Analysis of Solvency Ratios
Quarterly Data
Solvency ratios also known as long-term debt ratios measure a company ability to meet long-term obligations.
Solvency Ratios (Summary)
Johnson Controls International plc, solvency ratios (quarterly data)
Based on: 10-Q (reporting date: 2024-03-31), 10-Q (reporting date: 2023-12-31), 10-K (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-Q (reporting date: 2022-12-31), 10-K (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-Q (reporting date: 2021-12-31), 10-K (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-Q (reporting date: 2020-12-31), 10-K (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-Q (reporting date: 2019-12-31), 10-K (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-Q (reporting date: 2018-12-31).
The financial leverage and debt-related ratios over the observed periods indicate several notable trends. The debt-to-equity ratio initially decreased significantly in the first half of 2019, reaching a low point by June 30, 2019, before gradually increasing again in subsequent quarters. From early 2022 onwards, the ratio shows a more pronounced upward trajectory, reaching its peak at the end of the period observed in March 31, 2024.
The debt-to-capital ratio follows a somewhat similar pattern, with a substantial decline in early 2019 and a generally rising trend from 2021 through 2024. The fluctuations are less severe compared to the debt-to-equity ratio, but the upward movement in recent periods suggests an increasing reliance on debt relative to overall capital.
The debt-to-assets ratio remains relatively stable throughout the timeline but undergoes a modest decline in mid-2019, followed by a gradual rise starting around 2021. Though the variations are less marked than in other ratios, the increment towards the end suggests a slight increase in debt usage against total assets over time.
Financial leverage is consistently above 2.0 and shows an early dip in mid-2019, paralleling other debt ratios. From 2021 onwards, it steadily increases, peaking near the end of the data set. This indicates the company’s growing use of debt financing relative to shareholders’ equity to enhance asset growth.
Overall, the data suggests a period of deleveraging in early 2019, followed by a sustained return to higher leverage levels up to early 2024. The incremental increases in debt-related ratios and financial leverage imply a strategic shift towards using more borrowed funds in the capital structure, possibly to finance growth initiatives or operations, with a correspondingly higher financial risk profile in the more recent periods.
- Debt to Equity Ratio
- Significant decrease in early 2019, followed by a steady increase from 2021 onward, peaking in March 2024.
- Debt to Capital Ratio
- Lower volatility than debt to equity; declines in early 2019, trend upward from 2021 to 2024.
- Debt to Assets Ratio
- Relatively stable with a small initial decline, gradual increase starting in 2021, indicating slight rise in total debt relative to assets.
- Financial Leverage
- Consistently above 2.0, dips mid-2019, then rises steadily, reflecting increased use of debt in financing assets in recent years.
Debt Ratios
Debt to Equity
Johnson Controls International plc, debt to equity calculation (quarterly data)
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||||||
| Short-term debt | 2,210) | 1,998) | 385) | 186) | 1,737) | 1,026) | 669) | 2,081) | 2,044) | 392) | 8) | 265) | 248) | 11) | 31) | 1,321) | 344) | 20) | 10) | 20) | 2,862) | 2,319) | |||||||
| Current portion of long-term debt | 1,165) | 652) | 645) | 1,081) | 922) | 937) | 865) | 217) | 240) | 220) | 226) | 196) | 196) | 453) | 262) | 1,102) | 1,086) | 1,342) | 501) | 501) | 1,106) | 1) | |||||||
| Long-term debt, less current portion | 7,348) | 7,959) | 7,818) | 8,497) | 7,832) | 7,784) | 7,426) | 7,194) | 7,366) | 7,437) | 7,506) | 7,318) | 7,323) | 7,469) | 7,526) | 5,671) | 5,640) | 5,920) | 6,708) | 6,804) | 8,418) | 9,588) | |||||||
