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)
Lockheed Martin Corp., solvency ratios
Based on: 10-K (reporting date: 2024-12-31), 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).
- Debt to Equity
- The debt to equity ratio exhibits a fluctuating yet overall increasing trend over the five-year period. It decreased sharply from 2.02 in 2020 to 1.07 in 2021, indicating a reduction in leverage relative to shareholders' equity. However, from 2021 onwards, the ratio steadily increased, reaching 3.20 by 2024, which suggests a rising reliance on debt financing compared to equity.
- Debt to Equity (including operating lease liability)
- This ratio mirrors the trend of debt to equity excluding operating leases but shows consistently slightly higher values, indicating the recognition of operating lease liabilities increases the overall debt base. Like the base ratio, it decreased in 2021 but then increased each subsequent year, ending at 3.38 in 2024.
- Debt to Capital
- The debt to capital ratio follows a similar pattern. It declined from 0.67 in 2020 to 0.52 in 2021, then increased progressively to 0.76 in 2024. This indicates that debt makes up a growing proportion of the company's overall capital structure after 2021.
- Debt to Capital (including operating lease liability)
- This metric is consistently higher than the debt to capital excluding leases but reflects the same trend, decreasing in 2021 before rising annually to 0.77 in 2024, pointing to increased leverage when all liabilities are considered.
- Debt to Assets
- The debt to assets ratio shows a steady increase except for a slight decline from 0.24 in 2020 to 0.23 in 2021. From 2021 onward, the ratio climbed annually, reaching 0.36 by 2024, implying that a larger share of the company's assets is financed through debt over time.
- Debt to Assets (including operating lease liability)
- Including operating lease liabilities increases this ratio somewhat. After a decrease from 0.26 in 2020 to 0.26 in 2021 (no change), it rises steadily to 0.39 by 2024, reinforcing the trend of growing debt-related financing.
- Financial Leverage
- Financial leverage decreased significantly from 8.43 in 2020 to 4.64 in 2021, suggesting a reduction in the use of borrowed funds relative to equity. However, from 2021 onward, leverage increased substantially, climbing to 8.78 in 2024, which may indicate increased risk or strategic use of debt for growth or operations.
- Interest Coverage
- Interest coverage shows a clear downward trend across the five years, falling from 14.93 in 2020 to 7.00 in 2024. This indicates a decreasing ability to cover interest expenses with operating income, possibly reflecting increased interest expenses or reduced operating income relative to earlier years.
- Fixed Charge Coverage
- Similarly, fixed charge coverage has declined consistently from 11.12 in 2020 to 5.80 in 2024. The lower coverage suggests tightening financial conditions related to the ability to meet fixed financial obligations, which may affect financial flexibility.
Debt Ratios
Coverage Ratios
Debt to Equity
Lockheed Martin Corp., debt to equity calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current maturities of long-term debt | 643) | 168) | 118) | 6) | 500) | |
| Long-term debt, net, excluding current portion | 19,627) | 17,291) | 15,429) | 11,670) | 11,669) | |
| Total debt | 20,270) | 17,459) | 15,547) | 11,676) | 12,169) | |
| Stockholders’ equity | 6,333) | 6,835) | 9,266) | 10,959) | 6,015) | |
| Solvency Ratio | ||||||
| Debt to equity1 | 3.20 | 2.55 | 1.68 | 1.07 | 2.02 | |
| Benchmarks | ||||||
| Debt to Equity, Competitors2 | ||||||
| Boeing Co. | — | — | — | — | — | |
| Caterpillar Inc. | 1.97 | 1.94 | 2.33 | 2.29 | 2.42 | |
| Eaton Corp. plc | 0.50 | 0.49 | 0.51 | 0.52 | 0.54 | |
| GE Aerospace | 1.00 | 0.77 | 0.89 | 0.87 | 2.11 | |
| Honeywell International Inc. | 1.67 | 1.29 | 1.17 | 1.06 | 1.28 | |
| RTX Corp. | 0.69 | 0.73 | 0.44 | 0.43 | 0.44 | |
| Debt to Equity, Sector | ||||||
| Capital Goods | 1.54 | 1.54 | 1.33 | 1.26 | 1.75 | |
| Debt to Equity, Industry | ||||||
| Industrials | 1.39 | 1.52 | 1.42 | 1.37 | 1.82 | |
Based on: 10-K (reporting date: 2024-12-31), 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).
