Analysis of Solvency Ratios
Quarterly Data
Solvency ratios also known as long-term debt ratios measure a company ability to meet long-term obligations.
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- Balance Sheet: Assets
- Analysis of Liquidity Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Analysis of Reportable Segments
- Enterprise Value to EBITDA (EV/EBITDA)
- Present Value of Free Cash Flow to Equity (FCFE)
- Selected Financial Data since 2005
- Operating Profit Margin since 2005
- Return on Assets (ROA) since 2005
- Analysis of Debt
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Solvency Ratios (Summary)
Raytheon Co., solvency ratios (quarterly data)
Based on: 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-29), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-07-01), 10-Q (reporting date: 2018-04-01), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-10-01), 10-Q (reporting date: 2017-07-02), 10-Q (reporting date: 2017-04-02), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-10-02), 10-Q (reporting date: 2016-07-03), 10-Q (reporting date: 2016-04-03).
The financial ratios over the observed quarters indicate several important trends in the company's leverage and interest coverage.
- Debt to Equity Ratio
- This ratio shows a gradual decline from 0.53 in early 2016 to a low of 0.37 in September 2019 with a slight uptick to 0.39 at the end of 2019. This suggests a consistent reduction in reliance on debt relative to shareholders' equity over the period.
- Debt to Equity (Including Operating Lease Liability)
- The trend mirrors the traditional debt to equity ratio, with a slight difference where an increase is observed in the first quarter of 2019 followed by a decrease towards the end of 2019. This indicates present but controlled impact of lease liabilities on the company’s financial leverage.
- Debt to Capital Ratio
- This ratio exhibits a subtle but steady decline from 0.34 in early 2016 to 0.27 in September 2019, though with a minor increase to 0.28 in the final quarter. This trend reinforces the observation of decreasing financial risk through less debt financing over the period.
- Debt to Capital (Including Operating Lease Liability)
- Similar to its counterpart excluding lease liabilities, this ratio shows a downward trend with minor fluctuations, indicating controlled influence of operating leases on capital structure.
- Debt to Assets Ratio
- A slight decrease from 0.18 in 2016 to 0.14 in late 2019 is observed, suggesting a gradual reduction in total liabilities relative to total assets, consistent with diminishing debt levels.
- Debt to Assets (Including Operating Lease Liability)
- The ratio remains fairly stable with a minor increase around early 2019 before returning to 0.16. This reflects some variability due to lease liabilities but overall stable asset coverage.
- Financial Leverage
- The financial leverage ratio demonstrates modest fluctuations, generally moving between 2.8 and 3.1, with a slight dip to 2.53 in September 2019 followed by an increase to 2.83 at the end of 2019. This suggests relatively stable use of debt in capital structure with some variability in equity levels influencing leverage.
- Interest Coverage
- Interest coverage shows a clear upward trend from 11.98 in early 2016 to 23.14 by the end of 2019. This indicates a significant improvement in the company's ability to meet interest expenses from earnings, enhancing financial stability and creditworthiness.
Overall, the data reveals a consistent reduction in the company's debt relative to equity, capital, and assets, accompanied by a strengthening capacity to cover interest obligations. The inclusion of operating lease liabilities slightly affects leverage ratios but does not alter the general downward trend in financial risk indicators. This progression points to a cautious approach to leveraging and improved financial health over the examined periods.
Debt Ratios
Coverage Ratios
Debt to Equity
Raytheon Co., debt to equity calculation (quarterly data)
| Dec 31, 2019 | Sep 29, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jul 1, 2018 | Apr 1, 2018 | Dec 31, 2017 | Oct 1, 2017 | Jul 2, 2017 | Apr 2, 2017 | Dec 31, 2016 | Oct 2, 2016 | Jul 3, 2016 | Apr 3, 2016 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||
| Commercial paper and current portion of long-term debt | |||||||||||||||||||||
| Long-term debt, excluding current portion | |||||||||||||||||||||
| Total debt | |||||||||||||||||||||
| Total Raytheon Company stockholders’ equity | |||||||||||||||||||||
| Solvency Ratio | |||||||||||||||||||||
| Debt to equity1 | |||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||
| Debt to Equity, Competitors2 | |||||||||||||||||||||
| Boeing Co. | |||||||||||||||||||||
| Caterpillar Inc. | |||||||||||||||||||||
| Eaton Corp. plc | |||||||||||||||||||||
| GE Aerospace | |||||||||||||||||||||
| Honeywell International Inc. | |||||||||||||||||||||
| Lockheed Martin Corp. | |||||||||||||||||||||
| RTX Corp. | |||||||||||||||||||||
Based on: 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-29), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-07-01), 10-Q (reporting date: 2018-04-01), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-10-01), 10-Q (reporting date: 2017-07-02), 10-Q (reporting date: 2017-04-02), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-10-02), 10-Q (reporting date: 2016-07-03), 10-Q (reporting date: 2016-04-03).
