Sherwin-Williams Co. (NYSE:SHW)

Debt to Equity

The debt to equity ratio initially decreased from 2.97 in Q1 2020 to 1.97 in Q3 2020, indicating a reduction in leverage relative to shareholders' equity. Subsequently, the ratio increased consistently, peaking at 4.77 in Q2 2022, suggesting a period of higher financial leverage. After this peak, the ratio demonstrated a downward trend, stabilizing between approximately 2.43 and 3.06 during 2023 and into mid-2025, implying a moderation in reliance on debt financing over the longer term.

Debt to Equity (Including Operating Lease Liability)

This ratio follows a similar pattern to the standard debt to equity ratio but at higher absolute levels due to the inclusion of operating lease liabilities. It dropped from 3.5 in Q1 2020 to 2.4 in Q3 2020, before rising to a peak of 5.62 in Q2 2022. Then, the ratio declined and fluctuated moderately in the range of 2.9 to 4.11 through 2023 and the first half of 2025, reflecting a comparable long-term stabilization trend as seen in the standard debt to equity measure.

Debt to Capital

The debt to capital ratio showed a modest decline from 0.75 in Q1 2020 to 0.66 in Q3 2020, indicating a decrease in the proportion of debt within total capital. This was followed by a rebound to 0.83 by Q1 2022. Subsequently, the ratio slightly decreased and remained relatively stable around 0.71 to 0.75 through mid-2025, signaling consistent capital structure proportions with moderate leverage levels over the period.

Debt to Capital (Including Operating Lease Liability)

Including operating leases, this ratio displayed a trend consistent with the debt to capital ratio but at somewhat elevated levels. It decreased from 0.78 in Q1 2020 to 0.71 in Q3 2020, followed by an increase to a peak of 0.85 in Q1 2022. Afterward, it declined and stayed relatively steady between 0.74 and 0.8 through mid-2025, reflecting stable leverage when accounting for lease obligations.

Debt to Assets

The debt to assets ratio decreased from 0.47 in Q1 2020 to 0.40 in Q3 2020, suggesting reduced debt levels relative to total assets. It then rose to 0.49 in Q1 2022 before declining and fluctuating between 0.42 and 0.48 through mid-2025, indicating a moderate level of leverage compared with asset base with some variability over time.

Debt to Assets (Including Operating Lease Liability)

When including operating lease liabilities, this ratio showed a similar pattern but generally higher values. It fell from 0.56 in Q1 2020 to 0.48 in Q3 2020 and then climbed to 0.57 in early 2022. Thereafter, it exhibited a mild decline, staying between 0.5 and 0.56 through the analysis period, consistent with stable leverage adjusted for lease obligations.

Financial Leverage

Financial leverage decreased from 6.25 in Q1 2020 to 4.95 in Q3 2020, indicating reduced use of debt relative to equity. It increased sharply thereafter, reaching a peak of 9.91 in Q2 2022. Following this high point, financial leverage steadily trended downward, stabilizing around 5.7 to 7.3 during 2023 to mid-2025. This suggests ongoing moderation in leverage after a period of heightened debt usage.

Interest Coverage

Interest coverage data starts from Q4 2020 at 8.4 and displays a generally stable to improving trend over the period. It rose gradually to a peak of 9.32 in Q1 2025, indicating an increasing ability to service interest expenses with operating earnings. The stable and improving interest coverage ratio suggests solid operational cash flow relative to interest obligations throughout the observed quarters.

Total Debt

The total debt exhibited a fluctuating pattern over the periods presented. Initially, from March 31, 2020, to September 30, 2020, there was a consistent decline in total debt, dropping from approximately $9,770 million to $8,291 million. Following this trough in late 2020, debt levels increased again, peaking notably in March 31, 2022, at around $10,593 million. The trend thereafter shows moderate fluctuations, with a slight downward movement through September 30, 2023, reaching about $9,936 million. However, the debt rose again during the last reported quarters, crossing above $10,700 million by March 31, 2025. This trajectory suggests a pattern of debt management with periods of strategic reduction followed by increases, reflecting possible financing or capital expenditure cycles.

Shareholders’ Equity

Shareholders’ equity showed considerable variation with an overall positive trend toward the end of the period. At the start, equity values climbed from approximately $3,289 million in March 2020 to a peak near $4,207 million in September 2020. This was followed by a substantial decline reaching a low point of roughly $2,437 million by December 31, 2021. Subsequently, the equity increased steadily with some volatility, rising to over $4,400 million by the final quarter in March 31, 2025. This recovery after the 2021 dip might indicate improved profitability, retained earnings accumulation, or capital injections strengthening the equity base.