1 2024 Calculation
Debt to equity = Total debt ÷ Stockholders’ equity
= 20,270 ÷ 6,333 = 3.20
2 Click competitor name to see calculations.
- Total debt
-
The total debt has exhibited a consistent upward trajectory over the five-year period. Starting at $12,169 million in 2020, the debt decreased slightly to $11,676 million in 2021, followed by a significant increase to $15,547 million in 2022. This upward momentum continued through 2023 and 2024, reaching $17,459 million and $20,270 million respectively, indicating an expanding leverage in monetary terms.
- Stockholders’ equity
-
Stockholders’ equity showed an initial increase from $6,015 million in 2020 to a peak of $10,959 million in 2021. However, from 2022 onwards, equity values declined steadily to $9,266 million in 2022, then to $6,835 million in 2023, and further down to $6,333 million in 2024. This decline suggests a weakening in the net asset position over recent years.
- Debt to equity ratio
-
The debt to equity ratio started at a relatively high level of 2.02 in 2020 but showed a marked improvement to 1.07 in 2021, corresponding to the simultaneous debt decrease and equity increase that year. However, this ratio deteriorated significantly in subsequent years, rising to 1.68 in 2022 and then increasing further to 2.55 in 2023 and 3.2 in 2024. The worsening debt to equity ratio highlights increased financial leverage and potentially greater financial risk due to growing debt relative to equity.
- Overall financial trends
-
The overall financial trends indicate that the company has progressively increased its debt levels while experiencing a decline in stockholders’ equity after an initial growth period. The increasing debt burden combined with decreasing equity has resulted in a steadily rising debt to equity ratio over the last three years, signaling a shift toward higher leverage. This trend denotes heightened exposure to financial risk and suggests that the company may be relying more heavily on debt financing to support its operations or strategic initiatives.
Debt to Equity (including Operating Lease Liability)
Lockheed Martin Corp., debt to equity (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current maturities of long-term debt | 643) | 168) | 118) | 6) | 500) | |
| Long-term debt, net, excluding current portion | 19,627) | 17,291) | 15,429) | 11,670) | 11,669) | |
| Total debt | 20,270) | 17,459) | 15,547) | 11,676) | 12,169) | |
| Current operating lease liabilities | 315) | 315) | 301) | 300) | 274) | |
| Noncurrent operating lease liabilities | 833) | 862) | 916) | 1,100) | 841) | |
| Total debt (including operating lease liability) | 21,418) | 18,636) | 16,764) | 13,076) | 13,284) | |
| Stockholders’ equity | 6,333) | 6,835) | 9,266) | 10,959) | 6,015) | |
| Solvency Ratio | ||||||
| Debt to equity (including operating lease liability)1 | 3.38 | 2.73 | 1.81 | 1.19 | 2.21 | |
| Benchmarks | ||||||
| Debt to Equity (including Operating Lease Liability), Competitors2 | ||||||
| Boeing Co. | — | — | — | — | — | |
| Caterpillar Inc. | 2.00 | 1.97 | 2.37 | 2.33 | 2.46 | |
| Eaton Corp. plc | 0.54 | 0.52 | 0.54 | 0.55 | 0.57 | |
| GE Aerospace | 1.05 | 0.84 | 0.96 | 0.94 | 2.20 | |
| Honeywell International Inc. | 1.73 | 1.36 | 1.23 | 1.11 | 1.32 | |
| RTX Corp. | 0.72 | 0.76 | 0.47 | 0.46 | 0.47 | |
| Debt to Equity (including Operating Lease Liability), Sector | ||||||
| Capital Goods | 1.60 | 1.61 | 1.39 | 1.32 | 1.81 | |
| Debt to Equity (including Operating Lease Liability), Industry | ||||||
| Industrials | 1.55 | 1.71 | 1.59 | 1.54 | 2.00 | |
Based on: 10-K (reporting date: 2024-12-31), 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).
1 2024 Calculation
Debt to equity (including operating lease liability) = Total debt (including operating lease liability) ÷ Stockholders’ equity
= 21,418 ÷ 6,333 = 3.38
2 Click competitor name to see calculations.
- Total debt (including operating lease liability)
-
The total debt shows a consistent upward trend over the five-year period. Starting at 13,284 million US dollars at the end of 2020, the debt slightly decreased to 13,076 million in 2021. However, from 2021 onwards, there is a steady increase each year, reaching 21,418 million by the end of 2024. This indicates a rising reliance on borrowed funds or lease liabilities over the period analyzed.
