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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- Enterprise Value (EV)
- Enterprise Value to FCFF (EV/FCFF)
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Solvency Ratios (Summary)
Trane Technologies plc, solvency ratios (quarterly data)
Based on: 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 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: 2018-06-30), 10-Q (reporting date: 2018-03-31).
The financial ratios exhibit notable trends over the observed periods. Starting with leverage indicators, the debt to equity ratio initially fluctuates slightly around the 0.6 range in 2018, rising to a peak close to 0.97 in the first quarter of 2020. Subsequently, this ratio gradually declines and stabilizes around 0.75 to 0.8 from 2021 to early 2023. This pattern suggests an increase in reliance on debt financing up to early 2020, followed by a moderate reduction and stabilization.
The debt to capital ratio follows a somewhat similar trajectory. It begins near 0.38 in early 2018, climbs to near 0.49 in early 2020, then slightly decreases and remains relatively steady around 0.43 to 0.46 through 2021 to 2023. This indicates that the proportion of debt within the company's capital structure increased markedly until 2020 and has since maintained that elevated level.
Regarding the debt to assets ratio, the data shows a gradual increase from about 0.22 in late 2018 to approximately 0.32 in early 2020. Thereafter, it moderates and stabilizes around 0.27, maintaining consistency throughout 2021 to 2023. This ratio trend aligns with those of debt to equity and debt to capital, confirming higher leverage until 2020 followed by stabilization.
Financial leverage, defined as the ratio of total assets to equity, reveals an increase from approximately 2.5 in late 2018 to a peak exceeding 3.0 in early 2020. Post-2020, the ratio fluctuates mildly, remaining close to 3.0 through to the first quarter of 2023. This indicates a modestly higher use of equity buffer relative to assets over the period, especially around 2020.
Interest coverage ratio data is partially missing for early periods but begins at 8.52 in late 2018, rises to 9.77 by early 2019, then dips to about 6.18 by the end of 2020. From 2021 onwards, the ratio exhibits a steady increasing trend, reaching approximately 10.91 by the first quarter of 2023. This upward movement suggests improved ability to cover interest expenses with operating earnings over recent quarters, reflecting enhanced financial health or profitability.
- Leverage Trends
- The company’s leverage increased steadily through early 2020, as shown by rising debt to equity, debt to capital, and debt to assets ratios. Since then, leverage ratios have generally leveled off or experienced slight decreases, indicating a cautious approach to debt levels post-2020.
- Financial Leverage
- The financial leverage metric rose to just above 3.0 around 2020, after which it remained stable. This reflects a consistent relationship between asset base and equity, suggesting ongoing balance in capital structure management.
- Interest Coverage
- Despite a decline during 2019-2020, the interest coverage ratio has shown marked improvement since 2021, reaching its highest levels in early 2023. This improvement may point to better earnings performance relative to debt servicing costs, enhancing the company’s capacity to meet interest obligations.
Debt Ratios
Coverage Ratios
Debt to Equity
Trane Technologies plc, debt to equity calculation (quarterly data)
| Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||||||||||||||||||||||||
| Short-term borrowings and current maturities of long-term debt | ||||||||||||||||||||||||||||
| Long-term debt,excluding current maturities | ||||||||||||||||||||||||||||
| Total debt | ||||||||||||||||||||||||||||
| Total Trane Technologies plc shareholders’ 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-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 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: 2018-06-30), 10-Q (reporting date: 2018-03-31).
1 Q1 2023 Calculation
Debt to equity = Total debt ÷ Total Trane Technologies plc shareholders’ equity
= ÷ =
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals several noteworthy trends related to the company's debt, equity, and leverage ratios over the examined periods.
- Total Debt
- Total debt remained relatively stable from March 2018 through December 2018, fluctuating slightly around the 4.09 to 4.36 million US$ thousand range. Starting from March 2019, there was a significant increase in total debt, rising sharply to over 5.6 million US$ thousand, and remaining elevated through 2019. During 2020, total debt saw a slight decline, stabilizing around the 5.26 to 5.27 million US$ thousand range by the end of the year. From 2021 to early 2023, total debt gradually decreased and hovered near 4.8 to 4.9 million US$ thousand, indicating some deleveraging after its peak in 2019-2020.
