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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- Statement of Comprehensive Income
- Balance Sheet: Assets
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Liquidity Ratios
- Analysis of Reportable Segments
- Capital Asset Pricing Model (CAPM)
- Dividend Discount Model (DDM)
- Debt to Equity since 2005
- Total Asset Turnover since 2005
- Price to Sales (P/S) since 2005
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Solvency Ratios (Summary)
GE Aerospace, solvency ratios (quarterly data)
Based on: 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31).
The analysis of the quarterly financial data reveals notable trends in the company's leverage and interest coverage ratios over the observed periods.
- Debt to Equity Ratio
- The debt to equity ratio shows a clear downward trend from March 2020 through December 2021, decreasing significantly from approximately 2.41 to 0.87. This suggests a reduction in reliance on debt financing relative to equity during this period. From early 2022 to mid-2025, the ratio fluctuates moderately, maintaining levels mostly around 0.7 to 1.06, indicating a relatively stable capital structure with balanced debt and equity proportions.
- Debt to Capital Ratio
- This ratio follows a similar pattern as the debt to equity ratio with a decrease from 0.71 in March 2020 to 0.47 by December 2021, reflecting a reduction in debt as a portion of total capital. Afterward, the ratio stabilizes between 0.41 and 0.51 through mid-2025. This suggests the company has maintained a consistent approach to capital composition with moderate leverage.
- Debt to Assets Ratio
- The debt to assets ratio also declines from 0.32 in early 2020 to around 0.13 by late 2023, indicating a decreasing proportion of assets funded by debt. It then marginally increases to approximately 0.16 in subsequent quarters but remains relatively low through mid-2025, signaling a conservative asset financing strategy with limited debt usage relative to total assets.
- Financial Leverage Ratio
- Financial leverage decreases markedly from about 7.43 in March 2020 to 4.93 by December 2021, reflecting a reduction in the use of debt to finance assets. From 2022 through mid-2025, the ratio rises gradually back to a range of roughly 6.37 to 6.71, which may indicate an increasing degree of leverage or asset base growth financed by both equity and debt but at controlled levels.
- Interest Coverage Ratio
- Interest coverage ratios are only available from late 2020 onward and show considerable volatility early on, with negative values observed in late 2020 and early 2021, signifying an inability to cover interest expenses during those periods. However, from mid-2022 onwards, the ratio demonstrates a consistent and strong improvement, reaching double-digit values by late 2024 and mid-2025. This improvement reflects enhanced earnings or reduced interest obligations, indicating stronger capacity to service debt interest.
Overall, the data indicate a company that initially reduced its leverage substantially up to the end of 2021, followed by periods of moderate leverage increase while maintaining stable capital ratios. The marked improvement in interest coverage from mid-2022 onward suggests strengthened operational performance or financial management, enhancing the ability to meet interest obligations comfortably. The trends point toward prudent financial management with an emphasis on balancing debt and equity while improving solvency metrics and earnings capacity over time.
Debt Ratios
Coverage Ratios
Debt to Equity
GE Aerospace, debt to equity calculation (quarterly data)
| Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||||||
| Short-term borrowings | |||||||||||||||||||||||||||||
| Long-term borrowings | |||||||||||||||||||||||||||||
| Total debt | |||||||||||||||||||||||||||||
| Shareholders’ equity | |||||||||||||||||||||||||||||
| Solvency Ratio | |||||||||||||||||||||||||||||
| Debt to equity1 | |||||||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||||||
| Debt to Equity, Competitors2 | |||||||||||||||||||||||||||||
| Boeing Co. | |||||||||||||||||||||||||||||
| Caterpillar Inc. | |||||||||||||||||||||||||||||
| Eaton Corp. plc | |||||||||||||||||||||||||||||
| Honeywell International Inc. | |||||||||||||||||||||||||||||
| Lockheed Martin Corp. | |||||||||||||||||||||||||||||
| RTX Corp. | |||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31).
1 Q2 2025 Calculation
Debt to equity = Total debt ÷ Shareholders’ equity
= ÷ =
2 Click competitor name to see calculations.
- Total Debt
- The total debt exhibits a general declining trend from March 2020 to June 2025. Starting at $85,154 million in March 2020, debt decreases steadily with some fluctuations, reaching a low of $19,887 million by June 2025. Notable sharp reductions occur between December 2021 and March 2023, where debt falls from $35,185 million to $22,421 million, indicating significant deleveraging. Post-March 2023, the debt continues to decrease but at a more moderate pace, remaining relatively stable around $19,000 to $20,000 million.