| Total debt | 10,723) | 10,609) | 8,848) | 9,764) | 10,491) | 9,747) | 8,960) | 9,492) | 9,650) | 8,049) | 7,740) | 7,779) | 7,767) | 7,933) | 7,819) | 8,094) | 7,070) | 7,282) | 7,219) | 7,325) | 12,386) | 11,908) | |||||||
| Shareholders’ equity attributable to Johnson Controls | 15,658) | 16,698) | 16,545) | 16,324) | 15,890) | 16,046) | 16,268) | 15,988) | 16,536) | 17,249) | 17,562) | 17,840) | 17,698) | 17,656) | 17,447) | 17,805) | 18,084) | 19,329) | 19,766) | 20,363) | 20,036) | 20,102) | |||||||
| Solvency Ratio | |||||||||||||||||||||||||||||
| Debt to equity1 | 0.68 | 0.64 | 0.53 | 0.60 | 0.66 | 0.61 | 0.55 | 0.59 | 0.58 | 0.47 | 0.44 | 0.44 | 0.44 | 0.45 | 0.45 | 0.45 | 0.39 | 0.38 | 0.37 | 0.36 | 0.62 | 0.59 | |||||||
| Benchmarks | |||||||||||||||||||||||||||||
| Debt to Equity, Competitors2 | |||||||||||||||||||||||||||||
| Boeing Co. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Caterpillar Inc. | 2.18 | 2.15 | 1.94 | 1.81 | 2.07 | 2.04 | 2.33 | 2.34 | 2.35 | 2.20 | 2.29 | 2.21 | 2.23 | 2.30 | — | — | — | — | — | — | — | — | |||||||
| Eaton Corp. plc | 0.51 | 0.48 | 0.49 | 0.50 | 0.52 | 0.50 | 0.51 | 0.56 | 0.59 | 0.58 | 0.52 | 0.57 | 0.79 | 0.68 | — | — | — | — | — | — | — | — | |||||||
| GE Aerospace | 1.06 | 0.69 | 0.77 | 0.73 | 0.70 | 0.71 | 0.89 | 0.97 | 0.94 | 0.86 | 0.87 | 1.68 | 1.90 | 2.12 | — | — | — | — | — | — | — | — | |||||||
| Honeywell International Inc. | 1.65 | 1.53 | 1.29 | 1.18 | 1.24 | 1.13 | 1.17 | 0.96 | 1.09 | 1.05 | 1.06 | 1.19 | 1.19 | 1.19 | — | — | — | — | — | — | — | — | |||||||
| Lockheed Martin Corp. | 3.12 | 2.92 | 2.55 | 1.88 | 1.90 | 1.62 | 1.68 | 0.96 | 1.02 | 1.16 | 1.07 | 1.21 | 1.87 | 1.93 | — | — | — | — | — | — | — | — | |||||||
| RTX Corp. | 0.71 | 0.71 | 0.73 | 0.51 | 0.49 | 0.47 | 0.44 | 0.48 | 0.45 | 0.43 | 0.43 | 0.44 | 0.44 | 0.44 | — | — | — | — | — | — | — | — | |||||||
Based on: 10-Q (reporting date: 2024-03-31), 10-Q (reporting date: 2023-12-31), 10-K (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-Q (reporting date: 2022-12-31), 10-K (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-Q (reporting date: 2021-12-31), 10-K (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-Q (reporting date: 2020-12-31), 10-K (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-Q (reporting date: 2019-12-31), 10-K (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-Q (reporting date: 2018-12-31).
1 Q2 2024 Calculation
Debt to equity = Total debt ÷ Shareholders’ equity attributable to Johnson Controls
= 10,723 ÷ 15,658 = 0.68
2 Click competitor name to see calculations.
- Total Debt
-
Total debt experienced significant fluctuations over the observed periods. Initially, the debt stood at a high level around 12 billion US dollars at the end of 2018 and the beginning of 2019, but then it sharply decreased to approximately 7.3 billion US dollars by mid-2019. Following this reduction, the debt level remained relatively stable through 2019 and the early months of 2020, fluctuating slightly between 7 and 8 billion US dollars.
Starting mid-2020, the total debt showed a tendency to increase again, reaching a peak of over 10.4 billion US dollars by the end of the first quarter of 2023. A temporary dip occurred around mid-2023 but was followed by another increase to over 10.7 billion US dollars by March 2024. This pattern indicates a renewed buildup of debt after a period of relative stability.
- Shareholders’ Equity Attributable to Johnson Controls
-
Shareholders’ equity showed a gradual declining trend over the entire period under review. Starting above 20 billion US dollars at the end of 2018, equity values steadily decreased through the years with some minor fluctuations but no significant rebounds. By the end of 2023 and into the first quarter of 2024, shareholders’ equity had dropped to around 15.7 billion US dollars.
