Analysis of Solvency Ratios
Solvency ratios also known as long-term debt ratios measure a company ability to meet long-term obligations.
Solvency Ratios (Summary)
Debt Ratios
Coverage Ratios
NXP Semiconductors N.V., solvency ratios
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 20-F (reporting date: 2018-12-31), 20-F (reporting date: 2017-12-31).
The solvency profile exhibits a consistent increase in leverage and significant volatility in debt coverage capabilities between 2017 and 2021.
- Capital Structure and Leverage
- A sustained upward trend in leverage is observed across all primary metrics. The debt-to-equity ratio increased steadily from 0.49 in 2017 to 0.85 in 2020, followed by a sharp acceleration to 1.62 in 2021. Similarly, the debt-to-assets ratio grew from 0.27 to 0.51, and the debt-to-capital ratio rose from 0.33 to 0.62 over the same period. Financial leverage followed this trajectory, increasing from 1.78 in 2017 to a peak of 3.20 in 2021, indicating a strategic shift toward a more debt-intensive capital structure.
- Impact of Operating Lease Liabilities
- The integration of operating lease liabilities into the solvency calculations produces negligible deviations from the standard debt ratios. This suggests that lease-related obligations constitute a minor portion of the total liability framework relative to traditional debt instruments.
- Debt Servicing and Coverage
- The company experienced substantial fluctuations in its ability to service debt. Interest coverage and fixed charge coverage ratios peaked in 2018 at 9.92 and 8.38, respectively, before declining sharply. By 2020, the interest coverage ratio fell to 0.99 and the fixed charge coverage ratio to 0.99, signaling a period where operating earnings were barely sufficient to cover interest and fixed obligations. However, a strong recovery occurred in 2021, with the interest coverage ratio rebounding to 6.90 and the fixed charge coverage ratio rising to 6.01.
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Debt to Equity
NXP Semiconductors N.V., debt to equity calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term debt | —) | —) | —) | 1,107) | 751) | |
| Long-term debt | 10,572) | 7,609) | 7,365) | 6,247) | 5,814) | |
| Total debt | 10,572) | 7,609) | 7,365) | 7,354) | 6,565) | |
| Stockholders’ equity | 6,528) | 8,944) | 9,441) | 10,505) | 13,527) | |
| Solvency Ratio | ||||||
| Debt to equity1 | 1.62 | 0.85 | 0.78 | 0.70 | 0.49 | |
| Benchmarks | ||||||
| Debt to Equity, Competitors2 | ||||||
| Advanced Micro Devices Inc. | 0.04 | — | — | — | — | |
| Analog Devices Inc. | 0.18 | 0.43 | — | — | — | |
| Applied Materials Inc. | 0.45 | 0.52 | — | — | — | |
| Broadcom Inc. | 1.59 | 1.72 | — | — | — | |
| Intel Corp. | 0.40 | — | — | — | — | |
| KLA Corp. | 1.02 | — | — | — | — | |
| Lam Research Corp. | 0.83 | — | — | — | — | |
| Marvell Technology Inc. | 0.14 | — | — | — | — | |
| Micron Technology Inc. | 0.15 | 0.17 | — | — | — | |
| NVIDIA Corp. | 0.41 | — | — | — | — | |
| Qualcomm Inc. | 1.58 | 2.59 | — | — | — | |
| Texas Instruments Inc. | 0.58 | — | — | — | — | |
| Debt to Equity, Sector | ||||||
| Semiconductors & Semiconductor Equipment | 0.49 | — | — | — | — | |
| Debt to Equity, Industry | ||||||
| Information Technology | 0.83 | — | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 20-F (reporting date: 2018-12-31), 20-F (reporting date: 2017-12-31).
1 2021 Calculation
Debt to equity = Total debt ÷ Stockholders’ equity
= 10,572 ÷ 6,528 = 1.62
2 Click competitor name to see calculations.
Between 2017 and 2021, a significant shift in the solvency profile is observed, characterized by a steady increase in total liabilities and a simultaneous contraction of stockholders' equity. This divergence has resulted in a progressive escalation of the debt-to-equity ratio, indicating an increasing reliance on borrowed capital relative to equity financing.
