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
Roper Technologies Inc., solvency ratios
Based on: 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), 10-K (reporting date: 2018-12-31).
The solvency profile exhibits a distinct cycle of leverage expansion followed by a period of significant deleveraging. A peak in debt-related ratios is observed in 2020, with a subsequent and consistent downward trend through 2022, resulting in the lowest leverage levels across the analyzed five-year period.
- Debt-to-Equity and Capitalization Ratios
- Debt to equity increased from 0.64 in 2018 to a peak of 0.91 in 2020, before declining sharply to 0.42 by December 31, 2022. This pattern is mirrored in the debt to capital and debt to assets ratios, which also peaked in 2020 at 0.48 and 0.40, respectively, and reached period lows in 2022 at 0.29 and 0.25. The inclusion of operating lease liabilities has a negligible impact on these metrics, suggesting that lease obligations do not significantly alter the company's solvency risk profile.
- Financial Leverage
- Financial leverage followed the trajectory of the debt ratios, rising from 1.97 in 2018 to 2.29 in 2020. A consistent reduction thereafter led to a ratio of 1.68 by 2022, indicating a shift toward a more equity-heavy capital structure and reduced reliance on borrowed funds.
- Coverage Ratios
- Interest coverage and fixed charge coverage experienced a peak in 2019, with interest coverage reaching 12.94 and fixed charge coverage reaching 9.82. Both metrics contracted significantly in 2020 and 2021, with interest coverage dipping to 6.43 and fixed charge coverage to 5.26. However, by 2022, a recovery is observed, with interest coverage rising to 7.66 and fixed charge coverage to 6.32, signaling a strengthened ability to service debt obligations relative to earnings.
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Debt to Equity
Roper Technologies Inc., debt to equity calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Current portion of long-term debt, net | 699,200) | 799,200) | 502,000) | 602,200) | 1,500) | |
| Long-term debt, net of current portion | 5,962,500) | 7,122,600) | 9,064,500) | 4,673,100) | 4,940,200) | |
| Total debt | 6,661,700) | 7,921,800) | 9,566,500) | 5,275,300) | 4,941,700) | |
| Stockholders’ equity | 16,037,800) | 11,563,800) | 10,479,800) | 9,491,900) | 7,738,500) | |
| Solvency Ratio | ||||||
| Debt to equity1 | 0.42 | 0.69 | 0.91 | 0.56 | 0.64 | |
| Benchmarks | ||||||
| Debt to Equity, Competitors2 | ||||||
| Apple Inc. | 2.39 | 1.99 | 1.73 | — | — | |
| Arista Networks Inc. | 0.00 | 0.00 | — | — | — | |
| Cisco Systems Inc. | 0.24 | 0.28 | — | — | — | |
| Dell Technologies Inc. | — | 19.36 | — | — | — | |
| Lumentum Holdings Inc. | 1.00 | 0.60 | — | — | — | |
| Super Micro Computer Inc. | 0.42 | 0.09 | — | — | — | |
| Debt to Equity, Sector | ||||||
| Technology Hardware & Equipment | 1.65 | 1.64 | — | — | — | |
| Debt to Equity, Industry | ||||||
| Information Technology | 0.70 | 0.83 | — | — | — | |
Based on: 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), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Debt to equity = Total debt ÷ Stockholders’ equity
= 6,661,700 ÷ 16,037,800 = 0.42
2 Click competitor name to see calculations.
The solvency profile between 2018 and 2022 reflects a period of significant leverage fluctuation followed by a substantial strengthening of the balance sheet. While a marked increase in borrowing occurred mid-period, the simultaneous and consistent growth in stockholders' equity has resulted in a lower overall risk profile by the end of the analyzed timeframe.
- Total Debt Trends
- Total debt exhibited a non-linear trajectory, beginning at 4,941,700 thousand US$ in 2018 and rising moderately in 2019. A sharp increase occurred in 2020, with debt peaking at 9,566,500 thousand US$, nearly doubling the 2018 levels. This peak was followed by a consecutive two-year decline, reducing the total debt to 6,661,700 thousand US$ by December 31, 2022.