1 Q4 2019 Calculation
Debt to equity = Total debt ÷ Total Raytheon Company stockholders’ equity
= ÷ =
2 Click competitor name to see calculations.
- Total Debt
- The total debt remained relatively stable over the observed periods, with values fluctuating slightly between approximately $4.76 billion and $5.35 billion. There was a notable decrease in debt starting from the second quarter of 2019, indicating some reduction in financial leverage or repayment activity during that time frame.
- Total Stockholders' Equity
- Stockholders’ equity showed a general upward trend over the periods, increasing from about $10.1 billion in early 2016 to a peak of approximately $12.98 billion in the third quarter of 2019. A slight decline is noted in the final quarter of 2019, suggesting either a distribution, loss, or adjustment impacting equity.
- Debt to Equity Ratio
- The debt to equity ratio demonstrated a gradual decreasing trend throughout the period, moving from around 0.53 in early 2016 to approximately 0.37 by the third quarter of 2019. This indicates an improvement in the company's capital structure, with equity growing at a faster pace than debt or debt levels being managed downward. The minor rise to 0.39 in the last quarter does not significantly disrupt this overall improvement.
- Overall Financial Structure
- The combination of stable or slightly decreasing debt with steadily increasing equity reflects a strengthening financial position. The company appears to have enhanced its solvency and reduced financial risk over the examined timeframe, as evidenced by the improving debt to equity ratio. The observed trends suggest prudent financial management and potentially increased retained earnings or capital infusions contributing to equity growth.
Debt to Equity (including Operating Lease Liability)
Raytheon Co., debt to equity (including operating lease liability) calculation (quarterly data)
| Dec 31, 2019 | Sep 29, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jul 1, 2018 | Apr 1, 2018 | Dec 31, 2017 | Oct 1, 2017 | Jul 2, 2017 | Apr 2, 2017 | Dec 31, 2016 | Oct 2, 2016 | Jul 3, 2016 | Apr 3, 2016 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||
| Commercial paper and current portion of long-term debt | |||||||||||||||||||||
| Long-term debt, excluding current portion | |||||||||||||||||||||
| Total debt | |||||||||||||||||||||
| Operating lease liabilities, noncurrent | |||||||||||||||||||||
| Total debt (including operating lease liability) | |||||||||||||||||||||
| Total Raytheon Company stockholders’ equity | |||||||||||||||||||||
| Solvency Ratio | |||||||||||||||||||||
| Debt to equity (including operating lease liability)1 | |||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||
| Debt to Equity (including Operating Lease Liability), Competitors2 | |||||||||||||||||||||
| Eaton Corp. plc | |||||||||||||||||||||
| RTX Corp. | |||||||||||||||||||||
Based on: 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-29), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-07-01), 10-Q (reporting date: 2018-04-01), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-10-01), 10-Q (reporting date: 2017-07-02), 10-Q (reporting date: 2017-04-02), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-10-02), 10-Q (reporting date: 2016-07-03), 10-Q (reporting date: 2016-04-03).
1 Q4 2019 Calculation
Debt to equity (including operating lease liability) = Total debt (including operating lease liability) ÷ Total Raytheon Company stockholders’ equity
= ÷ =
2 Click competitor name to see calculations.
- Total Debt (Including Operating Lease Liability)
- The total debt remained relatively stable between April 2016 and December 2018, fluctuating slightly around the 5,300 million US dollar mark. Beginning in the first quarter of 2019, the debt level increased noticeably, peaking at 5,777 million US dollars in the second quarter of 2019, before decreasing somewhat towards the end of that year.
