CSX Corp. (NASDAQ:CSX)

Debt to Equity

The debt to equity ratio exhibited a gradual increasing trend from 0.96 in March 2018 to 1.45 in March 2023, with minor fluctuations. Notably, the ratio peaked around late 2019 and mid-2020, followed by a slight decline and stabilization near 1.2 to 1.3 through 2021 and early 2022. The ratio then increased again toward the end of the period to reach its highest point.

Debt to Equity (Including Operating Lease Liability)

This metric closely tracked the standard debt to equity ratio but consistently showed slightly higher values, indicating the impact of operating lease liabilities. It increased from 0.96 in March 2018 to 1.49 in March 2023, mirroring the overall upward trend and confirming an elevated leverage when accounting for operating leases.

Debt to Capital

The debt to capital ratio rose from 0.49 in March 2018 to around 0.59 in March 2023. The increase was steady, with the ratio remaining relatively stable between 0.55 and 0.59 from early 2020 onwards, suggesting a consistent portion of capital structure financed by debt over this later period.

Debt to Capital (Including Operating Lease Liability)

Similar to the traditional debt to capital ratio, this measure that includes operating lease liabilities also increased over time, starting at 0.49 in March 2018 and ending at 0.60 in March 2023. The proximity of values to the non-inclusive ratio indicates additional leverage from leases but a broadly consistent capital structure trend.

Debt to Assets

The ratio of debt to total assets followed an upward trajectory from 0.37 to 0.43 across the analyzed period. The ratio was fairly stable during 2020-2022 at approximately 0.40-0.41 before rising again towards the final quarters, indicating an increased portion of assets financed by debt.

Debt to Assets (Including Operating Lease Liability)

Including operating lease liabilities, this ratio was consistently higher by a small margin compared to the base debt to assets. It increased from 0.37 in early 2018 up to 0.44 by March 2023, reinforcing that lease obligations contribute moderately to overall asset financing.

Financial Leverage

Financial leverage ratios rose from 2.60 in March 2018 to 3.37 in March 2023. The ratio showed a marked increase through 2018 and 2019, slight declines and stabilizations during 2020 and 2021, followed by growth again in the last two years. This trend reflects increasing use of debt relative to equity to finance the company's assets.

Interest Coverage

Interest coverage ratios, available from late 2018 onwards, started at 7.74 and generally declined to a low of 5.73 by the end of 2020. Subsequently, there was a clear improvement with the ratio climbing steadily to above 8.3 by early 2023. This suggests improved earnings availability to meet interest obligations, indicating enhanced operational income relative to interest expenses over recent years.

Total Debt

The total debt exhibited a generally increasing trend between March 2018 and March 2023. Starting at approximately $13.79 billion in March 2018, the debt level rose steadily to reach a peak around $18.05 billion in March 2023, with minor fluctuations along the way. Notably, the increase was more pronounced from 2021 onward, indicating a growing reliance on debt financing in recent periods.

Shareholders’ Equity, Attributable to CSX

Shareholders’ equity showed a declining trajectory over the observed period. Beginning at about $14.38 billion in March 2018, equity decreased consistently to approximately $12.33 billion by March 2023. This decline suggests erosion in net asset value attributable to shareholders, with periods of slight recovery in between but an overall downward trend.

Debt to Equity Ratio

The debt to equity ratio progressively increased from 0.96 in March 2018 to 1.45 in March 2023. This upward movement indicates a rising leverage position, where debt is growing at a faster rate than equity. The ratio crossed the benchmark of 1.0 around late 2018 and remained above 1.0 thereafter, pointing to a capital structure increasingly weighted toward debt.

Summary of Trends

The combination of increasing total debt and decreasing shareholders’ equity led to a steady rise in the debt to equity ratio over the five-year span. This pattern reflects a strategic or necessary shift towards greater financial leverage. Such a shift might elevate financial risk but could also be aligned with growth, investment, or capital management strategies. The decline in equity may signal challenges in profitability or asset retention, warranting further analysis of operational performance and retained earnings.

Total Debt (including operating lease liability)

The total debt level experienced a general increase over the analyzed period. Starting at 13,787 million US dollars in the first quarter of 2018, it peaked multiple times, approaching approximately 17,500 million by the end of 2018. From 2019 through early 2021, total debt fluctuated slightly but remained relatively stable around the 16,800 to 17,200 million mark. In 2022, total debt saw some volatility, ending the year higher at approximately 18,500 million, slightly decreasing to 18,400 million by the first quarter of 2023.