- Stockholders' Equity Growth
- A consistent upward trend is observed in stockholders' equity throughout the five-year period. Equity grew steadily from 7,738,500 thousand US$ in 2018 to 16,037,800 thousand US$ in 2022. This continuous expansion provided a stable foundation that mitigated the impact of the increased debt load observed in 2020.
- Debt to Equity Ratio Analysis
- The debt to equity ratio mirrored the volatility of the total debt while benefiting from the growth in equity. The ratio improved from 0.64 in 2018 to 0.56 in 2019, before spiking to a period high of 0.91 in 2020. Following this peak, the ratio declined to 0.69 in 2021 and reached a period low of 0.42 in 2022. This final value indicates a significant shift toward a more equity-heavy capital structure and improved long-term solvency.
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Debt to Equity (including Operating Lease Liability)
Roper Technologies Inc., debt to equity (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Current portion of long-term debt, net | 699,200) | 799,200) | 502,000) | 602,200) | 1,500) | |
| Long-term debt, net of current portion | 5,962,500) | 7,122,600) | 9,064,500) | 4,673,100) | 4,940,200) | |
| Total debt | 6,661,700) | 7,921,800) | 9,566,500) | 5,275,300) | 4,941,700) | |
| Current operating lease liabilities | 46,400) | 51,400) | 65,100) | 56,800) | —) | |
| Noncurrent operating lease liabilities (included in Other liabilities) | 164,200) | 180,900) | 219,200) | 220,000) | —) | |
| Total debt (including operating lease liability) | 6,872,300) | 8,154,100) | 9,850,800) | 5,552,100) | 4,941,700) | |
| Stockholders’ equity | 16,037,800) | 11,563,800) | 10,479,800) | 9,491,900) | 7,738,500) | |
| Solvency Ratio | ||||||
| Debt to equity (including operating lease liability)1 | 0.43 | 0.71 | 0.94 | 0.58 | 0.64 | |
| Benchmarks | ||||||
| Debt to Equity (including Operating Lease Liability), Competitors2 | ||||||
| Apple Inc. | 2.61 | 2.16 | 1.87 | — | — | |
| Arista Networks Inc. | 0.01 | 0.02 | — | — | — | |
| Cisco Systems Inc. | 0.27 | 0.31 | — | — | — | |
| Dell Technologies Inc. | — | 20.25 | — | — | — | |
| Lumentum Holdings Inc. | 1.03 | 0.63 | — | — | — | |
| Super Micro Computer Inc. | 0.44 | 0.11 | — | — | — | |
| Debt to Equity (including Operating Lease Liability), Sector | ||||||
| Technology Hardware & Equipment | 1.79 | 1.76 | — | — | — | |
| Debt to Equity (including Operating Lease Liability), Industry | ||||||
| Information Technology | 0.76 | 0.90 | — | — | — | |
Based on: 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), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Debt to equity (including operating lease liability) = Total debt (including operating lease liability) ÷ Stockholders’ equity
= 6,872,300 ÷ 16,037,800 = 0.43
2 Click competitor name to see calculations.
The solvency profile between 2018 and 2022 is characterized by a significant mid-period increase in leverage followed by a disciplined deleveraging process and consistent growth in the equity base.
- Total Debt Trends
- Total debt, including operating lease liabilities, exhibited a volatile trajectory. A moderate increase occurred between 2018 and 2019, followed by a substantial surge in 2020, where debt peaked at US$ 9,850,800 thousand. This peak represented a nearly 77% increase over the previous year. However, a downward trend followed in 2021 and 2022, with total debt reducing to US$ 6,872,300 thousand by the end of the period.
- Stockholders' Equity Growth
- In contrast to the fluctuations in debt, stockholders' equity demonstrated consistent and uninterrupted growth throughout the five-year period. Equity rose from US$ 7,738,500 thousand in 2018 to US$ 16,037,800 thousand in 2022. This steady accumulation of equity has served as a primary driver in improving the overall solvency position of the organization.
