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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- Income Statement
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Short-term (Operating) Activity Ratios
- Analysis of Long-term (Investment) Activity Ratios
- Common Stock Valuation Ratios
- Net Profit Margin since 2012
- Return on Assets (ROA) since 2012
- Price to Operating Profit (P/OP) since 2012
- Analysis of Debt
- Aggregate Accruals
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Solvency Ratios (Summary)
Kraft Foods Group Inc., solvency ratios (quarterly data)
Based on: 10-Q (reporting date: 2015-03-28), 10-K (reporting date: 2014-12-27), 10-Q (reporting date: 2014-09-27), 10-Q (reporting date: 2014-06-28), 10-Q (reporting date: 2014-03-29), 10-K (reporting date: 2013-12-28), 10-Q (reporting date: 2013-09-28), 10-Q (reporting date: 2013-06-29), 10-Q (reporting date: 2013-03-30), 10-K (reporting date: 2012-12-29), 10-Q (reporting date: 2012-09-30), 10-12B/A (reporting date: 2012-06-30), 10-12B/A (reporting date: 2012-03-31).
- Debt to equity ratio
- The debt to equity ratio shows a notable increase from 0 in March 2012 to a peak of 2.79 in December 2012. Following the peak, there is a gradual decline reaching about 1.79 in September 2014, before rising again to around 2.22 by March 2015. This indicates that the company increased its leverage significantly at the end of 2012, then managed to reduce it modestly throughout 2013 and most of 2014, before taking on more debt again in early 2015.
- Debt to capital ratio
- The debt to capital ratio mirrors the debt to equity trend but with less volatility. Starting at 0 in March 2012, it rises steadily to 0.74 by December 2012. Afterward, it decreases to around 0.64–0.65 in late 2013 and most of 2014, suggesting some deleveraging. However, by the first quarter of 2015, it climbs back to approximately 0.69–0.70, indicating increased leverage again toward the end of the period.
- Debt to assets ratio
- The debt to assets ratio rises initially from 0 in March 2012 to 0.43 by September 2012 and remains consistently stable at approximately 0.43–0.44 throughout the subsequent periods until March 2015. This stability suggests the company's debt scaling roughly proportionately with its asset base during this period, maintaining a relatively constant risk level in terms of asset coverage.
- Financial leverage ratio
- Financial leverage demonstrates a marked spike from 1.28 in March 2012 to 6.53 in December 2012, indicating a significant increase in the use of debt financing relative to equity. Thereafter, the ratio declines steadily to about 4.08 by September 2014. However, it then rises again to approximately 5.12 by March 2015, suggesting a renewed increase in leverage comparable to earlier levels in the period.
- Interest coverage ratio
- Interest coverage data is missing for the first two quarters of 2012. Starting from December 2012, the ratio is high at 10.51, indicating strong earnings ability to cover interest expenses. This metric declines steadily to 3.63 by March 2015. The downward trend reveals diminishing capacity to cover interest costs over time, which could raise concerns over the company’s earnings and financial health concerning debt servicing.
Debt Ratios
Coverage Ratios
Debt to Equity
Kraft Foods Group Inc., debt to equity calculation (quarterly data)
| Mar 28, 2015 | Dec 27, 2014 | Sep 27, 2014 | Jun 28, 2014 | Mar 29, 2014 | Dec 28, 2013 | Sep 28, 2013 | Jun 29, 2013 | Mar 30, 2013 | Dec 29, 2012 | Sep 30, 2012 | Jun 30, 2012 | Mar 31, 2012 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||
| Current portion of long-term debt | ||||||||||||||||||
| Long-term debt, excluding current portion | ||||||||||||||||||
| Total debt | ||||||||||||||||||
| Equity | ||||||||||||||||||
| Solvency Ratio | ||||||||||||||||||
| Debt to equity1 | ||||||||||||||||||
| Benchmarks | ||||||||||||||||||
| Debt to Equity, Competitors2 | ||||||||||||||||||
| lululemon athletica inc. | ||||||||||||||||||
| Nike Inc. | ||||||||||||||||||
Based on: 10-Q (reporting date: 2015-03-28), 10-K (reporting date: 2014-12-27), 10-Q (reporting date: 2014-09-27), 10-Q (reporting date: 2014-06-28), 10-Q (reporting date: 2014-03-29), 10-K (reporting date: 2013-12-28), 10-Q (reporting date: 2013-09-28), 10-Q (reporting date: 2013-06-29), 10-Q (reporting date: 2013-03-30), 10-K (reporting date: 2012-12-29), 10-Q (reporting date: 2012-09-30), 10-12B/A (reporting date: 2012-06-30), 10-12B/A (reporting date: 2012-03-31).
