Analysis of Solvency Ratios
Solvency ratios also known as long-term debt ratios measure a company ability to meet long-term obligations.
Solvency Ratios (Summary)
Debt Ratios
Coverage Ratios
Johnson Controls International plc, solvency ratios
Based on: 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30).
The overall solvency position reflects a period of fluctuation followed by a gradual increase in leverage between 2019 and 2022. While the organization maintained a conservative debt profile in 2019, subsequent years show a trend toward higher debt-to-equity and debt-to-capital ratios, suggesting an increased reliance on borrowed funds for financing operations and growth.
- Leverage and Capital Structure
- The debt to equity ratio experienced a notable decline to 0.37 in 2019 before rising to a peak of 0.55 in 2022, ending at 0.53 in 2023. When operating lease liabilities are included, the debt to equity ratio is consistently higher, reaching a maximum of 0.63 in 2022, which indicates that lease obligations represent a significant component of the total liability structure. Similarly, the debt to capital ratio rose from 0.27 in 2019 to 0.35 in 2023.
- Asset-Based Solvency and Financial Leverage
- The debt to assets ratio remained relatively stable throughout the period, fluctuating between 0.17 and 0.24. However, the financial leverage ratio demonstrates a steady upward trajectory, increasing from 2.14 in 2019 to 2.55 in 2023, confirming a trend of expanding the asset base through increased leverage.
- Debt Service Coverage
- Coverage ratios exhibit significant volatility. The interest coverage ratio peaked at 12.94 in 2021 but declined sharply to 6.57 by September 2023. A corresponding pattern is evident in the fixed charge coverage ratio, which reached a high of 5.33 in 2021 before descending to 3.47 in 2023. While these ratios have trended downward since 2021, they remain well above the critical threshold of 1.0, indicating a continued capacity to service debt obligations.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
Debt to Equity
Johnson Controls International plc, debt to equity calculation, comparison to benchmarks
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | Sep 30, 2018 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Short-term debt | 385) | 669) | 8) | 31) | 10) | 1,315) | |
| Current portion of long-term debt | 645) | 865) | 226) | 262) | 501) | 26) | |
| Long-term debt, less current portion | 7,818) | 7,426) | 7,506) | 7,526) | 6,708) | 9,654) | |
| Total debt | 8,848) | 8,960) | 7,740) | 7,819) | 7,219) | 10,995) | |
| Shareholders’ equity attributable to Johnson Controls | 16,545) | 16,268) | 17,562) | 17,447) | 19,766) | 21,164) | |
| Solvency Ratio | |||||||
| Debt to equity1 | 0.53 | 0.55 | 0.44 | 0.45 | 0.37 | 0.52 | |
| Benchmarks | |||||||
| Debt to Equity, Competitors2 | |||||||
| Boeing Co. | — | — | — | — | — | — | |
| Caterpillar Inc. | 1.94 | 2.33 | 2.29 | — | — | — | |
| Eaton Corp. plc | 0.49 | 0.51 | 0.52 | — | — | — | |
| GE Aerospace | 0.77 | 0.89 | 0.87 | — | — | — | |
| Honeywell International Inc. | 1.29 | 1.17 | 1.06 | — | — | — | |
| Lockheed Martin Corp. | 2.55 | 1.68 | 1.07 | — | — | — | |
| RTX Corp. | 0.73 | 0.44 | 0.43 | — | — | — | |
| Debt to Equity, Sector | |||||||
| Capital Goods | 1.54 | 1.33 | 1.26 | — | — | — | |
| Debt to Equity, Industry | |||||||
| Industrials | 1.52 | 1.42 | 1.37 | — | — | — | |
Based on: 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30).
1 2023 Calculation
Debt to equity = Total debt ÷ Shareholders’ equity attributable to Johnson Controls
= 8,848 ÷ 16,545 = 0.53
2 Click competitor name to see calculations.
The solvency profile from 2018 to 2023 indicates a period of initial deleveraging followed by a gradual increase in financial leverage. The interplay between total debt and shareholders' equity has resulted in a fluctuating debt to equity ratio, reflecting shifts in the company's capital structure.
- Total Debt Dynamics
- A significant reduction in total debt occurred between 2018 and 2019, decreasing from US$ 10,995 million to US$ 7,219 million. This downward movement was followed by a period of relative stability between 2020 and 2021. However, debt levels rose again in 2022 to US$ 8,960 million, before experiencing a slight contraction to US$ 8,848 million in 2023.