- Debt to Equity Ratio Analysis
- The debt to equity ratio reflects the combined impact of the aforementioned debt and equity movements. The ratio initially decreased slightly from 0.64 in 2018 to 0.58 in 2019, before spiking to 0.94 in 2020, indicating a period of higher financial risk and increased reliance on borrowed capital. From 2021 onward, a strong corrective trend is observed, with the ratio falling to 0.71 and eventually reaching a period low of 0.43 in 2022. This final value indicates a significantly strengthened balance sheet and a lower risk profile compared to the 2018 baseline.
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Debt to Capital
Roper Technologies Inc., debt to capital calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Current portion of long-term debt, net | 699,200) | 799,200) | 502,000) | 602,200) | 1,500) | |
| Long-term debt, net of current portion | 5,962,500) | 7,122,600) | 9,064,500) | 4,673,100) | 4,940,200) | |
| Total debt | 6,661,700) | 7,921,800) | 9,566,500) | 5,275,300) | 4,941,700) | |
| Stockholders’ equity | 16,037,800) | 11,563,800) | 10,479,800) | 9,491,900) | 7,738,500) | |
| Total capital | 22,699,500) | 19,485,600) | 20,046,300) | 14,767,200) | 12,680,200) | |
| Solvency Ratio | ||||||
| Debt to capital1 | 0.29 | 0.41 | 0.48 | 0.36 | 0.39 | |
| Benchmarks | ||||||
| Debt to Capital, Competitors2 | ||||||
| Apple Inc. | 0.70 | 0.67 | 0.63 | — | — | |
| Arista Networks Inc. | 0.00 | 0.00 | — | — | — | |
| Cisco Systems Inc. | 0.19 | 0.22 | — | — | — | |
| Dell Technologies Inc. | 1.07 | 0.95 | — | — | — | |
| Lumentum Holdings Inc. | 0.50 | 0.37 | — | — | — | |
| Super Micro Computer Inc. | 0.30 | 0.08 | — | — | — | |
| Debt to Capital, Sector | ||||||
| Technology Hardware & Equipment | 0.62 | 0.62 | — | — | — | |
| Debt to Capital, Industry | ||||||
| Information Technology | 0.41 | 0.45 | — | — | — | |
Based on: 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), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Debt to capital = Total debt ÷ Total capital
= 6,661,700 ÷ 22,699,500 = 0.29
2 Click competitor name to see calculations.
The solvency profile of the organization exhibits a period of significant leverage fluctuation between 2018 and 2022, characterized by a sharp increase in debt obligations during 2020 followed by a sustained deleveraging trend.
- Debt to Capital Ratio Trend
- The debt to capital ratio demonstrates a non-linear trajectory, starting at 0.39 in 2018 and dipping slightly to 0.36 in 2019. A significant peak occurred in 2020, where the ratio rose to 0.48, representing the highest level of leverage in the analyzed period. Subsequently, the ratio declined to 0.41 in 2021 and reached a five-year low of 0.29 by December 31, 2022. This indicates a strategic shift toward a more equity-weighted capital structure.
- Total Debt Volatility
- Total debt experienced a substantial surge in 2020, increasing from 5,275,300 thousand US dollars in 2019 to 9,566,500 thousand US dollars. Following this peak, total debt was systematically reduced over the next two years, falling to 7,921,800 thousand US dollars in 2021 and further to 6,661,700 thousand US dollars by the end of 2022.
- Total Capital Expansion
- Total capital grew consistently over the five-year horizon, expanding from 12,680,200 thousand US dollars in 2018 to 22,699,500 thousand US dollars in 2022. While there was a marginal contraction in 2021, the overall growth in the capital base, combined with the reduction in total debt, contributed to the overall decline in the debt to capital ratio.
The convergence of a growing total capital base and a reducing total debt load has resulted in a strengthened solvency position. The reduction of the debt to capital ratio to 0.29 suggests a decreased reliance on borrowed funds and an improved capacity to manage long-term obligations.
