Balance Sheet: Liabilities and Stockholders’ Equity

The balance sheet provides creditors, investors, and analysts with information on company resources (assets) and its sources of capital (its equity and liabilities). It normally also provides information about the future earnings capacity of a company assets as well as an indication of cash flows that may come from receivables and inventories.

Liabilities represents obligations of a company arising from past events, the settlement of which is expected to result in an outflow of economic benefits from the entity.

Parker-Hannifin Corp., consolidated balance sheet: liabilities and stockholders’ equity

US$ in thousands

	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020	Jun 30, 2019	Jun 30, 2018	Jun 30, 2017
Notes payable and long-term debt payable within one year	1,724,310)	2,824)	809,529)	587,014)	638,466)	1,008,465)
Accounts payable, trade	1,731,925)	1,667,878)	1,111,759)	1,413,155)	1,430,306)	1,300,496)
Accrued payrolls and other compensation	470,132)	507,027)	424,231)	426,285)	427,500)	435,911)
Accrued domestic and foreign taxes	250,292)	236,384)	195,314)	167,312)	198,878)	153,137)
Other accrued liabilities	1,682,659)	682,390)	607,540)	558,007)	502,333)	497,851)
Current liabilities	5,859,318)	3,096,503)	3,148,373)	3,151,773)	3,197,483)	3,395,860)
Long-term debt, excluding payable within one year	9,755,825)	6,582,053)	7,652,256)	6,520,831)	4,318,559)	4,861,895)
Pensions and other postretirement benefits	639,939)	1,055,638)	1,887,414)	1,304,379)	1,177,605)	1,406,082)
Deferred income taxes	307,044)	553,981)	382,528)	193,066)	234,858)	221,790)
Other liabilities	521,897)	639,355)	539,089)	438,489)	526,089)	336,931)
Noncurrent liabilities	11,224,705)	8,831,027)	10,461,287)	8,456,765)	6,257,111)	6,826,698)
Total liabilities	17,084,023)	11,927,530)	13,609,660)	11,608,538)	9,454,594)	10,222,558)
Serial preferred stock, $.50 par value; none issued	—)	—)	—)	—)	—)	—)
Common stock, $.50 par value	90,523)	90,523)	90,523)	90,523)	90,523)	90,523)
Additional capital	327,307)	329,619)	416,585)	462,086)	496,592)	543,879)
Retained earnings	15,661,808)	14,915,497)	13,530,666)	12,777,538)	11,625,975)	10,930,348)
Accumulated other comprehensive loss	(1,543,198)	(1,566,727)	(2,558,875)	(2,059,048)	(1,763,086)	(1,924,204)
Treasury shares at cost	(5,688,429)	(5,370,605)	(5,364,916)	(5,309,130)	(4,590,138)	(4,378,897)
Shareholders’ equity	8,848,011)	8,398,307)	6,113,983)	5,961,969)	5,859,866)	5,261,649)
Noncontrolling interests	11,909)	15,363)	14,546)	6,183)	5,627)	5,697)
Total equity	8,859,920)	8,413,670)	6,128,529)	5,968,152)	5,865,493)	5,267,346)
Total liabilities and equity	25,943,943)	20,341,200)	19,738,189)	17,576,690)	15,320,087)	15,489,904)

Based on: 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30).

The financial data over the six-year period exhibit multiple significant trends in liabilities, equity, and overall financial structure.

Current Liabilities: Current liabilities slightly declined from 3,395,860 thousand USD in mid-2017 to around 3,096,503 thousand USD in mid-2021, indicating some improvement in short-term obligations management. However, in mid-2022, there was a sharp increase to approximately 5,859,318 thousand USD, suggesting a sudden rise in current obligations. Notably, 'Notes payable and long-term debt payable within one year' fluctuated, decreasing drastically in 2021 to 2,824 thousand USD from 809,529 thousand USD the previous year, before surging in 2022 to 1,724,310 thousand USD.
Accounts Payable and Accrued Liabilities: 'Accounts payable, trade' showed a fluctuating but generally upward trend, rising from about 1,300,496 thousand USD in 2017 to 1,731,925 thousand USD in 2022, with a dip in 2020. 'Accrued payroll and other compensation' remained relatively stable around 424,000-507,000 thousand USD, peaking in 2021 then slightly decreasing in 2022. 'Other accrued liabilities' displayed a steady increase over the years, notably more than doubling between 2021 and 2022, indicating increased short-term expenses or obligations.
Long-term Debt and Noncurrent Liabilities: Long-term debt excluding amounts payable within one year increased substantially from approximately 4,861,895 thousand USD in 2017 to 9,755,825 thousand USD in 2022. This reflects a significant increase in long-term borrowing or obligations. Noncurrent liabilities followed a similar upward trajectory, rising from 6,826,698 thousand USD to 11,224,705 thousand USD over the same period, indicating greater long-term financial commitments. 'Pensions and other postretirement benefits' showed volatility, peaking in 2020 and then sharply declining by 2022, which may reflect changes in pension funding or actuarial assumptions.
Deferred Taxes and Other Liabilities: 'Deferred income taxes' increased until 2021, more than doubling from 221,790 thousand USD in 2017 to 553,981 thousand USD, then decreased to 307,044 thousand USD in 2022. 'Other liabilities' showed moderate fluctuation but remained within a range of approximately 337,000 to 639,000 thousand USD, dropping slightly in the last year.
Total Liabilities: Total liabilities increased steadily from 10,222,558 thousand USD in 2017 to 17,084,023 thousand USD in 2022, reflecting overall growth in indebtedness and obligations. The growth was especially notable in 2022, which saw a large increase relative to prior years.
Shareholders’ Equity: Shareholders' equity exhibited an upward trend, rising from 5,261,649 thousand USD in 2017 to 8,848,011 thousand USD in 2022. This growth was largely driven by increases in retained earnings, which grew consistently from 10,930,348 thousand USD to 15,661,808 thousand USD. Conversely, 'Additional capital' decreased progressively over the period, suggesting reduced capital injections or buybacks. Accumulated other comprehensive loss, though negative throughout, saw a reduction in magnitude in the latest years, indicating some recovery in comprehensive income elements. Treasury shares at cost increased steadily in absolute value, indicating ongoing share repurchase activity.
Total Equity and Balance Sheet Size: Total equity increased in line with shareholders’ equity, more than doubling from about 5,267,346 thousand USD to 8,859,920 thousand USD. Correspondingly, total liabilities and equity expanded from approximately 15,489,904 thousand USD to 25,943,943 thousand USD over the six years, indicating substantial growth in the company's balance sheet size.

In summary, the data reveal a pattern of increasing financial leverage via both current and long-term liabilities, alongside growth in equity principally fueled by retained earnings. The sharp increases in certain liabilities, especially in current liabilities and long-term debt in 2022, suggest a pivot toward higher debt levels. Share repurchases appear sustained over the years. The fluctuation in postretirement benefits and deferred taxes reflects dynamic elements of the company's obligations. Overall, the company has expanded its financial base but with increased indebtedness and ongoing management of various accrued and deferred liabilities.

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Parker-Hannifin Corp. (NYSE:PH)

Balance Sheet: Liabilities and Stockholders’ Equity