- Total Debt Trends
- Total debt experienced a consistent upward trajectory, rising from 6,565 million US dollars in 2017 to 10,572 million US dollars by 2021. While growth remained relatively stable between 2018 and 2020, a substantial increase occurred in the final year of the period, representing a notable expansion of the company's total financial obligations.
- Stockholders' Equity Trends
- A sustained downward trend is evident in stockholders' equity, which declined from 13,527 million US dollars in 2017 to 6,528 million US dollars in 2021. This continuous reduction reflects a contraction in the net asset base available to absorb potential losses and a decrease in the equity cushion supporting the organization's debt.
- Debt to Equity Ratio Analysis
- The debt to equity ratio climbed steadily from 0.49 in 2017 to 0.85 in 2020, before surging to 1.62 in 2021. This shift indicates that the company transitioned from a conservative capital structure, where equity significantly exceeded debt, to a highly leveraged position where debt obligations outweigh equity by a substantial margin.
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Debt to Equity (including Operating Lease Liability)
NXP Semiconductors N.V., debt to equity (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term debt | —) | —) | —) | 1,107) | 751) | |
| Long-term debt | 10,572) | 7,609) | 7,365) | 6,247) | 5,814) | |
| Total debt | 10,572) | 7,609) | 7,365) | 7,354) | 6,565) | |
| Lease liabilities related to operating leases (included in Other current liabilities) | 56) | 60) | 62) | —) | —) | |
| Lease liabilities related to operating leases (included in Other non-current liabilities) | 181) | 177) | 176) | —) | —) | |
| Total debt (including operating lease liability) | 10,809) | 7,846) | 7,603) | 7,354) | 6,565) | |
| Stockholders’ equity | 6,528) | 8,944) | 9,441) | 10,505) | 13,527) | |
| Solvency Ratio | ||||||
| Debt to equity (including operating lease liability)1 | 1.66 | 0.88 | 0.81 | 0.70 | 0.49 | |
| Benchmarks | ||||||
| Debt to Equity (including Operating Lease Liability), Competitors2 | ||||||
| Advanced Micro Devices Inc. | 0.10 | — | — | — | — | |
| Analog Devices Inc. | 0.19 | 0.46 | — | — | — | |
| Applied Materials Inc. | 0.47 | 0.54 | — | — | — | |
| Broadcom Inc. | 1.61 | 1.75 | — | — | — | |
| Intel Corp. | 0.40 | — | — | — | — | |
| KLA Corp. | 1.05 | — | — | — | — | |
| Lam Research Corp. | 0.86 | — | — | — | — | |
| Marvell Technology Inc. | 0.16 | — | — | — | — | |
| Micron Technology Inc. | 0.17 | 0.19 | — | — | — | |
| NVIDIA Corp. | 0.46 | — | — | — | — | |
| Qualcomm Inc. | 1.64 | 2.67 | — | — | — | |
| Texas Instruments Inc. | 0.62 | — | — | — | — | |
| Debt to Equity (including Operating Lease Liability), Sector | ||||||
| Semiconductors & Semiconductor Equipment | 0.51 | — | — | — | — | |
| Debt to Equity (including Operating Lease Liability), Industry | ||||||
| Information Technology | 0.90 | — | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 20-F (reporting date: 2018-12-31), 20-F (reporting date: 2017-12-31).
1 2021 Calculation
Debt to equity (including operating lease liability) = Total debt (including operating lease liability) ÷ Stockholders’ equity
= 10,809 ÷ 6,528 = 1.66
2 Click competitor name to see calculations.
A continuous deterioration in the solvency position is evident between 2017 and 2021. The financial structure shifted from a low-leverage position to a more highly leveraged state, characterized by a simultaneous increase in total liabilities and a substantial reduction in equity.
- Total Debt Evolution
- Total debt, including operating lease liabilities, exhibited a consistent upward trajectory over the five-year period. Starting at 6,565 million US dollars in 2017, obligations grew steadily through 2020 before experiencing a sharp acceleration in 2021, reaching 10,809 million US dollars. This final period represented a significant increase of approximately 37.7% over the previous year's levels.
- Stockholders' Equity Erosion
- Conversely, stockholders' equity declined steadily every year from 2017 to 2021. The equity base decreased from 13,527 million US dollars in 2017 to 6,528 million US dollars in 2021. This sustained reduction indicates a contraction of the equity cushion available to absorb potential losses or support further borrowing.
