Motorola Solutions Inc. (NYSE:MSI)

Debt to Equity and Related Ratios

The debt to equity ratio was not reported for the years 2019 through 2021 but is considerably high at 51.84 in 2022 before dropping sharply to 8.31 in 2023. When including operating lease liabilities, a similar pattern is observed, with a high of 56.47 in 2022 decreasing to 9.05 in 2023. This indicates a significant reduction in reliance on debt relative to equity in the latest year.

Debt to Capital Ratios

There is a gradual declining trend in the debt to capital ratio from 1.16 in 2019 down to 0.89 in 2023. When including operating lease liabilities, the ratio shows a similar trend, decreasing from 1.14 to 0.9 over the same period. This decline suggests an improvement in capital structure with a decreasing share of debt in total capital.

Debt to Assets Ratios

The debt to assets ratio began at 0.48 in 2019 and showed a slight decreasing trend over the years, reaching 0.45 by 2023. Including operating lease liabilities, the ratio started at 0.54 and decreased to 0.49 over the same period. This indicates modest deleveraging in terms of asset financing.

Financial Leverage

The financial leverage ratio is only available for 2022 and 2023, showing an extremely high value of 110.47 in 2022 which substantially declined to 18.42 in 2023. This significant drop points to much lower leverage and a healthier capital structure in the recent year.

Interest Coverage Ratio

The interest coverage ratio improved steadily from 5.22 in 2019 to 9.62 in 2023, peaking at 8.22 in 2021 before a slight dip in 2022. This trend reflects increasing ability to meet interest obligations comfortably through earnings.

Fixed Charge Coverage Ratio

This ratio also increased consistently from 3.71 in 2019 to 6.52 in 2023, with minor fluctuations. The improving fixed charge coverage ratio suggests enhanced capacity to cover fixed financial charges.

Total Debt

The total debt increased steadily over the analyzed period, rising from $5,129 million in 2019 to $6,018 million by the end of 2023. This indicates a gradual increase in the company's financial leverage or borrowing over the five years.

Total Stockholders’ Equity (Deficit)

Stockholders' equity showed a significant positive trend, improving from a deficit of $700 million in 2019 to a positive $724 million in 2023. This reflects a substantial recovery and strengthening in the company’s net asset position, moving from a negative to a clearly positive equity balance.

Debt to Equity Ratio

The debt to equity ratio data is provided only for the last two years, showing a marked decrease from 51.84 in 2022 to 8.31 in 2023. This sharp reduction indicates a notable improvement in the company’s financial stability and a better balance between debt and equity financing, likely driven by the increased equity base combined with relatively stable debt levels in the most recent year.

The analysis of the financial data reveals several notable trends regarding the company's debt levels and equity position over the five-year period ending in 2023.

Total debt (including operating lease liability)

The total debt exhibits a general upward trend from 2019 through 2022. Starting at $5,748 million in 2019, the debt slightly decreased to $5,703 million in 2020, then increased to $6,130 million in 2021, and continued to rise to $6,551 million in 2022 and remained nearly flat at $6,550 million in 2023. This pattern suggests a cautious approach to leveraging, potentially reflecting strategic financing or investment decisions during these years.

Total stockholders’ equity (deficit)

The equity position shows a significant improvement over the same period. Initially, there was a deficit of $700 million in 2019, which progressively narrowed to a deficit of $558 million in 2020 and $40 million in 2021. By 2022, the equity turned positive at $116 million and improved substantially to $724 million in 2023. This positive trend indicates strengthening financial health and likely successful profitability or equity-raising activities that enhanced the company's net asset base.

Debt to equity ratio (including operating lease liability)

Available data for 2022 and 2023 reveal a dramatic reduction in the debt to equity ratio, from 56.47 in 2022 to 9.05 in 2023. This steep decline is consistent with the observed increase in equity alongside stable debt levels. The ratio indicates that, in 2022, the company had very high leverage relative to equity, but by 2023, leverage decreased substantially, suggesting an improved balance sheet structure and lower financial risk.

In summary, the company has maintained relatively stable debt levels since 2021 while significantly improving its equity position, resulting in a marked decrease in leverage ratios. This progression points to a strengthened financial position and likely enhanced capacity for future financial flexibility and stability.

