Sherwin-Williams Co. (NYSE:SHW)

Debt to Equity

The debt to equity ratio exhibited a general rise from early 2021 through the first half of 2022, peaking around mid-2022. Thereafter, a clear downward trend is observed, with ratios decreasing steadily from the second half of 2022 through 2025. This indicates a gradual reduction in reliance on debt relative to equity in the later periods after a phase of higher leverage.

Debt to Equity (Including Operating Lease Liability)

When including operating lease liabilities, the debt to equity ratio follows a similar pattern to the standard debt to equity measure but at higher levels. The ratio peaked in mid-2022, signaling heightened leverage including lease obligations, followed by a consistent decline towards 2025. This suggests improved management of total debt obligations over time.

Debt to Capital

This ratio remained relatively stable within a narrow band, showing a slight increase through early 2022 before gradually decreasing into 2025. The movements imply a moderate adjustment in the capital structure to optimize the balance between debt and overall capital during the periods.

Debt to Capital (Including Operating Lease Liability)

The trend mirrors that of the debt to capital ratio excluding leases but at marginally higher values. The ratio peaked in early 2022 and then showed a moderate decline, indicating that total debt including leases comprises a consistent share of the capital base with mild deleveraging in later years.

Debt to Assets

The debt to assets ratio exhibits minor fluctuations, slightly increasing until early 2022, then declining modestly through 2025. This signals a stable but cautious approach to leveraging assets over time, with a subtle reduction of debt relative to total assets in later periods.

Debt to Assets (Including Operating Lease Liability)

Including lease liabilities, the ratio remains higher but follows a similar pattern to the standard debt to assets ratio. The peak in early 2022 is followed by a steady decrease, reflecting a consistent management strategy addressing both financial and operating lease obligations relative to assets.

Financial Leverage

The financial leverage ratio rose steadily to a peak around mid-2022, indicating increased pressuring on equity financing relative to assets at that time. Subsequently, a consistent decline is observed through 2025, suggesting strengthening equity positions and improved financial robustness.

Interest Coverage

The interest coverage ratio showed some volatility but maintained a general upward trend from late 2022 onward. Starting from around 7.5, it increased to above 9 by late 2024 and early 2025. This improvement reflects enhanced ability to meet interest obligations from operational earnings, signaling improving financial health and reduced risk exposure.

Total Debt

The total debt demonstrates a generally increasing trend from the beginning of the period until the first quarter of 2022, peaking at over 10.5 billion USD. Subsequently, the debt fluctuates moderately throughout 2022 and 2023, with noticeable reductions in mid-2023. The later quarters show variability, with debt rising again towards the final periods, reaching approximately 11.5 billion USD by the third quarter of 2025. This pattern indicates cyclical adjustments in leverage but with an overall upward movement in debt levels over the analyzed timeline.

Shareholders’ Equity

Shareholders’ equity trends downward from the start date through early 2022, declining from nearly 3.1 billion USD to a low of approximately 2.2 billion USD. Following this low point, equity shows a consistent recovery and growth, surpassing prior levels to reach above 4.4 billion USD by the last quarter reviewed. This recovery suggests improved profitability or capital infusion, strengthening the equity base across the period from 2022 onward.

Debt to Equity Ratio

The ratio escalates sharply in early periods, moving from just below 3 to nearly 5 by the first quarter of 2022, reflecting the simultaneous increase in debt and decrease in equity. After this peak, there is a marked improvement as the ratio declines steadily through 2022 and into 2023, falling below 3 by mid-2023. The ratio maintains a relatively stable but slightly fluctuating range between 2.4 and 3.1 in the subsequent years, indicative of a more balanced capital structure with manageable leverage relative to equity.

Summary Insights

Overall, financial leverage intensified sharply early on, driven by increasing debt and falling equity, which could suggest heightened financial risk during that phase. From mid-2022 onwards, the company appears to have strategically reduced risk by increasing equity and managing debt levels, evident in a declining and more stable debt-to-equity ratio. The equity recovery alongside fluctuating debt indicates renewed financial strength and potentially improved operational performance or capitalization efforts. The recent rise in total debt towards the final periods warrants monitoring to assess its impact on financial stability, but the maintained equity growth supports continued resilience in the capital structure.

The analysis of the quarterly financial data reveals several noteworthy trends in the company's capital structure over the observed periods.