1 Q1 2015 Calculation
Debt to equity = Total debt ÷ Equity
= ÷ =
2 Click competitor name to see calculations.
- Total Debt
- The total debt shows a significant increase from March 31, 2012, to June 30, 2012, where it rises from 34 million US dollars to 5,995 million US dollars. Following this initial surge, total debt continues to increase but at a much slower rate, stabilizing around 10,000 million US dollars from December 29, 2012, through March 28, 2015. This pattern indicates an initial substantial borrowing or reclassification event, followed by consistent maintenance of high debt levels over the subsequent quarters.
- Equity
- Equity exhibits a declining trend from March 31, 2012, through December 29, 2012, where it decreases sharply from 17,275 million to 3,572 million US dollars. After this decline, equity experiences some recovery, gradually increasing to 5,187 million by December 28, 2013, with slight fluctuations thereafter. However, equity remains well below its initial level, ending at 4,517 million US dollars on March 28, 2015. The general trend reflects a reduction in shareholder equity early in the period, with moderate instability in subsequent periods.
- Debt to Equity Ratio
- The debt to equity ratio begins at 0 on March 31, 2012, then rises sharply to 0.55 by June 30, 2012, and continues to increase dramatically, peaking at 2.79 on December 29, 2012. After this peak, the ratio declines progressively to 1.79 by September 27, 2014, indicating an improvement in the balance between debt and equity. However, it rises again marginally to 2.22 by March 28, 2015. This pattern suggests an initial period of increasing financial leverage, followed by some deleveraging or equity gains, and a slight reversal towards increased leverage at the end of the period analyzed.
Debt to Capital
Kraft Foods Group Inc., debt to capital calculation (quarterly data)
| Mar 28, 2015 | Dec 27, 2014 | Sep 27, 2014 | Jun 28, 2014 | Mar 29, 2014 | Dec 28, 2013 | Sep 28, 2013 | Jun 29, 2013 | Mar 30, 2013 | Dec 29, 2012 | Sep 30, 2012 | Jun 30, 2012 | Mar 31, 2012 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||
| Current portion of long-term debt | ||||||||||||||||||
| Long-term debt, excluding current portion | ||||||||||||||||||
| Total debt | ||||||||||||||||||
| Equity | ||||||||||||||||||
| Total capital | ||||||||||||||||||
| Solvency Ratio | ||||||||||||||||||
| Debt to capital1 | ||||||||||||||||||
| Benchmarks | ||||||||||||||||||
| Debt to Capital, Competitors2 | ||||||||||||||||||
| lululemon athletica inc. | ||||||||||||||||||
| Nike Inc. | ||||||||||||||||||
Based on: 10-Q (reporting date: 2015-03-28), 10-K (reporting date: 2014-12-27), 10-Q (reporting date: 2014-09-27), 10-Q (reporting date: 2014-06-28), 10-Q (reporting date: 2014-03-29), 10-K (reporting date: 2013-12-28), 10-Q (reporting date: 2013-09-28), 10-Q (reporting date: 2013-06-29), 10-Q (reporting date: 2013-03-30), 10-K (reporting date: 2012-12-29), 10-Q (reporting date: 2012-09-30), 10-12B/A (reporting date: 2012-06-30), 10-12B/A (reporting date: 2012-03-31).
