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
Motorola Solutions Inc., solvency ratios
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
The solvency profile demonstrates a consistent trend toward deleveraging and enhanced financial stability from 2019 through 2023. There is a clear trajectory of reducing debt reliance relative to total capital and assets, culminating in a significant strengthening of the equity position by the end of the period.
- Capital Structure and Leverage Ratios
- A steady decline is observed in the debt to capital ratios, which decreased from 1.16 to 0.89 between 2019 and 2023. Debt to assets remained relatively stable but trended slightly downward, ending at 0.45 in 2023. Most notably, the debt to equity ratio exhibited a sharp contraction between 2022 and 2023, falling from 51.84 to 8.31, signaling a substantial shift toward equity financing or a significant reduction in total debt.
- Debt Service Capacity
- The capacity to meet financial obligations has improved significantly over the five-year horizon. The interest coverage ratio increased from 5.22 in 2019 to 9.62 in 2023, indicating a much stronger ability to service interest expenses from operating profits. Similarly, the fixed charge coverage ratio rose from 3.71 to 6.52, reflecting an increased margin of safety regarding fixed financial commitments.
- Financial Leverage
- Financial leverage experienced a drastic reduction in the final year of the period, dropping from 110.47 in 2022 to 18.42 in 2023. This abrupt decline correlates with the movement in the debt to equity ratio, highlighting a rapid transition toward a less leveraged balance sheet.
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Debt to Equity
Motorola Solutions Inc., debt to equity calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current portion of long-term debt | 1,313) | 1) | 5) | 12) | 16) | |
| Long-term debt, excluding current portion | 4,705) | 6,013) | 5,688) | 5,163) | 5,113) | |
| Total debt | 6,018) | 6,014) | 5,693) | 5,175) | 5,129) | |
| Total Motorola Solutions, Inc. stockholders’ equity (deficit) | 724) | 116) | (40) | (558) | (700) | |
| Solvency Ratio | ||||||
| Debt to equity1 | 8.31 | 51.84 | — | — | — | |
| Benchmarks | ||||||
| Debt to Equity, Competitors2 | ||||||
| Apple Inc. | 1.80 | 2.39 | 1.99 | — | — | |
| Arista Networks Inc. | 0.00 | 0.00 | 0.00 | — | — | |
| Cisco Systems Inc. | 0.19 | 0.24 | 0.28 | — | — | |
| Dell Technologies Inc. | — | — | 19.36 | — | — | |
| Lumentum Holdings Inc. | 2.07 | 1.00 | 0.60 | — | — | |
| Super Micro Computer Inc. | 0.15 | 0.42 | 0.09 | — | — | |
| Debt to Equity, Sector | ||||||
| Technology Hardware & Equipment | 1.34 | 1.65 | 1.64 | — | — | |
| Debt to Equity, Industry | ||||||
| Information Technology | 0.66 | 0.70 | 0.83 | — | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Debt to equity = Total debt ÷ Total Motorola Solutions, Inc. stockholders’ equity (deficit)
= 6,018 ÷ 724 = 8.31
2 Click competitor name to see calculations.
The financial position of the company demonstrates a significant transition from a deficit equity state to a positive solvency posture between 2019 and 2023, despite a gradual increase in total obligations.
- Total Debt Trends
- Total debt exhibited a consistent upward trajectory over the five-year period, rising from US$ 5,129 million in 2019 to US$ 6,018 million in 2023. The most substantial growth occurred between 2020 and 2022, while the debt level remained nearly flat between 2022 and 2023.
- Stockholders' Equity Evolution
- A pronounced recovery in stockholders' equity is observed. The company operated with a deficit for three consecutive years, starting at negative US$ 700 million in 2019 and narrowing to negative US$ 40 million by 2021. A critical pivot occurred in 2022 when equity turned positive at US$ 116 million, followed by a substantial increase to US$ 724 million by December 31, 2023.
- Debt to Equity Ratio Analysis
- The debt to equity ratio highlights the volatility associated with the transition from negative to positive equity. In 2022, the ratio was exceptionally high at 51.84, reflecting a high degree of leverage relative to a nascent positive equity base. By 2023, this ratio decreased sharply to 8.31. This improvement is attributed to the rapid expansion of stockholders' equity, which significantly diluted the impact of the total debt on the solvency ratio.