- Stockholders’ equity
-
Stockholders’ equity increased substantially from 6,015 million US dollars in 2020 to a peak of 10,959 million in 2021. Following this peak, equity has declined each subsequent year, reaching 6,333 million at the end of 2024. The pattern suggests an initial strengthening of equity position which later weakened, possibly due to losses, dividend payouts, share buybacks, or other factors impacting retained earnings or capital structure.
- Debt to equity ratio (including operating lease liability)
-
The debt to equity ratio reflects changes in both debt and equity levels, and demonstrates notable fluctuations. Starting at 2.21 in 2020, it dropped sharply to 1.19 in 2021 due to the increase in equity and slight decrease in debt. From 2021 onwards, the ratio rose significantly each year, reaching 3.38 by the end of 2024. This upward trend indicates increasing leverage and a more aggressive debt position relative to equity, suggesting a higher financial risk profile over time.
- Summary
-
Overall, the data indicates that while equity initially strengthened in 2021, subsequent years have seen a decline in equity alongside a steady increase in debt. The increasing debt to equity ratio signifies a gradually heightened leverage, implying rising financial risk. This pattern points toward an expansion financed more by debt than by equity, which may impact the company's risk and cost of capital going forward.
Debt to Capital
Lockheed Martin Corp., debt to capital calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current maturities of long-term debt | 643) | 168) | 118) | 6) | 500) | |
| Long-term debt, net, excluding current portion | 19,627) | 17,291) | 15,429) | 11,670) | 11,669) | |
| Total debt | 20,270) | 17,459) | 15,547) | 11,676) | 12,169) | |
| Stockholders’ equity | 6,333) | 6,835) | 9,266) | 10,959) | 6,015) | |
| Total capital | 26,603) | 24,294) | 24,813) | 22,635) | 18,184) | |
| Solvency Ratio | ||||||
| Debt to capital1 | 0.76 | 0.72 | 0.63 | 0.52 | 0.67 | |
| Benchmarks | ||||||
| Debt to Capital, Competitors2 | ||||||
| Boeing Co. | 1.08 | 1.49 | 1.39 | 1.35 | 1.40 | |
| Caterpillar Inc. | 0.66 | 0.66 | 0.70 | 0.70 | 0.71 | |
| Eaton Corp. plc | 0.33 | 0.33 | 0.34 | 0.34 | 0.35 | |
| GE Aerospace | 0.50 | 0.43 | 0.47 | 0.47 | 0.68 | |
| Honeywell International Inc. | 0.63 | 0.56 | 0.54 | 0.51 | 0.56 | |
| RTX Corp. | 0.41 | 0.42 | 0.31 | 0.30 | 0.31 | |
| Debt to Capital, Sector | ||||||
| Capital Goods | 0.61 | 0.61 | 0.57 | 0.56 | 0.64 | |
| Debt to Capital, Industry | ||||||
| Industrials | 0.58 | 0.60 | 0.59 | 0.58 | 0.65 | |
Based on: 10-K (reporting date: 2024-12-31), 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).
1 2024 Calculation
Debt to capital = Total debt ÷ Total capital
= 20,270 ÷ 26,603 = 0.76
2 Click competitor name to see calculations.
- Total debt
- The total debt of the company showed a decreasing trend from 2020 to 2021, dropping from 12,169 million US dollars to 11,676 million US dollars. However, from 2021 onwards, total debt increased steadily, reaching 15,547 million in 2022, 17,459 million in 2023, and further rising to 20,270 million in 2024. This indicates a significant accumulation of debt over the most recent three years.
- Total capital
- Total capital demonstrated an overall growth trend across the five-year period. Starting at 18,184 million US dollars in 2020, it increased significantly to 22,635 million in 2021, followed by continued growth to 24,813 million in 2022. There was a slight dip in 2023 to 24,294 million but capital rose again in 2024, reaching 26,603 million. The general upward trajectory suggests expansion of the company's capital base.
- Debt to capital ratio
- The debt to capital ratio declined markedly from 0.67 in 2020 to 0.52 in 2021, indicating a reduced proportion of debt within the overall capital structure at that time. However, from 2021 onward, the ratio increased consecutively, rising to 0.63 in 2022, 0.72 in 2023, and 0.76 in 2024. This reflects a growing reliance on debt financing relative to total capital, consistent with the observed increase in total debt outpacing the growth in total capital during this period.