- Shareholders' Equity Trends
- Shareholders' equity attributable to the company exhibited a consistent downward trend for the majority of the analyzed period. From a peak of US$ 21,164 million in 2018, equity declined to US$ 16,268 million by September 30, 2022. A marginal recovery was observed in 2023, with equity increasing to US$ 16,545 million.
- Debt to Equity Ratio Analysis
- The debt to equity ratio reached its lowest point in 2019 at 0.37, coinciding with the sharpest reduction in total debt. Subsequently, the ratio trended upward as debt increased and equity diminished, peaking at 0.55 in 2022. By 2023, the ratio settled at 0.53, returning to a level nearly identical to the 2018 baseline of 0.52, suggesting a stabilization of the long-term solvency position.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
Debt to Equity (including Operating Lease Liability)
Johnson Controls International plc, debt to equity (including operating lease liability) calculation, comparison to benchmarks
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | Sep 30, 2018 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Short-term debt | 385) | 669) | 8) | 31) | 10) | 1,315) | |
| Current portion of long-term debt | 645) | 865) | 226) | 262) | 501) | 26) | |
| Long-term debt, less current portion | 7,818) | 7,426) | 7,506) | 7,526) | 6,708) | 9,654) | |
| Total debt | 8,848) | 8,960) | 7,740) | 7,819) | 7,219) | 10,995) | |
| Operating lease liabilities, current (included in Other current liabilities) | 318) | 280) | 319) | 332) | —) | —) | |
| Operating lease liabilities, noncurrent (included in Other noncurrent liabilities) | 1,086) | 987) | 1,055) | 875) | —) | —) | |
| Total debt (including operating lease liability) | 10,252) | 10,227) | 9,114) | 9,026) | 7,219) | 10,995) | |
| Shareholders’ equity attributable to Johnson Controls | 16,545) | 16,268) | 17,562) | 17,447) | 19,766) | 21,164) | |
| Solvency Ratio | |||||||
| Debt to equity (including operating lease liability)1 | 0.62 | 0.63 | 0.52 | 0.52 | 0.37 | 0.52 | |
| Benchmarks | |||||||
| Debt to Equity (including Operating Lease Liability), Competitors2 | |||||||
| Boeing Co. | — | — | — | — | — | — | |
| Caterpillar Inc. | 1.97 | 2.37 | 2.33 | — | — | — | |
| Eaton Corp. plc | 0.52 | 0.54 | 0.55 | — | — | — | |
| GE Aerospace | 0.84 | 0.96 | 0.94 | — | — | — | |
| Honeywell International Inc. | 1.36 | 1.23 | 1.11 | — | — | — | |
| Lockheed Martin Corp. | 2.73 | 1.81 | 1.19 | — | — | — | |
| RTX Corp. | 0.76 | 0.47 | 0.46 | — | — | — | |
| Debt to Equity (including Operating Lease Liability), Sector | |||||||
| Capital Goods | 1.61 | 1.39 | 1.32 | — | — | — | |
| Debt to Equity (including Operating Lease Liability), Industry | |||||||
| Industrials | 1.71 | 1.59 | 1.54 | — | — | — | |
Based on: 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30).
1 2023 Calculation
Debt to equity (including operating lease liability) = Total debt (including operating lease liability) ÷ Shareholders’ equity attributable to Johnson Controls
= 10,252 ÷ 16,545 = 0.62
2 Click competitor name to see calculations.
The solvency profile exhibits a general increase in leverage over the period ending September 30, 2023. After a significant reduction in total debt in 2019, debt levels steadily rose, coinciding with a general decline in shareholders' equity, which has driven the debt-to-equity ratio upward.
- Total Debt Trends
- Total debt, including operating lease liabilities, experienced a sharp decline from US$ 10,995 million in 2018 to US$ 7,219 million in 2019. This was followed by a consistent upward trend, reaching US$ 10,252 million by 2023. This indicates a return toward historical debt levels after a period of deleveraging.
- Shareholders' Equity Trends
- Equity attributable to the company showed a steady downward trajectory for the majority of the period. From a peak of US$ 21,164 million in 2018, equity decreased to US$ 16,268 million in 2022, before a slight recovery to US$ 16,545 million in 2023. This reduction in the equity base increases the proportional impact of the company's debt obligations.