Total Debt (including operating lease liability)

The total debt level shows fluctuations across the quarters, with a general upward trend from early 2021 through early 2023, peaking near the first quarter of 2023. Following this, there is a moderate decline in the debt amount through late 2023 and mid-2024, before rising again towards the end of the period under review, reaching its highest value in the last quarter recorded. This pattern suggests periods of increased borrowing followed by some repayments or reductions in liabilities, with recent quarters indicating renewed debt accumulation.

Shareholders’ Equity

Shareholders' equity initially declines from the first quarter of 2021 until the end of 2021, reflecting potential net losses, dividends, or share repurchases reducing the equity base. From the beginning of 2022 onwards, a recovery trend is evident, with equity increasing steadily and reaching higher levels by mid-2024. Despite some minor fluctuations, this upward movement indicates an improvement in retained earnings or capital contributions, strengthening the company's equity position through the majority of the observed timeframe.

Debt to Equity Ratio (including operating lease liability)

This ratio peaks significantly around the first half of 2022, indicating heightened leverage with a higher proportion of debt relative to equity. Subsequently, it declines through 2023 and mid-2024, reflecting deleveraging influenced by increasing equity and/or decreasing debt levels. However, in the last quarters covered, there is a mild increase in this ratio, suggesting a slight reversal in leverage trends, though the ratio remains below early 2022 highs. Overall, the ratio illustrates varying leverage strategies with phases of elevated risk followed by cautious balance sheet management.

In summary, the company experienced increased leverage and reduced equity up to early 2022, followed by a recovery period characterized by strengthened equity and lower relative debt levels. The latter part of the latest quarters indicates a modest return to higher leverage, potentially signaling new financing activities or strategic shifts in capital management.

Total Debt

The total debt exhibited fluctuations over the observed periods. Initially, debt levels were relatively stable around 9.0 billion USD through 2021, but a noticeable increase occurred in early 2022, reaching above 10.5 billion USD. This was followed by a modest decline and some variability, with debt dropping below 10 billion USD during parts of 2023 and 2024. However, in the most recent quarters, debt rose again reaching above 11 billion USD by the last quarter analyzed. This pattern indicates a cyclical borrowing behavior with peaks approximately every two years and a tendency toward increased leverage in recent times.

Total Capital

Total capital displayed a steady upward trend over the entire period. Starting from about 12.2 billion USD in early 2021, total capital increased persistently, crossing 13.6 billion USD by the end of 2022. Despite some minor quarterly declines, this upward momentum continued through 2023 and beyond, reaching nearly 16 billion USD by the last reported quarter. This growth in capital suggests ongoing capital accumulation, potentially via retained earnings, equity issuance, or reinvestment.

Debt to Capital Ratio

The debt to capital ratio started at 0.75 in early 2021 and generally increased to peak around 0.83 in mid-2022. After this peak, the ratio trended downward, falling to the low 0.70s during late 2023 and early 2024, indicating a relative reduction in leverage compared to total capital. Toward the end of the observation period, the ratio stabilized around 0.71 to 0.72, showing a moderate level of leverage that is somewhat lower than the early 2022 peak but still consistent with a historically elevated debt position. The fluctuations suggest active management of financial leverage, adjusting debt levels relative to the capital base.

Total Debt (including operating lease liability)

The total debt increased steadily from March 2021 to March 2022, rising from approximately $10.9 billion to nearly $12.5 billion. Following this peak, the debt fluctuated modestly but remained close to this elevated level through 2022 and into early 2023. Notably, there was a decline from $13 billion in March 2023 to about $11.8 billion by December 2023, suggesting some debt reduction during that period. However, from early 2024 onward, debt levels resumed an upward trend, reaching around $13.6 billion by September 2025, the highest point in the observed timeframe.

Total Capital (including operating lease liability)

Total capital exhibited a generally increasing trend throughout the period, starting at approximately $14 billion in March 2021 and rising to about $18 billion by September 2025. The growth was steady, with occasional plateaus, such as a slight dip around late 2023 and early 2024. This increase in capital suggests continued investment or retained earnings contributing to the company's capital base over the analyzed quarters.