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Debt to Equity (including Operating Lease Liability)
Motorola Solutions Inc., debt to equity (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current portion of long-term debt | 1,313) | 1) | 5) | 12) | 16) | |
| Long-term debt, excluding current portion | 4,705) | 6,013) | 5,688) | 5,163) | 5,113) | |
| Total debt | 6,018) | 6,014) | 5,693) | 5,175) | 5,129) | |
| Current operating lease liabilities | 125) | 118) | 124) | 126) | 122) | |
| Non-current operating lease liabilities | 407) | 419) | 313) | 402) | 497) | |
| Total debt (including operating lease liability) | 6,550) | 6,551) | 6,130) | 5,703) | 5,748) | |
| Total Motorola Solutions, Inc. stockholders’ equity (deficit) | 724) | 116) | (40) | (558) | (700) | |
| Solvency Ratio | ||||||
| Debt to equity (including operating lease liability)1 | 9.05 | 56.47 | — | — | — | |
| Benchmarks | ||||||
| Debt to Equity (including Operating Lease Liability), Competitors2 | ||||||
| Apple Inc. | 1.99 | 2.61 | 2.16 | — | — | |
| Arista Networks Inc. | 0.01 | 0.01 | 0.02 | — | — | |
| Cisco Systems Inc. | 0.21 | 0.27 | 0.31 | — | — | |
| Dell Technologies Inc. | — | — | 20.25 | — | — | |
| Lumentum Holdings Inc. | 2.12 | 1.03 | 0.63 | — | — | |
| Super Micro Computer Inc. | 0.16 | 0.44 | 0.11 | — | — | |
| Debt to Equity (including Operating Lease Liability), Sector | ||||||
| Technology Hardware & Equipment | 1.47 | 1.79 | 1.76 | — | — | |
| Debt to Equity (including Operating Lease Liability), Industry | ||||||
| Information Technology | 0.72 | 0.76 | 0.90 | — | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Debt to equity (including operating lease liability) = Total debt (including operating lease liability) ÷ Total Motorola Solutions, Inc. stockholders’ equity (deficit)
= 6,550 ÷ 724 = 9.05
2 Click competitor name to see calculations.
A significant improvement in the solvency profile of the organization is evident between 2019 and 2023, primarily driven by a transition from a stockholders' equity deficit to a positive equity position.
- Total Debt Trends
- Total debt, including operating lease liabilities, exhibited a gradual upward trend from 2019 to 2022, rising from US$ 5,748 million to US$ 6,551 million. For the period ending December 31, 2023, the debt level remained virtually stagnant at US$ 6,550 million, indicating a stabilization of total borrowing.
- Stockholders' Equity Evolution
- A consistent recovery in equity is observed over the five-year period. The organization operated with a deficit of US$ 700 million in 2019, which narrowed to US$ 558 million in 2020 and US$ 40 million in 2021. This trend culminated in a shift to positive equity, reaching US$ 116 million in 2022 and increasing substantially to US$ 724 million by the end of 2023.
- Debt to Equity Ratio Analysis
- The debt to equity ratio was not calculable during the years of equity deficit. Upon the achievement of positive equity in 2022, the ratio was initially high at 56.47, reflecting a thin equity cushion relative to total debt. However, a sharp contraction in this ratio to 9.05 occurred by December 31, 2023, signaling a rapid improvement in the capital structure and a reduction in financial leverage relative to shareholders' funds.