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Debt to Capital (including Operating Lease Liability)
Roper Technologies Inc., debt to capital (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Current portion of long-term debt, net | 699,200) | 799,200) | 502,000) | 602,200) | 1,500) | |
| Long-term debt, net of current portion | 5,962,500) | 7,122,600) | 9,064,500) | 4,673,100) | 4,940,200) | |
| Total debt | 6,661,700) | 7,921,800) | 9,566,500) | 5,275,300) | 4,941,700) | |
| Current operating lease liabilities | 46,400) | 51,400) | 65,100) | 56,800) | —) | |
| Noncurrent operating lease liabilities (included in Other liabilities) | 164,200) | 180,900) | 219,200) | 220,000) | —) | |
| Total debt (including operating lease liability) | 6,872,300) | 8,154,100) | 9,850,800) | 5,552,100) | 4,941,700) | |
| Stockholders’ equity | 16,037,800) | 11,563,800) | 10,479,800) | 9,491,900) | 7,738,500) | |
| Total capital (including operating lease liability) | 22,910,100) | 19,717,900) | 20,330,600) | 15,044,000) | 12,680,200) | |
| Solvency Ratio | ||||||
| Debt to capital (including operating lease liability)1 | 0.30 | 0.41 | 0.48 | 0.37 | 0.39 | |
| Benchmarks | ||||||
| Debt to Capital (including Operating Lease Liability), Competitors2 | ||||||
| Apple Inc. | 0.72 | 0.68 | 0.65 | — | — | |
| Arista Networks Inc. | 0.01 | 0.02 | — | — | — | |
| Cisco Systems Inc. | 0.21 | 0.24 | — | — | — | |
| Dell Technologies Inc. | 1.06 | 0.95 | — | — | — | |
| Lumentum Holdings Inc. | 0.51 | 0.39 | — | — | — | |
| Super Micro Computer Inc. | 0.30 | 0.10 | — | — | — | |
| Debt to Capital (including Operating Lease Liability), Sector | ||||||
| Technology Hardware & Equipment | 0.64 | 0.64 | — | — | — | |
| Debt to Capital (including Operating Lease Liability), Industry | ||||||
| Information Technology | 0.43 | 0.47 | — | — | — | |
Based on: 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), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Debt to capital (including operating lease liability) = Total debt (including operating lease liability) ÷ Total capital (including operating lease liability)
= 6,872,300 ÷ 22,910,100 = 0.30
2 Click competitor name to see calculations.
The solvency profile between 2018 and 2022 is characterized by a period of increased leverage peaking in 2020, followed by a strategic reduction in debt and an expansion of the total capital base.
- Total Debt Trends
- Total debt, including operating lease liabilities, experienced a moderate increase from 4,941,700 thousand US$ in 2018 to 5,552,100 thousand US$ in 2019. A significant surge occurred in 2020, where debt reached a peak of 9,850,800 thousand US$. This was followed by a consistent two-year decline, with the balance falling to 8,154,100 thousand US$ in 2021 and further reducing to 6,872,300 thousand US$ by the end of 2022.
- Total Capital Growth
- Total capital, including operating lease liabilities, demonstrated a strong overall growth trend over the five-year period. Starting at 12,680,200 thousand US$ in 2018, the capital base expanded to 20,330,600 thousand US$ by 2020. Despite a slight contraction to 19,717,900 thousand US$ in 2021, the capital base reached its highest point in 2022 at 22,910,100 thousand US$.
- Debt to Capital Ratio Analysis
- The debt to capital ratio reflects the fluctuations in both total debt and total capital. The ratio remained relatively stable between 2018 and 2019 at 0.39 and 0.37, respectively. In 2020, the ratio peaked at 0.48, correlating with the sharp increase in total debt. Subsequent years show a marked improvement in solvency, with the ratio declining to 0.41 in 2021 and reaching a period low of 0.30 in 2022.