- Total Stockholders’ Equity
- The total stockholders' equity showed a general upward trend over the period. Starting just above 10,000 million US dollars in early 2016, equity increased steadily with some minor fluctuations and reached its highest point of approximately 12,982 million US dollars in the third quarter of 2019. A slight decline followed into the final quarter of 2019.
- Debt to Equity Ratio
- The debt to equity ratio demonstrated a gradual downward trend over the observed quarters, indicating an improvement in the company’s capital structure relative to equity. It decreased from about 0.53 in early 2016 to a low of 0.42 in the third quarter of 2019. Following this, the ratio saw a moderate rise to 0.45 by the end of 2019, suggesting a slight increase in leverage.
- Summary of Financial Position Trends
- Overall, the financial data reveals a pattern of cautious debt management with relatively stable total debt levels for an extended period, followed by a brief increase in early 2019. Concurrently, there is a consistent growth in stockholders’ equity, which contributes to a declining debt to equity ratio and, therefore, an improving balance sheet strength over most of the time frame. The slight uptick in debt and debt to equity ratio towards the end of 2019 may warrant monitoring to understand its implications.
Debt to Capital
Raytheon Co., debt to capital calculation (quarterly data)
| Dec 31, 2019 | Sep 29, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jul 1, 2018 | Apr 1, 2018 | Dec 31, 2017 | Oct 1, 2017 | Jul 2, 2017 | Apr 2, 2017 | Dec 31, 2016 | Oct 2, 2016 | Jul 3, 2016 | Apr 3, 2016 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||
| Commercial paper and current portion of long-term debt | |||||||||||||||||||||
| Long-term debt, excluding current portion | |||||||||||||||||||||
| Total debt | |||||||||||||||||||||
| Total Raytheon Company stockholders’ equity | |||||||||||||||||||||
| Total capital | |||||||||||||||||||||
| Solvency Ratio | |||||||||||||||||||||
| Debt to capital1 | |||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||
| Debt to Capital, Competitors2 | |||||||||||||||||||||
| Boeing Co. | |||||||||||||||||||||
| Caterpillar Inc. | |||||||||||||||||||||
| Eaton Corp. plc | |||||||||||||||||||||
| GE Aerospace | |||||||||||||||||||||
| Honeywell International Inc. | |||||||||||||||||||||
| Lockheed Martin Corp. | |||||||||||||||||||||
| RTX Corp. | |||||||||||||||||||||
Based on: 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-29), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-07-01), 10-Q (reporting date: 2018-04-01), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-10-01), 10-Q (reporting date: 2017-07-02), 10-Q (reporting date: 2017-04-02), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-10-02), 10-Q (reporting date: 2016-07-03), 10-Q (reporting date: 2016-04-03).
1 Q4 2019 Calculation
Debt to capital = Total debt ÷ Total capital
= ÷ =
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals several notable trends regarding the company's debt and capital structure over the examined periods.
- Total Debt
- The total debt remained relatively stable from April 2016 through June 2019, fluctuating minimally around the 5,300 to 5,000 million US dollar range initially. Starting from the quarter ending June 2019, there was a discernible decrease in total debt, reaching approximately 4,760 million US dollars by the end of 2019. This downward trend indicates a strategic reduction in liabilities during the later quarters of the dataset.
- Total Capital
- Total capital exhibited more variability compared to total debt. It grew from roughly 15,400 million US dollars in early 2016 to peak levels near 17,700 million US dollars in late 2019. Despite some fluctuations, this general upward trajectory reflects an expansion in the company's overall capital base over the period, suggesting either increased equity financing, retained earnings, or both.
- Debt to Capital Ratio
- The debt to capital ratio starts around 0.34 to 0.35 in early 2016, indicating that approximately one-third of the capital structure was financed through debt. This ratio gradually declined over time, reaching a low of about 0.27 by the penultimate quarter of 2019, before slightly increasing to 0.28 at the end of the year. The decreasing ratio implies a strengthening of the company's capital structure by reducing reliance on debt financing or increasing equity proportion, contributing to potentially lower financial risk.