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Debt to Capital
Motorola Solutions Inc., debt to capital calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current portion of long-term debt | 1,313) | 1) | 5) | 12) | 16) | |
| Long-term debt, excluding current portion | 4,705) | 6,013) | 5,688) | 5,163) | 5,113) | |
| Total debt | 6,018) | 6,014) | 5,693) | 5,175) | 5,129) | |
| Total Motorola Solutions, Inc. stockholders’ equity (deficit) | 724) | 116) | (40) | (558) | (700) | |
| Total capital | 6,742) | 6,130) | 5,653) | 4,617) | 4,429) | |
| Solvency Ratio | ||||||
| Debt to capital1 | 0.89 | 0.98 | 1.01 | 1.12 | 1.16 | |
| Benchmarks | ||||||
| Debt to Capital, Competitors2 | ||||||
| Apple Inc. | 0.64 | 0.70 | 0.67 | — | — | |
| Arista Networks Inc. | 0.00 | 0.00 | 0.00 | — | — | |
| Cisco Systems Inc. | 0.16 | 0.19 | 0.22 | — | — | |
| Dell Technologies Inc. | 1.12 | 1.07 | 0.95 | — | — | |
| Lumentum Holdings Inc. | 0.67 | 0.50 | 0.37 | — | — | |
| Super Micro Computer Inc. | 0.13 | 0.30 | 0.08 | — | — | |
| Debt to Capital, Sector | ||||||
| Technology Hardware & Equipment | 0.57 | 0.62 | 0.62 | — | — | |
| Debt to Capital, Industry | ||||||
| Information Technology | 0.40 | 0.41 | 0.45 | — | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Debt to capital = Total debt ÷ Total capital
= 6,018 ÷ 6,742 = 0.89
2 Click competitor name to see calculations.
The solvency profile demonstrates a consistent trend toward a more balanced capital structure between 2019 and 2023. Although total debt increased in absolute terms, a more aggressive expansion in total capital has led to a sustained decline in the debt-to-capital ratio over the five-year period.
- Total Debt Analysis
- Total debt grew from 5,129 million US dollars in 2019 to 6,018 million US dollars in 2023. The most significant increases occurred between 2020 and 2022, followed by a period of stabilization between 2022 and 2023, where debt levels remained nearly constant.
- Total Capital Analysis
- Total capital exhibited uninterrupted growth, increasing from 4,429 million US dollars in 2019 to 6,742 million US dollars in 2023. The growth rate accelerated notably between 2020 and 2021, contributing to the strengthening of the overall capital base.
- Debt to Capital Ratio Trends
- The debt-to-capital ratio declined steadily from 1.16 in 2019 to 0.89 in 2023. A critical transition occurred in 2022, when the ratio fell below 1.0, indicating that total capital surpassed total debt for the first time within the analyzed period. This downward trajectory reflects an improvement in long-term financial leverage and a reduction in solvency risk.
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Debt to Capital (including Operating Lease Liability)
Motorola Solutions Inc., debt to capital (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current portion of long-term debt | 1,313) | 1) | 5) | 12) | 16) | |
| Long-term debt, excluding current portion | 4,705) | 6,013) | 5,688) | 5,163) | 5,113) | |
| Total debt | 6,018) | 6,014) | 5,693) | 5,175) | 5,129) | |
| Current operating lease liabilities | 125) | 118) | 124) | 126) | 122) | |
| Non-current operating lease liabilities | 407) | 419) | 313) | 402) | 497) | |
| Total debt (including operating lease liability) | 6,550) | 6,551) | 6,130) | 5,703) | 5,748) | |
| Total Motorola Solutions, Inc. stockholders’ equity (deficit) | 724) | 116) | (40) | (558) | (700) | |
| Total capital (including operating lease liability) | 7,274) | 6,667) | 6,090) | 5,145) | 5,048) | |
| Solvency Ratio | ||||||
| Debt to capital (including operating lease liability)1 | 0.90 | 0.98 | 1.01 | 1.11 | 1.14 | |
| Benchmarks | ||||||
| Debt to Capital (including Operating Lease Liability), Competitors2 | ||||||
| Apple Inc. | 0.67 | 0.72 | 0.68 | — | — | |
| Arista Networks Inc. | 0.01 | 0.01 | 0.02 | — | — | |
| Cisco Systems Inc. | 0.18 | 0.21 | 0.24 | — | — | |
| Dell Technologies Inc. | 1.11 | 1.06 | 0.95 | — | — | |
| Lumentum Holdings Inc. | 0.68 | 0.51 | 0.39 | — | — | |
| Super Micro Computer Inc. | 0.14 | 0.30 | 0.10 | — | — | |
| Debt to Capital (including Operating Lease Liability), Sector | ||||||
| Technology Hardware & Equipment | 0.59 | 0.64 | 0.64 | — | — | |
| Debt to Capital (including Operating Lease Liability), Industry | ||||||
| Information Technology | 0.42 | 0.43 | 0.47 | — | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Debt to capital (including operating lease liability) = Total debt (including operating lease liability) ÷ Total capital (including operating lease liability)
