.Long-term Debt and Solvency Analysis
Difficulty: Beginner
Solvency ratios also known as long-term debt ratios measure a company's ability to meet long-term obligations.
Ratios (Summary)
FedEx Corp., debt and solvency ratios
| May 31, 2017 | May 31, 2016 | May 31, 2015 | May 31, 2014 | May 31, 2013 | May 31, 2012 | ||
|---|---|---|---|---|---|---|---|
| | Debt to equity | ||||||
| | Debt to capital | ||||||
| | Interest coverage |
Source: Based on data from FedEx Corp. Annual Reports
| Ratio | Description | The company |
|---|---|---|
| Debt-to-equity ratio | A solvency ratio calculated as total debt divided by total shareholders' equity. | FedEx Corp.'s debt-to-equity ratio deteriorated from 2015 to 2016 but then slightly improved from 2016 to 2017. |
| Debt-to-capital ratio | A solvency ratio calculated as total debt divided by total debt plus shareholders' equity. | FedEx Corp.'s debt-to-capital ratio deteriorated from 2015 to 2016 but then slightly improved from 2016 to 2017. |
| Interest coverage ratio | A solvency ratio calculated as EBIT divided by interest payments. | FedEx Corp.'s interest coverage ratio improved from 2015 to 2016 and from 2016 to 2017. |
Debt to Equity
FedEx Corp., debt to equity calculation, comparison to benchmarks
| May 31, 2017 | May 31, 2016 | May 31, 2015 | May 31, 2014 | May 31, 2013 | May 31, 2012 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (USD $ in millions) | |||||||
| | Current portion of long-term debt | ||||||
| | Long-term debt, less current portion | ||||||
| | Total debt | ||||||
| | Common stockholders' investment | ||||||
| Ratio | |||||||
| | Debt to equity1 | ||||||
| Benchmarks | |||||||
| Debt to Equity, Competitors | |||||||
| Union Pacific Corp. | |||||||
| United Parcel Service Inc. | |||||||
| Debt to Equity, Sector | |||||||
| Industrial Transportation | |||||||
| Debt to Equity, Industry | |||||||
| Industrials | |||||||
Source: Based on data from FedEx Corp. Annual Reports
2017 Calculations
1 Debt to equity = Total debt ÷ Common stockholders' investment
= ÷ =
| Ratio | Description | The company |
|---|---|---|
| Debt-to-equity ratio | A solvency ratio calculated as total debt divided by total shareholders' equity. | FedEx Corp.'s debt-to-equity ratio deteriorated from 2015 to 2016 but then slightly improved from 2016 to 2017. |
Debt to Capital
FedEx Corp., debt to capital calculation, comparison to benchmarks
| May 31, 2017 | May 31, 2016 | May 31, 2015 | May 31, 2014 | May 31, 2013 | May 31, 2012 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (USD $ in millions) | |||||||
| | Current portion of long-term debt | ||||||
| | Long-term debt, less current portion | ||||||
| | Total debt | ||||||
| | Common stockholders' investment | ||||||
| | Total capital | ||||||
| Ratio | |||||||
| | Debt to capital1 | ||||||
| Benchmarks | |||||||
| Debt to Capital, Competitors | |||||||
| Union Pacific Corp. | |||||||
| United Parcel Service Inc. | |||||||
| Debt to Capital, Sector | |||||||
| Industrial Transportation | |||||||
| Debt to Capital, Industry | |||||||
| Industrials | |||||||
Source: Based on data from FedEx Corp. Annual Reports
2017 Calculations
1 Debt to capital = Total debt ÷ Total capital
= ÷ =
| Ratio | Description | The company |
|---|---|---|
| Debt-to-capital ratio | A solvency ratio calculated as total debt divided by total debt plus shareholders' equity. | FedEx Corp.'s debt-to-capital ratio deteriorated from 2015 to 2016 but then slightly improved from 2016 to 2017. |
Interest Coverage
FedEx Corp., interest coverage calculation, comparison to benchmarks
| May 31, 2017 | May 31, 2016 | May 31, 2015 | May 31, 2014 | May 31, 2013 | May 31, 2012 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (USD $ in millions) | |||||||
| | Net income | ||||||
| | Add: Income tax expense | ||||||
| | Add: Interest expense | ||||||
| | Earnings before interest and tax (EBIT) | ||||||
| Ratio | |||||||
| | Interest coverage1 | ||||||
| Benchmarks | |||||||
| Interest Coverage, Competitors | |||||||
| Union Pacific Corp. | |||||||
| United Parcel Service Inc. | |||||||
| Interest Coverage, Sector | |||||||
| Industrial Transportation | |||||||
| Interest Coverage, Industry | |||||||
| Industrials | |||||||
Source: Based on data from FedEx Corp. Annual Reports
2017 Calculations
1 Interest coverage = EBIT ÷ Interest expense
= ÷ =
| Ratio | Description | The company |
|---|---|---|
| Interest coverage ratio | A solvency ratio calculated as EBIT divided by interest payments. | FedEx Corp.'s interest coverage ratio improved from 2015 to 2016 and from 2016 to 2017. |