Debt to Equity Ratio

The debt to equity ratio showed pronounced variability which mirrored the inverse movements of debt and equity. Initially high at 2.97 in March 2020, the ratio declined to a low of about 1.97 by September 2020. Thereafter, it increased sharply to a peak of nearly 4.77 in June 30, 2022, corresponding to the period when equity was near its trough and debt was elevated. From mid-2022 onwards, the ratio steadily decreased, reaching levels close to 2.43 by June 30, 2025. This indicates a strengthening equity position relative to debt or a reduction in leverage in the latter periods. The fluctuations suggest an adaptive capital structure with shifts balancing growth, risk management, and financing needs over time.

Total debt (including operating lease liability)

The total debt exhibits fluctuations throughout the periods analyzed. Starting at approximately $11.5 billion in March 2020, the total debt declined steadily through September 2020 to around $10 billion. It then increased gradually towards the end of 2020, reaching just over $11.4 billion in December 2020. In 2021, debt levels showed an initial rise in the first quarter, peaking near $11.5 billion by year-end. During 2022, the total debt maintained a relatively stable position around $12.5 billion, with minor variations quarter to quarter. In 2023, the debt level initially rose to about $13 billion early in the year but trended downward subsequently to approximately $11.8 billion by the fourth quarter. The data for 2024 and mid-2025 indicates a moderate increase again, with values ranging from roughly $12 billion to $12.8 billion. Overall, the total debt reveals cyclical patterns with periods of both debt reduction and accumulation within the analyzed timeframe.

Shareholders’ equity

Shareholders' equity shows a general declining trend from March 2020 through the end of 2021, dropping from nearly $3.3 billion to around $2.4 billion. Early 2022 marked a turning point wherein equity began recovering steadily. By the end of 2022, equity had rebounded to approximately $3.1 billion and continued to improve through 2023, reaching nearly $3.8 billion by year-end. In 2024 and the first half of 2025, equity fluctuates between $3.5 billion and $4.4 billion, showing periods of incremental growth. This upward recovery after the initial downturn suggests improved equity performance in the later observed quarters.

Debt to equity ratio (including operating lease liability)

The debt to equity ratio initially decreased from 3.5 in March 2020 to a low of 2.4 in September 2020, reflecting a reduction in leverage or relative increase in equity. However, the ratio escalated significantly during 2021, peaking at 4.72 by December 2021, indicating a higher reliance on debt financing relative to equity. This ratio reached its highest point of 5.62 in mid-2022 before reversing direction and declining to around 4.03 by the end of 2022. The trend from 2023 onwards shows a continuing reduction in the debt to equity ratio, falling to approximately 2.9 by mid-2025, which implies strengthening equity or controlled debt levels. The overall pattern reveals considerable volatility in leverage, with elevated ratios indicating periods of increased financial risk, followed by phases of deleveraging and improved financial structure.

Summary

Throughout the periods observed, total debt fluctuated moderately but remained relatively elevated, while shareholders’ equity experienced an initial contraction followed by a sustained recovery trend. The debt to equity ratio mirrored these movements, initially decreasing, then spiking as equity diminished and debt grew, and finally decreasing again as equity strengthened and debt growth moderated. These dynamics reflect shifts in the company’s capital structure, suggesting phases of increased leverage risk which later gave way to a more balanced or cautious financial position.

Total Debt

The total debt levels exhibited fluctuations over the analyzed periods. Initially, there was a decline from approximately 9.77 billion US dollars in March 2020 to around 8.29 billion by the end of 2020. This decline was followed by an upward trend, peaking near 11.07 billion in March 2023. Subsequently, a general downward movement occurred, with total debt decreasing to around 9.89 billion by December 2024, though a slight increase was noted in the following quarters up to June 2025.

Total Capital

Total capital showed moderate variability but generally trended upward throughout the periods. Starting at roughly 13.06 billion US dollars in March 2020, the figure exhibited mild declines through 2020 and early 2021, followed by a steady increase reaching about 15.09 billion by June 2025. The growth was not entirely linear, with some periods reflecting stagnation or minor decreases, but the overall trajectory indicates strengthening capital base.

Debt to Capital Ratio

The debt to capital ratio demonstrated notable shifts during the timeline. Beginning at 0.75 in March 2020, there was a decrease to 0.66 by September 2020, indicating a reduction in leverage relative to capital. Thereafter, the ratio increased steadily, peaking at 0.83 in early 2022. Following this apex, the ratio declined gradually and stabilized around the low 0.70s range towards mid-2025. This pattern suggests the company experienced a phase of higher leverage which later eased, signaling a partial deleveraging or balance adjustment between debt and equity components.