= 6,550 ÷ 7,274 = 0.90
2 Click competitor name to see calculations.
The overall solvency profile indicates a progressive strengthening of the capital structure between 2019 and 2023. While absolute debt levels increased over the period, the growth in total capital exceeded the growth in debt, resulting in a consistent reduction of the debt-to-capital ratio.
- Total Debt Trends
- Total debt, including operating lease liabilities, remained relatively stable between 2019 and 2020 before entering a period of growth. Debt levels rose from US$ 5,748 million in 2019 to a peak of US$ 6,551 million in 2022, before stabilizing at US$ 6,550 million in 2023. This represents an overall increase of approximately 14% over the five-year window.
- Total Capital Expansion
- Total capital exhibited consistent and accelerated growth throughout the analyzed period. Starting at US$ 5,048 million in 2019, the capital base expanded to US$ 7,274 million by 2023. This sustained increase in total capital occurred regardless of the fluctuations in total debt, suggesting a significant accumulation of equity or other capital components.
- Debt to Capital Ratio Analysis
- The debt to capital ratio followed a steady downward trajectory, declining from 1.14 in 2019 to 0.90 in 2023. The transition of this ratio from above 1.0 to below 1.0 is a notable shift, indicating that the total capital base now exceeds the total debt obligations. This trend reflects a decompression of leverage and an improved solvency position, as the organization successfully grew its capital base at a faster rate than its liabilities.
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Debt to Assets
Motorola Solutions Inc., debt to assets calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current portion of long-term debt | 1,313) | 1) | 5) | 12) | 16) | |
| Long-term debt, excluding current portion | 4,705) | 6,013) | 5,688) | 5,163) | 5,113) | |
| Total debt | 6,018) | 6,014) | 5,693) | 5,175) | 5,129) | |
| Total assets | 13,336) | 12,814) | 12,189) | 10,876) | 10,642) | |
| Solvency Ratio | ||||||
| Debt to assets1 | 0.45 | 0.47 | 0.47 | 0.48 | 0.48 | |
| Benchmarks | ||||||
| Debt to Assets, Competitors2 | ||||||
| Apple Inc. | 0.32 | 0.34 | 0.36 | — | — | |
| Arista Networks Inc. | 0.00 | 0.00 | 0.00 | — | — | |
| Cisco Systems Inc. | 0.08 | 0.10 | 0.12 | — | — | |
| Dell Technologies Inc. | 0.33 | 0.29 | 0.39 | — | — | |
| Lumentum Holdings Inc. | 0.61 | 0.45 | 0.33 | — | — | |
| Super Micro Computer Inc. | 0.08 | 0.19 | 0.04 | — | — | |
| Debt to Assets, Sector | ||||||
| Technology Hardware & Equipment | 0.27 | 0.29 | 0.32 | — | — | |
| Debt to Assets, Industry | ||||||
| Information Technology | 0.26 | 0.26 | 0.29 | — | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Debt to assets = Total debt ÷ Total assets
= 6,018 ÷ 13,336 = 0.45
2 Click competitor name to see calculations.
The financial trajectory from 2019 to 2023 reveals a strategic expansion of the asset base that has outpaced the increase in total debt, resulting in a gradual improvement in the overall solvency position.
- Total Debt Evolution
- Total debt increased from US$ 5,129 million in 2019 to US$ 6,018 million in 2023. While debt grew steadily between 2020 and 2022, a significant deceleration occurred in 2023, where debt levels remained nearly stagnant, suggesting a stabilization of borrowing activities.
- Total Asset Expansion
- Total assets exhibited a consistent upward trend, rising from US$ 10,642 million in 2019 to US$ 13,336 million in 2023. The most substantial growth occurred in 2021, contributing to a strengthened balance sheet over the five-year period.