This consistent decline reflects a reduction in net assets attributable to the company’s shareholders, which may be due to factors such as net losses, dividends, or share repurchases exceeding net income during these quarters.
- Debt to Equity Ratio
-
The debt to equity ratio reveals notable changes in the company's financial leverage. At the beginning of the period, the ratio was approximately 0.59 to 0.62, then it sharply declined to a low of around 0.36-0.39 through mid-2019 and early 2020. This reduction corresponds with the earlier observed decrease in total debt and indicates a period of reduced leverage.
From mid-2020 onwards, the ratio steadily increased, aligning with the rising total debt and declining equity. The debt to equity ratio peaked near 0.68 by March 2024, signaling a higher reliance on debt financing relative to shareholders’ equity.
This upward trend in leverage could imply increasing financial risk or a strategic decision to utilize more debt capital in the company's financing structure.
Debt to Capital
Johnson Controls International plc, debt to capital calculation (quarterly data)
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||||||
| Short-term debt | 2,210) | 1,998) | 385) | 186) | 1,737) | 1,026) | 669) | 2,081) | 2,044) | 392) | 8) | 265) | 248) | 11) | 31) | 1,321) | 344) | 20) | 10) | 20) | 2,862) | 2,319) | |||||||
| Current portion of long-term debt | 1,165) | 652) | 645) | 1,081) | 922) | 937) | 865) | 217) | 240) | 220) | 226) | 196) | 196) | 453) | 262) | 1,102) | 1,086) | 1,342) | 501) | 501) | 1,106) | 1) | |||||||
| Long-term debt, less current portion | 7,348) | 7,959) | 7,818) | 8,497) | 7,832) | 7,784) | 7,426) | 7,194) | 7,366) | 7,437) | 7,506) | 7,318) | 7,323) | 7,469) | 7,526) | 5,671) | 5,640) | 5,920) | 6,708) | 6,804) | 8,418) | 9,588) | |||||||
| Total debt | 10,723) | 10,609) | 8,848) | 9,764) | 10,491) | 9,747) | 8,960) | 9,492) | 9,650) | 8,049) | 7,740) | 7,779) | 7,767) | 7,933) | 7,819) | 8,094) | 7,070) | 7,282) | 7,219) | 7,325) | 12,386) | 11,908) | |||||||
| Shareholders’ equity attributable to Johnson Controls | 15,658) | 16,698) | 16,545) | 16,324) | 15,890) | 16,046) | 16,268) | 15,988) | 16,536) | 17,249) | 17,562) | 17,840) | 17,698) | 17,656) | 17,447) | 17,805) | 18,084) | 19,329) | 19,766) | 20,363) | 20,036) | 20,102) | |||||||
| Total capital | 26,381) | 27,307) | 25,393) | 26,088) | 26,381) | 25,793) | 25,228) | 25,480) | 26,186) | 25,298) | 25,302) | 25,619) | 25,465) | 25,589) | 25,266) | 25,899) | 25,154) | 26,611) | 26,985) | 27,688) | 32,422) | 32,010) | |||||||
| Solvency Ratio | |||||||||||||||||||||||||||||
| Debt to capital1 | 0.41 | 0.39 | 0.35 | 0.37 | 0.40 | 0.38 | 0.36 | 0.37 | 0.37 | 0.32 | 0.31 | 0.30 | 0.31 | 0.31 | 0.31 | 0.31 | 0.28 | 0.27 | 0.27 | 0.26 | 0.38 | 0.37 | |||||||
| Benchmarks | |||||||||||||||||||||||||||||
| Debt to Capital, Competitors2 | |||||||||||||||||||||||||||||
| Boeing Co. | 1.45 | 1.55 | 1.49 | 1.47 | 1.42 | 1.39 | 1.39 | 1.45 | 1.35 | 1.36 | 1.35 | 1.30 | 1.36 | 1.40 | — | — | — | — | — | — | — | — | |||||||
| Caterpillar Inc. | 0.69 | 0.68 | 0.66 | 0.64 | 0.67 | 0.67 | 0.70 | 0.70 | 0.70 | 0.69 | 0.70 | 0.69 | 0.69 | 0.70 | — | — | — | — | — | — | — | — | |||||||
| Eaton Corp. plc | 0.34 | 0.32 | 0.33 | 0.33 | 0.34 | 0.34 | 0.34 | 0.36 | 0.37 | 0.37 | 0.34 | 0.36 | 0.44 | 0.40 | — | — | — | — | — | — | — | — | |||||||
| GE Aerospace | 0.51 | 0.41 | 0.43 | 0.42 | 0.41 | 0.41 | 0.47 | 0.49 | 0.48 | 0.46 | 0.47 | 0.63 | 0.65 | 0.68 | — | — | — | — | — | — | — | — | |||||||
| Honeywell International Inc. | 0.62 | 0.61 | 0.56 | 0.54 | 0.55 | 0.53 | 0.54 | 0.49 | 0.52 | 0.51 | 0.51 | 0.54 | 0.54 | 0.54 | — | — | — | — | — | — | — | — | |||||||
