Stock Analysis on Net

Honeywell International Inc. (NASDAQ:HON)

Analysis of Operating Leases

Microsoft Excel

Adjustments to Financial Statements for Operating Leases

Honeywell International Inc., adjustments to financial statements

US$ in millions

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Adjustment to Total Assets
Total assets (as reported) 61,525 62,275 64,470 64,586 58,679
Add: Operating lease right-of-use asset (before adoption of FASB Topic 842)1
Total assets (adjusted) 61,525 62,275 64,470 64,586 58,679
Adjustment to Total Debt
Total debt (as reported) 20,443 19,570 19,599 22,384 16,002
Add: Operating lease liability (before adoption of FASB Topic 842)2
Add: Current operating lease liabilities 196 192 185 187 171
Add: Non-current operating lease liabilities 897 775 847 641 534
Total debt (adjusted) 21,536 20,537 20,631 23,212 16,707

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

1, 2 Equal to total present value of future operating lease payments.


Honeywell International Inc., Financial Data: Reported vs. Adjusted


Adjusted Financial Ratios for Operating Leases (Summary)

Honeywell International Inc., adjusted financial ratios

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Total Asset Turnover1
Reported total asset turnover 0.60 0.57 0.53 0.51 0.63
Adjusted total asset turnover 0.60 0.57 0.53 0.51 0.63
Debt to Equity2
Reported debt to equity 1.29 1.17 1.06 1.28 0.87
Adjusted debt to equity 1.36 1.23 1.11 1.32 0.90
Return on Assets3 (ROA)
Reported ROA 9.20% 7.97% 8.60% 7.40% 10.47%
Adjusted ROA 9.20% 7.97% 8.60% 7.40% 10.47%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

Financial ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Honeywell International Inc. adjusted total asset turnover ratio improved from 2021 to 2022 and from 2022 to 2023.
Adjusted debt to equity A solvency ratio calculated as adjusted total debt divided by total shareholders’ equity. Honeywell International Inc. adjusted debt to equity ratio deteriorated from 2021 to 2022 and from 2022 to 2023.
Adjusted ROA A profitability ratio calculated as net income divided by adjusted total assets. Honeywell International Inc. adjusted ROA deteriorated from 2021 to 2022 but then improved from 2022 to 2023 exceeding 2021 level.

Honeywell International Inc., Financial Ratios: Reported vs. Adjusted


Adjusted Total Asset Turnover

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Net sales 36,662 35,466 34,392 32,637 36,709
Total assets 61,525 62,275 64,470 64,586 58,679
Activity Ratio
Total asset turnover1 0.60 0.57 0.53 0.51 0.63
Adjusted for Operating Leases
Selected Financial Data (US$ in millions)
Net sales 36,662 35,466 34,392 32,637 36,709
Adjusted total assets 61,525 62,275 64,470 64,586 58,679
Activity Ratio
Adjusted total asset turnover2 0.60 0.57 0.53 0.51 0.63

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

1 Total asset turnover = Net sales ÷ Total assets
= 36,662 ÷ 61,525 = 0.60

2 Adjusted total asset turnover = Net sales ÷ Adjusted total assets
= 36,662 ÷ 61,525 = 0.60

Activity ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Honeywell International Inc. adjusted total asset turnover ratio improved from 2021 to 2022 and from 2022 to 2023.

Adjusted Debt to Equity

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Total debt 20,443 19,570 19,599 22,384 16,002
Total Honeywell shareowners’ equity 15,856 16,697 18,569 17,549 18,494
Solvency Ratio
Debt to equity1 1.29 1.17 1.06 1.28 0.87
Adjusted for Operating Leases
Selected Financial Data (US$ in millions)
Adjusted total debt 21,536 20,537 20,631 23,212 16,707
Total Honeywell shareowners’ equity 15,856 16,697 18,569 17,549 18,494
Solvency Ratio
Adjusted debt to equity2 1.36 1.23 1.11 1.32 0.90

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

1 Debt to equity = Total debt ÷ Total Honeywell shareowners’ equity
= 20,443 ÷ 15,856 = 1.29

2 Adjusted debt to equity = Adjusted total debt ÷ Total Honeywell shareowners’ equity
= 21,536 ÷ 15,856 = 1.36

Solvency ratio Description The company
Adjusted debt-to-equity A solvency ratio calculated as adjusted total debt divided by total shareholders’ equity. Honeywell International Inc. adjusted debt-to-equity ratio deteriorated from 2021 to 2022 and from 2022 to 2023.

Adjusted Return on Assets (ROA)

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to Honeywell 5,658 4,966 5,542 4,779 6,143
Total assets 61,525 62,275 64,470 64,586 58,679
Profitability Ratio
ROA1 9.20% 7.97% 8.60% 7.40% 10.47%
Adjusted for Operating Leases
Selected Financial Data (US$ in millions)
Net income attributable to Honeywell 5,658 4,966 5,542 4,779 6,143
Adjusted total assets 61,525 62,275 64,470 64,586 58,679
Profitability Ratio
Adjusted ROA2 9.20% 7.97% 8.60% 7.40% 10.47%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

1 ROA = 100 × Net income attributable to Honeywell ÷ Total assets
= 100 × 5,658 ÷ 61,525 = 9.20%

2 Adjusted ROA = 100 × Net income attributable to Honeywell ÷ Adjusted total assets
= 100 × 5,658 ÷ 61,525 = 9.20%

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as net income divided by adjusted total assets. Honeywell International Inc. adjusted ROA deteriorated from 2021 to 2022 but then improved from 2022 to 2023 exceeding 2021 level.