Debt to Capital (including Operating Lease Liability)
Lockheed Martin Corp., debt to capital (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current maturities of long-term debt | 643) | 168) | 118) | 6) | 500) | |
| Long-term debt, net, excluding current portion | 19,627) | 17,291) | 15,429) | 11,670) | 11,669) | |
| Total debt | 20,270) | 17,459) | 15,547) | 11,676) | 12,169) | |
| Current operating lease liabilities | 315) | 315) | 301) | 300) | 274) | |
| Noncurrent operating lease liabilities | 833) | 862) | 916) | 1,100) | 841) | |
| Total debt (including operating lease liability) | 21,418) | 18,636) | 16,764) | 13,076) | 13,284) | |
| Stockholders’ equity | 6,333) | 6,835) | 9,266) | 10,959) | 6,015) | |
| Total capital (including operating lease liability) | 27,751) | 25,471) | 26,030) | 24,035) | 19,299) | |
| Solvency Ratio | ||||||
| Debt to capital (including operating lease liability)1 | 0.77 | 0.73 | 0.64 | 0.54 | 0.69 | |
| Benchmarks | ||||||
| Debt to Capital (including Operating Lease Liability), Competitors2 | ||||||
| Boeing Co. | 1.08 | 1.47 | 1.37 | 1.34 | 1.39 | |
| Caterpillar Inc. | 0.67 | 0.66 | 0.70 | 0.70 | 0.71 | |
| Eaton Corp. plc | 0.35 | 0.34 | 0.35 | 0.36 | 0.36 | |
| GE Aerospace | 0.51 | 0.46 | 0.49 | 0.49 | 0.69 | |
| Honeywell International Inc. | 0.63 | 0.58 | 0.55 | 0.53 | 0.57 | |
| RTX Corp. | 0.42 | 0.43 | 0.32 | 0.31 | 0.32 | |
| Debt to Capital (including Operating Lease Liability), Sector | ||||||
| Capital Goods | 0.62 | 0.62 | 0.58 | 0.57 | 0.64 | |
| Debt to Capital (including Operating Lease Liability), Industry | ||||||
| Industrials | 0.61 | 0.63 | 0.61 | 0.61 | 0.67 | |
Based on: 10-K (reporting date: 2024-12-31), 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).
1 2024 Calculation
Debt to capital (including operating lease liability) = Total debt (including operating lease liability) ÷ Total capital (including operating lease liability)
= 21,418 ÷ 27,751 = 0.77
2 Click competitor name to see calculations.
The financial data exhibits several noteworthy trends regarding the debt and capital structure over the five-year period.
- Total Debt (Including Operating Lease Liability)
-
Total debt shows a consistent upward trajectory, increasing from 13,284 million US$ in 2020 to 21,418 million US$ in 2024. While a slight decrease is observed in 2021 relative to 2020, this is followed by a marked increase in 2022 and continues through 2023 and 2024, reflecting growing leverage or increased borrowing over time.
- Total Capital (Including Operating Lease Liability)
-
Total capital increased significantly from 19,299 million US$ in 2020 to 27,751 million US$ in 2024. The largest growth occurred between 2020 and 2021, with subsequent years showing moderate increases. Notably, there was a slight dip from 26,030 million US$ in 2022 to 25,471 million US$ in 2023 before rising again in 2024, indicating some fluctuation in the capital base.
- Debt to Capital Ratio (Including Operating Lease Liability)
-
The debt to capital ratio displays variability across the period. Starting at a high of 0.69 in 2020, it decreases significantly to 0.54 in 2021, suggesting a period of deleveraging or capital increase surpassing debt growth. However, from 2021 onwards, the ratio trends upward, reaching 0.77 in 2024. This indicates that debt is increasing at a faster rate than capital in the later years, reflecting a heavier reliance on debt within the capital structure.
Overall, the analysis points to an increasing dependence on debt financing over time, especially notable in the last three years, which may affect financial risk and leverage ratios. Meanwhile, total capital growth, although positive overall, appears to experience some volatility. The interplay between rising total debt and changing capital levels results in a fluctuating but upward trending debt-to-capital ratio, signaling a shift towards a more leveraged capital structure in recent years.