Shareholders’ Equity

Shareholders’ equity displayed a downward trend over the period shown. Initially, equity stood around 14,378 million US dollars in March 2018 but gradually declined with small fluctuations. By the end of 2018, equity had decreased to approximately 12,563 million. The downward slope continued with mild recoveries throughout 2020 and 2021, peaking near 13,490 million in December 2021. Beyond this peak, equity once again declined consistently, closing at roughly 12,326 million in March 2023.

Debt to Equity Ratio

The debt to equity ratio demonstrated a rising trend, indicating increasing leverage over time. Beginning at a ratio of 0.96 in March 2018, the ratio climbed steadily, passing the 1.0 mark by the third quarter of 2018 and reaching approximately 1.45 by the first quarter of 2020. The ratio showed some moderation through 2020 and 2021, fluctuating slightly in the 1.25 to 1.33 range. However, from 2022 onward, the debt to equity ratio increased again, reaching its highest levels of 1.49 by the first quarter of 2023, suggesting a higher reliance on debt financing relative to equity.

Overall Analysis

The analysis reveals a company progressively increasing its debt levels while experiencing a decline in shareholders’ equity. Correspondingly, the leverage ratio increased, signaling a higher financial risk profile as debt grows in relation to equity. The debt-to-equity ratio approaching and exceeding 1.4 in recent periods may warrant careful consideration regarding capital structure sustainability and risk management. The equity decline despite fluctuations could be indicative of operational challenges, dividend payments, or other equity-affecting events not detailed in the dataset.

Total Debt

The total debt displayed a gradual increase from March 2018 through September 2019, rising from approximately $13.8 billion to about $16.7 billion. This upward movement plateaued somewhat around the end of 2019 and into mid-2021, fluctuating around the $16.3 billion to $16.7 billion range. Starting in 2022, the total debt level again rose noticeably, reaching a peak of roughly $18.0 billion by the end of the first quarter of 2023.

Total Capital

Total capital remained relatively stable throughout the period, with some fluctuations across quarters. It started near $28.2 billion in early 2018, experienced slight decreases and recoveries around the $27 billion to $29.8 billion range over the succeeding years, and showed a modest upward trend in 2020 and 2021, peaking at approximately $29.8 billion. In 2022, total capital trended downward slightly from previous highs, settling around $30.2 billion by the onset of 2023, indicating some variability but overall a stable capital base.

Debt to Capital Ratio

This ratio showed a generally increasing trend from 0.49 in March 2018 to about 0.59 by March 2023. The ratio rose steadily through 2019, reaching nearly 0.59, indicating a growing proportion of debt relative to total capital during that period. Between late 2019 and mid-2021, the ratio stabilized around 0.55 to 0.56, before resuming its upward movement reaching 0.59 again in early 2023. This reflects a gradual increase in leverage over the examined timeframe.

Overall Analysis

The financial data reveal a consistent pattern of slightly increasing leverage over the nearly five-year period, with total debt rising more noticeably in the most recent years. Total capital, while fluctuating, largely maintained a stable range, suggesting the company sustained its capital structure even as debt levels climbed. The increase in the debt-to-capital ratio points to a strategic shift or external factors leading to higher reliance on debt financing over equity or other capital sources.

Total Debt (including operating lease liability)

The total debt level showed a moderate increase from March 2018 through December 2019, rising from approximately $13.8 billion to about $16.7 billion. During 2020, the debt remained relatively stable, fluctuating slightly around the $17 billion mark. From 2021 through the first quarter of 2023, the debt level remained fairly consistent, oscillating close to $16.8 billion, before increasing toward the end of 2022 and early 2023 to approximately $18.4 billion. Overall, the debt trend indicates an initial gradual upward movement followed by relative stability with a modest increase in the most recent quarters.

Total Capital (including operating lease liability)

Total capital experienced a slight decline from around $28.2 billion in early 2018 to roughly $27.3 billion by the end of 2018. From 2019 onward, total capital steadily increased, reaching a peak of approximately $30.3 billion at the close of 2021. In 2022 and through early 2023, capital levels fluctuated but generally stayed within a range of $29.8 billion to $31.4 billion, peaking in late 2022. This pattern suggests an overall growth in capital with some volatility in the most recent periods.