The analysis of the financial trends over the observed quarters reveals notable dynamics in the company's debt structure and capital management.

Total debt (including operating lease liability)

Over the several quarters, total debt exhibited fluctuations with a general pattern of increase from early 2020 through the end of 2025. Initial debt levels near $11.5 billion in March 2020 decreased steadily until September 2020, followed by a rising trend that peaked above $13 billion by early 2023. Subsequent periods show some reduction and stabilization in debt levels, maintaining values generally between $11.8 billion and $13 billion through to mid-2025. This suggests active management of debt with periods of both deleveraging and increased borrowing.

Total capital (including operating lease liability)

Total capital showed a more consistent upward trend during the period. Starting at approximately $14.8 billion in March 2020, capital levels decreased slightly through 2020 but then increased steadily, reaching over $17 billion by mid-2025. This indicates overall growth in the company's capital base, which could be due to retained earnings, additional equity infusion, or other capital adjustments that enhanced the company's financial capacity.

Debt to capital ratio (including operating lease liability)

The ratio of debt to capital displayed variability reflecting the interplay between debt and capital levels. Beginning at 0.78 in early 2020, it declined to a low around 0.71 in late 2020, signaling a temporary reduction in leverage. Thereafter, the ratio increased to a peak of about 0.85 in 2021 and early 2022, indicating higher leverage during that period. From mid-2022 onward, the leverage ratio gradually reduced to values in the mid-0.70s by mid-2025. This trend suggests improved balance sheet strength with a relative decrease in reliance on debt financing as compared to capital over time.

In summary, the company's financial profile over the quarters shows active debt management alongside steadily increasing total capital. The leverage ratio trend reveals phases of increased borrowing followed by gradual deleveraging, reflecting strategic adjustments to optimize financial structure and potentially enhance creditworthiness and financial stability.

The data demonstrates fluctuations and overall trends in the company’s debt and asset levels over a series of quarterly periods from March 2020 through June 2025. A detailed analysis of these metrics reveals the following insights.

Total Debt

Total debt shows an initial decline from approximately 9.77 billion USD in March 2020 to around 8.29 billion USD in September 2020, indicating a significant reduction over these two quarters. Following this decrease, debt levels gradually increased, reaching a peak near 11.08 billion USD by March 2023. Thereafter, total debt exhibits a fluctuating but generally downward trend, with occasional increases, ending at about 10.69 billion USD in June 2025.

Total Assets

Total assets remain relatively stable initially, fluctuating slightly around 20.5 billion USD through 2020 and 2021. A more pronounced upward trend emerges from 2022 onward, with assets increasing steadily, reaching approximately 25.36 billion USD by June 2025. This steady asset growth over the later periods suggests expanding resource base or investments over time.

Debt to Assets Ratio

The debt-to-assets ratio mirrors the movements observed in debt and asset levels. Initially, the ratio declines from 0.47 in the first quarter of 2020 to 0.40 by September 2020, reflecting proportionally lower debt relative to assets. Subsequently, the ratio rises again, peaking at 0.49 in March 2022, indicating higher leverage. From this peak, the ratio trends slightly downward with some fluctuations, ending at approximately 0.42 in June 2025. These variations suggest changing leverage strategies, with periods of both increased and reduced reliance on debt financing.

Overall, the company has experienced a phase of debt reduction early in the period, followed by an increase aligned with asset growth. The latter years show growing assets accompanied by moderately managed debt levels, as indicated by the somewhat stabilized but fluctuating debt to asset ratios. This pattern may reflect strategic financial management to balance growth and leverage risks effectively over time.

The analysis of the quarterly financial data reveals several important trends and patterns related to the company's leverage and asset base over the observed periods.

Total Debt (Including Operating Lease Liability)

The total debt fluctuated over the analyzed quarters, initially decreasing from approximately 11.5 billion US dollars in the first quarter of 2020 to around 10.1 billion US dollars by the third quarter of 2020. Thereafter, the debt level generally increased, reaching a peak near 13 billion US dollars in early 2023, followed by a decline during mid-2023 and stabilization slightly below 12 billion US dollars towards the end of 2024. In the first half of 2025, debt levels rose again, climbing above 12.7 billion US dollars. These variations suggest active management of debt levels, possibly reflecting changing financing strategies or capital expenditures.

Total Assets

The total assets remained relatively stable in 2020, fluctuating narrowly around 20.5 billion US dollars. Starting from 2021, assets showed a steady upward trajectory, rising notably from around 20.4 billion US dollars at the beginning of that year to roughly 25.3 billion US dollars by mid-2025. This increment indicates consistent growth in the asset base, which could be attributed to asset acquisitions, capital investments, or appreciation of existing assets.