The observed data indicates that while leverage increased substantially in 2020, the subsequent reduction in total debt coupled with a growing capital base has resulted in a significantly lower debt-to-capital ratio by 2022, suggesting a strengthened solvency position.
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Debt to Assets
Roper Technologies Inc., debt to assets calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Current portion of long-term debt, net | 699,200) | 799,200) | 502,000) | 602,200) | 1,500) | |
| Long-term debt, net of current portion | 5,962,500) | 7,122,600) | 9,064,500) | 4,673,100) | 4,940,200) | |
| Total debt | 6,661,700) | 7,921,800) | 9,566,500) | 5,275,300) | 4,941,700) | |
| Total assets | 26,980,800) | 23,713,900) | 24,024,800) | 18,108,900) | 15,249,500) | |
| Solvency Ratio | ||||||
| Debt to assets1 | 0.25 | 0.33 | 0.40 | 0.29 | 0.32 | |
| Benchmarks | ||||||
| Debt to Assets, Competitors2 | ||||||
| Apple Inc. | 0.34 | 0.36 | 0.35 | — | — | |
| Arista Networks Inc. | 0.00 | 0.00 | — | — | — | |
| Cisco Systems Inc. | 0.10 | 0.12 | — | — | — | |
| Dell Technologies Inc. | 0.29 | 0.39 | — | — | — | |
| Lumentum Holdings Inc. | 0.45 | 0.33 | — | — | — | |
| Super Micro Computer Inc. | 0.19 | 0.04 | — | — | — | |
| Debt to Assets, Sector | ||||||
| Technology Hardware & Equipment | 0.29 | 0.32 | — | — | — | |
| Debt to Assets, Industry | ||||||
| Information Technology | 0.26 | 0.29 | — | — | — | |
Based on: 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), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Debt to assets = Total debt ÷ Total assets
= 6,661,700 ÷ 26,980,800 = 0.25
2 Click competitor name to see calculations.
The solvency profile between 2018 and 2022 is characterized by a significant volatility spike in 2020 followed by a consistent trend toward deleveraging. While total assets grew steadily throughout the period, the debt load peaked mid-cycle before declining to levels that indicate a strengthened balance sheet by the end of 2022.
- Total Debt Evolution
- Total debt exhibited a sharp increase from US$ 5,275,300 thousand in 2019 to a peak of US$ 9,566,500 thousand in 2020. Following this peak, a consistent downward trajectory is observed, with total debt reducing to US$ 6,661,700 thousand by December 31, 2022. This pattern suggests a period of substantial capital acquisition followed by a strategic phase of debt reduction.
- Asset Base Expansion
- Total assets demonstrated an overall upward trend, rising from US$ 15,249,500 thousand in 2018 to US$ 26,980,800 thousand in 2022. The most pronounced growth occurred between 2019 and 2020, where assets increased by approximately US$ 5.9 billion. This expansion closely mirrors the spike in debt during the same period, suggesting that the increase in leverage was utilized to fund asset growth.
- Debt to Assets Ratio Analysis
- The debt to assets ratio fluctuated from 0.32 in 2018 to a peak of 0.40 in 2020. In the subsequent two years, the ratio declined steadily to 0.33 in 2021 and reached a five-year low of 0.25 by the end of 2022. This trend indicates a progressive improvement in solvency, as a lower proportion of the company's asset base is financed via debt at the conclusion of the analyzed period compared to the start.
