Stock Analysis on Net

Honeywell International Inc. (NASDAQ:HON)

Analysis of Inventory

Microsoft Excel

Inventory Disclosure

Honeywell International Inc., balance sheet: inventory

US$ in millions

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Raw materials 1,704 1,407 1,352 1,079 1,056
Work in process 1,217 1,049 861 798 817
Finished products 3,257 3,082 2,925 2,612 2,593
Inventories valued at current costs 6,178 5,538 5,138 4,489 4,466
Reduction to LIFO cost basis (45)
Inventories 6,178 5,538 5,138 4,489 4,421

Based on: 10-K (reporting date: 2023-12-31), 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).

Item Description The company
Inventories Amount after valuation and LIFO reserves of inventory expected to be sold, or consumed within one year or operating cycle, if longer. Honeywell International Inc. inventories increased from 2021 to 2022 and from 2022 to 2023.

Adjustment to Inventory: Conversion from LIFO to FIFO

Adjusting LIFO Inventory to FIFO (Current) Cost

US$ in millions

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Adjustment to Inventories
Inventories at LIFO (as reported) 6,178 5,538 5,138 4,489 4,421
Add: Inventory LIFO reserve 45
Inventories at FIFO (adjusted) 6,178 5,538 5,138 4,489 4,466
Adjustment to Current Assets
Current assets (as reported) 23,502 24,982 25,372 28,175 24,303
Add: Inventory LIFO reserve 45
Current assets (adjusted) 23,502 24,982 25,372 28,175 24,348
Adjustment to Total Assets
Total assets (as reported) 61,525 62,275 64,470 64,586 58,679
Add: Inventory LIFO reserve 45
Total assets (adjusted) 61,525 62,275 64,470 64,586 58,724
Adjustment to Total Honeywell Shareowners’ Equity
Total Honeywell shareowners’ equity (as reported) 15,856 16,697 18,569 17,549 18,494
Add: Inventory LIFO reserve 45
Total Honeywell shareowners’ equity (adjusted) 15,856 16,697 18,569 17,549 18,539
Adjustment to Net Income Attributable To Honeywell
Net income attributable to Honeywell (as reported) 5,658 4,966 5,542 4,779 6,143
Add: Increase (decrease) in inventory LIFO reserve (45) 6
Net income attributable to Honeywell (adjusted) 5,658 4,966 5,542 4,734 6,149

Based on: 10-K (reporting date: 2023-12-31), 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).

Honeywell International Inc. inventory value on Dec 31, 2023 would be $6,178 (in millions) if the FIFO inventory method was used instead of LIFO. Honeywell International Inc. inventories, valued on a LIFO basis, on Dec 31, 2023 were $6,178. Honeywell International Inc. inventories would have been $— higher than reported on Dec 31, 2023 if the FIFO method had been used instead.


Honeywell International Inc., Financial Data: Reported vs. Adjusted


Adjusted Financial Ratios: LIFO vs. FIFO (Summary)

Honeywell International Inc., adjusted financial ratios

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Current Ratio
Reported current ratio (LIFO) 1.27 1.25 1.30 1.47 1.34
Adjusted current ratio (FIFO) 1.27 1.25 1.30 1.47 1.35
Net Profit Margin
Reported net profit margin (LIFO) 15.43% 14.00% 16.11% 14.64% 16.73%
Adjusted net profit margin (FIFO) 15.43% 14.00% 16.11% 14.51% 16.75%
Total Asset Turnover
Reported total asset turnover (LIFO) 0.60 0.57 0.53 0.51 0.63
Adjusted total asset turnover (FIFO) 0.60 0.57 0.53 0.51 0.63
Financial Leverage
Reported financial leverage (LIFO) 3.88 3.73 3.47 3.68 3.17
Adjusted financial leverage (FIFO) 3.88 3.73 3.47 3.68 3.17
Return on Equity (ROE)
Reported ROE (LIFO) 35.68% 29.74% 29.85% 27.23% 33.22%
Adjusted ROE (FIFO) 35.68% 29.74% 29.85% 26.98% 33.17%
Return on Assets (ROA)
Reported ROA (LIFO) 9.20% 7.97% 8.60% 7.40% 10.47%
Adjusted ROA (FIFO) 9.20% 7.97% 8.60% 7.33% 10.47%

Based on: 10-K (reporting date: 2023-12-31), 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).

