10-K (filing date: 2018-11-19), 10-Q (filing date: 2018-08-08), 10-Q (filing date: 2018-05-02), 10-Q (filing date: 2018-02-07), 10-K (filing date: 2017-11-20), 10-Q (filing date: 2017-08-02), 10-Q (filing date: 2017-05-04), 10-Q (filing date: 2017-02-08), 10-K (filing date: 2016-11-16), 10-Q (filing date: 2016-08-03), 10-Q (filing date: 2016-05-05), 10-Q (filing date: 2016-02-03), 10-K (filing date: 2015-11-18), 10-Q (filing date: 2015-08-05), 10-Q (filing date: 2015-05-06), 10-Q (filing date: 2015-02-04), 10-K (filing date: 2014-11-19), 10-Q (filing date: 2014-08-06), 10-Q (filing date: 2014-05-07), 10-Q (filing date: 2014-02-05).

1 Q4 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 Q2 2019 to Q3 2019 and from Q3 2019 to Q4 2019.

Debt to Assets

Emerson Electric Co., debt to assets calculation (quarterly data)

Microsoft Excel LibreOffice Calc
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 Sep 30, 2014 Jun 30, 2014 Mar 31, 2014 Dec 31, 2013
Selected Financial Data (US$ in millions)
Short-term borrowings and current maturities of long-term debt 1,444  1,877  2,551  3,320  1,623  2,862  1,833  2,093  862  1,363  252  254  2,584  3,220  3,232  3,409  2,553  3,179  3,358  3,484  2,465  2,975  2,661  1,958 
Long-term debt, excluding current maturities 4,277  4,336  3,786  2,641  3,137  3,126  3,357  3,375  3,794  3,797  3,816  3,815  4,062  4,062  4,062  4,043  4,289  4,290  3,272  3,289  3,559  3,565  3,836  3,834 
Total debt 5,721  6,213  6,337  5,961  4,760  5,988  5,190  5,468  4,656  5,160  4,068  4,069  6,646  7,282  7,294  7,452  6,842  7,469  6,630  6,773  6,024  6,540  6,497  5,792 
 
Total assets 20,497  21,317  21,071  20,429  20,390  20,487  19,785  19,858  19,589  19,402  17,277  17,471  21,743  22,082  21,764  21,552  22,088  23,464  22,968  23,724  24,177  25,115  24,346  24,124 
Solvency Ratio
Debt to assets1 0.28 0.29 0.30 0.29 0.23 0.29 0.26 0.28 0.24 0.27 0.24 0.23 0.31 0.33 0.34 0.35 0.31 0.32 0.29 0.29 0.25 0.26 0.27 0.24

Based on: 10-K (filing date: 2019-11-18), 10-Q (filing date: 2019-08-07), 10-Q (filing date: 2019-05-09), 10-Q (filing date: 2019-02-06), 10-K (filing date: 2018-11-19), 10-Q (filing date: 2018-08-08), 10-Q (filing date: 2018-05-02), 10-Q (filing date: 2018-02-07), 10-K (filing date: 2017-11-20), 10-Q (filing date: 2017-08-02), 10-Q (filing date: 2017-05-04), 10-Q (filing date: 2017-02-08), 10-K (filing date: 2016-11-16), 10-Q (filing date: 2016-08-03), 10-Q (filing date: 2016-05-05), 10-Q (filing date: 2016-02-03), 10-K (filing date: 2015-11-18), 10-Q (filing date: 2015-08-05), 10-Q (filing date: 2015-05-06), 10-Q (filing date: 2015-02-04), 10-K (filing date: 2014-11-19), 10-Q (filing date: 2014-08-06), 10-Q (filing date: 2014-05-07), 10-Q (filing date: 2014-02-05).

1 Q4 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 Q2 2019 to Q3 2019 and from Q3 2019 to Q4 2019.

Financial Leverage

Emerson Electric Co., financial leverage calculation (quarterly data)

Microsoft Excel LibreOffice Calc
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 Sep 30, 2014 Jun 30, 2014 Mar 31, 2014 Dec 31, 2013
Selected Financial Data (US$ in millions)
Total assets 20,497  21,317  21,071  20,429  20,390  20,487  19,785  19,858  19,589  19,402  17,277  17,471  21,743  22,082  21,764  21,552  22,088  23,464  22,968  23,724  24,177  25,115  24,346  24,124 
Common stockholders’ equity 8,233  8,755  8,526  8,236  8,947  8,413  8,492  8,349  8,718  7,966  8,006  7,713  7,568  7,901  7,692  7,456  8,081  8,749  8,918  9,513  10,119  10,820  10,477  10,741 
Solvency Ratio
Financial leverage1 2.49 2.43 2.47 2.48 2.28 2.44 2.33 2.38 2.25 2.44 2.16 2.27 2.87 2.79 2.83 2.89 2.73 2.68 2.58 2.49 2.39 2.32 2.32 2.25