- Debt to Equity Ratio Trajectory
- The debt to equity ratio reflects the combined impact of rising debt and falling equity, resulting in a steep increase from 0.49 in 2017 to 1.66 in 2021. While the ratio grew incrementally between 2017 and 2020, a critical threshold was crossed in 2021, where total debt exceeded total equity. This trend indicates a fundamental shift in the capital structure toward a greater reliance on external financing.
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Debt to Capital
NXP Semiconductors N.V., debt to capital calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term debt | —) | —) | —) | 1,107) | 751) | |
| Long-term debt | 10,572) | 7,609) | 7,365) | 6,247) | 5,814) | |
| Total debt | 10,572) | 7,609) | 7,365) | 7,354) | 6,565) | |
| Stockholders’ equity | 6,528) | 8,944) | 9,441) | 10,505) | 13,527) | |
| Total capital | 17,100) | 16,553) | 16,806) | 17,859) | 20,092) | |
| Solvency Ratio | ||||||
| Debt to capital1 | 0.62 | 0.46 | 0.44 | 0.41 | 0.33 | |
| Benchmarks | ||||||
| Debt to Capital, Competitors2 | ||||||
| Advanced Micro Devices Inc. | 0.04 | — | — | — | — | |
| Analog Devices Inc. | 0.15 | 0.30 | — | — | — | |
| Applied Materials Inc. | 0.31 | 0.34 | — | — | — | |
| Broadcom Inc. | 0.61 | 0.63 | — | — | — | |
| Intel Corp. | 0.29 | — | — | — | — | |
| KLA Corp. | 0.50 | — | — | — | — | |
| Lam Research Corp. | 0.45 | — | — | — | — | |
| Marvell Technology Inc. | 0.12 | — | — | — | — | |
| Micron Technology Inc. | 0.13 | 0.15 | — | — | — | |
| NVIDIA Corp. | 0.29 | — | — | — | — | |
| Qualcomm Inc. | 0.61 | 0.72 | — | — | — | |
| Texas Instruments Inc. | 0.37 | — | — | — | — | |
| Debt to Capital, Sector | ||||||
| Semiconductors & Semiconductor Equipment | 0.33 | — | — | — | — | |
| Debt to Capital, Industry | ||||||
| Information Technology | 0.45 | — | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 20-F (reporting date: 2018-12-31), 20-F (reporting date: 2017-12-31).
1 2021 Calculation
Debt to capital = Total debt ÷ Total capital
= 10,572 ÷ 17,100 = 0.62
2 Click competitor name to see calculations.
A consistent upward trend in the company's solvency risk profile is observed between 2017 and 2021, characterized by a steady increase in the debt to capital ratio. This progression indicates a strategic shift toward a more leveraged capital structure over the five-year period.
- Total Debt Accumulation
- Total debt increased from 6,565 million US dollars in 2017 to 10,572 million US dollars in 2021. While the growth was relatively gradual between 2018 and 2020, a significant acceleration occurred in 2021, where debt rose by approximately 39% compared to the previous year.
- Total Capital Dynamics
- Total capital exhibited a downward trajectory for the majority of the period, declining from 20,092 million US dollars in 2017 to a low of 16,553 million US dollars in 2020. A slight recovery was noted in 2021, with total capital increasing to 17,100 million US dollars.
- Debt to Capital Ratio Analysis
- The debt to capital ratio rose incrementally from 0.33 in 2017 to 0.46 in 2020, before jumping sharply to 0.62 in 2021. The simultaneous increase in total debt and the overall reduction in total capital through 2020 compounded the upward pressure on this ratio, signifying that debt comprises a larger portion of the company's total funding sources.