- Debt to Assets Ratio Trend
- The debt to assets ratio declined incrementally from 0.48 in 2019 and 2020 to 0.45 by the end of 2023. This downward trend indicates that a smaller proportion of total assets are financed through debt, reflecting reduced financial leverage and an enhanced capacity to cover long-term obligations.
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Debt to Assets (including Operating Lease Liability)
Motorola Solutions Inc., debt to assets (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current portion of long-term debt | 1,313) | 1) | 5) | 12) | 16) | |
| Long-term debt, excluding current portion | 4,705) | 6,013) | 5,688) | 5,163) | 5,113) | |
| Total debt | 6,018) | 6,014) | 5,693) | 5,175) | 5,129) | |
| Current operating lease liabilities | 125) | 118) | 124) | 126) | 122) | |
| Non-current operating lease liabilities | 407) | 419) | 313) | 402) | 497) | |
| Total debt (including operating lease liability) | 6,550) | 6,551) | 6,130) | 5,703) | 5,748) | |
| Total assets | 13,336) | 12,814) | 12,189) | 10,876) | 10,642) | |
| Solvency Ratio | ||||||
| Debt to assets (including operating lease liability)1 | 0.49 | 0.51 | 0.50 | 0.52 | 0.54 | |
| Benchmarks | ||||||
| Debt to Assets (including Operating Lease Liability), Competitors2 | ||||||
| Apple Inc. | 0.35 | 0.38 | 0.39 | — | — | |
| Arista Networks Inc. | 0.01 | 0.01 | 0.01 | — | — | |
| Cisco Systems Inc. | 0.09 | 0.11 | 0.13 | — | — | |
| Dell Technologies Inc. | 0.34 | 0.30 | 0.41 | — | — | |
| Lumentum Holdings Inc. | 0.62 | 0.47 | 0.35 | — | — | |
| Super Micro Computer Inc. | 0.08 | 0.19 | 0.05 | — | — | |
| Debt to Assets (including Operating Lease Liability), Sector | ||||||
| Technology Hardware & Equipment | 0.30 | 0.31 | 0.34 | — | — | |
| Debt to Assets (including Operating Lease Liability), Industry | ||||||
| Information Technology | 0.28 | 0.29 | 0.31 | — | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Debt to assets (including operating lease liability) = Total debt (including operating lease liability) ÷ Total assets
= 6,550 ÷ 13,336 = 0.49
2 Click competitor name to see calculations.
The solvency profile indicates a gradual improvement in the relationship between total liabilities and the total asset base over the five-year period from 2019 to 2023. The debt-to-assets ratio transitioned from 0.54 to 0.49, reflecting a reduction in financial leverage relative to the overall size of the balance sheet.
- Total Debt Trends
- Total debt, including operating lease liabilities, exhibited a general upward trajectory, increasing from 5,748 million USD in 2019 to 6,550 million USD by the end of 2023. Although a marginal decrease was noted in 2020, debt levels rose steadily through 2022 before stabilizing in the final year of the period.
- Asset Base Expansion
- Total assets demonstrated consistent and uninterrupted growth throughout the analyzed timeframe. The asset base expanded from 10,642 million USD in 2019 to 13,336 million USD in 2023, indicating a steady accumulation of resources.
- Debt to Assets Ratio Analysis
- The decline in the debt-to-assets ratio from 0.54 in 2019 to 0.49 in 2023 is a result of asset growth outpacing the increase in total debt. This divergence suggests an improved solvency position, as a smaller proportion of total assets is funded by debt obligations at the end of 2023 compared to the start of the period.