1 Q1 2015 Calculation
Debt to capital = Total debt ÷ Total capital
= ÷ =
2 Click competitor name to see calculations.
- Total Debt
- The total debt experienced a significant increase from the first quarter of 2012 to the second quarter of 2012, rising sharply from 34 million USD to 5,995 million USD. Following this substantial jump, total debt continued to increase steadily until reaching a plateau close to 10,000 million USD around the fourth quarter of 2012. From that point through the first quarter of 2015, the total debt remained relatively stable, fluctuating slightly around the 10,000 million USD mark.
- Total Capital
- Total capital showed moderate fluctuations over the period. It began at 17,309 million USD in the first quarter of 2012 and slightly decreased in subsequent quarters, reaching a low of 13,543 million USD in the fourth quarter of 2012. From early 2013 onward, total capital generally increased, peaking at 15,604 million USD in the third quarter of 2014. However, in the last observed quarter, total capital slightly declined to 14,549 million USD.
- Debt to Capital Ratio
- The debt to capital ratio rose sharply from 0 at the beginning of 2012 to 0.56 by the third quarter. It peaked at 0.74 at the end of 2012, coinciding with the increase in total debt and the reduction in total capital. From 2013 to 2014, the ratio gradually declined, reaching a low of 0.64 in the third quarter of 2014, indicating improved capital structure balance. However, towards the end of the period, the ratio increased again to reach 0.69 in the first quarter of 2015, suggesting a slight trend towards higher leverage.
- Overall Pattern
- The data reflects a period of significant leverage increase early on, likely due to large debt issuance or acquisition activity around mid-2012. Following this, the company maintained a relatively stable debt level while capital saw modest growth and some volatility. The debt to capital ratio corroborates this, showing a peak in leverage during late 2012 followed by some deleveraging and a slight increase again by early 2015. These trends suggest strategic financial management to balance debt levels and capital structure in response to changing operational or market conditions.
Debt to Assets
Kraft Foods Group Inc., debt to assets calculation (quarterly data)
| Mar 28, 2015 | Dec 27, 2014 | Sep 27, 2014 | Jun 28, 2014 | Mar 29, 2014 | Dec 28, 2013 | Sep 28, 2013 | Jun 29, 2013 | Mar 30, 2013 | Dec 29, 2012 | Sep 30, 2012 | Jun 30, 2012 | Mar 31, 2012 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||
| Current portion of long-term debt | ||||||||||||||||||
| Long-term debt, excluding current portion | ||||||||||||||||||
| Total debt | ||||||||||||||||||
| Total assets | ||||||||||||||||||
| Solvency Ratio | ||||||||||||||||||
| Debt to assets1 | ||||||||||||||||||
| Benchmarks | ||||||||||||||||||
| Debt to Assets, Competitors2 | ||||||||||||||||||
| lululemon athletica inc. | ||||||||||||||||||
| Nike Inc. | ||||||||||||||||||
Based on: 10-Q (reporting date: 2015-03-28), 10-K (reporting date: 2014-12-27), 10-Q (reporting date: 2014-09-27), 10-Q (reporting date: 2014-06-28), 10-Q (reporting date: 2014-03-29), 10-K (reporting date: 2013-12-28), 10-Q (reporting date: 2013-09-28), 10-Q (reporting date: 2013-06-29), 10-Q (reporting date: 2013-03-30), 10-K (reporting date: 2012-12-29), 10-Q (reporting date: 2012-09-30), 10-12B/A (reporting date: 2012-06-30), 10-12B/A (reporting date: 2012-03-31).