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Debt to Capital (including Operating Lease Liability)
NXP Semiconductors N.V., debt to capital (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term debt | —) | —) | —) | 1,107) | 751) | |
| Long-term debt | 10,572) | 7,609) | 7,365) | 6,247) | 5,814) | |
| Total debt | 10,572) | 7,609) | 7,365) | 7,354) | 6,565) | |
| Lease liabilities related to operating leases (included in Other current liabilities) | 56) | 60) | 62) | —) | —) | |
| Lease liabilities related to operating leases (included in Other non-current liabilities) | 181) | 177) | 176) | —) | —) | |
| Total debt (including operating lease liability) | 10,809) | 7,846) | 7,603) | 7,354) | 6,565) | |
| Stockholders’ equity | 6,528) | 8,944) | 9,441) | 10,505) | 13,527) | |
| Total capital (including operating lease liability) | 17,337) | 16,790) | 17,044) | 17,859) | 20,092) | |
| Solvency Ratio | ||||||
| Debt to capital (including operating lease liability)1 | 0.62 | 0.47 | 0.45 | 0.41 | 0.33 | |
| Benchmarks | ||||||
| Debt to Capital (including Operating Lease Liability), Competitors2 | ||||||
| Advanced Micro Devices Inc. | 0.09 | — | — | — | — | |
| Analog Devices Inc. | 0.16 | 0.31 | — | — | — | |
| Applied Materials Inc. | 0.32 | 0.35 | — | — | — | |
| Broadcom Inc. | 0.62 | 0.64 | — | — | — | |
| Intel Corp. | 0.29 | — | — | — | — | |
| KLA Corp. | 0.51 | — | — | — | — | |
| Lam Research Corp. | 0.46 | — | — | — | — | |
| Marvell Technology Inc. | 0.14 | — | — | — | — | |
| Micron Technology Inc. | 0.14 | 0.16 | — | — | — | |
| NVIDIA Corp. | 0.31 | — | — | — | — | |
| Qualcomm Inc. | 0.62 | 0.73 | — | — | — | |
| Texas Instruments Inc. | 0.38 | — | — | — | — | |
| Debt to Capital (including Operating Lease Liability), Sector | ||||||
| Semiconductors & Semiconductor Equipment | 0.34 | — | — | — | — | |
| Debt to Capital (including Operating Lease Liability), Industry | ||||||
| Information Technology | 0.47 | — | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 20-F (reporting date: 2018-12-31), 20-F (reporting date: 2017-12-31).
1 2021 Calculation
Debt to capital (including operating lease liability) = Total debt (including operating lease liability) ÷ Total capital (including operating lease liability)
= 10,809 ÷ 17,337 = 0.62
2 Click competitor name to see calculations.
The solvency profile demonstrates a consistent increase in financial leverage between 2017 and 2021. This trend is characterized by a steady rise in total debt coupled with a general contraction in total capital for the majority of the period, resulting in a progressively higher debt-to-capital ratio.
- Total Debt Analysis
- Total debt, including operating lease liabilities, exhibited a continuous upward trend over the five-year period. From 2017 to 2020, debt increased incrementally from 6,565 million US$ to 7,846 million US$. A significant acceleration occurred in 2021, with total debt rising to 10,809 million US$, marking a substantial increase in borrowed capital during the final year of the observed period.
- Total Capital Analysis
- Total capital showed a contrasting trend, declining steadily from 20,092 million US$ in 2017 to a low of 16,790 million US$ in 2020. A slight recovery was noted in 2021, where total capital rose to 17,337 million US$. The net result over the five years was a reduction in the overall capital base despite the increase in debt.
- Debt to Capital Ratio Trends
- The debt to capital ratio rose every year without exception, moving from 0.33 in 2017 to 0.47 in 2020. This upward trajectory culminated in a sharp increase to 0.62 in 2021. This shift indicates that debt shifted from representing one-third of the capital structure to nearly two-thirds, signaling a significant increase in the company's reliance on debt financing relative to its total capital.
The combination of rising total debt and a shrinking capital base through 2020, followed by a surge in borrowing in 2021, has fundamentally altered the solvency position. The rapid escalation of the ratio in the final year suggests a strategic shift or a requirement for significant external funding, leading to a more leveraged capital structure.