Financial ratio Description The company
Adjusted current ratio A liquidity ratio calculated as adjusted current assets divided by current liabilities. Honeywell International Inc. adjusted current ratio deteriorated from 2021 to 2022 but then slightly improved from 2022 to 2023.
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by revenue. Honeywell International Inc. adjusted net profit margin ratio deteriorated from 2021 to 2022 but then improved from 2022 to 2023 not reaching 2021 level.
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Honeywell International Inc. adjusted total asset turnover ratio improved from 2021 to 2022 and from 2022 to 2023.
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.
Honeywell International Inc. adjusted financial leverage ratio increased from 2021 to 2022 and from 2022 to 2023.
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. Honeywell International Inc. adjusted ROE deteriorated from 2021 to 2022 but then improved from 2022 to 2023 exceeding 2021 level.
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. Honeywell International Inc. adjusted ROA deteriorated from 2021 to 2022 but then improved from 2022 to 2023 exceeding 2021 level.

Honeywell International Inc., Financial Ratios: Reported vs. Adjusted


Adjusted Current Ratio

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Current assets 23,502 24,982 25,372 28,175 24,303
Current liabilities 18,539 19,938 19,508 19,197 18,098
Liquidity Ratio
Current ratio1 1.27 1.25 1.30 1.47 1.34
Adjusted: After Conversion from LIFO to FIFO
Selected Financial Data (US$ in millions)
Adjusted current assets 23,502 24,982 25,372 28,175 24,348
Current liabilities 18,539 19,938 19,508 19,197 18,098
Liquidity Ratio
Adjusted current ratio2 1.27 1.25 1.30 1.47 1.35

Based on: 10-K (reporting date: 2023-12-31), 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).

2023 Calculations

1 Current ratio = Current assets ÷ Current liabilities
= 23,502 ÷ 18,539 = 1.27

2 Adjusted current ratio = Adjusted current assets ÷ Current liabilities
= 23,502 ÷ 18,539 = 1.27

Liquidity ratio Description The company
Adjusted current ratio A liquidity ratio calculated as adjusted current assets divided by current liabilities. Honeywell International Inc. adjusted current ratio deteriorated from 2021 to 2022 but then slightly improved from 2022 to 2023.

Adjusted Net Profit Margin

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to Honeywell 5,658 4,966 5,542 4,779 6,143
Net sales 36,662 35,466 34,392 32,637 36,709
Profitability Ratio
Net profit margin1 15.43% 14.00% 16.11% 14.64% 16.73%
Adjusted: After Conversion from LIFO to FIFO
Selected Financial Data (US$ in millions)
Adjusted net income attributable to Honeywell 5,658 4,966 5,542 4,734 6,149
Net sales 36,662 35,466 34,392 32,637 36,709
Profitability Ratio
Adjusted net profit margin2 15.43% 14.00% 16.11% 14.51% 16.75%

Based on: 10-K (reporting date: 2023-12-31), 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).

2023 Calculations

1 Net profit margin = 100 × Net income attributable to Honeywell ÷ Net sales
= 100 × 5,658 ÷ 36,662 = 15.43%

2 Adjusted net profit margin = 100 × Adjusted net income attributable to Honeywell ÷ Net sales
= 100 × 5,658 ÷ 36,662 = 15.43%

Profitability ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by revenue. Honeywell International Inc. adjusted net profit margin ratio deteriorated from 2021 to 2022 but then improved from 2022 to 2023 not reaching 2021 level.

Adjusted Total Asset Turnover

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Net sales 36,662 35,466 34,392 32,637 36,709
Total assets 61,525 62,275 64,470 64,586 58,679
Activity Ratio
Total asset turnover1 0.60 0.57 0.53 0.51 0.63
Adjusted: After Conversion from LIFO to FIFO
Selected Financial Data (US$ in millions)
Net sales 36,662 35,466 34,392 32,637 36,709
Adjusted total assets 61,525 62,275 64,470 64,586 58,724
Activity Ratio
Adjusted total asset turnover2 0.60 0.57 0.53 0.51 0.63

Based on: 10-K (reporting date: 2023-12-31), 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).

