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Trane Technologies plc (NYSE:TT)

This company has been moved to the archive! The financial data has not been updated since May 3, 2023.

Common-Size Balance Sheet: Liabilities and Stockholders’ Equity

Trane Technologies plc, common-size consolidated balance sheet: liabilities and stockholders’ equity

Microsoft Excel
Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018
Accounts payable 11.57 9.90 8.37 8.83 9.52
Accrued compensation and benefits 2.99 3.02 2.48 2.68 2.97
Accrued expenses and other current liabilities 11.09 11.46 8.77 9.04 9.65
Short-term borrowings and current maturities of long-term debt 5.80 1.94 4.27 3.17 1.96
Current liabilities 31.45% 26.31% 23.90% 23.73% 24.09%
Long-term debt,excluding current maturities 20.95 24.87 24.76 24.02 20.88
Postemployment and other benefit liabilities 3.69 4.49 5.64 5.96 6.66
Deferred and noncurrent income taxes 3.76 3.22 3.19 3.33 3.01
Other noncurrent liabilities 6.38 6.37 7.11 7.28 5.93
Noncurrent liabilities 34.78% 38.95% 40.71% 40.59% 36.47%
Total liabilities 66.24% 65.26% 64.60% 64.32% 60.56%
Ordinary shares, $1.00 par value 1.40 1.44 1.45 1.28 1.49
Ordinary shares held in treasury, at cost -9.51 -9.52 -9.47 -8.39 -9.60
Retained earnings 46.02 46.25 46.79 47.49 52.69
Accumulated other comprehensive loss -4.24 -3.53 -3.48 -4.91 -5.38
Total Trane Technologies plc shareholders’ equity 33.67% 34.64% 35.29% 35.47% 39.20%
Noncontrolling interest 0.09 0.10 0.11 0.22 0.23
Total equity 33.76% 34.74% 35.40% 35.68% 39.44%
Total liabilities and equity 100.00% 100.00% 100.00% 100.00% 100.00%

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

The capital structure reflects a consistent shift toward higher leverage, with total liabilities increasing from 60.56% of total liabilities and equity in 2018 to 66.24% by 2022. Conversely, total equity experienced a steady decline over the same period, falling from 39.44% to 33.76%. This trend indicates a progressive reduction in the proportion of assets financed by shareholders' equity in favor of debt and other obligations.

Current Liabilities Analysis
Current liabilities exhibited an upward trajectory, particularly accelerating between 2021 and 2022, ending at 31.45% of the total structure compared to 24.09% in 2018. This increase was primarily driven by a rise in accounts payable, which climbed to 11.57% in 2022 after a period of fluctuation, and a significant spike in short-term borrowings and current maturities of long-term debt, which reached a five-year peak of 5.80% in 2022.
Noncurrent Liabilities Trends
Noncurrent liabilities peaked in 2020 at 40.71% before trending downward to 34.78% by 2022. A notable component of this decrease is found in postemployment and other benefit liabilities, which fell consistently from 6.66% in 2018 to 3.69% in 2022. Long-term debt, excluding current maturities, remained relatively stable for several years around 24% before decreasing to 20.95% in 2022, mirroring the decline in overall noncurrent obligations.
Equity Component Shifts
The reduction in total equity is largely attributable to a decline in retained earnings, which dropped from 52.69% in 2018 to 46.02% in 2022. Ordinary shares held in treasury maintained a consistent negative impact on equity, hovering around -9.5% for most of the analyzed period. Accumulated other comprehensive losses remained present throughout the period, with a fluctuating but persistent negative effect on the total equity balance, ending at -4.24% in 2022.
Overall Solvency and Capital Mix
The transition in the common-size balance sheet suggests an increasing reliance on short-term funding and operational liabilities. While noncurrent debt has stabilized or decreased as a percentage of the total, the growth in current liabilities and the simultaneous erosion of the retained earnings percentage suggest a strategic shift in how the entity manages its financing and capital returns.

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