Microsoft Excel LibreOffice Calc

Long-term Debt and Solvency Analysis

Difficulty: Beginner


Ratios (Summary)

Raytheon Co., debt and solvency ratios

Microsoft Excel LibreOffice Calc
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Debt to equity 0.51 0.53 0.53 0.56 0.43
Debt to capital 0.34 0.35 0.34 0.36 0.30
Interest coverage 16.19 14.06 12.96 15.00 14.13

Based on: 10-K (filing date: 2018-02-14), 10-K (filing date: 2017-02-15), 10-K (filing date: 2016-02-10), 10-K (filing date: 2015-02-11), 10-K (filing date: 2014-02-11).

Ratio Description The company
Debt-to-equity ratio A solvency ratio calculated as total debt divided by total shareholders' equity. Raytheon Co.'s debt-to-equity ratio deteriorated from 2015 to 2016 but then improved from 2016 to 2017 exceeding 2015 level.
Debt-to-capital ratio A solvency ratio calculated as total debt divided by total debt plus shareholders' equity. Raytheon Co.'s debt-to-capital ratio deteriorated from 2015 to 2016 but then improved from 2016 to 2017 exceeding 2015 level.
Interest coverage ratio A solvency ratio calculated as EBIT divided by interest payments. Raytheon Co.'s interest coverage ratio improved from 2015 to 2016 and from 2016 to 2017.

Debt to Equity

Raytheon Co., debt to equity calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Selected Financial Data (USD $ in millions)
Commercial paper 300  –  –  –  – 
Long-term debt 4,750  5,335  5,330  5,330  4,734 
Total debt 5,050  5,335  5,330  5,330  4,734 
Total Raytheon Company stockholders' equity 9,963  10,066  10,128  9,525  11,035 
Ratio
Debt to equity1 0.51 0.53 0.53 0.56 0.43
Benchmarks
Debt to Equity, Competitors
Boeing Co. 31.32 12.18 1.57 1.05 0.65
General Dynamics Corp. 0.35 0.35 0.32 0.33 0.27
Lockheed Martin Corp. 9.45 4.93 1.81 1.25
Northrop Grumman Corp. 2.17 1.34 1.18 0.82 0.56
United Technologies Corp. 0.93 0.87 0.75 0.63 0.64
Debt to Equity, Sector
Aerospace & Defense 1.34 1.15 0.96 0.70 0.58
Debt to Equity, Industry
Industrials 1.36 1.31 1.30 1.50 1.39

Based on: 10-K (filing date: 2018-02-14), 10-K (filing date: 2017-02-15), 10-K (filing date: 2016-02-10), 10-K (filing date: 2015-02-11), 10-K (filing date: 2014-02-11).

2017 Calculations

1 Debt to equity = Total debt ÷ Total Raytheon Company stockholders' equity
= 5,050 ÷ 9,963 = 0.51

Ratio Description The company
Debt-to-equity ratio A solvency ratio calculated as total debt divided by total shareholders' equity. Raytheon Co.'s debt-to-equity ratio deteriorated from 2015 to 2016 but then improved from 2016 to 2017 exceeding 2015 level.

Debt to Capital

Raytheon Co., debt to capital calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Selected Financial Data (USD $ in millions)
Commercial paper 300  –  –  –  – 
Long-term debt 4,750  5,335  5,330  5,330  4,734 
Total debt 5,050  5,335  5,330  5,330  4,734 
Total Raytheon Company stockholders' equity 9,963  10,066  10,128  9,525  11,035 
Total capital 15,013  15,401  15,458  14,855  15,769 
Ratio
Debt to capital1 0.34 0.35 0.34 0.36 0.30
Benchmarks
Debt to Capital, Competitors
Boeing Co. 0.97 0.92 0.61 0.51 0.39
General Dynamics Corp. 0.26 0.26 0.24 0.25 0.21
Lockheed Martin Corp. 1.05 0.90 0.83 0.64 0.56
Northrop Grumman Corp. 0.68 0.57 0.54 0.45 0.36
United Technologies Corp. 0.48 0.46 0.43 0.39 0.39
Debt to Capital, Sector
Aerospace & Defense 0.57 0.53 0.49 0.41 0.37
Debt to Capital, Industry
Industrials 0.58 0.57 0.56 0.60 0.58

Based on: 10-K (filing date: 2018-02-14), 10-K (filing date: 2017-02-15), 10-K (filing date: 2016-02-10), 10-K (filing date: 2015-02-11), 10-K (filing date: 2014-02-11).

2017 Calculations

1 Debt to capital = Total debt ÷ Total capital
= 5,050 ÷ 15,013 = 0.34

Ratio Description The company
Debt-to-capital ratio A solvency ratio calculated as total debt divided by total debt plus shareholders' equity. Raytheon Co.'s debt-to-capital ratio deteriorated from 2015 to 2016 but then improved from 2016 to 2017 exceeding 2015 level.

Interest Coverage

Raytheon Co., interest coverage calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Selected Financial Data (USD $ in millions)
Net income attributable to Raytheon Company 2,024  2,211  2,074  2,244  1,996 
Add: Net income attributable to noncontrolling interest (23) (37) (7) 14  17 
Less: Income from discontinued operations, net of tax 13  65  64 
Add: Income tax expense 1,114  857  733  790  808 
Add: Interest expense 205  232  233  213  210 
Earnings before interest and tax (EBIT) 3,318  3,262  3,020  3,196  2,967 
Ratio
Interest coverage1 16.19 14.06 12.96 15.00 14.13
Benchmarks
Interest Coverage, Competitors
Boeing Co. 28.90 19.19 27.01 22.46 17.17
General Dynamics Corp. 35.85 43.74 42.86 37.91 36.02
Lockheed Martin Corp. 9.09 8.37 12.34 16.46 12.87
Northrop Grumman Corp. 9.47 10.71 10.27 11.41 12.14
United Technologies Corp. 8.63 7.14 7.84 9.08 9.04
Interest Coverage, Sector
Aerospace & Defense 13.29 11.05 13.34 14.08 12.94
Interest Coverage, Industry
Industrials 7.95 8.24 10.83 7.76 7.15

Based on: 10-K (filing date: 2018-02-14), 10-K (filing date: 2017-02-15), 10-K (filing date: 2016-02-10), 10-K (filing date: 2015-02-11), 10-K (filing date: 2014-02-11).

2017 Calculations

1 Interest coverage = EBIT ÷ Interest expense
= 3,318 ÷ 205 = 16.19

Ratio Description The company
Interest coverage ratio A solvency ratio calculated as EBIT divided by interest payments. Raytheon Co.'s interest coverage ratio improved from 2015 to 2016 and from 2016 to 2017.