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Debt to Assets
NXP Semiconductors N.V., debt to assets calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term debt | —) | —) | —) | 1,107) | 751) | |
| Long-term debt | 10,572) | 7,609) | 7,365) | 6,247) | 5,814) | |
| Total debt | 10,572) | 7,609) | 7,365) | 7,354) | 6,565) | |
| Total assets | 20,864) | 19,847) | 20,016) | 21,530) | 24,049) | |
| Solvency Ratio | ||||||
| Debt to assets1 | 0.51 | 0.38 | 0.37 | 0.34 | 0.27 | |
| Benchmarks | ||||||
| Debt to Assets, Competitors2 | ||||||
| Advanced Micro Devices Inc. | 0.03 | — | — | — | — | |
| Analog Devices Inc. | 0.13 | 0.24 | — | — | — | |
| Applied Materials Inc. | 0.21 | 0.24 | — | — | — | |
| Broadcom Inc. | 0.53 | 0.54 | — | — | — | |
| Intel Corp. | 0.23 | — | — | — | — | |
| KLA Corp. | 0.34 | — | — | — | — | |
| Lam Research Corp. | 0.31 | — | — | — | — | |
| Marvell Technology Inc. | 0.11 | — | — | — | — | |
| Micron Technology Inc. | 0.12 | 0.12 | — | — | — | |
| NVIDIA Corp. | 0.24 | — | — | — | — | |
| Qualcomm Inc. | 0.38 | 0.44 | — | — | — | |
| Texas Instruments Inc. | 0.31 | — | — | — | — | |
| Debt to Assets, Sector | ||||||
| Semiconductors & Semiconductor Equipment | 0.26 | — | — | — | — | |
| Debt to Assets, Industry | ||||||
| Information Technology | 0.29 | — | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 20-F (reporting date: 2018-12-31), 20-F (reporting date: 2017-12-31).
1 2021 Calculation
Debt to assets = Total debt ÷ Total assets
= 10,572 ÷ 20,864 = 0.51
2 Click competitor name to see calculations.
A consistent upward trend in the debt-to-assets ratio is observed between 2017 and 2021, indicating an increasing reliance on borrowed funds to finance the asset base. The ratio progressed from 0.27 in 2017 to 0.51 by the end of 2021, marking a significant shift in the company's solvency profile.
- Total Debt Evolution
- Total debt exhibited steady growth for the majority of the period, rising from 6,565 million USD in 2017 to 7,609 million USD in 2020. A substantial increase occurred in 2021, where total debt rose to 10,572 million USD, representing a sharp acceleration in borrowing during the final year of the analyzed period.
- Total Asset Trends
- Total assets experienced a general decline from 2017 through 2020, decreasing from 24,049 million USD to a low of 19,847 million USD. Although a modest recovery to 20,864 million USD was recorded in 2021, the overall asset base remained significantly lower than the 2017 levels.
- Debt to Assets Ratio Interpretation
- The debt to assets ratio increased incrementally from 0.27 in 2017 to 0.38 in 2020. The most pronounced increase occurred between 2020 and 2021, where the ratio climbed from 0.38 to 0.51. This progression is the result of the simultaneous increase in total liabilities and the general contraction of the asset base, culminating in a position where more than half of the total assets are financed through debt by the end of 2021.
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Debt to Assets (including Operating Lease Liability)
NXP Semiconductors N.V., debt to assets (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term debt | —) | —) | —) | 1,107) | 751) | |
| Long-term debt | 10,572) | 7,609) | 7,365) | 6,247) | 5,814) | |
| Total debt | 10,572) | 7,609) | 7,365) | 7,354) | 6,565) | |
| Lease liabilities related to operating leases (included in Other current liabilities) | 56) | 60) | 62) | —) | —) | |
| Lease liabilities related to operating leases (included in Other non-current liabilities) | 181) | 177) | 176) | —) | —) | |
| Total debt (including operating lease liability) | 10,809) | 7,846) | 7,603) | 7,354) | 6,565) | |
| Total assets | 20,864) | 19,847) | 20,016) | 21,530) | 24,049) | |
| Solvency Ratio | ||||||
| Debt to assets (including operating lease liability)1 | 0.52 | 0.40 | 0.38 | 0.34 | 0.27 | |
| Benchmarks | ||||||
| Debt to Assets (including Operating Lease Liability), Competitors2 | ||||||
| Advanced Micro Devices Inc. | 0.06 | — | — | — | — | |
| Analog Devices Inc. | 0.14 | 0.25 | — | — | — | |
| Applied Materials Inc. | 0.22 | 0.26 | — | — | — | |
| Broadcom Inc. | 0.53 | 0.55 | — | — | — | |
| Intel Corp. | 0.23 | — | — | — | — | |
| KLA Corp. | 0.35 | — | — | — | — | |
| Lam Research Corp. | 0.33 | — | — | — | — | |
| Marvell Technology Inc. | 0.12 | — | — | — | — | |
| Micron Technology Inc. | 0.12 | 0.13 | — | — | — | |
| NVIDIA Corp. | 0.27 | — | — | — | — | |
| Qualcomm Inc. | 0.40 | 0.46 | — | — | — | |
| Texas Instruments Inc. | 0.33 | — | — | — | — | |
| Debt to Assets (including Operating Lease Liability), Sector | ||||||
| Semiconductors & Semiconductor Equipment | 0.27 | — | — | — | — | |
| Debt to Assets (including Operating Lease Liability), Industry | ||||||
| Information Technology | 0.31 | — | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 20-F (reporting date: 2018-12-31), 20-F (reporting date: 2017-12-31).