Overall, the trends suggest a deliberate effort to enhance financial stability by reducing debt obligations and increasing total capital. The consistent decrease in the debt to capital ratio is reflective of a more conservative financing approach, which could improve creditworthiness and flexibility for future investments or operations.
Debt to Capital (including Operating Lease Liability)
Raytheon Co., debt to capital (including operating lease liability) calculation (quarterly data)
| Dec 31, 2019 | Sep 29, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jul 1, 2018 | Apr 1, 2018 | Dec 31, 2017 | Oct 1, 2017 | Jul 2, 2017 | Apr 2, 2017 | Dec 31, 2016 | Oct 2, 2016 | Jul 3, 2016 | Apr 3, 2016 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||
| Commercial paper and current portion of long-term debt | |||||||||||||||||||||
| Long-term debt, excluding current portion | |||||||||||||||||||||
| Total debt | |||||||||||||||||||||
| Operating lease liabilities, noncurrent | |||||||||||||||||||||
| Total debt (including operating lease liability) | |||||||||||||||||||||
| Total Raytheon Company stockholders’ equity | |||||||||||||||||||||
| Total capital (including operating lease liability) | |||||||||||||||||||||
| Solvency Ratio | |||||||||||||||||||||
| Debt to capital (including operating lease liability)1 | |||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||
| Debt to Capital (including Operating Lease Liability), Competitors2 | |||||||||||||||||||||
| Eaton Corp. plc | |||||||||||||||||||||
| RTX Corp. | |||||||||||||||||||||
Based on: 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-29), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-07-01), 10-Q (reporting date: 2018-04-01), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-10-01), 10-Q (reporting date: 2017-07-02), 10-Q (reporting date: 2017-04-02), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-10-02), 10-Q (reporting date: 2016-07-03), 10-Q (reporting date: 2016-04-03).
1 Q4 2019 Calculation
Debt to capital (including operating lease liability) = Total debt (including operating lease liability) ÷ Total capital (including operating lease liability)
= ÷ =
2 Click competitor name to see calculations.
- Total debt (including operating lease liability)
- The total debt remained relatively stable from April 2016 through December 2018, fluctuating slightly around the 5,300 to 5,055 million US$ range. Starting in the first quarter of 2019, debt increased noticeably, peaking at 5,777 million US$ in the second quarter of 2019, before declining moderately to 5,450 and 5,466 million US$ in the third and fourth quarters respectively. This indicates a period of increased borrowing or liability recognition in early 2019, followed by some debt reduction toward the end of that year.
- Total capital (including operating lease liability)
- Total capital exhibited a fluctuating trend over the observed period. From April 2016 until early 2017, it increased modestly, then experienced a decline by the end of 2017. From early 2018 onward, total capital generally trended upward, peaking at 18,432 million US$ in the third quarter of 2019. However, a slight decrease was observed in the last quarter of 2019 to 17,689 million US$. This suggests overall growth in the company's capital base over the long term, despite some short-term volatility.
- Debt to capital ratio (including operating lease liability)
- The debt to capital ratio remained relatively consistent, fluctuating between 0.30 and 0.35 throughout the period. The ratio started at approximately 0.34 in early 2016, dipped slightly during the middle periods in 2017 and 2018, reaching a low near 0.30 by the third quarter of 2019. The ratio slightly increased again to 0.31 by the end of 2019. This stable but slightly declining leverage ratio indicates a moderate reduction in the proportion of debt to total capital over time, reflecting a cautious approach to leveraging and potential strengthening of the equity or capital base relative to debt.