Debt to Capital Ratio (including operating lease liability)

The debt-to-capital ratio began near 0.78 in early 2021 and increased moderately to a peak of 0.85 by mid-2022, indicating a higher proportion of debt financing relative to total capital. After mid-2022, the ratio showed a generally downward or stabilizing trend, declining to around 0.74-0.76 through 2024 and maintaining this range up to the third quarter of 2025. This shift suggests a gradual improvement in the capital structure with less reliance on debt financing as a proportion of total capital in the latter part of the period.

Overall Insights

The financial data reflects a company that initially increased its debt levels significantly until early 2022, simultaneously growing its total capital. After reaching a debt peak, there was a phase of debt reduction or stabilization, which contributed to a decrease in the debt-to-capital ratio, indicating a healthier balance sheet structure. Subsequently, both total debt and capital resumed growth, but the debt-to-capital ratio remained relatively stable, implying balanced financing strategies. The consistent growth in total capital underscores sustained financial expansion, while fluctuations in debt levels highlight active debt management practices over the quarters analyzed.

Total Debt

The total debt demonstrates a fluctuating but generally upward trend over the observed periods. Starting at approximately $9.1 billion, debt levels increased through early 2022, peaking near $11.1 billion in the first quarter of 2023. Subsequent quarters show a moderate decline, followed by renewed increases towards the end of the dataset, culminating in a value exceeding $11.5 billion by the third quarter of 2025. This pattern suggests episodic borrowing activities or debt refinancing, potentially aligned with capital expenditure or operational requirements.

Total Assets

Total assets depict consistent growth throughout the timeframe. Beginning near $20.4 billion, asset values steadily increased with minor fluctuations, surpassing $26.2 billion by the third quarter of 2025. This continuous asset growth indicates sustained investment and asset accumulation, which may reflect expansion, acquisitions, or appreciation in asset values. The steady rise over the multiple years suggests a solid asset base supporting the company's operations.

Debt to Assets Ratio

The debt-to-assets ratio oscillates within a relatively narrow range between 0.42 and 0.49. Early periods show a moderate increase in the ratio from 0.43 to near 0.49, coinciding with rising debt levels relative to assets. Subsequently, a decline in the ratio occurs into 2023 and 2024, indicating either a reduction in relative debt or asset growth outpacing debt. However, slight increases are again observable towards the latter part of the time series. Overall, the ratio suggests a stable capital structure with a balanced use of debt financing relative to total assets, without extreme leverage variations.

Summary Insight

The company exhibits a pattern of increasing asset accumulation accompanied by similar scale fluctuations in total debt. Despite periods of rising debt, the consistent growth in assets contributes to maintaining a relatively stable debt-to-assets ratio. This dynamic reflects a strategy balancing leverage with asset growth, implying prudent financial management focused on growth while managing indebtedness levels. No abrupt or volatile swings in financial leverage ratios were detected, indicating controlled risk exposure from a capital structure perspective.

The analyzed financial data reflects trends in total debt, total assets, and the debt-to-assets ratio over multiple quarterly periods, revealing key dynamics in the company's leverage and asset growth.

Total Debt (Including Operating Lease Liability)

The total debt exhibits fluctuations across the observed quarters. Initially, the debt level remained relatively stable around 10.8 billion US dollars from March 2021 to September 2021, followed by a noticeable increase reaching approximately 12.5 billion by mid-2022. Subsequently, there is a pattern of minor decreases and increases, with debt peaking again around 13.6 billion US dollars toward the end of the projection period in late 2025. This reflects periodic adjustments in borrowing or lease obligations, possibly linked to operational needs or strategic financing decisions.

Total Assets

Total assets show a consistent upward trend throughout the timeframe. From approximately 20.4 billion US dollars in early 2021, assets grew steadily, surpassing 23 billion by early 2023 and reaching beyond 26 billion towards the end of 2025. This increase demonstrates ongoing asset accumulation or appreciation, which may be attributable to investments, acquisitions, or organic growth in asset base.

Debt to Assets Ratio (Including Operating Lease Liability)

The ratio of total debt to total assets reflects moderate leverage with values oscillating between 0.50 and 0.57 throughout the periods. Notably, the ratio started at approximately 0.53 in early 2021 and experienced a gradual rise to about 0.57 by mid-2022, indicating increasing reliance on debt relative to assets. Following this, the ratio slightly declined and fluctuated around the 0.50 to 0.54 range, suggesting a partial deleveraging or asset growth outpacing debt increases in the latter periods.