1 2021 Calculation
Debt to assets (including operating lease liability) = Total debt (including operating lease liability) ÷ Total assets
= 10,809 ÷ 20,864 = 0.52
2 Click competitor name to see calculations.
Between 2017 and 2021, a consistent increase in the leverage profile is observed, characterized by a rising debt burden coupled with a fluctuating asset base. This trend culminates in a significant rise in the debt-to-assets ratio, indicating a shift toward a more highly leveraged capital structure.
- Debt Accumulation
- Total debt, including operating lease liabilities, exhibited a continuous upward trend over the five-year period. From 2017 to 2020, growth was steady, increasing from US$ 6,565 million to US$ 7,846 million. A substantial acceleration occurred in 2021, where debt rose to US$ 10,809 million, representing a sharp increase in total liabilities during the final year of the analyzed period.
- Asset Base Trends
- Total assets experienced a general contraction from 2017 through 2020, declining from US$ 24,049 million to US$ 19,847 million. While a slight recovery was noted in 2021, with assets increasing to US$ 20,864 million, the total asset value remained significantly lower than the levels recorded in 2017.
- Debt to Assets Ratio Analysis
- The debt-to-assets ratio reflects the compounding effect of increasing liabilities and a diminished asset base. The ratio rose progressively from 0.27 in 2017 to 0.40 in 2020. In 2021, the ratio reached 0.52, the highest point in the period. This indicates that by the end of 2021, debt financed 52% of total assets, nearly doubling the proportion observed at the start of the period and signaling a weakened solvency position.
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Financial Leverage
NXP Semiconductors N.V., financial leverage calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Total assets | 20,864) | 19,847) | 20,016) | 21,530) | 24,049) | |
| Stockholders’ equity | 6,528) | 8,944) | 9,441) | 10,505) | 13,527) | |
| Solvency Ratio | ||||||
| Financial leverage1 | 3.20 | 2.22 | 2.12 | 2.05 | 1.78 | |
| Benchmarks | ||||||
| Financial Leverage, Competitors2 | ||||||
| Advanced Micro Devices Inc. | 1.66 | — | — | — | — | |
| Analog Devices Inc. | 1.38 | 1.79 | — | — | — | |
| Applied Materials Inc. | 2.11 | 2.11 | — | — | — | |
| Broadcom Inc. | 3.03 | 3.18 | — | — | — | |
| Intel Corp. | 1.77 | — | — | — | — | |
| KLA Corp. | 3.04 | — | — | — | — | |
| Lam Research Corp. | 2.64 | — | — | — | — | |
| Marvell Technology Inc. | 1.28 | — | — | — | — | |
| Micron Technology Inc. | 1.34 | 1.38 | — | — | — | |
| NVIDIA Corp. | 1.70 | — | — | — | — | |
| Qualcomm Inc. | 4.14 | 5.86 | — | — | — | |
| Texas Instruments Inc. | 1.85 | — | — | — | — | |
| Financial Leverage, Sector | ||||||
| Semiconductors & Semiconductor Equipment | 1.87 | — | — | — | — | |
| Financial Leverage, Industry | ||||||
| Information Technology | 2.87 | — | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 20-F (reporting date: 2018-12-31), 20-F (reporting date: 2017-12-31).
1 2021 Calculation
Financial leverage = Total assets ÷ Stockholders’ equity
= 20,864 ÷ 6,528 = 3.20
2 Click competitor name to see calculations.
Between 2017 and 2021, a consistent upward trend in financial leverage is observed, primarily driven by a substantial and continuous reduction in stockholders' equity.