Debt to Assets
Raytheon Co., debt to assets calculation (quarterly data)
| Dec 31, 2019 | Sep 29, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jul 1, 2018 | Apr 1, 2018 | Dec 31, 2017 | Oct 1, 2017 | Jul 2, 2017 | Apr 2, 2017 | Dec 31, 2016 | Oct 2, 2016 | Jul 3, 2016 | Apr 3, 2016 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||
| Commercial paper and current portion of long-term debt | |||||||||||||||||||||
| Long-term debt, excluding current portion | |||||||||||||||||||||
| Total debt | |||||||||||||||||||||
| Total assets | |||||||||||||||||||||
| Solvency Ratio | |||||||||||||||||||||
| Debt to assets1 | |||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||
| Debt to Assets, Competitors2 | |||||||||||||||||||||
| Boeing Co. | |||||||||||||||||||||
| Caterpillar Inc. | |||||||||||||||||||||
| Eaton Corp. plc | |||||||||||||||||||||
| GE Aerospace | |||||||||||||||||||||
| Honeywell International Inc. | |||||||||||||||||||||
| Lockheed Martin Corp. | |||||||||||||||||||||
| RTX Corp. | |||||||||||||||||||||
Based on: 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-29), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-07-01), 10-Q (reporting date: 2018-04-01), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-10-01), 10-Q (reporting date: 2017-07-02), 10-Q (reporting date: 2017-04-02), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-10-02), 10-Q (reporting date: 2016-07-03), 10-Q (reporting date: 2016-04-03).
1 Q4 2019 Calculation
Debt to assets = Total debt ÷ Total assets
= ÷ =
2 Click competitor name to see calculations.
- Total Debt
- The total debt remained relatively stable from early 2016 through to the end of 2018, fluctuating marginally around the range of 5,300 to 5,050 million US dollars. Starting in 2019, there was a noticeable decline in total debt, decreasing to approximately 4,760 million US dollars by the end of December 2019. This reduction suggests a strategic effort to lower leverage or improve debt management during 2019.
- Total Assets
- Total assets exhibited a steady upward trend throughout the period observed. Beginning around 28,800 million US dollars in early 2016, total assets showed consistent growth, reaching nearly 31,800 million US dollars by the start of 2019. The growth accelerated in 2019, culminating in total assets exceeding 34,500 million US dollars by the end of the year. This increasing asset base could reflect investment expansion, acquisitions, or enhanced operational capacity.
- Debt to Assets Ratio
- The debt to assets ratio demonstrated a gradual decline over the four-year span. Initially steady at around 0.18 through 2016 and early 2017, the ratio began to decrease slowly, reaching approximately 0.15 by mid-2019. By the end of 2019, the ratio further declined to around 0.14. This downward trend indicates an improvement in the company's financial leverage position, suggesting reduced reliance on debt financing relative to the growth in total assets.
- Overall Financial Position
- The combination of stable to decreasing total debt alongside steadily increasing total assets led to a consistent reduction in the debt to assets ratio. This pattern reflects a strengthening balance sheet over time, with the company improving its asset base while managing to either reduce or contain its debt levels. The most significant improvements appear in 2019, highlighting a potential focus on deleveraging and asset growth during that year.
Debt to Assets (including Operating Lease Liability)
Raytheon Co., debt to assets (including operating lease liability) calculation (quarterly data)
| Dec 31, 2019 | Sep 29, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jul 1, 2018 | Apr 1, 2018 | Dec 31, 2017 | Oct 1, 2017 | Jul 2, 2017 | Apr 2, 2017 | Dec 31, 2016 | Oct 2, 2016 | Jul 3, 2016 | Apr 3, 2016 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||
| Commercial paper and current portion of long-term debt | |||||||||||||||||||||
| Long-term debt, excluding current portion | |||||||||||||||||||||
| Total debt | |||||||||||||||||||||
| Operating lease liabilities, noncurrent | |||||||||||||||||||||
| Total debt (including operating lease liability) | |||||||||||||||||||||
| Total assets | |||||||||||||||||||||
| Solvency Ratio | |||||||||||||||||||||
| Debt to assets (including operating lease liability)1 | |||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||
| Debt to Assets (including Operating Lease Liability), Competitors2 | |||||||||||||||||||||
| Eaton Corp. plc | |||||||||||||||||||||
| RTX Corp. | |||||||||||||||||||||
Based on: 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-29), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-07-01), 10-Q (reporting date: 2018-04-01), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-10-01), 10-Q (reporting date: 2017-07-02), 10-Q (reporting date: 2017-04-02), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-10-02), 10-Q (reporting date: 2016-07-03), 10-Q (reporting date: 2016-04-03).