Overall, the debt-to-assets ratio portrays a balance between leveraging for growth and maintaining financial prudence, with no extreme changes detected that would indicate significant risk shifts.

In summary, the data points to a financial profile characterized by steady asset growth coupled with managed fluctuations in debt levels. The leverage ratio remains within a moderate band, underscoring an approach that balances debt usage with asset expansion over the analyzed periods.

The financial data indicates several noteworthy trends in the company's asset base, equity position, and leverage over the examined periods.

Total Assets

The total assets show a generally upward trajectory, increasing from approximately $20.4 billion at the beginning of the period to about $26.2 billion toward the end. This reflects consistent growth in the company's asset base, with some minor fluctuations, notably a slight decline in the final quarter but followed by recovery and continued growth. The asset expansion suggests ongoing investment or accumulation of resources.

Shareholders’ Equity

Shareholders’ equity experienced a decline in the early periods, dropping from around $3.1 billion to a low near $2.2 billion. However, from mid-2022 onward, equity shows a recovery trend, rising steadily and reaching over $4.4 billion by the final reported period. This recovery indicates strengthening net worth or retained earnings, reflecting improved profitability, capital injections, or effective equity management.

Financial Leverage

The financial leverage ratio, defined as total assets divided by shareholders’ equity, initially increased significantly, peaking at around 9.9 in mid-2022. This rise indicates a higher reliance on debt relative to equity during that time. Subsequently, leverage declines steadily, stabilizing around the 5.7 to 6.7 range in the later periods. The reduction in leverage suggests efforts toward deleveraging or equity growth outpacing debt expansion, leading to a more balanced capital structure.

In summary, the company expanded its total assets markedly over the period while initially faced with shrinking equity, which later saw significant recovery and growth. The high leverage mid-period reflects a period of increased debt utilization, but the subsequent decline in leverage indicates a financial strengthening and a shift toward lower risk by improving the equity ratio relative to total assets.

The analysis of the quarterly financial data reveals several important trends and fluctuations in the company's operating performance and financial obligations over the observed periods.

Earnings before Interest and Tax (EBIT)

The EBIT values exhibit significant quarter-to-quarter variability throughout the reported timeframe. Initially, there is a notable increase from March 2021 to June 2021, followed by a decline in the fourth quarter of 2021. The first half of 2022 shows recovery and growth, peaking in the third quarter with a value nearing one million US dollars (thousands). However, this is succeeded by a retreat towards the end of 2022. The first three quarters of 2023 demonstrate an upward trajectory with particularly strong results in the second and third quarters, exceeding previous peaks. A decline occurs again in the fourth quarter, but subsequent quarters in 2024 and early 2025 indicate a renewed upward trend, maintaining EBIT levels largely above 700 million US dollars (thousands). Overall, EBIT reflects cyclical performance with recurring peaks and troughs, suggesting sensitivity to seasonal or market factors.

Interest Expense

The interest expense has a generally increasing trend over the entire period. Starting from approximately 83 million US dollars (thousands) in early 2021, it gradually rises with minor fluctuations, reaching about 117 million US dollars (thousands) by the last quarter of 2025. The gradual increase reflects either growing borrowing costs or higher debt levels. The changes are relatively smooth compared to EBIT, indicating a steady rise in financing costs.

Interest Coverage Ratio

The interest coverage ratio, which measures the company's ability to meet interest obligations from operating earnings, shows a moderate level of stability with some fluctuations. Early 2021 levels are close to 9 times coverage, followed by a slight decline through late 2021 and mid-2022, dipping near 7 times. There is a recovery trend starting late 2022 and prominent improvement through 2024, reaching above 9 times coverage. The ratio slightly decreases again towards the end of the analyzed period but remains close to 8 to 9 times. The trend in coverage ratio generally mirrors the movements in EBIT relative to a steadily increasing interest expense, indicating that despite rising interest expenses, the company's earnings capacity has been sufficient to maintain a comfortable margin for interest payments.

In summary, the data indicates that the company experiences fluctuating operational earnings with cyclical peaks, while interest expenses grow steadily over time. Despite this, the ability to cover interest costs remains robust, supported by relatively strong EBIT performance after mid-2022. Continuous monitoring is advisable to assess whether the operational trend can sustain or improve coverage amid rising financing costs.