1 Q1 2015 Calculation
Debt to assets = Total debt ÷ Total assets
= ÷ =
2 Click competitor name to see calculations.
- Total Debt
- The total debt exhibited a significant increase from March 2012 to June 2012, rising sharply from 34 million USD to 5,995 million USD. Following this initial surge, the debt continued to increase steadily over the subsequent periods, reaching approximately 10,032 million USD by December 2014 and remaining stable through March 2015.
- Total Assets
- Total assets remained relatively stable throughout the observed periods, fluctuating within a narrow range. Starting at 22,095 million USD in March 2012, assets slightly decreased by June 2012 but then displayed a gradual upward trend, peaking near 23,361 million USD in March 2014. Thereafter, a minor decline occurred toward the end of 2014, with assets closing around 23,134 million USD in March 2015.
- Debt to Assets Ratio
- This ratio reflected the substantial increase in debt relative to assets. Initially negligible at 0 in March 2012 due to almost no debt, it rose sharply to 0.27 by June 2012 and then stabilized at approximately 0.43 for the majority of the remaining periods. Minor fluctuations were noted, with a slight uptick to 0.44 during late 2014, but the ratio generally indicates a consistent leverage level of just over 40% from the middle of 2012 onward.
- Overall Analysis
- The financial trends indicate a notable shift in capital structure occurring in mid-2012, characterized by a substantial incurrence of debt. Despite the considerable increase in liabilities, the total asset base remained largely stable, suggesting that asset growth did not keep pace with the rise in debt. The leverage ratio stabilized thereafter, implying a maintained level of financial risk. The company’s debt management appears consistent in the later periods, with no significant variation in leverage, but the high debt level warrants continued monitoring for potential impacts on financial flexibility.
Financial Leverage
Kraft Foods Group Inc., financial leverage calculation (quarterly data)
| Mar 28, 2015 | Dec 27, 2014 | Sep 27, 2014 | Jun 28, 2014 | Mar 29, 2014 | Dec 28, 2013 | Sep 28, 2013 | Jun 29, 2013 | Mar 30, 2013 | Dec 29, 2012 | Sep 30, 2012 | Jun 30, 2012 | Mar 31, 2012 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||
| Total assets | ||||||||||||||||||
| Equity | ||||||||||||||||||
| Solvency Ratio | ||||||||||||||||||
| Financial leverage1 | ||||||||||||||||||
| Benchmarks | ||||||||||||||||||
| Financial Leverage, Competitors2 | ||||||||||||||||||
| lululemon athletica inc. | ||||||||||||||||||
| Nike Inc. | ||||||||||||||||||
Based on: 10-Q (reporting date: 2015-03-28), 10-K (reporting date: 2014-12-27), 10-Q (reporting date: 2014-09-27), 10-Q (reporting date: 2014-06-28), 10-Q (reporting date: 2014-03-29), 10-K (reporting date: 2013-12-28), 10-Q (reporting date: 2013-09-28), 10-Q (reporting date: 2013-06-29), 10-Q (reporting date: 2013-03-30), 10-K (reporting date: 2012-12-29), 10-Q (reporting date: 2012-09-30), 10-12B/A (reporting date: 2012-06-30), 10-12B/A (reporting date: 2012-03-31).
1 Q1 2015 Calculation
Financial leverage = Total assets ÷ Equity
= ÷ =
2 Click competitor name to see calculations.
The financial data reveals several notable trends in the company's financial position over the observed periods.
- Total assets
- Total assets demonstrate relative stability with minor fluctuations, starting at approximately $22.1 billion in March 2012 and slightly increasing to about $23.1 billion by March 2015. The asset base peaks around the end of 2012 at $23.3 billion, followed by periods of small variations but overall remains within a narrow range across the quarters.
- Equity
- Equity experiences a pronounced and consistent decline in the earlier periods, dropping sharply from $17.3 billion in March 2012 to as low as $3.6 billion by December 2012. Following this decline, equity levels stabilize somewhat and show minor incremental increases through subsequent quarters, reaching $4.5 billion by March 2015. However, this level remains substantially lower than at the beginning of the period, indicating significant depletion of shareholder equity over time.