1 Q4 2019 Calculation
Debt to assets (including operating lease liability) = Total debt (including operating lease liability) ÷ Total assets
= ÷ =
2 Click competitor name to see calculations.
The financial data presents a detailed view of certain key balance sheet items over a series of quarterly periods.
- Total Debt (including operating lease liability)
- Total debt remained relatively stable around the 5,300 million USD mark through most of 2016 and early 2017, with figures fluctuating minimally between 5,332 and 5,337 million USD. Starting in mid-2017, there was a slight reduction to approximately 5,047 million USD, which persisted with minor fluctuations until the end of 2018. However, beginning in the first quarter of 2019, total debt increased noticeably, peaking at 5,777 million USD in the second quarter of 2019 before receding somewhat to 5,466 million USD by the fourth quarter of 2019.
- Total Assets
- Total assets displayed a generally upward trend over the entire period. The assets started around 28,829 million USD in early 2016 and showed steady growth through successive quarters, culminating in significant increases observed in 2019, reaching a peak of 34,566 million USD by the end of 2019. This upward trajectory indicates the company's expansion or accumulation of assets over time, with occasional minor declines or plateauing, such as a slight dip towards the third quarter of 2018.
- Debt to Assets Ratio (including operating lease liability)
- The debt to assets ratio remained relatively consistent throughout the observed periods, fluctuating modestly between 0.16 and 0.18. Notably, the ratio showed minor decreases in the latter part of 2017 and early 2018, dropping to as low as 0.16, which suggests an improvement in the balance between debt and asset levels during that timeframe. Toward 2019, there was a slight increase back to approximately 0.18, corresponding with the increase in total debt noted during the same period. Overall, the ratio indicates a stable leverage position with minor variations that correspond with changes in total debt and asset values.
In summary, the company maintained a relatively stable debt level through most of the period while gradually expanding its asset base. The leverage, as measured by the debt to assets ratio, remained stable with slight fluctuations suggesting controlled debt management aligned with asset growth. The notable increase in debt in early 2019 warrants attention, particularly as assets also increased, maintaining the ratio within a moderate range.
Financial Leverage
Raytheon Co., financial leverage calculation (quarterly data)
| Dec 31, 2019 | Sep 29, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jul 1, 2018 | Apr 1, 2018 | Dec 31, 2017 | Oct 1, 2017 | Jul 2, 2017 | Apr 2, 2017 | Dec 31, 2016 | Oct 2, 2016 | Jul 3, 2016 | Apr 3, 2016 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||
| Total assets | |||||||||||||||||||||
| Total Raytheon Company stockholders’ equity | |||||||||||||||||||||
| Solvency Ratio | |||||||||||||||||||||
| Financial leverage1 | |||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||
| Financial Leverage, Competitors2 | |||||||||||||||||||||
| Boeing Co. | |||||||||||||||||||||
| Caterpillar Inc. | |||||||||||||||||||||
| Eaton Corp. plc | |||||||||||||||||||||
| GE Aerospace | |||||||||||||||||||||
| Honeywell International Inc. | |||||||||||||||||||||
| Lockheed Martin Corp. | |||||||||||||||||||||
| RTX Corp. | |||||||||||||||||||||
Based on: 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-29), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-07-01), 10-Q (reporting date: 2018-04-01), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-10-01), 10-Q (reporting date: 2017-07-02), 10-Q (reporting date: 2017-04-02), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-10-02), 10-Q (reporting date: 2016-07-03), 10-Q (reporting date: 2016-04-03).
1 Q4 2019 Calculation
Financial leverage = Total assets ÷ Total Raytheon Company stockholders’ equity
= ÷ =
2 Click competitor name to see calculations.
- Total assets
-
Total assets show a generally increasing trend over the observed periods. Starting at approximately 28.8 billion USD in early April 2016, total assets gradually rose to about 34.6 billion USD by the end of December 2019. There are some minor fluctuations, such as a dip around mid-2018 and early 2019, but the overall trajectory is upward, reflecting expansion or asset accumulation within the company during this timeframe.