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Debt to Assets (including Operating Lease Liability)
Roper Technologies Inc., debt to assets (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Current portion of long-term debt, net | 699,200) | 799,200) | 502,000) | 602,200) | 1,500) | |
| Long-term debt, net of current portion | 5,962,500) | 7,122,600) | 9,064,500) | 4,673,100) | 4,940,200) | |
| Total debt | 6,661,700) | 7,921,800) | 9,566,500) | 5,275,300) | 4,941,700) | |
| Current operating lease liabilities | 46,400) | 51,400) | 65,100) | 56,800) | —) | |
| Noncurrent operating lease liabilities (included in Other liabilities) | 164,200) | 180,900) | 219,200) | 220,000) | —) | |
| Total debt (including operating lease liability) | 6,872,300) | 8,154,100) | 9,850,800) | 5,552,100) | 4,941,700) | |
| Total assets | 26,980,800) | 23,713,900) | 24,024,800) | 18,108,900) | 15,249,500) | |
| Solvency Ratio | ||||||
| Debt to assets (including operating lease liability)1 | 0.25 | 0.34 | 0.41 | 0.31 | 0.32 | |
| Benchmarks | ||||||
| Debt to Assets (including Operating Lease Liability), Competitors2 | ||||||
| Apple Inc. | 0.38 | 0.39 | 0.38 | — | — | |
| Arista Networks Inc. | 0.01 | 0.01 | — | — | — | |
| Cisco Systems Inc. | 0.11 | 0.13 | — | — | — | |
| Dell Technologies Inc. | 0.30 | 0.41 | — | — | — | |
| Lumentum Holdings Inc. | 0.47 | 0.35 | — | — | — | |
| Super Micro Computer Inc. | 0.19 | 0.05 | — | — | — | |
| Debt to Assets (including Operating Lease Liability), Sector | ||||||
| Technology Hardware & Equipment | 0.31 | 0.34 | — | — | — | |
| Debt to Assets (including Operating Lease Liability), Industry | ||||||
| Information Technology | 0.29 | 0.31 | — | — | — | |
Based on: 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), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Debt to assets (including operating lease liability) = Total debt (including operating lease liability) ÷ Total assets
= 6,872,300 ÷ 26,980,800 = 0.25
2 Click competitor name to see calculations.
The analysis of solvency metrics from 2018 to 2022 reveals a period of significant leverage expansion followed by a consistent deleveraging phase, resulting in a strengthened financial position by the end of the period.
- Debt to Assets Ratio Trend
- The ratio remained relatively stable between 2018 and 2019, moving from 0.32 to 0.31. A sharp increase occurred in 2020, where the ratio peaked at 0.41, indicating a higher proportion of assets financed through debt. However, a subsequent downward trend was observed, with the ratio decreasing to 0.34 in 2021 and reaching a period low of 0.25 by December 31, 2022.
- Debt and Asset Dynamics
- Total debt, including operating lease liabilities, experienced a substantial spike in 2020, increasing from US$ 5,552,100 thousand in 2019 to US$ 9,850,800 thousand. This increase was accompanied by a significant growth in total assets, which rose from US$ 18,108,900 thousand to US$ 24,024,800 thousand in the same year. From 2021 onward, total debt was systematically reduced to US$ 6,872,300 thousand by 2022, while total assets continued an overall upward trajectory, ending at US$ 26,980,800 thousand.
- Solvency Implications
- The reduction of the debt-to-assets ratio to 0.25 by the end of 2022 suggests a significant improvement in solvency. The divergence observed between 2020 and 2022—characterized by decreasing total debt and increasing total assets—indicates a reduced reliance on borrowed funds and an enhanced capacity to cover liabilities, thereby lowering the overall financial risk profile.
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Financial Leverage
Roper Technologies Inc., financial leverage calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Total assets | 26,980,800) | 23,713,900) | 24,024,800) | 18,108,900) | 15,249,500) | |
| Stockholders’ equity | 16,037,800) | 11,563,800) | 10,479,800) | 9,491,900) | 7,738,500) | |
| Solvency Ratio | ||||||
| Financial leverage1 | 1.68 | 2.05 | 2.29 | 1.91 | 1.97 | |
| Benchmarks | ||||||
| Financial Leverage, Competitors2 | ||||||
| Apple Inc. | 6.96 | 5.56 | 4.96 | — | — | |
| Arista Networks Inc. | 1.39 | 1.44 | — | — | — | |
| Cisco Systems Inc. | 2.36 | 2.36 | — | — | — | |
| Dell Technologies Inc. | — | 49.78 | — | — | — | |
| Lumentum Holdings Inc. | 2.22 | 1.80 | — | — | — | |
| Super Micro Computer Inc. | 2.25 | 2.05 | — | — | — | |
| Financial Leverage, Sector | ||||||
| Technology Hardware & Equipment | 5.71 | 5.12 | — | — | — | |
| Financial Leverage, Industry | ||||||
| Information Technology | 2.65 | 2.87 | — | — | — | |
Based on: 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), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Financial leverage = Total assets ÷ Stockholders’ equity