Debt to Assets Ratio (Including Operating Lease Liability)

The debt to assets ratio demonstrated a decreasing trend during the initial periods, falling from 0.56 in early 2020 to 0.48 by the third quarter of 2020. Subsequent quarters exhibited fluctuations, with the ratio rising back to approximately 0.56 at the end of 2021. Starting in 2022, the ratio gradually declined and stabilized around 0.5, indicating that, despite increases in total debt, asset growth outpaced debt increases overall. This stabilization suggests a balanced leverage position, maintaining moderate risk levels in capital structure management.

Overall, the data indicate a strategy combining cautious increase in debt with continuous growth in total assets, resulting in a relatively stable debt to assets ratio in recent periods. This balance implies effective capital management that supports asset expansion while controlling leverage risk.

The analysis of the quarterly financial data reveals several notable trends in the company's assets, equity, and financial leverage over the observed periods.

Total assets

Total assets remained relatively stable from the first quarter of 2020 through the end of 2021, fluctuating modestly within a range close to 20.4 billion US dollars. Beginning in early 2022, a steady upward trend emerged, with total assets increasing from approximately 21.7 billion US dollars to peak around 25.4 billion by the second quarter of 2025. This growth suggests ongoing asset acquisitions or asset value improvements that bolster the company's asset base over the medium term.

Shareholders’ equity

Shareholders’ equity demonstrated significant volatility throughout the periods under review. Initially, there was an increase from approximately 3.3 billion in early 2020 to over 4.2 billion by the third quarter of 2020, indicating potential retained earnings or capital injections. However, a noticeable decline followed from late 2020 through 2021, dropping to around 2.4 billion by the end of 2021. The subsequent quarters starting in 2022 reflected a general recovery trend, with equity gradually rising to a peak of about 4.4 billion by mid-2025. The fluctuations in equity suggest periods of earnings variability, dividend distribution, or changes in capital structure impacting the net asset value attributable to shareholders.

Financial leverage

The financial leverage ratio exhibited a pattern of initial decline from 6.25 in the first quarter of 2020 to a low of approximately 4.95 in the third quarter of 2020, implying reduced reliance on debt during this period. However, leverage increased sharply through 2021, reaching a high of 9.91 in the second quarter of 2022, indicating enhanced debt utilization relative to equity. Thereafter, the ratio steadily decreased to around 5.76 by the second quarter of 2025, aligning with the recovery in shareholders’ equity and sustained asset growth. This trajectory suggests a strategic effort to deleverage following a period of increased financial risk, resulting in a more balanced capital structure toward the end of the observed timeline.

The analysis of the quarterly financial data reveals notable fluctuations and trends in key financial metrics over the observed periods.

Earnings Before Interest and Tax (EBIT)

The EBIT values exhibit significant variability across quarters, with observable cyclical patterns. The initial period starts at 478.5 million US dollars and rapidly increases to a peak of 958.9 million in September 2020 before declining sharply at year-end 2020 to 586.7 million. In 2021, EBIT fluctuates again, peaking at 902.7 million in mid-year and falling to 393.8 million by the end of the year. A recovery phase is seen in 2022, where the EBIT rises again, reaching highs above 970 million, followed by another dip in December 2022. The trend continues into 2023 and 2024 with similar patterns of rise and fall, peaking notably at 1,128.2 million in mid-2024 before declining in the final recorded quarters. This pattern suggests a seasonal or market-driven volatility in earnings performance.

Interest Expense

The interest expense exhibits a steady and gradual upward trend over the periods analyzed. Starting at 86.2 million US dollars in the first quarter of 2020, it rises consistently, reaching 112.4 million by the fourth quarter of 2025. The increase appears relatively smooth without abrupt fluctuations, indicating potentially rising debt levels or increasing costs of borrowing over time.

Interest Coverage Ratio

The interest coverage ratio, available from the third quarter of 2020 onward, presents a generally stable and slightly increasing trend. Starting at around 8.4, it fluctuates modestly but maintains a range between approximately 7.0 and 9.3. The ratio improves especially in the latter quarters of the data, reflecting an enhanced ability to cover interest expenses from earnings. Even during periods when EBIT declined, the coverage ratio remained above 7, indicating a healthy margin to meet interest obligations.

In summary, the data indicates cyclical EBIT performance with peaks and troughs likely tied to seasonal factors or market conditions. Interest expenses steadily increase, possibly reflecting growing debt commitments or higher interest rates. Despite these pressures, the interest coverage ratio remains robust, reflecting continued solid financial health and ability to manage debt service costs effectively across the time frame.