- Shareholders’ Equity
- Shareholders’ equity shows fluctuations with periods of both growth and decline over the reported quarters. Beginning at $35,284 million in March 2020, equity slightly decreases until September 2020, then increases to a peak of $40,310 million in December 2021. Following this peak, equity declines to approximately $27,378 million by December 2023. Between March 2024 and June 2025, equity remains relatively stable, fluctuating marginally around the $19,000 to $19,300 million range. This indicates some volatility in equity values with notable reduction after December 2021.
- Debt to Equity Ratio
- The debt-to-equity ratio demonstrates a marked decrease from 2.41 in March 2020 to a low point of approximately 0.69 in June 2024, reflecting a significant improvement in the capital structure with debt levels dropping faster than equity. This decline corresponds to the period where total debt decreased sharply. After June 2024, the ratio increases slightly to around 1.02 in March 2025, suggesting some rise in debt relative to equity, possibly due to the continued equity decline or a relative stabilization of debt. Overall, the trend indicates a strong deleveraging phase until mid-2024, followed by a moderate reversal towards a higher leverage position.
Debt to Capital
GE Aerospace, debt to capital calculation (quarterly data)
| Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||||||
| Short-term borrowings | |||||||||||||||||||||||||||||
| Long-term borrowings | |||||||||||||||||||||||||||||
| Total debt | |||||||||||||||||||||||||||||
| Shareholders’ equity | |||||||||||||||||||||||||||||
| Total capital | |||||||||||||||||||||||||||||
| Solvency Ratio | |||||||||||||||||||||||||||||
| Debt to capital1 | |||||||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||||||
| Debt to Capital, Competitors2 | |||||||||||||||||||||||||||||
| Boeing Co. | |||||||||||||||||||||||||||||
| Caterpillar Inc. | |||||||||||||||||||||||||||||
| Eaton Corp. plc | |||||||||||||||||||||||||||||
| Honeywell International Inc. | |||||||||||||||||||||||||||||
| Lockheed Martin Corp. | |||||||||||||||||||||||||||||
| RTX Corp. | |||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31).
1 Q2 2025 Calculation
Debt to capital = Total debt ÷ Total capital
= ÷ =
2 Click competitor name to see calculations.
The financial data reveals a clear overall decreasing trend in total debt from March 31, 2020 to June 30, 2025. Starting at US$85,154 million in early 2020, total debt consistently declines with minor fluctuations, reaching approximately US$18,887 million by mid-2025. A notable acceleration in debt reduction occurs between December 31, 2021, and March 31, 2023, where the figures sharply drop from US$35,185 million to US$22,421 million.
Total capital follows a somewhat parallel downward trajectory, beginning at US$120,438 million in March 2020 and falling to US$38,022 million by June 2025. There are some periods of relative stability or minor increases, such as from December 31, 2022, to March 31, 2024, where total capital fluctuates around the mid-50,000 to low-50,000 million range before declining again thereafter. The decline in total capital is less steep in the earlier years but becomes more pronounced past 2022.
The debt-to-capital ratio demonstrates a significant reduction from 0.71 in March 2020 to a low point of approximately 0.41 during mid to late 2023. This decline suggests improved capital structure with lower reliance on debt financing relative to total capital. However, from mid-2023 onwards, the ratio increases again to around 0.50 by mid-2025, indicating a relative increase in debt levels or a decrease in total capital, or both, during this period. This partial rebound implies a moderate shift back towards higher financial leverage in the most recent periods.
Overall, the trends indicate a deliberate and effective deleveraging strategy throughout the early years, reducing both absolute debt and the proportion of debt relative to total capital. However, the ratio's increase toward the end of the analyzed period may warrant closer monitoring to understand the drivers behind this shift and its potential implications on financial risk and capital management practices.
- Total Debt
- Consistently decreasing from US$85,154 million in early 2020 to US$18,887 million by mid-2025, with a notable rapid decline between late 2021 and early 2023.
- Total Capital
- Declining from US$120,438 million to US$38,022 million over the period, with some relative stability around 2022-2023 before further decreases.
- Debt to Capital Ratio
- Reduced significantly from 0.71 to 0.41 between 2020 and 2023, reflecting improved financial structure, followed by an increase back to 0.50 by mid-2025, indicating rising financial leverage.
Debt to Assets
GE Aerospace, debt to assets calculation (quarterly data)
| Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||||||
| Short-term borrowings | |||||||||||||||||||||||||||||
| Long-term borrowings | |||||||||||||||||||||||||||||
| Total debt | |||||||||||||||||||||||||||||
| Total assets | |||||||||||||||||||||||||||||
| Solvency Ratio | |||||||||||||||||||||||||||||
| Debt to assets1 | |||||||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||||||
| Debt to Assets, Competitors2 | |||||||||||||||||||||||||||||
| Boeing Co. | |||||||||||||||||||||||||||||
| Caterpillar Inc. | |||||||||||||||||||||||||||||
| Eaton Corp. plc | |||||||||||||||||||||||||||||
| Honeywell International Inc. | |||||||||||||||||||||||||||||
| Lockheed Martin Corp. | |||||||||||||||||||||||||||||
| RTX Corp. | |||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31).