- Total Shareholders’ Equity
- Total shareholders’ equity displayed more volatility compared to total debt. Initially, from March 2018 to December 2018, equity fluctuated modestly between approximately 6.78 and 7.31 million US$ thousand. Equity levels increased in 2019, reaching peaks above 7.2 million US$ thousand around the mid and end of the year. However, there was a pronounced decline in equity during the first quarters of 2020, dropping sharply to around 5.77 million US$ thousand by March 2020. Post-March 2020, shareholders’ equity experienced a recovery trend, increasing gradually until mid-2021, but then displayed a downward trend again through early 2023, oscillating between roughly 5.7 and 6.1 million US$ thousand.
- Debt to Equity Ratio
- The debt to equity ratio moved in accordance with changes in debt and equity. Initially, in 2018, the ratio remained below 0.65, indicating moderate leverage. With the rise in total debt and the relative dip in equity in 2019, the ratio escalated substantially, peaking near 0.8 by the end of that year. The ratio further surged during the early quarters of 2020, reaching nearly 0.97, reflecting the combined impact of high debt levels and reduced equity. Following this peak, the ratio gradually declined through 2020 and 2021, stabilizing around 0.75 to 0.8 in 2022 and early 2023. This indicates a moderate leverage profile, with some deleveraging occurring after the crisis period in 2020.
In summary, the data portrays a period of increased borrowing and financial stress around 2019-2020, accompanied by a significant dip in shareholders’ equity and a consequent peak in leverage. Post-crisis, the company appears to have undertaken efforts to reduce debt and restore equity levels, resulting in somewhat improved leverage ratios by 2023, though still higher than the earlier pre-crisis period. This reflects a period of financial adjustment and recalibration in response to external or operational challenges impacting capital structure and balance sheet strength.
Debt to Capital
Trane Technologies plc, debt to capital calculation (quarterly data)
| Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||||||||||||||||||||||||
| Short-term borrowings and current maturities of long-term debt | ||||||||||||||||||||||||||||
| Long-term debt,excluding current maturities | ||||||||||||||||||||||||||||
| Total debt | ||||||||||||||||||||||||||||
| Total Trane Technologies plc shareholders’ 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-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 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: 2018-06-30), 10-Q (reporting date: 2018-03-31).
1 Q1 2023 Calculation
Debt to capital = Total debt ÷ Total capital
= ÷ =
2 Click competitor name to see calculations.
The total debt of the company exhibited fluctuating trends over the analyzed period. Initially, total debt was relatively stable around the 4.3 to 4.4 million USD range from the first quarter of 2018 to the fourth quarter of 2018. Subsequently, there was a noticeable increase starting from the first quarter of 2019, peaking near 5.74 million USD in the second quarter of 2019. Following this peak, the debt level trended downward gradually, reaching approximately 4.83 million USD by the first quarter of 2023.
Total capital showed a similar pattern of variation. The capital was stable around 11.1 to 11.4 million USD in 2018, before rising to over 12.8 million USD in the third and fourth quarters of 2019. However, a marked decline occurred afterward, with total capital dropping below 11 million USD at times in 2022 and early 2023. The data suggests some volatility in capital levels with a general downtrend following the peak years.
The debt to capital ratio reveals insights about the company’s leverage profile. This ratio increased markedly from approximately 0.36-0.39 in 2018 to around 0.44-0.45 during the peak debt period in 2019. This elevated leverage level remained relatively consistent through 2020 and 2021, with slight variations generally staying between 0.43 and 0.45. By 2022 and into early 2023, the ratio exhibited minor fluctuations but stayed within a narrow range around 0.44 to 0.46.
Overall, the company increased leverage in 2019, reflected by increases in both total debt and the debt to capital ratio. Afterward, the levels of total debt and total capital both declined somewhat, causing the debt to capital ratio to stabilize at a moderately high level, suggesting a maintained but cautious leverage position. The data indicates efforts to manage capital resources while using debt strategically, without significant deleveraging occurring through the latest period.