Total Debt

The total debt level increased steadily over the five-year period. Starting from 5,129 million US dollars in 2019, it rose slightly to 5,175 million in 2020, followed by a more noticeable increase to 5,693 million in 2021. The upward trend continued, reaching 6,014 million in 2022 and marginally increasing to 6,018 million in 2023. This indicates a consistent rise in borrowing or liabilities classified as debt during this time frame.

Total Capital

Total capital experienced a consistent upward trajectory throughout the period evaluated. Initially recorded at 4,429 million US dollars in 2019, it increased to 4,617 million in 2020, then showed a more pronounced growth to 5,653 million in 2021. The capital base further strengthened to 6,130 million in 2022 and continued to rise, reaching 6,742 million in 2023. The continuous growth in total capital suggests an expansion in the company's financial foundation and potentially greater equity or retained earnings alongside debt.

Debt to Capital Ratio

The debt to capital ratio reveals a declining trend over the five years under review, moving from 1.16 in 2019 down to 0.89 in 2023. This decreasing ratio indicates an improving capital structure, with debt representing a smaller proportion of total capital over time. The ratio dropped steadily each year: 1.12 in 2020, 1.01 in 2021, and 0.98 in 2022, reflecting a gradual deleveraging or better balance between debt and other capital components despite the nominal increase in total debt. The decline below 1.0 in the last two years suggests that capital growth outpaced debt growth.

Total debt (including operating lease liability)

The total debt shows an overall increasing trend from 2019 through 2023. Starting at $5,748 million in 2019, it slightly decreased to $5,703 million in 2020 but then rose consistently to reach $6,550 million by the end of 2023. This indicates a gradual rise in the company's debt obligations over the five-year period.

Total capital (including operating lease liability)

Total capital increased steadily across the years. Beginning at $5,048 million in 2019, it rose modestly in 2020 to $5,145 million, then experienced more significant growth in the subsequent years, reaching $7,274 million in 2023. This upward trend reflects an expanding capital base over time.

Debt to capital (including operating lease liability) ratio

The debt to capital ratio decreased progressively from 1.14 in 2019 to 0.9 in 2023. This decline suggests an improvement in the capital structure, with debt becoming a smaller proportion of total capital. Despite the increase in total debt, the faster growth in total capital appears to have strengthened the capital base and reduced leverage risk.

The financial data presents an overview of key balance sheet items over a five-year period, highlighting trends in total debt, total assets, and the debt to assets ratio.

Total Debt

Total debt showed a gradual increase from 5,129 million US dollars in 2019 to 6,018 million US dollars in 2023. The debt rose steadily each year, with a moderate acceleration between 2020 and 2022 before stabilizing between 2022 and 2023. Over the period, total debt increased by approximately 17.3%.

Total Assets

Total assets demonstrated consistent growth each year, rising from 10,642 million US dollars in 2019 to 13,336 million US dollars in 2023. The increase was steady and continuous, reflecting an overall growth of about 25.3% across the five years.

Debt to Assets Ratio

The debt to assets ratio experienced a slight but steady decline over the analyzed period. Starting at 0.48 in 2019 and 2020, the ratio decreased to 0.47 for the years 2021 and 2022, before dropping to 0.45 in 2023. This downward trend indicates a relative reduction in financial leverage, implying that asset growth outpaced the increase in debt levels.

In summary, the company’s total assets have grown consistently and at a faster rate than total debt, leading to a gradual improvement in the debt to assets ratio. This suggests strengthening asset base relative to liabilities and a moderate reduction in financial leverage risk over the five-year period analyzed.

Total Debt (Including Operating Lease Liability)

The total debt remained relatively stable from 2019 to 2020, with a slight decrease from 5748 million USD to 5703 million USD. However, starting in 2021, there was a noticeable increase, reaching 6130 million USD, and continued rising to 6551 million USD in 2022. In 2023, the total debt slightly declined by 1 million USD to 6550 million USD, indicating near stabilization at elevated levels compared to the earlier years.

Total Assets

Total assets demonstrated a consistent upward trend throughout the entire period. Beginning at 10642 million USD in 2019, total assets grew incrementally each year, reaching 10876 million USD in 2020, 12189 million USD in 2021, 12814 million USD in 2022, and finally 13336 million USD in 2023. This steady growth suggests ongoing asset accumulation or investment activities over the observed timeframe.