- Total Raytheon Company stockholders’ equity
-
Stockholders’ equity exhibits moderate growth with some variability across quarters. Beginning near 10.1 billion USD in early 2016, equity levels generally trend upward, reaching a peak of roughly 13.0 billion USD near the third quarter of 2019. However, significant fluctuations occur, notably a decline toward the end of 2017, where equity decreased to below 10.0 billion USD, and a similar decrease towards the end of 2019. Despite these drops, the overall increase suggests retained earnings growth or capital injections over the long term.
- Financial leverage
-
The financial leverage ratio, defined as total assets divided by stockholders’ equity, demonstrates variability with an overall downward trend toward the later part of the series. Starting at 2.85 in early 2016, the ratio experiences fluctuations between approximately 2.5 and 3.1. Peaks in leverage are noted around the end of 2016 and 2017, reaching above 3.0, indicating increased use of debt or liabilities relative to equity during these periods. Toward the end of 2019, the ratio declines to around 2.5, suggesting a relative reduction in leverage, possibly due to higher equity or asset adjustments. This pattern indicates cycles of leverage management and potential changes in capital structure strategy over the four-year span.
Interest Coverage
Raytheon Co., interest coverage calculation (quarterly data)
| Dec 31, 2019 | Sep 29, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jul 1, 2018 | Apr 1, 2018 | Dec 31, 2017 | Oct 1, 2017 | Jul 2, 2017 | Apr 2, 2017 | Dec 31, 2016 | Oct 2, 2016 | Jul 3, 2016 | Apr 3, 2016 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||
| Net income attributable to Raytheon Company | |||||||||||||||||||||
| Add: Net income attributable to noncontrolling interest | |||||||||||||||||||||
| Less: Income (loss) from discontinued operations, net of tax | |||||||||||||||||||||
| Add: Income tax expense | |||||||||||||||||||||
| Add: Interest expense | |||||||||||||||||||||
| Earnings before interest and tax (EBIT) | |||||||||||||||||||||
| Solvency Ratio | |||||||||||||||||||||
| Interest coverage1 | |||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||
| Interest Coverage, Competitors2 | |||||||||||||||||||||
| Boeing Co. | |||||||||||||||||||||
| Caterpillar Inc. | |||||||||||||||||||||
| Eaton Corp. plc | |||||||||||||||||||||
| GE Aerospace | |||||||||||||||||||||
| Honeywell International Inc. | |||||||||||||||||||||
| Lockheed Martin Corp. | |||||||||||||||||||||
Based on: 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-29), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-07-01), 10-Q (reporting date: 2018-04-01), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-10-01), 10-Q (reporting date: 2017-07-02), 10-Q (reporting date: 2017-04-02), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-10-02), 10-Q (reporting date: 2016-07-03), 10-Q (reporting date: 2016-04-03).
1 Q4 2019 Calculation
Interest coverage
= (EBITQ4 2019
+ EBITQ3 2019
+ EBITQ2 2019
+ EBITQ1 2019)
÷ (Interest expenseQ4 2019
+ Interest expenseQ3 2019
+ Interest expenseQ2 2019
+ Interest expenseQ1 2019)
= ( + + + )
÷ ( + + + )
=
2 Click competitor name to see calculations.
- Earnings before Interest and Tax (EBIT)
- The EBIT shows a generally upward trend from April 2016 to December 2019. Starting at 618 million USD in April 2016, the EBIT increases with some fluctuations, reaching 1110 million USD by the last quarter of 2019. Notable increases occur particularly after March 2019, where EBIT rises steadily from 965 million USD to 1110 million USD over the year, indicating an overall improvement in operating profitability.
- Interest Expense
- Interest expense remains relatively stable over the periods, with values fluctuating slightly between 58 million USD at the start to a low of 44 million USD in mid-2019, and then settling around 45-46 million USD towards the end of 2019. The lack of significant variation suggests consistent debt servicing costs, possibly reflecting stable debt levels or refinancing activity at similar interest rates.
- Interest Coverage Ratio
- The interest coverage ratio exhibits a positive and steady improvement from 11.98 in April 2016 to 23.14 by December 2019. This ratio nearly doubles over the period, reflecting stronger earnings relative to interest obligations. The increasing interest coverage ratio indicates enhanced ability to meet interest payments from earnings, suggesting improved financial stability and reduced credit risk.