| Lockheed Martin Corp. | 0.76 | 0.74 | 0.72 | 0.65 | 0.66 | 0.62 | 0.63 | 0.49 | 0.50 | 0.54 | 0.52 | 0.55 | 0.65 | 0.66 | — | — | — | — | — | — | — | — | |||||||
| RTX Corp. | 0.42 | 0.41 | 0.42 | 0.34 | 0.33 | 0.32 | 0.31 | 0.32 | 0.31 | 0.30 | 0.30 | 0.30 | 0.31 | 0.31 | — | — | — | — | — | — | — | — | |||||||
Based on: 10-Q (reporting date: 2024-03-31), 10-Q (reporting date: 2023-12-31), 10-K (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-Q (reporting date: 2022-12-31), 10-K (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-Q (reporting date: 2021-12-31), 10-K (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-Q (reporting date: 2020-12-31), 10-K (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-Q (reporting date: 2019-12-31), 10-K (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-Q (reporting date: 2018-12-31).
1 Q2 2024 Calculation
Debt to capital = Total debt ÷ Total capital
= 10,723 ÷ 26,381 = 0.41
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals several notable trends in the company’s debt and capital structure over the observed periods.
- Total Debt
- The total debt exhibits considerable fluctuations over the quarters. Initially, total debt was around 11.9 billion USD at the end of 2018 and increased slightly in the first quarter of 2019 before a significant drop through mid-2019, reaching a low near 7.2 billion USD by September 2019. Following this, the debt level generally rose again, peaking near 10.6 billion USD at the end of 2023. There is evidence of volatility with occasional decreases, but an overall upward drift is perceptible towards the latter dates, ending at approximately 10.7 billion USD in the first quarter of 2024.
- Total Capital
- Total capital maintains a more stable but generally declining pattern compared to debt. Starting from about 32.0 billion USD at the end of 2018, it decreases steadily through 2019 and early 2020, reaching a trough near 25.1 billion USD at the end of the first quarter of 2020. Thereafter, the capital fluctuates around the mid-25 to mid-26 billion USD range with slight increases and decreases but without a strong directional trend. By early 2024, the total capital measures close to 26.4 billion USD, indicating a modest recovery from its lowest points but still below the initial value in late 2018.
- Debt to Capital Ratio
- The ratio of debt to capital demonstrates meaningful changes corresponding to the movements in debt and capital. It starts at a moderate level of 0.37 at the end of 2018, declines markedly to around 0.26-0.28 during mid-2019—coinciding with the period of reduced debt—and then gradually rises through late 2019 and 2020. From 2021 onward, the ratio fluctuates around 0.30 to 0.32, with a noticeable increase starting in early 2022, reaching peaks close to 0.40 and above by 2023 and early 2024. The latest data suggest that the company has increased its leverage, with the debt component growing faster relative to capital, resulting in a higher debt-to-capital ratio nearing 0.41 by the first quarter of 2024.
In summary, the financial data indicate a period of initial deleveraging and reduction in total debt up to mid-2019, followed by a trend of increasing indebtedness and higher leverage over the subsequent years. Total capital shows a declining trend initially but remains relatively stable in recent quarters. The growing debt-to-capital ratio signals an elevated risk profile from a capital structure perspective, as debt constitutes a larger proportion of the company’s overall capital base in the most recent periods.