Debt to Assets
Lockheed Martin Corp., debt to assets calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current maturities of long-term debt | 643) | 168) | 118) | 6) | 500) | |
| Long-term debt, net, excluding current portion | 19,627) | 17,291) | 15,429) | 11,670) | 11,669) | |
| Total debt | 20,270) | 17,459) | 15,547) | 11,676) | 12,169) | |
| Total assets | 55,617) | 52,456) | 52,880) | 50,873) | 50,710) | |
| Solvency Ratio | ||||||
| Debt to assets1 | 0.36 | 0.33 | 0.29 | 0.23 | 0.24 | |
| Benchmarks | ||||||
| Debt to Assets, Competitors2 | ||||||
| Boeing Co. | 0.34 | 0.38 | 0.42 | 0.42 | 0.42 | |
| Caterpillar Inc. | 0.44 | 0.43 | 0.45 | 0.46 | 0.47 | |
| Eaton Corp. plc | 0.24 | 0.24 | 0.25 | 0.25 | 0.25 | |
| GE Aerospace | 0.16 | 0.13 | 0.17 | 0.18 | 0.30 | |
| Honeywell International Inc. | 0.41 | 0.33 | 0.31 | 0.30 | 0.35 | |
| RTX Corp. | 0.25 | 0.27 | 0.20 | 0.20 | 0.20 | |
| Debt to Assets, Sector | ||||||
| Capital Goods | 0.31 | 0.29 | 0.28 | 0.28 | 0.32 | |
| Debt to Assets, Industry | ||||||
| Industrials | 0.31 | 0.31 | 0.31 | 0.30 | 0.33 | |
Based on: 10-K (reporting date: 2024-12-31), 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).
1 2024 Calculation
Debt to assets = Total debt ÷ Total assets
= 20,270 ÷ 55,617 = 0.36
2 Click competitor name to see calculations.
The financial data reveals notable trends in the company's debt levels and asset base over the five-year period ending December 31, 2024.
- Total Debt
- The total debt increased consistently each year, starting from 12,169 million US dollars at the end of 2020 and rising to 20,270 million US dollars by the end of 2024. This growth represents a significant increase, indicating an expanding reliance on debt financing over the period.
- Total Assets
- Total assets showed a more moderate increase over the same period. They started at 50,710 million US dollars in 2020, grew slightly to 52,880 million in 2022, experienced a minor decline to 52,456 million in 2023, and then rose to 55,617 million by the end of 2024. The asset base has generally expanded but with less volatility compared to total debt.
- Debt to Assets Ratio
- The debt to assets ratio remained relatively stable around 0.23 to 0.24 during 2020 and 2021, but then increased steadily to 0.36 by 2024. This escalation reflects that debt has grown faster than assets, suggesting a heightened leverage position and potentially increased financial risk over the period.
In summary, the company has elevated its debt levels notably over the years while the growth in total assets has been less pronounced and somewhat uneven. The rising debt to assets ratio indicates a shift towards greater leverage, warranting attention to the implications for solvency and financial stability.
Debt to Assets (including Operating Lease Liability)
Lockheed Martin Corp., debt to assets (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current maturities of long-term debt | 643) | 168) | 118) | 6) | 500) | |
| Long-term debt, net, excluding current portion | 19,627) | 17,291) | 15,429) | 11,670) | 11,669) | |
| Total debt | 20,270) | 17,459) | 15,547) | 11,676) | 12,169) | |
| Current operating lease liabilities | 315) | 315) | 301) | 300) | 274) | |
| Noncurrent operating lease liabilities | 833) | 862) | 916) | 1,100) | 841) | |
| Total debt (including operating lease liability) | 21,418) | 18,636) | 16,764) | 13,076) | 13,284) | |
| Total assets | 55,617) | 52,456) | 52,880) | 50,873) | 50,710) | |
| Solvency Ratio | ||||||
| Debt to assets (including operating lease liability)1 | 0.39 | 0.36 | 0.32 | 0.26 | 0.26 | |
| Benchmarks | ||||||
| Debt to Assets (including Operating Lease Liability), Competitors2 | ||||||
| Boeing Co. | 0.36 | 0.40 | 0.43 | 0.43 | 0.43 | |
| Caterpillar Inc. | 0.44 | 0.44 | 0.46 | 0.46 | 0.48 | |
| Eaton Corp. plc | 0.26 | 0.26 | 0.26 | 0.27 | 0.27 | |
| GE Aerospace | 0.17 | 0.14 | 0.19 | 0.19 | 0.31 | |
| Honeywell International Inc. | 0.43 | 0.35 | 0.33 | 0.32 | 0.36 | |
| RTX Corp. | 0.27 | 0.28 | 0.21 | 0.21 | 0.21 | |
| Debt to Assets (including Operating Lease Liability), Sector | ||||||
| Capital Goods | 0.32 | 0.30 | 0.30 | 0.29 | 0.33 | |
| Debt to Assets (including Operating Lease Liability), Industry | ||||||
| Industrials | 0.35 | 0.35 | 0.34 | 0.34 | 0.36 | |
Based on: 10-K (reporting date: 2024-12-31), 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).