Debt to Capital Ratio (including operating lease liability)

The debt to capital ratio showed an upward trend from 0.49 in March 2018 to a peak of approximately 0.60 in late 2022 and early 2023. This indicates an increasing proportion of debt in the company’s capital structure over the analyzed period. The ratio rose steadily through 2018 and 2019, reaching around 0.59, then showed minor fluctuations but remained close to this higher level through 2021. The most recent data points suggest a rise in leverage, reflecting the concurrent increase in debt levels relative to capital.

Summary

Over the observed periods, the company demonstrated a pattern of gradually increasing total debt and total capital, with the capital growth slightly outpacing debt growth until 2021. However, starting in late 2022, the proportion of debt to capital increased, highlighting a shift toward higher leverage. The maintenance of relatively consistent debt levels through much of the period, followed by a notable increase late in the timeline, may justify further examination for potential impacts on financial risk and cost of capital. Overall, the evolving capital structure indicates strategic adjustments, potentially aimed at optimizing financing but accompanied by a measured increase in financial leverage.

The financial data over the observed periods reveal several important trends regarding the company's debt management and asset base.

Total Debt

The total debt level has generally increased over the observed timeframe. Beginning at approximately $13.8 billion in the first quarter of 2018, debt rose to a peak exceeding $16.7 billion by the end of 2019. Following a period of relative stability around $16.3 billion through most of 2021 and early 2022, there was a notable increase reaching above $18 billion in the quarters of 2022 and early 2023. This upward trend suggests the company has been incrementally relying more on debt financing over these years.

Total Assets

Total assets showed a modest growth trend across the same period. Starting at around $37.4 billion in early 2018, assets fluctuated slightly but trended upward, reaching just over $42 billion by the first quarter of 2023. This growth in assets was relatively steady, albeit moderate, indicating consistent expansion or accumulation of asset base, which may support the increasing debt.

Debt to Assets Ratio

The debt-to-assets ratio reflects the relationship between the company's leverage and asset base. Initially stable at about 0.37 in early 2018, the ratio rose to approximately 0.43 at the end of 2019, indicating a higher proportion of debt relative to assets. Following this period, the ratio stabilized around 0.40 to 0.41 through 2021 and early 2022. However, an increase back to 0.43 was noted again in the last periods of 2022 through early 2023. This pattern signals that despite asset growth, debt levels have risen at a somewhat faster pace, maintaining a higher leverage position by the end of the observation period.

In summary, the company has experienced a gradual increase in both debt and assets, with debt growing at a slightly faster rate. The debt-to-assets ratio's rise and persistence at elevated levels suggest a deliberate leverage strategy or increased borrowing to finance operations or investments. This upward leverage trend warrants close monitoring for potential impacts on financial risk and creditworthiness moving forward.

Total Debt (Including Operating Lease Liability)

The total debt level exhibited a general upward trend from March 2018 through December 2022, starting at $13,787 million and increasing to $18,537 million by December 2022. This increase reflects a substantial accumulation of obligations over this period. There is some fluctuation in the quarterly data, with debt peaking intermittently and minor decreases observed in a few quarters, such as between June 2019 and December 2019, and again between December 2021 and June 2022. However, the overall movement indicates growth in total debt, stabilizing around the $18,000 million mark in early 2023.

Total Assets

Total assets remained relatively stable with a gradual upward trend over the analyzed timeframe. Starting at $37,439 million in March 2018, asset levels experienced minor fluctuations but generally increased to reach a peak near $42,242 million in September 2022. Following this peak, slight decreases were observed but total assets remained above $41,000 million through March 2023. The growth in assets is more modest relative to the increase in debt, indicating expansion of the asset base but at a slower pace compared to liabilities.

Debt to Assets Ratio (Including Operating Lease Liability)

The debt to assets ratio shows a noticeable trend of increase from 0.37 in March 2018 to a high of about 0.44 by the end of 2019, indicating that the proportion of debt relative to asset base increased during this period. From early 2020 through mid-2022, the ratio remains relatively steady in the range of approximately 0.41 to 0.43, suggesting a phase of relative balance between growth in debt and assets. However, starting in late 2022 and continuing into early 2023, the ratio again approaches 0.44, reflecting increased leverage. This indicates a financial structure with higher reliance on debt financing as the proportion of liabilities relative to assets increases over time.