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Financial Leverage
Motorola Solutions Inc., financial leverage calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Total assets | 13,336) | 12,814) | 12,189) | 10,876) | 10,642) | |
| Total Motorola Solutions, Inc. stockholders’ equity (deficit) | 724) | 116) | (40) | (558) | (700) | |
| Solvency Ratio | ||||||
| Financial leverage1 | 18.42 | 110.47 | — | — | — | |
| Benchmarks | ||||||
| Financial Leverage, Competitors2 | ||||||
| Apple Inc. | 5.67 | 6.96 | 5.56 | — | — | |
| Arista Networks Inc. | 1.38 | 1.39 | 1.44 | — | — | |
| Cisco Systems Inc. | 2.30 | 2.36 | 2.36 | — | — | |
| Dell Technologies Inc. | — | — | 49.78 | — | — | |
| Lumentum Holdings Inc. | 3.42 | 2.22 | 1.80 | — | — | |
| Super Micro Computer Inc. | 1.86 | 2.25 | 2.05 | — | — | |
| Financial Leverage, Sector | ||||||
| Technology Hardware & Equipment | 4.94 | 5.71 | 5.12 | — | — | |
| Financial Leverage, Industry | ||||||
| Information Technology | 2.53 | 2.65 | 2.87 | — | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Financial leverage = Total assets ÷ Total Motorola Solutions, Inc. stockholders’ equity (deficit)
= 13,336 ÷ 724 = 18.42
2 Click competitor name to see calculations.
The organization has demonstrated a consistent improvement in its solvency position and capital structure over the five-year period ending December 31, 2023. A steady expansion of the asset base is accompanied by a critical transition from a deficit in stockholders' equity to a positive equity position, significantly altering the company's risk profile.
- Asset Growth Trend
- Total assets experienced a continuous upward trajectory, rising from 10,642 million US dollars in 2019 to 13,336 million US dollars in 2023. This represents a steady increase in the company's total resources over the analyzed period.
- Equity Recovery and Capital Structure
- A significant reversal in stockholders' equity is observed. The company began the period with a deficit of 700 million US dollars in 2019, which progressively narrowed to 558 million US dollars in 2020 and 40 million US dollars by 2021. The equity position transitioned to a positive balance of 116 million US dollars in 2022 and grew further to 724 million US dollars by 2023, signaling a substantial strengthening of the financial foundation.
- Financial Leverage Dynamics
- The financial leverage ratio underwent a dramatic reduction between 2022 and 2023, falling from 110.47 to 18.42. This sharp decline reflects a significant decrease in the reliance on debt to finance assets relative to the expanding equity base, indicating a marked reduction in financial risk and an improvement in long-term solvency.
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Interest Coverage
Motorola Solutions Inc., interest coverage calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net earnings attributable to Motorola Solutions, Inc. | 1,709) | 1,363) | 1,245) | 949) | 868) | |
| Add: Net income attributable to noncontrolling interest | 5) | 4) | 5) | 4) | 3) | |
| Add: Income tax expense | 432) | 148) | 302) | 221) | 130) | |
| Add: Interest expense | 249) | 240) | 215) | 233) | 237) | |
| Earnings before interest and tax (EBIT) | 2,395) | 1,755) | 1,767) | 1,407) | 1,238) | |
| Solvency Ratio | ||||||
| Interest coverage1 | 9.62 | 7.31 | 8.22 | 6.04 | 5.22 | |
| Benchmarks | ||||||
| Interest Coverage, Competitors2 | ||||||
| Apple Inc. | 29.92 | 41.64 | 42.29 | — | — | |
| Arista Networks Inc. | — | — | — | — | — | |
| Cisco Systems Inc. | 36.87 | 41.21 | 31.56 | — | — | |
| Dell Technologies Inc. | 3.64 | 4.84 | 2.54 | — | — | |
| Lumentum Holdings Inc. | -1.88 | 3.93 | 7.94 | — | — | |
| Super Micro Computer Inc. | 72.55 | 53.71 | 48.81 | — | — | |
| Interest Coverage, Sector | ||||||
| Technology Hardware & Equipment | 25.05 | 29.79 | 24.05 | — | — | |
| Interest Coverage, Industry | ||||||
| Information Technology | 17.37 | 22.18 | 19.66 | — | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Interest coverage = EBIT ÷ Interest expense
= 2,395 ÷ 249 = 9.62
2 Click competitor name to see calculations.
The financial solvency position regarding interest obligations has demonstrated a consistent strengthening trend between 2019 and 2023, characterized by a substantial increase in the capacity to service debt costs from operational earnings.
- Earnings before interest and tax (EBIT)
- A sustained upward trajectory is observed in operational profitability. EBIT increased from 1,238 million USD in 2019 to 2,395 million USD in 2023. Despite a marginal plateau in 2022, the sharp growth recorded in 2023 indicates a significant expansion of the earnings base available to cover fixed financial charges.