- Debt to Equity Ratio Analysis
- The debt-to-equity ratio fluctuated from 0.52 in 2018 to a low of 0.37 in 2019, reflecting the substantial debt reduction recorded during that fiscal year. However, the ratio climbed back to 0.52 in 2020 and 2021, and reached a peak of 0.63 in 2022. By 2023, the ratio remained elevated at 0.62, indicating a higher reliance on borrowed funds relative to equity compared to the initial 2018 position.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
Debt to Capital
Johnson Controls International plc, debt to capital calculation, comparison to benchmarks
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | Sep 30, 2018 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Short-term debt | 385) | 669) | 8) | 31) | 10) | 1,315) | |
| Current portion of long-term debt | 645) | 865) | 226) | 262) | 501) | 26) | |
| Long-term debt, less current portion | 7,818) | 7,426) | 7,506) | 7,526) | 6,708) | 9,654) | |
| Total debt | 8,848) | 8,960) | 7,740) | 7,819) | 7,219) | 10,995) | |
| Shareholders’ equity attributable to Johnson Controls | 16,545) | 16,268) | 17,562) | 17,447) | 19,766) | 21,164) | |
| Total capital | 25,393) | 25,228) | 25,302) | 25,266) | 26,985) | 32,159) | |
| Solvency Ratio | |||||||
| Debt to capital1 | 0.35 | 0.36 | 0.31 | 0.31 | 0.27 | 0.34 | |
| Benchmarks | |||||||
| Debt to Capital, Competitors2 | |||||||
| Boeing Co. | 1.49 | 1.39 | 1.35 | — | — | — | |
| Caterpillar Inc. | 0.66 | 0.70 | 0.70 | — | — | — | |
| Eaton Corp. plc | 0.33 | 0.34 | 0.34 | — | — | — | |
| GE Aerospace | 0.43 | 0.47 | 0.47 | — | — | — | |
| Honeywell International Inc. | 0.56 | 0.54 | 0.51 | — | — | — | |
| Lockheed Martin Corp. | 0.72 | 0.63 | 0.52 | — | — | — | |
| RTX Corp. | 0.42 | 0.31 | 0.30 | — | — | — | |
| Debt to Capital, Sector | |||||||
| Capital Goods | 0.61 | 0.57 | 0.56 | — | — | — | |
| Debt to Capital, Industry | |||||||
| Industrials | 0.60 | 0.59 | 0.58 | — | — | — | |
Based on: 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30).
1 2023 Calculation
Debt to capital = Total debt ÷ Total capital
= 8,848 ÷ 25,393 = 0.35
2 Click competitor name to see calculations.
The analysis of solvency metrics between September 30, 2018, and September 30, 2023, reveals a period of initial deleveraging followed by a gradual increase in the proportion of debt relative to total capital.
- Debt Obligations Trend
- A significant reduction in total debt occurred between 2018 and 2019, falling from US$ 10,995 million to US$ 7,219 million. Following this contraction, debt levels entered a phase of moderate growth, increasing to US$ 8,960 million by 2022 before slightly receding to US$ 8,848 million in 2023.
- Capital Base Evolution
- Total capital experienced a downward trend in the early part of the period, decreasing from US$ 32,159 million in 2018 to US$ 25,266 million in 2020. For the subsequent three years, the capital base remained highly stable, fluctuating minimally around the US$ 25.3 billion mark.