1 2024 Calculation
Debt to assets (including operating lease liability) = Total debt (including operating lease liability) ÷ Total assets
= 21,418 ÷ 55,617 = 0.39
2 Click competitor name to see calculations.
- Total Debt (Including Operating Lease Liability)
-
The total debt of the company has shown a consistent upward trend over the five-year period. Starting at 13,284 million US dollars in 2020, it decreased slightly to 13,076 million in 2021, but then increased significantly each subsequent year, reaching 21,418 million US dollars by the end of 2024. This represents a substantial rise in the company's leverage.
- Total Assets
-
Total assets have also increased over the period but at a more moderate and somewhat fluctuating pace compared to total debt. The asset base started at 50,710 million US dollars in 2020, with a slight increase to 50,873 million in 2021, a further increase to 52,880 million in 2022, followed by a small decline to 52,456 million in 2023, and then a rise again to 55,617 million in 2024. Overall, the total assets grew by approximately 9.7% from 2020 to 2024.
- Debt to Assets Ratio (Including Operating Lease Liability)
-
The debt to assets ratio illustrates the rising leverage and financial risk profile of the company. It remained stable at 0.26 from 2020 to 2021, but then increased steadily each year, reaching 0.39 by the end of 2024. This increase reflects that the growth in total debt has outpaced the growth in total assets, leading to a higher proportion of liabilities relative to the asset base.
- Summary
-
The company has increased its financial leverage over the analyzed period, as evidenced by the significant growth in total debt and the corresponding rise in the debt to assets ratio. Although the total assets have seen a moderate increase, this has not kept pace with the rise in liabilities. The increasing debt burden may imply an elevated risk profile and a greater reliance on external financing, which could affect financial flexibility and potentially increase financing costs in the future.
Financial Leverage
Lockheed Martin Corp., financial leverage calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Total assets | 55,617) | 52,456) | 52,880) | 50,873) | 50,710) | |
| Stockholders’ equity | 6,333) | 6,835) | 9,266) | 10,959) | 6,015) | |
| Solvency Ratio | ||||||
| Financial leverage1 | 8.78 | 7.67 | 5.71 | 4.64 | 8.43 | |
| Benchmarks | ||||||
| Financial Leverage, Competitors2 | ||||||
| Boeing Co. | — | — | — | — | — | |
| Caterpillar Inc. | 4.50 | 4.49 | 5.16 | 5.02 | 5.11 | |
| Eaton Corp. plc | 2.08 | 2.02 | 2.06 | 2.07 | 2.13 | |
| GE Aerospace | 6.37 | 5.96 | 5.16 | 4.93 | 7.13 | |
| Honeywell International Inc. | 4.04 | 3.88 | 3.73 | 3.47 | 3.68 | |
| RTX Corp. | 2.71 | 2.71 | 2.19 | 2.21 | 2.25 | |
| Financial Leverage, Sector | ||||||
| Capital Goods | 5.05 | 5.35 | 4.71 | 4.55 | 5.54 | |
| Financial Leverage, Industry | ||||||
| Industrials | 4.49 | 4.94 | 4.65 | 4.52 | 5.49 | |
Based on: 10-K (reporting date: 2024-12-31), 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).
1 2024 Calculation
Financial leverage = Total assets ÷ Stockholders’ equity
= 55,617 ÷ 6,333 = 8.78
2 Click competitor name to see calculations.
- Total Assets
- The total assets exhibited a generally upward trend over the observed period. Starting at 50,710 million USD in 2020, assets slightly increased to 50,873 million USD in 2021. A more notable increment occurred in 2022, reaching 52,880 million USD. Although there was a small decline in 2023, total assets rose again significantly in 2024, achieving the highest recorded value of 55,617 million USD. This suggests overall growth in the asset base over the five-year timeframe.