- Total Asset Trajectory
- Total assets exhibited a general decline from 2017 to 2020, decreasing from US$ 24,049 million to US$ 19,847 million. This downward movement was interrupted in 2021, when assets increased slightly to US$ 20,864 million.
- Stockholders' Equity Analysis
- A steady and significant erosion of stockholders' equity is evident over the five-year period. Equity fell from US$ 13,527 million in 2017 to US$ 6,528 million in 2021, representing a total decrease of approximately 51.7%. The consistent nature of this decline suggests a systematic reduction in the equity base.
- Financial Leverage Ratio
- The financial leverage ratio increased every year throughout the analyzed period. The ratio rose from 1.78 in 2017 to 2.22 in 2020, followed by a sharp acceleration in 2021, reaching 3.20. This progression indicates a significant shift in the capital structure, reflecting a higher reliance on debt relative to equity to finance the asset base.
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Interest Coverage
NXP Semiconductors N.V., interest coverage calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income attributable to stockholders | 1,871) | 52) | 243) | 2,208) | 2,215) | |
| Add: Net income attributable to noncontrolling interest | 35) | 28) | 29) | 50) | 57) | |
| Add: Income tax expense | 272) | (83) | 20) | 176) | (483) | |
| Add: Interest expense | 369) | 362) | 370) | 273) | 310) | |
| Earnings before interest and tax (EBIT) | 2,547) | 359) | 662) | 2,707) | 2,099) | |
| Solvency Ratio | ||||||
| Interest coverage1 | 6.90 | 0.99 | 1.79 | 9.92 | 6.77 | |
| Benchmarks | ||||||
| Interest Coverage, Competitors2 | ||||||
| Advanced Micro Devices Inc. | 109.09 | — | — | — | — | |
| Analog Devices Inc. | 8.19 | 7.79 | — | — | — | |
| Applied Materials Inc. | 29.69 | 18.36 | — | — | — | |
| Broadcom Inc. | 4.59 | 2.37 | — | — | — | |
| Intel Corp. | 37.35 | — | — | — | — | |
| KLA Corp. | 16.00 | — | — | — | — | |
| Lam Research Corp. | 21.95 | — | — | — | — | |
| Marvell Technology Inc. | -3.65 | — | — | — | — | |
| Micron Technology Inc. | 35.18 | 16.41 | — | — | — | |
| NVIDIA Corp. | 24.96 | — | — | — | — | |
| Qualcomm Inc. | 19.38 | 10.50 | — | — | — | |
| Texas Instruments Inc. | 49.47 | — | — | — | — | |
| Interest Coverage, Sector | ||||||
| Semiconductors & Semiconductor Equipment | 18.07 | — | — | — | — | |
| Interest Coverage, Industry | ||||||
| Information Technology | 19.66 | — | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 20-F (reporting date: 2018-12-31), 20-F (reporting date: 2017-12-31).
1 2021 Calculation
Interest coverage = EBIT ÷ Interest expense
= 2,547 ÷ 369 = 6.90
2 Click competitor name to see calculations.
The financial trajectory between 2017 and 2021 reveals significant volatility in the capacity to service debt, characterized by a period of severe contraction followed by a substantial recovery in solvency margins.
- Interest Coverage Ratio Trends
- The interest coverage ratio exhibited a peak of 9.92 in 2018, indicating a strong ability to meet interest obligations. This was followed by a precipitous decline to 1.79 in 2019 and a further drop to 0.99 in 2020. The 2020 value is particularly notable as it fell below the 1.0 threshold, signaling that earnings before interest and tax were insufficient to cover the annual interest expense. A recovery was observed in 2021, with the ratio returning to 6.90.
- EBIT Performance and Impact
- The volatility in the solvency ratio is directly attributable to fluctuations in Earnings before interest and tax (EBIT). Operating earnings increased from US$ 2,099 million in 2017 to US$ 2,707 million in 2018, before experiencing a sharp decline to US$ 662 million in 2019 and US$ 359 million in 2020. The subsequent increase to US$ 2,547 million in 2021 served as the primary driver for the restoration of the interest coverage capacity.