- Debt to Capital Ratio Dynamics
- The debt to capital ratio reached its lowest point of 0.27 in 2019, indicating a temporary strengthening of the solvency profile. This was followed by a steady upward trajectory, peaking at 0.36 in 2022. By September 30, 2023, the ratio settled at 0.35, suggesting that debt represents approximately 35% of the company's total capital structure.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
Debt to Capital (including Operating Lease Liability)
Johnson Controls International plc, debt to capital (including operating lease liability) calculation, comparison to benchmarks
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | Sep 30, 2018 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Short-term debt | 385) | 669) | 8) | 31) | 10) | 1,315) | |
| Current portion of long-term debt | 645) | 865) | 226) | 262) | 501) | 26) | |
| Long-term debt, less current portion | 7,818) | 7,426) | 7,506) | 7,526) | 6,708) | 9,654) | |
| Total debt | 8,848) | 8,960) | 7,740) | 7,819) | 7,219) | 10,995) | |
| Operating lease liabilities, current (included in Other current liabilities) | 318) | 280) | 319) | 332) | —) | —) | |
| Operating lease liabilities, noncurrent (included in Other noncurrent liabilities) | 1,086) | 987) | 1,055) | 875) | —) | —) | |
| Total debt (including operating lease liability) | 10,252) | 10,227) | 9,114) | 9,026) | 7,219) | 10,995) | |
| Shareholders’ equity attributable to Johnson Controls | 16,545) | 16,268) | 17,562) | 17,447) | 19,766) | 21,164) | |
| Total capital (including operating lease liability) | 26,797) | 26,495) | 26,676) | 26,473) | 26,985) | 32,159) | |
| Solvency Ratio | |||||||
| Debt to capital (including operating lease liability)1 | 0.38 | 0.39 | 0.34 | 0.34 | 0.27 | 0.34 | |
| Benchmarks | |||||||
| Debt to Capital (including Operating Lease Liability), Competitors2 | |||||||
| Boeing Co. | 1.47 | 1.37 | 1.34 | — | — | — | |
| Caterpillar Inc. | 0.66 | 0.70 | 0.70 | — | — | — | |
| Eaton Corp. plc | 0.34 | 0.35 | 0.36 | — | — | — | |
| GE Aerospace | 0.46 | 0.49 | 0.49 | — | — | — | |
| Honeywell International Inc. | 0.58 | 0.55 | 0.53 | — | — | — | |
| Lockheed Martin Corp. | 0.73 | 0.64 | 0.54 | — | — | — | |
| RTX Corp. | 0.43 | 0.32 | 0.31 | — | — | — | |
| Debt to Capital (including Operating Lease Liability), Sector | |||||||
| Capital Goods | 0.62 | 0.58 | 0.57 | — | — | — | |
| Debt to Capital (including Operating Lease Liability), Industry | |||||||
| Industrials | 0.63 | 0.61 | 0.61 | — | — | — | |
Based on: 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30).
1 2023 Calculation
Debt to capital (including operating lease liability) = Total debt (including operating lease liability) ÷ Total capital (including operating lease liability)
= 10,252 ÷ 26,797 = 0.38
2 Click competitor name to see calculations.
An analysis of solvency metrics from 2018 to 2023 reveals a period of initial deleveraging followed by a gradual increase in the proportion of debt relative to total capital. The debt-to-capital ratio exhibited volatility in the early part of the period before trending upward and stabilizing at a higher leverage level by the end of the timeframe.
- Debt to Capital Ratio Trends
- The ratio declined from 0.34 in 2018 to a minimum of 0.27 in 2019. Following this low, the ratio returned to 0.34 in 2020 and 2021, peaking at 0.39 in 2022 before settling at 0.38 in 2023. This indicates that the company's capital structure has become more debt-weighted over the last four years of the analyzed period.
- Total Debt Analysis
- Total debt, including operating lease liabilities, experienced a significant reduction between 2018 and 2019, dropping from US$ 10,995 million to US$ 7,219 million. Since 2019, there has been a consistent upward trajectory in debt obligations, reaching US$ 10,252 million by September 30, 2023, nearly returning to the levels observed in 2018.
- Total Capital Movements
- Total capital saw a substantial decrease from US$ 32,159 million in 2018 to US$ 26,473 million in 2020. For the remainder of the period, total capital remained relatively stagnant, fluctuating marginally between US$ 26,473 million and US$ 26,797 million. The combination of stable total capital and increasing total debt contributed to the rise in the solvency ratio observed from 2020 to 2023.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
Debt to Assets
Johnson Controls International plc, debt to assets calculation, comparison to benchmarks
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | Sep 30, 2018 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Short-term debt | 385) | 669) | 8) | 31) | 10) | 1,315) | |
| Current portion of long-term debt | 645) | 865) | 226) | 262) | 501) | 26) | |
| Long-term debt, less current portion | 7,818) | 7,426) | 7,506) | 7,526) | 6,708) | 9,654) | |
| Total debt | 8,848) | 8,960) | 7,740) | 7,819) | 7,219) | 10,995) | |
| Total assets | 42,242) | 42,158) | 41,890) | 40,815) | 42,287) | 48,797) | |
| Solvency Ratio | |||||||
| Debt to assets1 | 0.21 | 0.21 | 0.18 | 0.19 | 0.17 | 0.23 | |
| Benchmarks | |||||||
| Debt to Assets, Competitors2 | |||||||
| Boeing Co. | 0.38 | 0.42 | 0.42 | — | — | — | |
| Caterpillar Inc. | 0.43 | 0.45 | 0.46 | — | — | — | |
| Eaton Corp. plc | 0.24 | 0.25 | 0.25 | — | — | — | |
| GE Aerospace | 0.13 | 0.17 | 0.18 | — | — | — | |
| Honeywell International Inc. | 0.33 | 0.31 | 0.30 | — | — | — | |
| Lockheed Martin Corp. | 0.33 | 0.29 | 0.23 | — | — | — | |
| RTX Corp. | 0.27 | 0.20 | 0.20 | — | — | — | |
| Debt to Assets, Sector | |||||||
| Capital Goods | 0.29 | 0.28 | 0.28 | — | — | — | |
| Debt to Assets, Industry | |||||||
| Industrials | 0.31 | 0.31 | 0.30 | — | — | — | |
Based on: 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30).