- Total Debt
- Stable in 2018, increased substantially in early 2019, peaked mid-2019, then showed gradual decline through early 2023.
- Total Capital
- Relatively stable in 2018, increased in 2019, followed by a downward trend from 2020 onward, with some volatility in 2022-2023.
- Debt to Capital Ratio
- Increased from about 0.36-0.39 in 2018 to approximately 0.44-0.45 in 2019-2021, remaining relatively stable with slight fluctuations into early 2023.
Debt to Assets
Trane Technologies plc, debt to assets calculation (quarterly data)
| Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||||||||||||||||||||||||
| Short-term borrowings and current maturities of long-term debt | ||||||||||||||||||||||||||||
| Long-term debt,excluding current maturities | ||||||||||||||||||||||||||||
| 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-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 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: 2018-06-30), 10-Q (reporting date: 2018-03-31).
1 Q1 2023 Calculation
Debt to assets = Total debt ÷ Total assets
= ÷ =
2 Click competitor name to see calculations.
- Total Debt
- The total debt level initially showed a stable pattern, fluctuating slightly around 4.3 to 4.1 million US dollars (in thousands) during 2018. However, starting in the first quarter of 2019, total debt sharply increased to approximately 5.6 million US dollars, marking a significant step up in the company's leverage. This elevated debt level remained relatively steady throughout 2019 and 2020, with only minor fluctuations. From the first quarter of 2021 onward, total debt showed a gradual downward trend, declining from nearly 5.0 million US dollars to about 4.8 million by the first quarter of 2023.
- Total Assets
- Total assets followed a somewhat volatile trajectory over the period. In 2018, total assets remained in the range of approximately 17.9 to 18.4 million US dollars. The asset base expanded notably through 2019, reaching a peak in mid-2019 at around 20.6 million US dollars, coinciding with the increase in debt. In 2020, assets decreased sharply, falling close to 17.2 million US dollars but rebounded slightly in subsequent quarters. The period from 2021 to early 2023 saw total assets fluctuate modestly within the range of 17.6 to 18.3 million US dollars, reflecting relative stability with minor declines near the end of the period.
- Debt to Assets Ratio
- The debt to assets ratio illustrates the relationship between the company's leverage and its asset base. This ratio was around 0.22 to 0.24 during 2018, indicating moderate leverage. A marked increase occurred in early 2019, with the ratio rising to approximately 0.28, reflecting the increased debt relative to assets. This elevated leverage persisted through 2019 and into 2020, peaking near 0.32 in the first quarter of 2020. Subsequently, the ratio declined and stabilized around 0.27 from 2021 onward, suggesting a reduction in leverage and a more balanced capital structure. The ratio exhibited minor fluctuations but remained steady near this level through early 2023.
- Overall Trends and Insights
- The data reveals that the company experienced a significant shift in financial leverage starting in 2019, with both total debt and total assets increasing concurrently. The peak in debt to assets ratio in early 2020 suggests the company took on additional debt faster than asset growth, possibly for strategic investments or operational needs. The decline in total assets in 2020 followed by stabilization indicates some asset reallocation or depreciation events during that period. From 2021 onward, a trend of gradual debt reduction and relatively stable assets implies a focus on deleveraging and maintaining asset levels. The consistent debt to assets ratio near 0.27 through the recent periods reflects a deliberate effort to sustain a moderate leverage position, balancing risk and growth potential effectively.
Financial Leverage
Trane Technologies plc, financial leverage calculation (quarterly data)
| Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||||||||||||||||||||||||
| Total assets | ||||||||||||||||||||||||||||
| Total Trane Technologies plc shareholders’ 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-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 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: 2018-06-30), 10-Q (reporting date: 2018-03-31).
1 Q1 2023 Calculation
Financial leverage = Total assets ÷ Total Trane Technologies plc shareholders’ equity
= ÷ =
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals several notable trends in the company’s financial position over the observed periods.