1 Q2 2025 Calculation
Debt to assets = Total debt ÷ Total assets
= ÷ =
2 Click competitor name to see calculations.
The analysis of the financial data reveals distinct trends in the debt structure and asset base over the observed periods.
- Total Debt
- The total debt showed a continuous decline from March 31, 2020, starting at $85,154 million, and dropping significantly to $35,185 million by December 31, 2021. This downward trend continued at a slower pace through 2022, reaching $20,964 million by December 31, 2023. In the following quarters, total debt stabilized somewhat with minor fluctuations, ending at $18,887 million by June 30, 2025. This overall reduction indicates significant deleveraging efforts over the period.
- Total Assets
- Total assets also declined over the same timeframe, starting at $262,021 million in March 2020 and reducing consistently to $198,874 million by December 31, 2021. The decline continued into 2022, with assets falling to $163,045 million by December 31, 2023. Notably, total assets experienced further reductions and volatility after this point, dropping sharply to $123,190 million by June 30, 2024, before slightly recovering to $125,256 million by June 30, 2025. This pattern illustrates a contraction in asset base, particularly pronounced between 2023 and 2024.
- Debt to Assets Ratio
- The debt to assets ratio demonstrates a steady improvement in financial leverage, decreasing from 0.32 at the beginning of the period to a low of 0.13 by late 2023 and early 2024. Despite some slight increases toward the end of the series, with the ratio moving up to around 0.16, the trend suggests a reduction in reliance on debt relative to assets. The shorter-term fluctuations near the end may indicate minor adjustments in either debt or asset levels but do not negate the overall strengthening in the company's balance sheet structure observed.
In summary, the data indicates a consistent and significant reduction in total debt alongside a contracting asset base, resulting in notable improvements in the debt to assets ratio over the observed periods. The patterns point to strategic efforts to improve leverage and financial stability, with a more moderate adjustment phase toward the latest quarters.
Financial Leverage
GE Aerospace, financial leverage calculation (quarterly data)
| Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||||||
| Total assets | |||||||||||||||||||||||||||||
| Shareholders’ equity | |||||||||||||||||||||||||||||
| Solvency Ratio | |||||||||||||||||||||||||||||
| Financial leverage1 | |||||||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||||||
| Financial Leverage, Competitors2 | |||||||||||||||||||||||||||||
| Boeing Co. | |||||||||||||||||||||||||||||
| Caterpillar Inc. | |||||||||||||||||||||||||||||
| Eaton Corp. plc | |||||||||||||||||||||||||||||
| Honeywell International Inc. | |||||||||||||||||||||||||||||
| Lockheed Martin Corp. | |||||||||||||||||||||||||||||
| RTX Corp. | |||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31).
1 Q2 2025 Calculation
Financial leverage = Total assets ÷ Shareholders’ equity
= ÷ =
2 Click competitor name to see calculations.
- Total assets
- The total assets demonstrate a generally declining trend over the periods analyzed. Starting at US$262,021 million in March 2020, total assets decreased steadily through 2021, reaching a significant drop to US$198,874 million by December 2021. This reduction continued into 2022 and early 2023, bottoming out around US$156,662 million in September 2023. Following this low, a partial recovery is observed in subsequent quarters, with total assets rising to US$163,942 million by June 2024. A notable decline reemerges towards the end of the dataset, with total assets declining again to approximately US$124,123 million by March 2025. Overall, the asset base shrank considerably during this timeframe, with intermittent periods of modest recovery.
- Shareholders’ equity
- Shareholders’ equity exhibited fluctuations with an overall downward tendency. Beginning at US$35,284 million in March 2020, equity levels showed modest fluctuations through 2021, peaking at US$40,310 million in December 2021. However, this was followed by a steady decline throughout 2022 and early 2023. By September 2023, equity had decreased to approximately US$28,665 million and continued to fall, reaching a low point near US$19,135 million in June 2025. The data suggests diminishing net asset value attributable to owners, possibly reflecting losses, dividends, or other equity-reducing events during the later periods.