Debt to Assets
Johnson Controls International plc, debt to assets calculation (quarterly data)
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||||||
| Short-term debt | 2,210) | 1,998) | 385) | 186) | 1,737) | 1,026) | 669) | 2,081) | 2,044) | 392) | 8) | 265) | 248) | 11) | 31) | 1,321) | 344) | 20) | 10) | 20) | 2,862) | 2,319) | |||||||
| Current portion of long-term debt | 1,165) | 652) | 645) | 1,081) | 922) | 937) | 865) | 217) | 240) | 220) | 226) | 196) | 196) | 453) | 262) | 1,102) | 1,086) | 1,342) | 501) | 501) | 1,106) | 1) | |||||||
| Long-term debt, less current portion | 7,348) | 7,959) | 7,818) | 8,497) | 7,832) | 7,784) | 7,426) | 7,194) | 7,366) | 7,437) | 7,506) | 7,318) | 7,323) | 7,469) | 7,526) | 5,671) | 5,640) | 5,920) | 6,708) | 6,804) | 8,418) | 9,588) | |||||||
| Total debt | 10,723) | 10,609) | 8,848) | 9,764) | 10,491) | 9,747) | 8,960) | 9,492) | 9,650) | 8,049) | 7,740) | 7,779) | 7,767) | 7,933) | 7,819) | 8,094) | 7,070) | 7,282) | 7,219) | 7,325) | 12,386) | 11,908) | |||||||
| Total assets | 43,457) | 43,981) | 42,242) | 42,780) | 43,420) | 42,797) | 42,158) | 42,324) | 42,991) | 42,222) | 41,890) | 42,135) | 41,180) | 41,424) | 40,815) | 41,278) | 40,402) | 42,513) | 42,287) | 43,069) | 48,489) | 48,016) | |||||||
| Solvency Ratio | |||||||||||||||||||||||||||||
| Debt to assets1 | 0.25 | 0.24 | 0.21 | 0.23 | 0.24 | 0.23 | 0.21 | 0.22 | 0.22 | 0.19 | 0.18 | 0.18 | 0.19 | 0.19 | 0.19 | 0.20 | 0.17 | 0.17 | 0.17 | 0.17 | 0.26 | 0.25 | |||||||
| Benchmarks | |||||||||||||||||||||||||||||
| Debt to Assets, Competitors2 | |||||||||||||||||||||||||||||
| Boeing Co. | 0.41 | 0.36 | 0.38 | 0.39 | 0.39 | 0.41 | 0.42 | 0.42 | 0.42 | 0.43 | 0.42 | 0.43 | 0.43 | 0.42 | — | — | — | — | — | — | — | — | |||||||
| Caterpillar Inc. | 0.45 | 0.45 | 0.43 | 0.43 | 0.44 | 0.44 | 0.45 | 0.45 | 0.46 | 0.46 | 0.46 | 0.46 | 0.46 | 0.47 | — | — | — | — | — | — | — | — | |||||||
| Eaton Corp. plc | 0.25 | 0.24 | 0.24 | 0.25 | 0.25 | 0.25 | 0.25 | 0.26 | 0.28 | 0.27 | 0.25 | 0.27 | 0.33 | 0.30 | — | — | — | — | — | — | — | — | |||||||
| GE Aerospace | 0.16 | 0.13 | 0.13 | 0.13 | 0.13 | 0.14 | 0.17 | 0.17 | 0.18 | 0.18 | 0.18 | 0.27 | 0.27 | 0.29 | — | — | — | — | — | — | — | — | |||||||
| Honeywell International Inc. | 0.40 | 0.38 | 0.33 | 0.33 | 0.34 | 0.32 | 0.31 | 0.28 | 0.31 | 0.31 | 0.30 | 0.33 | 0.33 | 0.34 | — | — | — | — | — | — | — | — | |||||||
| Lockheed Martin Corp. | 0.35 | 0.35 | 0.33 | 0.31 | 0.31 | 0.29 | 0.29 | 0.22 | 0.22 | 0.23 | 0.23 | 0.23 | 0.23 | 0.24 | — | — | — | — | — | — | — | — | |||||||
| RTX Corp. | 0.26 | 0.27 | 0.27 | 0.22 | 0.22 | 0.21 | 0.20 | 0.21 | 0.20 | 0.20 | 0.20 | 0.20 | 0.20 | 0.20 | — | — | — | — | — | — | — | — | |||||||
Based on: 10-Q (reporting date: 2024-03-31), 10-Q (reporting date: 2023-12-31), 10-K (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-Q (reporting date: 2022-12-31), 10-K (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-Q (reporting date: 2021-12-31), 10-K (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-Q (reporting date: 2020-12-31), 10-K (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-Q (reporting date: 2019-12-31), 10-K (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-Q (reporting date: 2018-12-31).