1 2023 Calculation
Debt to assets = Total debt ÷ Total assets
= 8,848 ÷ 42,242 = 0.21
2 Click competitor name to see calculations.
The solvency profile from 2018 to 2023 is characterized by an initial sharp reduction in leverage followed by a period of stabilization and a moderate recent increase. The Debt to Assets ratio has remained within a relatively narrow band between 0.17 and 0.23, suggesting a controlled approach to asset financing through debt.
- Total Debt Trends
- A significant reduction in total debt occurred between September 30, 2018, and September 30, 2019, with liabilities falling from 10,995 million US$ to 7,219 million US$. Following this decline, debt levels remained relatively stable through 2021 before trending upward to 8,960 million US$ in 2022 and settling at 8,848 million US$ in 2023.
- Total Asset Fluctuations
- The asset base experienced a contraction between 2018 and 2020, decreasing from 48,797 million US$ to a low of 40,815 million US$. In the subsequent three years, total assets demonstrated minimal volatility, maintaining a consistent level around 42,000 million US$, ending the period at 42,242 million US$.
- Debt to Assets Ratio Analysis
- The Debt to Assets ratio peaked at 0.23 in 2018, reflecting the highest level of debt reliance during the analyzed period. A sharp decline to 0.17 in 2019 corresponds with the substantial reduction in total debt. A gradual increase is observed starting in 2021, with the ratio ascending to 0.21 in 2022 and remaining constant at 0.21 in 2023, indicating a slight increase in the proportion of assets financed by debt compared to the 2019-2021 period.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
Debt to Assets (including Operating Lease Liability)
Johnson Controls International plc, debt to assets (including operating lease liability) calculation, comparison to benchmarks
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | Sep 30, 2018 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Short-term debt | 385) | 669) | 8) | 31) | 10) | 1,315) | |
| Current portion of long-term debt | 645) | 865) | 226) | 262) | 501) | 26) | |
| Long-term debt, less current portion | 7,818) | 7,426) | 7,506) | 7,526) | 6,708) | 9,654) | |
| Total debt | 8,848) | 8,960) | 7,740) | 7,819) | 7,219) | 10,995) | |
| Operating lease liabilities, current (included in Other current liabilities) | 318) | 280) | 319) | 332) | —) | —) | |
| Operating lease liabilities, noncurrent (included in Other noncurrent liabilities) | 1,086) | 987) | 1,055) | 875) | —) | —) | |
| Total debt (including operating lease liability) | 10,252) | 10,227) | 9,114) | 9,026) | 7,219) | 10,995) | |
| Total assets | 42,242) | 42,158) | 41,890) | 40,815) | 42,287) | 48,797) | |
| Solvency Ratio | |||||||
| Debt to assets (including operating lease liability)1 | 0.24 | 0.24 | 0.22 | 0.22 | 0.17 | 0.23 | |
| Benchmarks | |||||||
| Debt to Assets (including Operating Lease Liability), Competitors2 | |||||||
| Boeing Co. | 0.40 | 0.43 | 0.43 | — | — | — | |
| Caterpillar Inc. | 0.44 | 0.46 | 0.46 | — | — | — | |
| Eaton Corp. plc | 0.26 | 0.26 | 0.27 | — | — | — | |
| GE Aerospace | 0.14 | 0.19 | 0.19 | — | — | — | |
| Honeywell International Inc. | 0.35 | 0.33 | 0.32 | — | — | — | |
| Lockheed Martin Corp. | 0.36 | 0.32 | 0.26 | — | — | — | |
| RTX Corp. | 0.28 | 0.21 | 0.21 | — | — | — | |
| Debt to Assets (including Operating Lease Liability), Sector | |||||||
| Capital Goods | 0.30 | 0.30 | 0.29 | — | — | — | |
| Debt to Assets (including Operating Lease Liability), Industry | |||||||
| Industrials | 0.35 | 0.34 | 0.34 | — | — | — | |
Based on: 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30).