- Stockholders’ Equity
- Stockholders’ equity showed considerable volatility. It increased sharply from 6,015 million USD in 2020 to a peak of 10,959 million USD in 2021. However, this was followed by a decline, falling to 9,266 million USD in 2022 and then sharply decreasing further to 6,835 million USD in 2023. By 2024, equity decreased slightly more to 6,333 million USD. This pattern indicates a significant fluctuation in equity levels, with a peak in 2021 and a downward trajectory afterward.
- Financial Leverage Ratio
- The financial leverage ratio, defined as the ratio of total assets to stockholders' equity, declined markedly from 8.43 in 2020 to 4.64 in 2021, reflecting the equity spike during that year. Subsequently, the ratio increased steadily each year, moving to 5.71 in 2022, 7.67 in 2023, and finally 8.78 in 2024, surpassing the 2020 level. This rising leverage after 2021 suggests an increasing use of debt or other liabilities relative to equity, indicating a higher financial risk profile in recent years.
Interest Coverage
Lockheed Martin Corp., interest coverage calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net earnings | 5,336) | 6,920) | 5,732) | 6,315) | 6,833) | |
| Less: Net loss from discontinued operations | —) | —) | —) | —) | (55) | |
| Add: Income tax expense | 884) | 1,178) | 948) | 1,235) | 1,347) | |
| Add: Interest expense | 1,036) | 916) | 623) | 569) | 591) | |
| Earnings before interest and tax (EBIT) | 7,256) | 9,014) | 7,303) | 8,119) | 8,826) | |
| Solvency Ratio | ||||||
| Interest coverage1 | 7.00 | 9.84 | 11.72 | 14.27 | 14.93 | |
| Benchmarks | ||||||
| Interest Coverage, Competitors2 | ||||||
| Boeing Co. | -3.48 | 0.18 | -0.98 | -0.88 | -5.71 | |
| Caterpillar Inc. | 27.21 | 26.66 | 20.80 | 17.88 | 8.80 | |
| Eaton Corp. plc | 36.12 | 26.34 | 21.22 | 21.11 | 12.72 | |
| GE Aerospace | 8.73 | 10.12 | 1.88 | -0.96 | 2.59 | |
| Honeywell International Inc. | 7.82 | 10.36 | 16.41 | 22.09 | 17.75 | |
| RTX Corp. | 4.14 | 3.32 | 5.64 | 4.71 | -0.65 | |
| Interest Coverage, Sector | ||||||
| Capital Goods | 4.92 | 6.84 | 4.84 | 3.98 | 1.99 | |
| Interest Coverage, Industry | ||||||
| Industrials | 5.79 | 6.64 | 4.98 | 5.14 | 1.25 | |
Based on: 10-K (reporting date: 2024-12-31), 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).
1 2024 Calculation
Interest coverage = EBIT ÷ Interest expense
= 7,256 ÷ 1,036 = 7.00
2 Click competitor name to see calculations.
- Earnings Before Interest and Tax (EBIT)
- Over the five-year period, EBIT exhibited variability with a general downward trend. Starting at 8,826 million US dollars in 2020, EBIT declined steadily to 7,303 million by 2022. There was a notable recovery in 2023, with EBIT rising to 9,014 million, followed by another decline to 7,256 million in 2024. This pattern indicates fluctuations in operational profitability, with EBIT ending slightly below the initial value of 2020.
- Interest Expense
- Interest expenses showed a consistent increase each year. Beginning at 591 million US dollars in 2020, the expense rose moderately to 623 million in 2022, then accelerated to 916 million in 2023, and further to 1,036 million in 2024. This upward trajectory suggests either an increased debt burden or higher interest rates impacting the company's financial costs.
- Interest Coverage Ratio
- The interest coverage ratio demonstrated a steady decline, signaling diminishing ability to cover interest expenses with earnings before interest and taxes. The ratio decreased from a strong 14.93 in 2020 to 7.00 in 2024. Notably, the ratio dropped below 10 in 2023 and continued declining in 2024, reflecting increased financial risk or reduced operational profitability in relation to interest obligations.
- Overall Analysis
- The data indicate a challenging financial environment characterized by declining EBIT and rising interest expenses, leading to a decreasing interest coverage ratio. Despite an interim improvement in EBIT during 2023, the subsequent year saw a return to lower profitability levels. The consistent increase in interest expenses combined with the falling interest coverage ratio underscores a growing strain on financial health, raising concern over the company’s capacity to comfortably service its debt going forward.