- Analysis of Interest Expenses
- Interest expenses remained relatively constant over the analyzed period, fluctuating within a narrow range between US$ 273 million and US$ 370 million. The relative stability of these fixed costs exacerbated the impact of the EBIT decline during 2019 and 2020, as the company could not reduce its interest burden to offset the significant drop in operating income.
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Fixed Charge Coverage
NXP Semiconductors N.V., fixed charge coverage calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income attributable to stockholders | 1,871) | 52) | 243) | 2,208) | 2,215) | |
| Add: Net income attributable to noncontrolling interest | 35) | 28) | 29) | 50) | 57) | |
| Add: Income tax expense | 272) | (83) | 20) | 176) | (483) | |
| Add: Interest expense | 369) | 362) | 370) | 273) | 310) | |
| Earnings before interest and tax (EBIT) | 2,547) | 359) | 662) | 2,707) | 2,099) | |
| Add: Operating lease cost | 66) | 65) | 59) | 57) | 63) | |
| Earnings before fixed charges and tax | 2,613) | 424) | 721) | 2,764) | 2,162) | |
| Interest expense | 369) | 362) | 370) | 273) | 310) | |
| Operating lease cost | 66) | 65) | 59) | 57) | 63) | |
| Fixed charges | 435) | 427) | 429) | 330) | 373) | |
| Solvency Ratio | ||||||
| Fixed charge coverage1 | 6.01 | 0.99 | 1.68 | 8.38 | 5.80 | |
| Benchmarks | ||||||
| Fixed Charge Coverage, Competitors2 | ||||||
| Advanced Micro Devices Inc. | 36.00 | — | — | — | — | |
| Analog Devices Inc. | 6.64 | 6.48 | — | — | — | |
| Applied Materials Inc. | 22.50 | 14.48 | — | — | — | |
| Broadcom Inc. | 3.70 | 1.92 | — | — | — | |
| Intel Corp. | 16.56 | — | — | — | — | |
| KLA Corp. | 13.03 | — | — | — | — | |
| Lam Research Corp. | 17.80 | — | — | — | — | |
| Marvell Technology Inc. | -1.75 | — | — | — | — | |
| Micron Technology Inc. | 22.49 | 11.10 | — | — | — | |
| NVIDIA Corp. | 14.40 | — | — | — | — | |
| Qualcomm Inc. | 14.48 | 8.30 | — | — | — | |
| Texas Instruments Inc. | 36.25 | — | — | — | — | |
| Fixed Charge Coverage, Sector | ||||||
| Semiconductors & Semiconductor Equipment | 12.49 | — | — | — | — | |
| Fixed Charge Coverage, Industry | ||||||
| Information Technology | 12.08 | — | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 20-F (reporting date: 2018-12-31), 20-F (reporting date: 2017-12-31).
1 2021 Calculation
Fixed charge coverage = Earnings before fixed charges and tax ÷ Fixed charges
= 2,613 ÷ 435 = 6.01
2 Click competitor name to see calculations.
The solvency profile from 2017 to 2021 is characterized by significant volatility in earnings capacity, leading to a fluctuating ability to meet fixed financial obligations. While the period began and ended with strong coverage, a pronounced decline occurred between 2019 and 2020, where the capacity to service fixed charges reached a critical minimum.
- Fixed Charge Coverage Ratio
- The ratio exhibited a peak of 8.38 in 2018, indicating a robust margin of safety. This was followed by a sharp contraction to 1.68 in 2019 and a further decline to 0.99 in 2020. The 2020 figure represents a point of financial tension, as the ratio fell below 1.0, signifying that earnings before fixed charges and tax were insufficient to cover fixed obligations. A strong recovery is observed in 2021, with the ratio rebounding to 6.01.
- Earnings Before Fixed Charges and Tax
- Earnings served as the primary driver of solvency volatility. After reaching 2,764 million US dollars in 2018, earnings experienced a severe downturn, dropping to 721 million US dollars in 2019 and hitting a low of 424 million US dollars in 2020. The subsequent increase to 2,613 million US dollars in 2021 indicates a restoration of operational profitability and cash flow generation.
- Fixed Charges
- Fixed charges remained relatively stable throughout the five-year period, ranging between 330 million and 435 million US dollars. The lack of significant variance in fixed costs underscores that the fluctuations in the coverage ratio were almost entirely dependent on the volatility of earnings rather than changes in the company's debt or lease structures.
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