1 Q2 2024 Calculation
Debt to assets = Total debt ÷ Total assets
= 10,723 ÷ 43,457 = 0.25
2 Click competitor name to see calculations.
- Total Debt
-
The total debt exhibits fluctuations over the observed quarters. Initially, the debt was slightly elevated around 12,000 million US dollars but saw a substantial decline by the middle of 2019, reaching a low near 7,200 million. Subsequently, debt levels hovered mostly in the 7,800 to 8,000 million range until early 2021. From early 2021 onward, debt began to increase more noticeably, peaking above 10,000 million in late 2023 and early 2024, indicating a renewed buildup of financial leverage.
- Total Assets
-
Total assets started near 48,000 million US dollars at the end of 2018 but sharply decreased to the low 40,000 million range by mid-2019. Thereafter, asset levels maintained relative stability with some volatility primarily between 41,000 and 43,000 million. Toward the end of the period, assets rose moderately, approaching 44,000 million in early 2024, reflecting a modest growth trend.
- Debt to Assets Ratio
-
The debt to assets ratio shows a clear downward shift in the first half of 2019, dropping from approximately 0.25 to 0.17, consistent with the reduction in total debt relative to assets. Following this period, the ratio increased gradually, fluctuating between 0.18 and 0.20 through 2020 and much of 2021. From 2021 onwards, there was an upward trend, with the ratio approaching and slightly exceeding 0.24 by early 2024. This pattern indicates a gradual increase in leverage, suggesting a strategic shift or changes in financing policy leading to higher relative indebtedness.
- Overall Financial Trend
-
The company experienced a notable deleveraging phase in 2019, reflected by declines in total debt and the debt to assets ratio. However, after a period of stabilization, an increase in total debt resumed from 2021 forward, surpassing previous peaks. Despite total assets remaining relatively stable with slight growth, the rising debt levels have elevated the leverage ratio, signaling increased financial risk. Monitoring this trend will be crucial to assess the company's capacity to manage debt and maintain financial stability going forward.
Financial Leverage
Johnson Controls International plc, financial leverage calculation (quarterly data)
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | ||||||||
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| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||||||
| Total assets | 43,457) | 43,981) | 42,242) | 42,780) | 43,420) | 42,797) | 42,158) | 42,324) | 42,991) | 42,222) | 41,890) | 42,135) | 41,180) | 41,424) | 40,815) | 41,278) | 40,402) | 42,513) | 42,287) | 43,069) | 48,489) | 48,016) | |||||||
| Shareholders’ equity attributable to Johnson Controls | 15,658) | 16,698) | 16,545) | 16,324) | 15,890) | 16,046) | 16,268) | 15,988) | 16,536) | 17,249) | 17,562) | 17,840) | 17,698) | 17,656) | 17,447) | 17,805) | 18,084) | 19,329) | 19,766) | 20,363) | 20,036) | 20,102) | |||||||
| Solvency Ratio | |||||||||||||||||||||||||||||
| Financial leverage1 | 2.78 | 2.63 | 2.55 | 2.62 | 2.73 | 2.67 | 2.59 | 2.65 | 2.60 | 2.45 | 2.39 | 2.36 | 2.33 | 2.35 | 2.34 | 2.32 | 2.23 | 2.20 | 2.14 | 2.12 | 2.42 | 2.39 | |||||||
| Benchmarks | |||||||||||||||||||||||||||||
| Financial Leverage, Competitors2 | |||||||||||||||||||||||||||||
| Boeing Co. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Caterpillar Inc. | 4.86 | 4.75 | 4.49 | 4.24 | 4.68 | 4.61 | 5.16 | 5.19 | 5.16 | 4.82 | 5.02 | 4.85 | 4.85 | 4.87 | — | — | — | — | — | — | — | — | |||||||