Debt to Assets Ratio (Including Operating Lease Liability)

The debt to assets ratio gradually decreased over the five-year span, starting from 0.54 in 2019 and declining to 0.52 in 2020. It further decreased to 0.50 in 2021, followed by a slight increase to 0.51 in 2022 before dropping again to 0.49 in 2023. This overall downward trend indicates a relative reduction in leverage, suggesting that the company’s growth in assets outpaced the increase in debt during this period, leading to a marginally healthier balance sheet structure.

Total assets

The total assets showed a steady increase over the five-year period. Starting at 10,642 million USD at the end of 2019, total assets rose consistently each year, reaching 13,336 million USD by the end of 2023. This reflects a gradual expansion in the asset base of the company over time.

Total Motorola Solutions, Inc. stockholders’ equity (deficit)

The stockholders’ equity exhibited a strong recovery trend. Initially, it was in significant deficit of -700 million USD as of December 31, 2019. This deficit decreased markedly in subsequent years, moving to -558 million USD in 2020 and further narrowing to -40 million USD in 2021. The equity position turned positive in 2022, reaching 116 million USD and continued to improve substantially to 724 million USD by the end of 2023. This shift indicates improving financial health and a restoring net worth for the company.

Financial leverage

Financial leverage data is only available for the last two periods, showing a sharp decline. As of December 31, 2022, the leverage ratio was extremely high at 110.47, indicating a potentially high level of debt relative to equity or other leverage metric used. By the end of 2023, this ratio dramatically decreased to 18.42, suggesting a significant reduction in leverage and possibly an improvement in the company’s capital structure and financial risk profile.

Earnings before interest and tax (EBIT)

Over the five-year period, EBIT demonstrated a generally upward trend, rising from 1,238 million US dollars in 2019 to 2,395 million US dollars in 2023. Notably, there was a substantial increase between 2021 and 2023, with EBIT growing from 1,767 million to 2,395 million US dollars, indicating improved operating profitability. The year 2022 showed a slight decline compared to 2021 but remained significantly higher than the levels recorded in 2019 and 2020.

Interest expense

Interest expenses remained relatively stable throughout the reviewed timeframe, fluctuating modestly between 215 million and 249 million US dollars. The lowest recorded interest expense was in 2021 at 215 million, while the highest was in 2023 at 249 million US dollars. Despite overall increased profitability, interest charges did not increase proportionally, suggesting controlled debt-related costs or refinancing activities.

Interest coverage ratio

The interest coverage ratio, which measures the firm's ability to meet interest obligations from its EBIT, consistently improved over the five years. Starting at 5.22 in 2019, it climbed to 9.62 in 2023, reflecting a stronger capacity to cover interest expenses. The peak ratio occurred in 2023, evidencing enhanced financial health and reduced risk associated with debt servicing. There was a slight dip in 2022 compared to 2021, mirroring the EBIT trend, but the ratio remained substantially higher than the earlier years.

Earnings before fixed charges and tax

There is a general upward trend in earnings before fixed charges and tax from 2019 to 2023. The values increased from 1371 million US dollars in 2019 to 2535 million US dollars in 2023, signaling growth. The increase was relatively steady year-over-year, with a notable jump from 1885 million in 2022 to 2535 million in 2023.

Fixed charges

Fixed charges showed a slight decline from 370 million in 2019 to 348 million in 2021, before increasing again to 370 million in 2022 and 389 million in 2023. Despite some fluctuations, fixed charges remained relatively stable over the five-year period, with only modest variations.

Fixed charge coverage ratio

The fixed charge coverage ratio exhibited a clear upward trend, improving from 3.71 in 2019 to 6.52 in 2023. This indicates that the company's ability to cover its fixed charges from earnings strengthened over time. The ratio peaked in 2021 at 5.46, experienced a slight dip in 2022, and then reached the highest level in 2023.

Overall insights

The data portrays an improving financial position, with increasing earnings before fixed charges and tax and enhanced coverage of fixed obligations. The stable fixed charges combined with rising earnings imply growing operational profitability and improved capacity to meet fixed costs. The significant increase in the fixed charge coverage ratio, particularly in the latest year, suggests greater financial stability and reduced risk related to the company’s fixed financial commitments.