1 2023 Calculation
Debt to assets (including operating lease liability) = Total debt (including operating lease liability) ÷ Total assets
= 10,252 ÷ 42,242 = 0.24
2 Click competitor name to see calculations.
The solvency profile reflects a period of fluctuation followed by a gradual increase in leverage from 2019 through 2023. While the debt-to-assets ratio has remained below 0.25 throughout the observed period, there is a discernible trend toward a higher reliance on debt relative to the asset base in recent years.
- Debt Trajectory
- Total debt, including operating lease liabilities, experienced a sharp decline in 2019, falling from US$ 10,995 million to US$ 7,219 million. This reduction was not sustained, as debt levels climbed steadily over the subsequent four years, returning to US$ 10,252 million by September 30, 2023.
- Asset Base Trends
- Total assets underwent a contraction between 2018 and 2020, decreasing from US$ 48,797 million to US$ 40,815 million. Following this decline, the asset base remained relatively stagnant, exhibiting only marginal growth to reach US$ 42,242 million by the end of the period.
- Debt to Assets Ratio Analysis
- The solvency ratio reached a period low of 0.17 in 2019, driven primarily by the significant reduction in total debt. From 2020 onward, the ratio trended upward, moving from 0.22 to a plateau of 0.24 in 2022 and 2023. This increase is the result of rising debt obligations occurring alongside a nearly flat asset trajectory, indicating a moderate increase in the company's financial leverage.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
Financial Leverage
Johnson Controls International plc, financial leverage calculation, comparison to benchmarks
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | Sep 30, 2018 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Total assets | 42,242) | 42,158) | 41,890) | 40,815) | 42,287) | 48,797) | |
| Shareholders’ equity attributable to Johnson Controls | 16,545) | 16,268) | 17,562) | 17,447) | 19,766) | 21,164) | |
| Solvency Ratio | |||||||
| Financial leverage1 | 2.55 | 2.59 | 2.39 | 2.34 | 2.14 | 2.31 | |
| Benchmarks | |||||||
| Financial Leverage, Competitors2 | |||||||
| Boeing Co. | — | — | — | — | — | — | |
| Caterpillar Inc. | 4.49 | 5.16 | 5.02 | — | — | — | |
| Eaton Corp. plc | 2.02 | 2.06 | 2.07 | — | — | — | |
| GE Aerospace | 5.96 | 5.16 | 4.93 | — | — | — | |
| Honeywell International Inc. | 3.88 | 3.73 | 3.47 | — | — | — | |
| Lockheed Martin Corp. | 7.67 | 5.71 | 4.64 | — | — | — | |
| RTX Corp. | 2.71 | 2.19 | 2.21 | — | — | — | |
| Financial Leverage, Sector | |||||||
| Capital Goods | 5.35 | 4.71 | 4.55 | — | — | — | |
| Financial Leverage, Industry | |||||||
| Industrials | 4.94 | 4.65 | 4.52 | — | — | — | |
Based on: 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30).
1 2023 Calculation
Financial leverage = Total assets ÷ Shareholders’ equity attributable to Johnson Controls
= 42,242 ÷ 16,545 = 2.55
2 Click competitor name to see calculations.
An analysis of the solvency position from 2018 to 2023 reveals a general trend of increasing financial leverage, driven primarily by a contraction in the equity base rather than an expansion of the asset base. While total assets experienced a significant reduction between 2018 and 2019, they have remained relatively stable over the subsequent four years.
- Total Assets Trend
- A sharp decline in total assets is noted between September 30, 2018, and September 30, 2019, falling from US$ 48,797 million to US$ 42,287 million. Following this contraction, the asset base entered a period of stabilization, with marginal annual increases leading to a value of US$ 42,242 million by September 30, 2023.
- Shareholders' Equity Evolution
- Shareholders' equity attributable to the parent company exhibited a consistent downward trajectory for much of the period. From a high of US$ 21,164 million in 2018, equity decreased to US$ 16,268 million by 2022, representing a substantial erosion of the equity cushion. A slight recovery was observed in 2023, with equity rising to US$ 16,545 million.