| Eaton Corp. plc | 2.05 | 2.00 | 2.02 | 2.03 | 2.05 | 2.04 | 2.06 | 2.14 | 2.15 | 2.12 | 2.07 | 2.14 | 2.39 | 2.27 | — | — | — | — | — | — | — | — | |||||||
| GE Aerospace | 6.62 | 5.49 | 5.96 | 5.47 | 5.23 | 5.20 | 5.16 | 5.75 | 5.35 | 4.92 | 4.93 | 6.33 | 7.09 | 7.30 | — | — | — | — | — | — | — | — | |||||||
| Honeywell International Inc. | 4.09 | 3.99 | 3.88 | 3.56 | 3.60 | 3.54 | 3.73 | 3.40 | 3.55 | 3.45 | 3.47 | 3.60 | 3.56 | 3.53 | — | — | — | — | — | — | — | — | |||||||
| Lockheed Martin Corp. | 8.92 | 8.27 | 7.67 | 6.11 | 6.17 | 5.66 | 5.71 | 4.35 | 4.53 | 5.15 | 4.64 | 5.38 | 7.99 | 8.15 | — | — | — | — | — | — | — | — | |||||||
| RTX Corp. | 2.73 | 2.65 | 2.71 | 2.33 | 2.24 | 2.22 | 2.19 | 2.25 | 2.26 | 2.20 | 2.21 | 2.23 | 2.23 | 2.24 | — | — | — | — | — | — | — | — | |||||||
Based on: 10-Q (reporting date: 2024-03-31), 10-Q (reporting date: 2023-12-31), 10-K (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-Q (reporting date: 2022-12-31), 10-K (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-Q (reporting date: 2021-12-31), 10-K (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-Q (reporting date: 2020-12-31), 10-K (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-Q (reporting date: 2019-12-31), 10-K (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-Q (reporting date: 2018-12-31).
1 Q2 2024 Calculation
Financial leverage = Total assets ÷ Shareholders’ equity attributable to Johnson Controls
= 43,457 ÷ 15,658 = 2.78
2 Click competitor name to see calculations.
The analysis of financial data over the reported periods reveals notable trends in total assets, shareholders’ equity, and financial leverage ratios. These elements provide insights into the company's asset base, equity position, and capital structure dynamics.
- Total Assets
- Total assets exhibited fluctuations with an overall moderate decline from December 31, 2018, through March 31, 2020. A decrease from approximately $48 billion to around $40 billion is observed during this timeframe. Subsequently, total assets showed relative stabilization with minor variations, then a gradual recovery trend from late 2022 through early 2024, reaching above $43 billion by March 31, 2024. This indicates a recovery in asset levels after earlier declines.
- Shareholders’ Equity Attributable to Johnson Controls
- Shareholders’ equity showed a downward trajectory beginning from approximately $20.1 billion at the end of 2018, declining steadily over most periods to near $15.7 billion by December 31, 2022. This diminution continued into early 2024, albeit at a slightly slower pace, ending near $15.7 billion by March 31, 2024. The persistent reduction in equity suggests pressures on retained earnings or possible distributions exceeding net income, which could impact overall financial stability.
- Financial Leverage Ratio
- The financial leverage ratio remained generally elevated and demonstrated a rising trend, increasing from about 2.39 at the end of 2018 to a peak near 2.78 by March 31, 2024. There were minor short-term fluctuations, but the ratio predominantly ascended, indicating increased use of debt relative to equity in financing the company’s assets. This upward trajectory implies a growing reliance on external financing and potentially higher financial risk.
In summary, the company experienced declines in both total assets and shareholders’ equity during the early part of the period, followed by asset recovery but continued equity erosion. Concurrently, the financial leverage ratio progressively increased, signaling a shift towards greater debt usage. These trends suggest evolving capital structure characteristics and warrant monitoring of debt levels and equity preservation strategies going forward.