Based on: 10-K (filing date: 2019-11-18), 10-Q (filing date: 2019-08-07), 10-Q (filing date: 2019-05-09), 10-Q (filing date: 2019-02-06), 10-K (filing date: 2018-11-19), 10-Q (filing date: 2018-08-08), 10-Q (filing date: 2018-05-02), 10-Q (filing date: 2018-02-07), 10-K (filing date: 2017-11-20), 10-Q (filing date: 2017-08-02), 10-Q (filing date: 2017-05-04), 10-Q (filing date: 2017-02-08), 10-K (filing date: 2016-11-16), 10-Q (filing date: 2016-08-03), 10-Q (filing date: 2016-05-05), 10-Q (filing date: 2016-02-03), 10-K (filing date: 2015-11-18), 10-Q (filing date: 2015-08-05), 10-Q (filing date: 2015-05-06), 10-Q (filing date: 2015-02-04), 10-K (filing date: 2014-11-19), 10-Q (filing date: 2014-08-06), 10-Q (filing date: 2014-05-07), 10-Q (filing date: 2014-02-05).

1 Q4 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 decreased from Q2 2019 to Q3 2019 but then increased from Q3 2019 to Q4 2019 exceeding Q2 2019 level.

Interest Coverage

Emerson Electric Co., interest coverage calculation (quarterly data)

Microsoft Excel LibreOffice Calc
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 Sep 30, 2014 Jun 30, 2014 Mar 31, 2014 Dec 31, 2013
Selected Financial Data (US$ in millions)
Net earnings common stockholders 717  604  520  465  617  712  482  392  504  413  292  309  438  479  369  349  648  564  973  525  410  728  547  462 
Add: Net income attributable to noncontrolling interest 12  10  10  10  15 
Less: Discontinued operations, net of tax —  —  —  —  —  —  —  —  (84) (55) (41) 38  46  —  —  —  —  —  —  —  — 
Add: Income tax expense 102  155  150  124  116  49  169  109  183  202  181  94  188  205  177  127  345  222  625  236  401  334  263  166 
Add: Interest expense 48  50  55  48  54  49  50  49  50  49  50  52  55  53  54  53  49  49  49  53  53  53  51  61 
Earnings before interest and tax (EBIT) 874  817  730  639  792  817  708  552  735  670  615  516  729  709  606  487  1,045  845  1,653  818  869  1,125  868  704 
Solvency Ratio
Interest coverage1 15.22 14.39 14.46 14.71 14.20 14.20 13.46 12.99 12.62 12.28 12.23 11.96 11.77 13.62 14.55 20.15 21.81 20.51 21.47 17.52 16.36

Based on: 10-K (filing date: 2019-11-18), 10-Q (filing date: 2019-08-07), 10-Q (filing date: 2019-05-09), 10-Q (filing date: 2019-02-06), 10-K (filing date: 2018-11-19), 10-Q (filing date: 2018-08-08), 10-Q (filing date: 2018-05-02), 10-Q (filing date: 2018-02-07), 10-K (filing date: 2017-11-20), 10-Q (filing date: 2017-08-02), 10-Q (filing date: 2017-05-04), 10-Q (filing date: 2017-02-08), 10-K (filing date: 2016-11-16), 10-Q (filing date: 2016-08-03), 10-Q (filing date: 2016-05-05), 10-Q (filing date: 2016-02-03), 10-K (filing date: 2015-11-18), 10-Q (filing date: 2015-08-05), 10-Q (filing date: 2015-05-06), 10-Q (filing date: 2015-02-04), 10-K (filing date: 2014-11-19), 10-Q (filing date: 2014-08-06), 10-Q (filing date: 2014-05-07), 10-Q (filing date: 2014-02-05).

1 Q4 2019 Calculation
Interest coverage = (EBITQ4 2019 + EBITQ3 2019 + EBITQ2 2019 + EBITQ1 2019) ÷ (Interest expenseQ4 2019 + Interest expenseQ3 2019 + Interest expenseQ2 2019 + Interest expenseQ1 2019)
= (874 + 817 + 730 + 639) ÷ (48 + 50 + 55 + 48) = 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 deteriorated from Q2 2019 to Q3 2019 but then improved from Q3 2019 to Q4 2019 exceeding Q2 2019 level.