Microsoft Excel LibreOffice Calc

Long-term Debt and Solvency Analysis

Difficulty: Beginner


Ratios (Summary)

Honeywell International Inc., debt and solvency ratios

Microsoft Excel LibreOffice Calc
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Debt to equity 0.89 1.04 0.81 0.66 0.49
Debt to capital 0.47 0.51 0.45 0.40 0.33
Interest coverage 21.40 22.84 20.07 22.25 19.30

Based on: 10-K (filing date: 2019-02-08), 10-K (filing date: 2018-02-09), 10-K (filing date: 2017-02-10), 10-K (filing date: 2016-02-12), 10-K (filing date: 2015-02-13).

Ratio Description The company
Debt-to-equity ratio A solvency ratio calculated as total debt divided by total shareholders’ equity. Honeywell International Inc.’s debt-to-equity ratio deteriorated from 2016 to 2017 but then improved from 2017 to 2018 not reaching 2016 level.
Debt-to-capital ratio A solvency ratio calculated as total debt divided by total debt plus shareholders’ equity. Honeywell International Inc.’s debt-to-capital ratio deteriorated from 2016 to 2017 but then improved from 2017 to 2018 not reaching 2016 level.

Ratio Description The company
Interest coverage ratio A solvency ratio calculated as EBIT divided by interest payments. Honeywell International Inc.’s interest coverage ratio improved from 2016 to 2017 but then slightly deteriorated from 2017 to 2018 not reaching 2016 level.

Debt to Equity

Honeywell International Inc., debt to equity calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Selected Financial Data (USD $ in millions)
Commercial paper and other short-term borrowings 3,586  3,958  3,366  5,937  1,698 
Current maturities of long-term debt 2,872  1,351  227  577  939 
Long-term debt, excluding current maturities 9,756  12,573  12,182  5,554  6,046 
Total debt 16,214  17,882  15,775  12,068  8,683 
Total Honeywell shareowners’ equity 18,180  17,276  19,369  18,283  17,657 
Ratio
Debt to equity1 0.89 1.04 0.81 0.66 0.49
Benchmarks
Debt to Equity, Competitors
3M Co. 1.50 1.21 1.14 0.93 0.53
Danaher Corp. 0.40 0.53 0.54 0.15
General Electric Co. 2.09 1.80 2.02 2.85
Debt to Equity, Sector
General Industrials 1.48 1.37 1.54 2.11
Debt to Equity, Industry
Industrials 1.36 1.31 1.30 1.50

Based on: 10-K (filing date: 2019-02-08), 10-K (filing date: 2018-02-09), 10-K (filing date: 2017-02-10), 10-K (filing date: 2016-02-12), 10-K (filing date: 2015-02-13).

2018 Calculations

1 Debt to equity = Total debt ÷ Total Honeywell shareowners’ equity
= 16,214 ÷ 18,180 = 0.89

Ratio Description The company
Debt-to-equity ratio A solvency ratio calculated as total debt divided by total shareholders’ equity. Honeywell International Inc.’s debt-to-equity ratio deteriorated from 2016 to 2017 but then improved from 2017 to 2018 not reaching 2016 level.

Debt to Capital

Honeywell International Inc., debt to capital calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Selected Financial Data (USD $ in millions)
Commercial paper and other short-term borrowings 3,586  3,958  3,366  5,937  1,698 
Current maturities of long-term debt 2,872  1,351  227  577  939 
Long-term debt, excluding current maturities 9,756  12,573  12,182  5,554  6,046 
Total debt 16,214  17,882  15,775  12,068  8,683 
Total Honeywell shareowners’ equity 18,180  17,276  19,369  18,283  17,657 
Total capital 34,394  35,158  35,144  30,351  26,340 
Ratio
Debt to capital1 0.47 0.51 0.45 0.40 0.33
Benchmarks
Debt to Capital, Competitors
3M Co. 0.60 0.55 0.53 0.48 0.34
Danaher Corp. 0.29 0.35 0.35 0.13
General Electric Co. 0.68 0.64 0.67 0.74
Debt to Capital, Sector
General Industrials 0.60 0.58 0.61 0.68
Debt to Capital, Industry
Industrials 0.58 0.57 0.56 0.60

Based on: 10-K (filing date: 2019-02-08), 10-K (filing date: 2018-02-09), 10-K (filing date: 2017-02-10), 10-K (filing date: 2016-02-12), 10-K (filing date: 2015-02-13).

2018 Calculations

1 Debt to capital = Total debt ÷ Total capital
= 16,214 ÷ 34,394 = 0.47

Ratio Description The company
Debt-to-capital ratio A solvency ratio calculated as total debt divided by total debt plus shareholders’ equity. Honeywell International Inc.’s debt-to-capital ratio deteriorated from 2016 to 2017 but then improved from 2017 to 2018 not reaching 2016 level.

Interest Coverage

Honeywell International Inc., interest coverage calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Selected Financial Data (USD $ in millions)
Net income attributable to Honeywell 6,765  1,655  4,809  4,768  4,239 
Add: Net income attributable to noncontrolling interest 63  43  37  79  90 
Add: Income tax expense 659  5,204  1,601  1,739  1,489 
Add: Interest and other financial charges 367  316  338  310  318 
Earnings before interest and tax (EBIT) 7,854  7,218  6,785  6,896  6,136 
Ratio
Interest coverage1 21.40 22.84 20.07 22.25 19.30
Benchmarks
Interest Coverage, Competitors
3M Co. 21.00 24.44 36.44 46.79 50.48
Danaher Corp. 19.06 15.16 21.42 29.38
General Electric Co. -0.81 2.80 3.36 2.82
Interest Coverage, Sector
General Industrials 2.52 5.38 7.10 4.33
Interest Coverage, Industry
Industrials 7.95 8.24 10.83 7.76

Based on: 10-K (filing date: 2019-02-08), 10-K (filing date: 2018-02-09), 10-K (filing date: 2017-02-10), 10-K (filing date: 2016-02-12), 10-K (filing date: 2015-02-13).

2018 Calculations

1 Interest coverage = EBIT ÷ Interest expense
= 7,854 ÷ 367 = 21.40

Ratio Description The company
Interest coverage ratio A solvency ratio calculated as EBIT divided by interest payments. Honeywell International Inc.’s interest coverage ratio improved from 2016 to 2017 but then slightly deteriorated from 2017 to 2018 not reaching 2016 level.