- Interest Expense
- Interest costs have remained relatively stable over the five-year period, fluctuating within a narrow range between 215 million USD and 249 million USD. The lack of significant volatility in interest expenses suggests a controlled debt structure or stable financing rates during this window.
- Interest Coverage Ratio
- The interest coverage ratio improved from 5.22 in 2019 to 9.62 in 2023. This progression indicates a marked reduction in financial risk, as the margin of safety for meeting interest payments has nearly doubled. The increase is primarily driven by the growth in EBIT rather than a reduction in debt costs, resulting in a significantly more robust solvency profile by the end of the period.
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Fixed Charge Coverage
Motorola Solutions Inc., fixed charge coverage calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net earnings attributable to Motorola Solutions, Inc. | 1,709) | 1,363) | 1,245) | 949) | 868) | |
| Add: Net income attributable to noncontrolling interest | 5) | 4) | 5) | 4) | 3) | |
| Add: Income tax expense | 432) | 148) | 302) | 221) | 130) | |
| Add: Interest expense | 249) | 240) | 215) | 233) | 237) | |
| Earnings before interest and tax (EBIT) | 2,395) | 1,755) | 1,767) | 1,407) | 1,238) | |
| Add: Operating lease cost | 140) | 130) | 133) | 130) | 133) | |
| Earnings before fixed charges and tax | 2,535) | 1,885) | 1,900) | 1,537) | 1,371) | |
| Interest expense | 249) | 240) | 215) | 233) | 237) | |
| Operating lease cost | 140) | 130) | 133) | 130) | 133) | |
| Fixed charges | 389) | 370) | 348) | 363) | 370) | |
| Solvency Ratio | ||||||
| Fixed charge coverage1 | 6.52 | 5.09 | 5.46 | 4.23 | 3.71 | |
| Benchmarks | ||||||
| Fixed Charge Coverage, Competitors2 | ||||||
| Apple Inc. | 20.17 | 25.65 | 26.13 | — | — | |
| Arista Networks Inc. | 73.83 | 49.20 | 31.02 | — | — | |
| Cisco Systems Inc. | 18.98 | 20.30 | 16.92 | — | — | |
| Dell Technologies Inc. | 3.14 | 4.16 | 2.26 | — | — | |
| Lumentum Holdings Inc. | -1.05 | 3.52 | 6.73 | — | — | |
| Super Micro Computer Inc. | 40.95 | 24.03 | 12.52 | — | — | |
| Fixed Charge Coverage, Sector | ||||||
| Technology Hardware & Equipment | 17.13 | 19.64 | 16.52 | — | — | |
| Fixed Charge Coverage, Industry | ||||||
| Information Technology | 11.23 | 13.28 | 12.13 | — | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Fixed charge coverage = Earnings before fixed charges and tax ÷ Fixed charges
= 2,535 ÷ 389 = 6.52
2 Click competitor name to see calculations.
The solvency profile regarding fixed charge coverage has strengthened significantly between 2019 and 2023. This improvement is primarily driven by robust growth in earnings before fixed charges and tax, while fixed obligations remained relatively stable over the five-year period.
- Earnings before fixed charges and tax
- A consistent upward trajectory is observed, with earnings rising from 1,371 million US dollars in 2019 to 2,535 million US dollars in 2023. Despite a marginal decline in 2022 to 1,885 million US dollars, the subsequent increase in 2023 represents the most significant growth spike in the analyzed period.
- Fixed charges
- Fixed obligations have remained stable, fluctuating within a narrow range between 348 million and 389 million US dollars. A slight downward trend was noted between 2019 and 2021, followed by a moderate increase through 2023, indicating that the expansion of earnings has not been offset by a proportional increase in fixed costs.
- Fixed charge coverage ratio
- The coverage ratio improved from 3.71 in 2019 to 6.52 in 2023, signaling an enhanced capacity to meet fixed financial obligations. While a temporary contraction occurred in 2022, dropping to 5.09 from a 2021 high of 5.46, the ratio recovered sharply in 2023 to reach its highest level in the observed timeframe.
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