2023 Calculations

1 Total asset turnover = Net sales ÷ Total assets
= 36,662 ÷ 61,525 = 0.60

2 Adjusted total asset turnover = Net sales ÷ Adjusted total assets
= 36,662 ÷ 61,525 = 0.60

Activity ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Honeywell International Inc. adjusted total asset turnover ratio improved from 2021 to 2022 and from 2022 to 2023.

Adjusted Financial Leverage

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Total assets 61,525 62,275 64,470 64,586 58,679
Total Honeywell shareowners’ equity 15,856 16,697 18,569 17,549 18,494
Solvency Ratio
Financial leverage1 3.88 3.73 3.47 3.68 3.17
Adjusted: After Conversion from LIFO to FIFO
Selected Financial Data (US$ in millions)
Adjusted total assets 61,525 62,275 64,470 64,586 58,724
Adjusted total Honeywell shareowners’ equity 15,856 16,697 18,569 17,549 18,539
Solvency Ratio
Adjusted financial leverage2 3.88 3.73 3.47 3.68 3.17

Based on: 10-K (reporting date: 2023-12-31), 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).

2023 Calculations

1 Financial leverage = Total assets ÷ Total Honeywell shareowners’ equity
= 61,525 ÷ 15,856 = 3.88

2 Adjusted financial leverage = Adjusted total assets ÷ Adjusted total Honeywell shareowners’ equity
= 61,525 ÷ 15,856 = 3.88

Solvency ratio Description The company
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.
Honeywell International Inc. adjusted financial leverage ratio increased from 2021 to 2022 and from 2022 to 2023.

Adjusted Return on Equity (ROE)

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to Honeywell 5,658 4,966 5,542 4,779 6,143
Total Honeywell shareowners’ equity 15,856 16,697 18,569 17,549 18,494
Profitability Ratio
ROE1 35.68% 29.74% 29.85% 27.23% 33.22%
Adjusted: After Conversion from LIFO to FIFO
Selected Financial Data (US$ in millions)
Adjusted net income attributable to Honeywell 5,658 4,966 5,542 4,734 6,149
Adjusted total Honeywell shareowners’ equity 15,856 16,697 18,569 17,549 18,539
Profitability Ratio
Adjusted ROE2 35.68% 29.74% 29.85% 26.98% 33.17%

Based on: 10-K (reporting date: 2023-12-31), 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).

2023 Calculations

1 ROE = 100 × Net income attributable to Honeywell ÷ Total Honeywell shareowners’ equity
= 100 × 5,658 ÷ 15,856 = 35.68%

2 Adjusted ROE = 100 × Adjusted net income attributable to Honeywell ÷ Adjusted total Honeywell shareowners’ equity
= 100 × 5,658 ÷ 15,856 = 35.68%

Profitability ratio Description The company
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. Honeywell International Inc. adjusted ROE deteriorated from 2021 to 2022 but then improved from 2022 to 2023 exceeding 2021 level.

Adjusted Return on Assets (ROA)

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to Honeywell 5,658 4,966 5,542 4,779 6,143
Total assets 61,525 62,275 64,470 64,586 58,679
Profitability Ratio
ROA1 9.20% 7.97% 8.60% 7.40% 10.47%
Adjusted: After Conversion from LIFO to FIFO
Selected Financial Data (US$ in millions)
Adjusted net income attributable to Honeywell 5,658 4,966 5,542 4,734 6,149
Adjusted total assets 61,525 62,275 64,470 64,586 58,724
Profitability Ratio
Adjusted ROA2 9.20% 7.97% 8.60% 7.33% 10.47%

Based on: 10-K (reporting date: 2023-12-31), 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).

2023 Calculations

1 ROA = 100 × Net income attributable to Honeywell ÷ Total assets
= 100 × 5,658 ÷ 61,525 = 9.20%

2 Adjusted ROA = 100 × Adjusted net income attributable to Honeywell ÷ Adjusted total assets
= 100 × 5,658 ÷ 61,525 = 9.20%

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. Honeywell International Inc. adjusted ROA deteriorated from 2021 to 2022 but then improved from 2022 to 2023 exceeding 2021 level.