= 26,980,800 ÷ 16,037,800 = 1.68
2 Click competitor name to see calculations.
Between 2018 and 2022, a general expansion of the balance sheet is observed, characterized by consistent growth in total assets and stockholders' equity. While the organization experienced a period of increased financial leverage peaking in 2020, the subsequent years show a trend toward deleveraging and a strengthened equity base.
- Financial Leverage Trends
- The financial leverage ratio exhibited volatility over the five-year period, fluctuating between a high of 2.29 and a low of 1.68. A peak in leverage occurred on December 31, 2020, coinciding with a significant increase in total assets. Following this peak, a consistent downward trend is observed, with the ratio declining to 2.05 in 2021 and further to 1.68 by December 31, 2022. This trajectory indicates a reduction in the reliance on debt to finance assets and an improvement in the overall solvency position.
- Asset and Equity Growth
- Total assets grew from 15.25 billion US dollars in 2018 to 26.98 billion US dollars in 2022. The most pronounced growth occurred between 2019 and 2020, where assets increased by approximately 5.92 billion US dollars. During the same period, stockholders' equity increased steadily from 7.74 billion US dollars to 16.04 billion US dollars. A substantial increase in equity is noted in 2022, where it rose by approximately 4.47 billion US dollars, acting as a primary driver for the reduction in financial leverage.
- Capital Structure Analysis
- The relationship between asset growth and equity suggests a strategic shift in the capital structure. The spike in leverage in 2020 indicates that the asset expansion during that year was more heavily funded by liabilities than by equity. However, the subsequent growth in stockholders' equity through 2022 outpaced asset growth, resulting in a more conservative leverage profile and a more robust equity-to-asset ratio by the end of the period.
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Interest Coverage
Roper Technologies Inc., interest coverage calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net earnings | 4,544,700) | 1,152,600) | 949,700) | 1,767,900) | 944,400) | |
| Less: Net earnings from discontinued operations | 3,559,100) | 170,000) | —) | —) | —) | |
| Add: Income tax expense | 296,400) | 288,400) | 259,600) | 459,500) | 254,000) | |
| Add: Interest expense, net | 192,400) | 234,100) | 218,900) | 186,600) | 182,100) | |
| Earnings before interest and tax (EBIT) | 1,474,400) | 1,505,100) | 1,428,200) | 2,414,000) | 1,380,500) | |
| Solvency Ratio | ||||||
| Interest coverage1 | 7.66 | 6.43 | 6.52 | 12.94 | 7.58 | |
| Benchmarks | ||||||
| Interest Coverage, Competitors2 | ||||||
| Apple Inc. | 41.64 | 42.29 | 24.35 | — | — | |
| Arista Networks Inc. | — | — | — | — | — | |
| Cisco Systems Inc. | 41.21 | 31.56 | — | — | — | |
| Dell Technologies Inc. | 4.84 | 2.54 | — | — | — | |
| Lumentum Holdings Inc. | 3.93 | 7.94 | — | — | — | |
| Super Micro Computer Inc. | 53.71 | 48.81 | — | — | — | |
| Interest Coverage, Sector | ||||||
| Technology Hardware & Equipment | 29.79 | 24.05 | — | — | — | |
| Interest Coverage, Industry | ||||||
| Information Technology | 22.18 | 19.66 | — | — | — | |
Based on: 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), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Interest coverage = EBIT ÷ Interest expense
= 1,474,400 ÷ 192,400 = 7.66
2 Click competitor name to see calculations.
The analysis of solvency metrics from 2018 to 2022 reveals a volatile yet generally stable capacity to meet interest obligations. The interest coverage ratio experienced a significant peak in 2019 followed by a period of contraction and a subsequent recovery by the end of 2022.