- Financial leverage (ratio)
- The financial leverage ratio increases dramatically during the initial periods, rising from a low of 1.28 in March 2012 to a high of 6.53 by December 2012. Thereafter, leverage declines steadily to around 4.08 in September 2014 before rising again to approximately 5.12 by March 2015. This pattern reflects an initial significant increase in leverage likely due to the drop in equity, followed by some deleveraging, but with leverage remaining elevated compared to the start of the period.
Overall, the data indicates that while total assets remained fairly constant, the company's equity base substantially weakened during 2012, leading to elevated financial leverage ratios. Although partial recovery in equity and reduction in leverage occurred subsequently, financial risk as measured by leverage remained higher than at the beginning of the timeline. These trends suggest a period of financial stress and potential restructuring or losses affecting shareholder value in the early quarters, with subsequent attempts to stabilize the capital structure.
Interest Coverage
Kraft Foods Group Inc., interest coverage calculation (quarterly data)
Based on: 10-Q (reporting date: 2015-03-28), 10-K (reporting date: 2014-12-27), 10-Q (reporting date: 2014-09-27), 10-Q (reporting date: 2014-06-28), 10-Q (reporting date: 2014-03-29), 10-K (reporting date: 2013-12-28), 10-Q (reporting date: 2013-09-28), 10-Q (reporting date: 2013-06-29), 10-Q (reporting date: 2013-03-30), 10-K (reporting date: 2012-12-29), 10-Q (reporting date: 2012-09-30), 10-12B/A (reporting date: 2012-06-30), 10-12B/A (reporting date: 2012-03-31).
1 Q1 2015 Calculation
Interest coverage
= (EBITQ1 2015
+ EBITQ4 2014
+ EBITQ3 2014
+ EBITQ2 2014)
÷ (Interest expenseQ1 2015
+ Interest expenseQ4 2014
+ Interest expenseQ3 2014
+ Interest expenseQ2 2014)
= ( + + + )
÷ ( + + + )
=
The earnings before interest and tax (EBIT) exhibited notable fluctuations throughout the observed periods. Initially, EBIT increased from 753 million US dollars in March 2012 to a peak of 927 million US dollars in June 2012. This was followed by a decline to 261 million US dollars by December 2012. Starting in March 2013, EBIT broadly trended upwards, reaching a high of 1,514 million US dollars in December 2013, marking the highest recorded figure in the dataset. Subsequently, EBIT showed variability with moderate decreases and increases, including a significant drop to -614 million US dollars in December 2014, which represents a considerable negative deviation before recovering to 740 million US dollars in March 2015.
Regarding interest and other expenses, net values remained relatively stable over the quarters, fluctuating modestly around the 100 to 130 million US dollars range. There was no pronounced trend of sharp increases or decreases, indicating a relatively consistent level of net interest and other expenses.
The interest coverage ratio, which measures the company’s ability to meet its interest obligations from EBIT, was not available for the early periods but showed variable performance in the periods reported. The ratio peaked at 10.51 and gradually declined to 3.63 by March 2015. This downward trend in coverage ratio, particularly the sharp reduction towards the end of the timeline, reflects a decreased ability to cover interest expenses comfortably, correlating with the increased volatility and the negative EBIT observed in late 2014.
- EBIT Trend
- Characterized by significant volatility with initial growth, a steep fall at the end of 2012, a peak in late 2013, and a sharp negative loss in late 2014 followed by partial recovery.
- Interest and Other Expenses
- Remained steady without material trends, fluctuating narrowly within a consistent range.
- Interest Coverage Ratio
- Demonstrated a declining trend over time, with high coverage in mid-2012 and early 2013 weakening significantly by early 2015, indicative of growing financial pressure in meeting interest obligations.