- Financial leverage
- The financial leverage ratio, calculated as total assets divided by shareholders' equity, varied considerably during the period. Initially, leverage was very high at 7.43 in March 2020 and peaked slightly higher at 7.64 in September 2020. This was followed by a marked decline through 2021, reaching a low of 4.93 in December 2021, indicating reduced reliance on debt relative to equity. Subsequently, leverage began to increase again from 2022 onward, peaking at 6.71 in September 2024. The ratio remained elevated in later periods, concluding around 6.55 in June 2025. This pattern suggests an initial deleveraging phase, followed by a renewed increase in leverage, which may imply increased borrowing or deteriorating equity levels, consistent with the observed reductions in equity.
Interest Coverage
GE Aerospace, interest coverage calculation (quarterly data)
| Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||||||
| Net income (loss) attributable to the Company | |||||||||||||||||||||||||||||
| Add: Net income attributable to noncontrolling interest | |||||||||||||||||||||||||||||
| Less: Net income (loss) from discontinued operations, net of taxes | |||||||||||||||||||||||||||||
| Add: Income tax expense | |||||||||||||||||||||||||||||
| Add: Interest and other financial charges | |||||||||||||||||||||||||||||
| Earnings before interest and tax (EBIT) | |||||||||||||||||||||||||||||
| Solvency Ratio | |||||||||||||||||||||||||||||
| Interest coverage1 | |||||||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||||||
| Interest Coverage, Competitors2 | |||||||||||||||||||||||||||||
| Boeing Co. | |||||||||||||||||||||||||||||
| Caterpillar Inc. | |||||||||||||||||||||||||||||
| Eaton Corp. plc | |||||||||||||||||||||||||||||
| Honeywell International Inc. | |||||||||||||||||||||||||||||
| Lockheed Martin Corp. | |||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31).
1 Q2 2025 Calculation
Interest coverage
= (EBITQ2 2025
+ EBITQ1 2025
+ EBITQ4 2024
+ EBITQ3 2024)
÷ (Interest expenseQ2 2025
+ Interest expenseQ1 2025
+ Interest expenseQ4 2024
+ Interest expenseQ3 2024)
= ( + + + )
÷ ( + + + )
=
2 Click competitor name to see calculations.
- Earnings before interest and tax (EBIT)
- The EBIT values exhibit notable volatility throughout the analyzed periods. Starting from a robust 7,269 million USD in the first quarter of 2020, the figure sharply declined to negative territory in the subsequent quarters, reaching lows of -1,342 million USD and -915 million USD in the second and third quarters of 2020, respectively. A recovery is observed by the end of 2020 with EBIT climbing back to 3,458 million USD. The following year, however, shows fluctuations with multiple quarters again reflecting negative EBIT values, notably -3,042 million USD in the last quarter of 2021. From the beginning of 2022 onwards, EBIT starts to recover steadily, with occasional dips, but overall momentum is upward, consistently showing positive results in all quarters of 2023 and continuing this trend into 2025. The highest values within this recovery phase are recorded in the first quarter of 2023 and the last quarter of 2024, indicating strengthening operational profitability.
- Interest and other financial charges
- Interest and other financial charges show a gradual declining trend over the entire timeline. Beginning at 794 million USD in the first quarter of 2020, the amount mostly decreases consistently quarter to quarter, reaching 158 million USD by the second quarter of 2025. The reduction in interest expenses suggests effective financial management or refinancing efforts that have led to lower financing costs. Minor fluctuations are evident, but the overall trend is downward, which is favorable for profitability and financial stability.
- Interest coverage ratio
- The interest coverage ratio reflects the ability to service interest expenses from operating earnings. The ratio data begins being recorded in the fourth quarter of 2020, showing a modest value of 2.59 and then declining sharply to below 1 in the first quarters of 2021, including a negative value by the end of 2021, indicating periods where EBIT was insufficient to cover interest charges. From the first quarter of 2022 onwards, a marked and continuous improvement in interest coverage is notable. By 2023, the ratio reaches significantly higher levels, surpassing 6 and even exceeding 10 in the fourth quarter of 2023. The company maintains strong interest coverage ratios above 6 through 2024 and into 2025, with the highest value of 11.46 recorded in the second quarter of 2025. This trend indicates a substantial strengthening in the company's ability to meet its financial obligations from operational earnings, reflecting improved profitability and reduced financial risk.
- Summary
- Overall, the data reveals a period of financial difficulty in 2020 and 2021 marked by negative EBIT and weak interest coverage, suggesting operational and financial challenges. However, starting in 2022, the company initiates a recovery phase characterized by rising EBIT and steadily reducing interest expenses. The improvement in EBIT contributes to enhanced interest coverage ratios, signaling better financial health and operational efficiency. By 2023 through to mid-2025, the company demonstrates strong earnings performance and robust capacity to cover interest charges, which likely reflects successful strategic or operational initiatives undertaken during the earlier period of volatility.