- Total Assets
- Total assets initially showed some fluctuation between March 2018 and December 2019, generally ranging between approximately 17.9 billion and 20.7 billion US dollars. The assets peaked around mid-2019, followed by a decline starting in early 2020, reaching their lowest point in March 2023 at approximately 17.9 billion US dollars. Despite minor recoveries during the last quarters, the overall trend from early 2020 onward reflects a contraction in total assets.
- Total Shareholders’ Equity
- Shareholders’ equity also exhibited variation throughout the period. From March 2018 to December 2019, equity values rose moderately, reaching a peak in the latter part of 2019. However, from early 2020, there was a pronounced decline, with equity dropping from around 7.3 billion US dollars in late 2019 to a trough near 5.7 billion US dollars by mid-2022. Although there was a slight upward trend in 2023, the recovery did not restore equity to previous highs. This suggests some reduction in net assets attributable to shareholders during the pandemic period and its aftermath.
- Financial Leverage
- The financial leverage ratio, calculated as total assets divided by shareholders’ equity, fluctuated within a range from 2.5 to slightly above 3.0 over the analyzed timeframe. The ratio increased progressively, especially from 2019 onward, peaking at over 3.0 in mid-2022. This upward movement indicates a relative increase in the proportion of debt or liabilities compared to equity, implying higher financial risk and a more leveraged balance sheet. The ratio slightly decreased towards the first quarter of 2023 but remained elevated relative to the earlier quarters.
Overall, the data presents a trajectory marked by a decline in both total assets and shareholders’ equity starting in early 2020, coinciding with an increase in financial leverage. These dynamics suggest the company faced financial pressures that led to a contraction in net equity and raised leverage levels during this period, potentially reflecting challenging market conditions or operational impacts. The modest signs of stabilization in early 2023 may hint at a possible slowing of these adverse trends, but leverage remains comparatively high.
Interest Coverage
Trane Technologies plc, interest coverage calculation (quarterly data)
| Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||||||||||||||||||||||||
| Net earnings (loss) attributable to Trane Technologies plc | ||||||||||||||||||||||||||||
| Add: Net income attributable to noncontrolling interest | ||||||||||||||||||||||||||||
| Less: 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-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 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: 2018-06-30), 10-Q (reporting date: 2018-03-31).
1 Q1 2023 Calculation
Interest coverage
= (EBITQ1 2023
+ EBITQ4 2022
+ EBITQ3 2022
+ EBITQ2 2022)
÷ (Interest expenseQ1 2023
+ Interest expenseQ4 2022
+ Interest expenseQ3 2022
+ Interest expenseQ2 2022)
= ( + + + )
÷ ( + + + )
=
2 Click competitor name to see calculations.
The earnings before interest and tax (EBIT) of the company exhibited considerable fluctuations throughout the observed quarters. Initially, EBIT experienced a significant rise from $239,400 thousand in March 2018 to a peak of $636,800 thousand in June 2018, followed by a decline towards the end of 2018, settling at $426,300 thousand by December. This cyclical pattern repeated in subsequent years, with EBIT generally increasing in the second quarter of each year and then tapering off by the year-end. Notably, EBIT saw substantial recovery beginning in mid-2022, with values rising from $387,500 thousand in March 2022 to a high of $720,800 thousand in September 2022 before trending downward again in early 2023.
Interest expense demonstrated relative stability over the given period, with values oscillating narrowly between approximately $48,500 thousand and $72,900 thousand. Although minor variations were observed, no significant upward or downward trend emerged. This consistency suggests steady financing costs without drastic changes in debt levels or interest rates.
The interest coverage ratio, which measures the company’s ability to meet interest obligations from EBIT, was not reported in the earliest periods but showed an increasing trend thereafter. Starting at 8.52 in March 2019, the ratio fluctuated slightly but gradually improved, reaching 10.91 by March 2023. This upward trajectory reflects improved earnings capacity relative to interest costs, indicating strengthening financial health and enhanced ability to service debt.
Overall, the data indicates that while the company’s EBIT is subject to seasonal or cyclical variations, it generally demonstrates resilience and recovery after downturns, particularly evident in the upswing observed during 2021 and 2022. The steady interest expense alongside improving interest coverage ratios supports the conclusion of increasing operational efficiency or profitability relative to financing costs over time.