Total assets

Total assets exhibit a generally stable trend with moderate fluctuations over the presented periods. Starting at approximately 37.4 billion USD in the first quarter of 2018, total assets slightly declined to about 36.7 billion USD by the end of 2018. This was followed by a period of gradual increase, peaking near 40.5 billion USD at the end of 2021. Subsequently, total assets experienced slight volatility, with values moving between approximately 40.4 billion USD and 42.2 billion USD during 2022, before a small decrease to about 41.5 billion USD in the first quarter of 2023. Overall, the asset base has shown modest growth through the five-year span with some intermittent declines.

Shareholders’ equity, attributable to CSX

Shareholders’ equity attributable to the company declined during the initial years, falling from around 14.4 billion USD in early 2018 to about 11.8 billion USD at the end of 2019. After this decline, equity showed signs of recovery, reaching approximately 13.5 billion USD by the end of 2021. Nonetheless, in the most recent periods, from 2022 through the first quarter of 2023, equity exhibited a downward trend again, decreasing progressively to approximately 12.3 billion USD. This pattern suggests some volatility in equity levels, with a period of recovery sandwiched between phases of decline.

Financial leverage

Financial leverage, calculated as the ratio of total assets to equity, has generally increased over the observed time frame. Starting at 2.6 in the first quarter of 2018, the ratio rose steadily to a peak above 3.2 by the first quarter of 2020. Thereafter, there was a slight reduction in leverage ratios throughout 2020 and 2021, lowering from about 3.27 to near 3.00. However, financial leverage resumed its upward trajectory in 2022 and early 2023, reaching the highest observed level of approximately 3.37. This increase in leverage indicates a progressively larger proportion of assets funded by liabilities or debt relative to shareholders’ equity.

Earnings before interest and tax (EBIT)

The EBIT values exhibit considerable fluctuations over the observed periods. From March 2018 to December 2018, EBIT showed a steady increase, peaking at 1,312 million USD in September 2018 before slightly declining towards the end of the year. In 2019, EBIT oscillated between 1,170 and 1,330 million USD with no clear directional trend. There was a noticeable dip in the middle of 2020, with EBIT falling to 843 million USD in June 2020; however, a subsequent recovery was observed, reaching 1,183 million USD by December 2020. The following year, EBIT entered a phase of significant growth, culminating in a high of 1,711 million USD in June 2021. The last quarters of 2021 and the first quarter of 2022 revealed a somewhat declining trend, although EBIT remained above 1,300 million USD. Notably, from mid-2022 through early 2023, EBIT rebounded sharply, surpassing previous highs and stabilizing around 1,500 million USD towards March 2023.

Interest Expense

Interest expense demonstrated a gradual upward trend throughout the entire period. Beginning at 149 million USD in March 2018, the expense consistently increased each quarter with minor short-term variations. By the end of 2019, it had risen to approximately 189 million USD. Despite some fluctuations around this level, it maintained a slow yet steady ascent, reaching its peak of 201 million USD by March 2023. This suggests rising financing costs or increased debt obligations over the period.

Interest Coverage Ratio

The interest coverage ratio data is only available starting in September 2018. At that time, the ratio was 7.74, indicating strong ability to cover interest payments with EBIT. A gradual decline was observed through the end of 2020, reaching a low of 5.73 in December 2020, suggesting reduced operational earnings relative to interest expense during this timeframe. Beginning in 2021, the ratio recovered considerably, climbing to 7.48 in the second quarter and peaking at 8.35 in the third quarter of 2022. The ratio largely stabilized around 8.3 in the final observed quarters, indicating an improvement in EBIT relative to interest expense and thus a stronger capacity to meet interest obligations.

Overall Trends and Insights

Throughout the period, EBIT and the interest coverage ratio exhibit a pattern of initial growth, a mid-period dip coinciding with increased interest expenses, and a strong recovery in the latter years. Interest expense steadily increased, likely reflecting incremental debt or higher financing costs. Despite the rising interest burden, the improvement in EBIT in the last quarters enhances the interest coverage ratio, signifying strengthened financial health and operational profitability. The period around mid-2020 marks the most challenging phase with a significant EBIT decline and the lowest interest coverage ratio. However, the subsequent recovery demonstrates resilience and effective management of operating performance in relation to financing costs.