- Financial Leverage Dynamics
- The financial leverage ratio fluctuated initially, dipping to 2.14 in 2019, but subsequently entered a period of steady escalation. The ratio rose from 2.34 in 2020 to a peak of 2.59 in 2022, before slightly moderating to 2.55 in 2023. This upward trend indicates an increasing reliance on debt or other liabilities relative to equity to finance the company's assets.
The convergence of stable total assets and declining shareholders' equity has resulted in a higher leverage profile. The increase in the leverage ratio from 2.31 in 2018 to 2.55 in 2023 suggests a shift in the capital structure toward a more aggressive financing posture, which may impact the long-term solvency risk profile.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
Interest Coverage
Johnson Controls International plc, interest coverage calculation, comparison to benchmarks
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | Sep 30, 2018 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Net income attributable to Johnson Controls | 1,849) | 1,532) | 1,637) | 631) | 5,674) | 2,162) | |
| Add: Net income attributable to noncontrolling interest | 184) | 191) | 233) | 164) | 213) | 221) | |
| Less: Income from discontinued operations, net of tax | —) | —) | 124) | —) | 4,598) | —) | |
| Add: Income tax expense | (323) | (13) | 868) | 108) | (233) | 518) | |
| Add: Interest expense, net of capitalized interest costs | 307) | 225) | 219) | 240) | 335) | 437) | |
| Earnings before interest and tax (EBIT) | 2,017) | 1,935) | 2,833) | 1,143) | 1,391) | 3,338) | |
| Solvency Ratio | |||||||
| Interest coverage1 | 6.57 | 8.60 | 12.94 | 4.76 | 4.15 | 7.64 | |
| Benchmarks | |||||||
| Interest Coverage, Competitors2 | |||||||
| Boeing Co. | 0.18 | -0.98 | -0.88 | — | — | — | |
| Caterpillar Inc. | 26.66 | 20.80 | 17.88 | — | — | — | |
| Eaton Corp. plc | 26.34 | 21.22 | 21.11 | — | — | — | |
| GE Aerospace | 10.12 | 1.88 | -0.96 | — | — | — | |
| Honeywell International Inc. | 10.36 | 16.41 | 22.09 | — | — | — | |
| Lockheed Martin Corp. | 9.84 | 11.72 | 14.27 | — | — | — | |
| RTX Corp. | 3.32 | 5.64 | 4.71 | — | — | — | |
| Interest Coverage, Sector | |||||||
| Capital Goods | 6.84 | 4.84 | 3.98 | — | — | — | |
| Interest Coverage, Industry | |||||||
| Industrials | 6.64 | 4.98 | 5.14 | — | — | — | |
Based on: 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30).
1 2023 Calculation
Interest coverage = EBIT ÷ Interest expense
= 2,017 ÷ 307 = 6.57
2 Click competitor name to see calculations.
The solvency profile from 2018 to 2023 exhibits significant volatility, primarily driven by fluctuations in operating profitability rather than consistent changes in debt servicing costs. While the interest coverage ratio remained well above 1.0 throughout the period, indicating a consistent ability to meet interest obligations, the margin of safety has fluctuated substantially.
- Earnings Before Interest and Tax (EBIT) Trends
- A sharp contraction in EBIT occurred between 2018 and 2020, with values falling from US$ 3,338 million to a period low of US$ 1,143 million. A strong recovery was observed in 2021, reaching US$ 2,833 million, before stabilizing near the US$ 2 billion mark in 2022 and 2023.
- Net Interest Expense Analysis
- Interest costs followed a general downward trajectory from 2018 to 2021, decreasing from US$ 437 million to a low of US$ 219 million. However, a reversal is observed in the final two years, with expenses rising to US$ 307 million by September 30, 2023.