Fixed Charge Coverage
Lockheed Martin Corp., fixed charge coverage calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net earnings | 5,336) | 6,920) | 5,732) | 6,315) | 6,833) | |
| Less: Net loss from discontinued operations | —) | —) | —) | —) | (55) | |
| Add: Income tax expense | 884) | 1,178) | 948) | 1,235) | 1,347) | |
| Add: Interest expense | 1,036) | 916) | 623) | 569) | 591) | |
| Earnings before interest and tax (EBIT) | 7,256) | 9,014) | 7,303) | 8,119) | 8,826) | |
| Add: Operating lease expense | 260) | 273) | 275) | 275) | 223) | |
| Earnings before fixed charges and tax | 7,516) | 9,287) | 7,578) | 8,394) | 9,049) | |
| Interest expense | 1,036) | 916) | 623) | 569) | 591) | |
| Operating lease expense | 260) | 273) | 275) | 275) | 223) | |
| Fixed charges | 1,296) | 1,189) | 898) | 844) | 814) | |
| Solvency Ratio | ||||||
| Fixed charge coverage1 | 5.80 | 7.81 | 8.44 | 9.95 | 11.12 | |
| Benchmarks | ||||||
| Fixed Charge Coverage, Competitors2 | ||||||
| Boeing Co. | -2.69 | 0.31 | -0.70 | -0.64 | -4.75 | |
| Caterpillar Inc. | 20.25 | 19.73 | 14.92 | 12.73 | 6.58 | |
| Eaton Corp. plc | 13.79 | 11.90 | 10.01 | 10.40 | 6.24 | |
| GE Aerospace | 6.19 | 5.25 | 1.35 | -0.22 | 1.93 | |
| Honeywell International Inc. | 6.44 | 8.13 | 11.00 | 13.67 | 11.49 | |
| RTX Corp. | 3.59 | 2.81 | 4.40 | 3.66 | -0.22 | |
| Fixed Charge Coverage, Sector | ||||||
| Capital Goods | 4.03 | 5.14 | 3.61 | 3.06 | 1.66 | |
| Fixed Charge Coverage, Industry | ||||||
| Industrials | 3.96 | 4.32 | 3.30 | 3.44 | 1.12 | |
Based on: 10-K (reporting date: 2024-12-31), 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).
1 2024 Calculation
Fixed charge coverage = Earnings before fixed charges and tax ÷ Fixed charges
= 7,516 ÷ 1,296 = 5.80
2 Click competitor name to see calculations.
- Earnings Before Fixed Charges and Tax
-
The earnings before fixed charges and tax demonstrated a fluctuating trend over the five-year period. Initially, the earnings decreased from 9,049 million US dollars in 2020 to 7,578 million in 2022, reflecting a downward trend over two years. This was followed by a notable rebound in 2023, where earnings increased sharply to 9,287 million US dollars. However, in 2024, earnings declined again to 7,516 million US dollars, indicating volatility in operational profitability before accounting for fixed charges and taxes.
- Fixed Charges
-
Fixed charges increased steadily throughout the period, rising from 814 million US dollars in 2020 to 1,296 million US dollars in 2024. This consistent upward trajectory suggests escalating obligations related to interest and other fixed financial costs over the five years. The increase in fixed charges was particularly marked in 2023 and 2024, where the values rose to 1,189 million and then to 1,296 million respectively.
- Fixed Charge Coverage Ratio
-
The fixed charge coverage ratio declined consistently from 11.12 in 2020 to 5.8 in 2024. This ratio, which measures the ability to cover fixed charges with earnings before fixed charges and tax, indicates a weakening capacity over the years. The sharpest decreases occurred between 2022 and 2024, reflecting that fixed charges are consuming an increasing proportion of earnings, which may raise concerns regarding financial flexibility and risk.
- Overall Analysis
-
Overall, the data reveal a trend of decreasing operational earnings before fixed charges and tax coupled with rising fixed charges. The earnings volatile movement, combined with steadily increasing fixed financial obligations, has led to a significant decline in the fixed charge coverage ratio. This trend signals a deteriorating buffer to absorb fixed financial costs, potentially impacting financial stability if the pattern continues. The company may need to monitor its fixed charges closely and investigate avenues to improve earnings or manage fixed costs to maintain a healthier coverage ratio.