- Interest Coverage Ratio Dynamics
- The interest coverage ratio experienced a notable decline from 7.64 in 2018 to 4.15 in 2019, reflecting the initial drop in EBIT. The ratio reached a peak of 12.94 in 2021, the result of a simultaneous surge in earnings and a reduction in interest costs. Since 2021, a consistent downward trend has emerged, with the ratio falling to 6.57 by 2023, driven by moderated EBIT levels and increasing interest expenses.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
Fixed Charge Coverage
Johnson Controls International plc, fixed charge coverage calculation, comparison to benchmarks
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | Sep 30, 2018 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Net income attributable to Johnson Controls | 1,849) | 1,532) | 1,637) | 631) | 5,674) | 2,162) | |
| Add: Net income attributable to noncontrolling interest | 184) | 191) | 233) | 164) | 213) | 221) | |
| Less: Income from discontinued operations, net of tax | —) | —) | 124) | —) | 4,598) | —) | |
| Add: Income tax expense | (323) | (13) | 868) | 108) | (233) | 518) | |
| Add: Interest expense, net of capitalized interest costs | 307) | 225) | 219) | 240) | 335) | 437) | |
| Earnings before interest and tax (EBIT) | 2,017) | 1,935) | 2,833) | 1,143) | 1,391) | 3,338) | |
| Add: Operating lease cost | 384) | 352) | 384) | 399) | 452) | 467) | |
| Earnings before fixed charges and tax | 2,401) | 2,287) | 3,217) | 1,542) | 1,843) | 3,805) | |
| Interest expense, net of capitalized interest costs | 307) | 225) | 219) | 240) | 335) | 437) | |
| Operating lease cost | 384) | 352) | 384) | 399) | 452) | 467) | |
| Fixed charges | 691) | 577) | 603) | 639) | 787) | 904) | |
| Solvency Ratio | |||||||
| Fixed charge coverage1 | 3.47 | 3.96 | 5.33 | 2.41 | 2.34 | 4.21 | |
| Benchmarks | |||||||
| Fixed Charge Coverage, Competitors2 | |||||||
| Boeing Co. | 0.31 | -0.70 | -0.64 | — | — | — | |
| Caterpillar Inc. | 19.73 | 14.92 | 12.73 | — | — | — | |
| Eaton Corp. plc | 11.90 | 10.01 | 10.40 | — | — | — | |
| GE Aerospace | 5.25 | 1.35 | -0.22 | — | — | — | |
| Honeywell International Inc. | 8.13 | 11.00 | 13.67 | — | — | — | |
| Lockheed Martin Corp. | 7.81 | 8.44 | 9.95 | — | — | — | |
| RTX Corp. | 2.81 | 4.40 | 3.66 | — | — | — | |
| Fixed Charge Coverage, Sector | |||||||
| Capital Goods | 5.14 | 3.61 | 3.06 | — | — | — | |
| Fixed Charge Coverage, Industry | |||||||
| Industrials | 4.32 | 3.30 | 3.44 | — | — | — | |
Based on: 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30).
1 2023 Calculation
Fixed charge coverage = Earnings before fixed charges and tax ÷ Fixed charges
= 2,401 ÷ 691 = 3.47
2 Click competitor name to see calculations.
The analysis of solvency metrics from 2018 to 2023 reveals a period of significant volatility in the company's ability to meet its fixed obligations. The fixed charge coverage ratio experienced a sharp contraction between 2018 and 2020, followed by a substantial recovery in 2021, and a subsequent gradual decline through 2023.
- Earnings Before Fixed Charges and Tax
- A volatile trend is observed in earnings, which dropped precipitously from US$ 3,805 million in 2018 to a low of US$ 1,542 million in 2020. A strong recovery occurred in 2021, with earnings rising to US$ 3,217 million, before stabilizing between US$ 2,287 million and US$ 2,401 million in the final two years of the period.
- Fixed Charges
- Fixed charges exhibited a consistent downward trend for the majority of the period, decreasing from US$ 904 million in 2018 to a minimum of US$ 577 million in 2022. However, this trend reversed in 2023, with fixed charges increasing to US$ 691 million.
- Fixed Charge Coverage Ratio
- The coverage ratio reflects the interaction between fluctuating earnings and declining costs. The ratio fell from 4.21 in 2018 to 2.34 in 2019, indicating a reduced margin of safety. The ratio peaked at 5.33 in 2021, driven by the simultaneous occurrence of high earnings and low fixed charges. In the most recent two years, the ratio declined to 3.96 in 2022 and 3.47 in 2023, signaling a tightening of the solvency cushion as earnings moderated and fixed charges rose.
Overall, while the company maintains a coverage ratio well above 1.0, indicating that earnings are sufficient to cover fixed charges, the trend suggests a loss of the peak solvency strength observed in 2021. The most recent data indicates a downward trajectory in the coverage margin.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?