- Earnings Before Interest and Tax (EBIT)
- Operating earnings demonstrated substantial fluctuation over the five-year period. A significant increase was observed in 2019, where EBIT reached a peak of 2,414,000 thousand USD. This was followed by a sharp decline in 2020 to 1,428,200 thousand USD. Earnings remained relatively stable through 2021 and 2022, concluding the period at 1,474,400 thousand USD.
- Interest Expense, Net
- Net interest expenses showed a steady upward trend between 2018 and 2021, rising from 182,100 thousand USD to a peak of 234,100 thousand USD. However, a reversal occurred in 2022, with interest expenses decreasing to 192,400 thousand USD, indicating a reduction in the cost of debt servicing or a decrease in total outstanding debt.
- Interest Coverage Ratio
- The interest coverage ratio mirrored the volatility of EBIT. The ratio peaked at 12.94 in 2019, signifying a very strong ability to cover interest payments. A downward trend followed, with the ratio dropping to 6.52 in 2020 and reaching a low of 6.43 in 2021. This compression was the result of the simultaneous decrease in EBIT and increase in interest expenses. By December 31, 2022, the ratio recovered to 7.66, driven largely by the reduction in net interest expenses.
Overall, despite the fluctuations observed between 2019 and 2021, the interest coverage ratio remained well above 1.0 throughout the entire period. This indicates that the company maintained a sufficient margin of safety to meet its interest obligations from operating profits.
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Fixed Charge Coverage
Roper Technologies Inc., fixed charge coverage calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net earnings | 4,544,700) | 1,152,600) | 949,700) | 1,767,900) | 944,400) | |
| Less: Net earnings from discontinued operations | 3,559,100) | 170,000) | —) | —) | —) | |
| Add: Income tax expense | 296,400) | 288,400) | 259,600) | 459,500) | 254,000) | |
| Add: Interest expense, net | 192,400) | 234,100) | 218,900) | 186,600) | 182,100) | |
| Earnings before interest and tax (EBIT) | 1,474,400) | 1,505,100) | 1,428,200) | 2,414,000) | 1,380,500) | |
| Add: Operating lease expense | 48,700) | 64,600) | 68,500) | 65,900) | 61,700) | |
| Earnings before fixed charges and tax | 1,523,100) | 1,569,700) | 1,496,700) | 2,479,900) | 1,442,200) | |
| Interest expense, net | 192,400) | 234,100) | 218,900) | 186,600) | 182,100) | |
| Operating lease expense | 48,700) | 64,600) | 68,500) | 65,900) | 61,700) | |
| Fixed charges | 241,100) | 298,700) | 287,400) | 252,500) | 243,800) | |
| Solvency Ratio | ||||||
| Fixed charge coverage1 | 6.32 | 5.26 | 5.21 | 9.82 | 5.92 | |
| Benchmarks | ||||||
| Fixed Charge Coverage, Competitors2 | ||||||
| Apple Inc. | 25.65 | 26.13 | 16.34 | — | — | |
| Arista Networks Inc. | 49.20 | 31.02 | — | — | — | |
| Cisco Systems Inc. | 20.30 | 16.92 | — | — | — | |
| Dell Technologies Inc. | 4.16 | 2.26 | — | — | — | |
| Lumentum Holdings Inc. | 3.52 | 6.73 | — | — | — | |
| Super Micro Computer Inc. | 24.03 | 12.52 | — | — | — | |
| Fixed Charge Coverage, Sector | ||||||
| Technology Hardware & Equipment | 19.64 | 16.52 | — | — | — | |
| Fixed Charge Coverage, Industry | ||||||
| Information Technology | 13.23 | 12.08 | — | — | — | |
Based on: 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), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Fixed charge coverage = Earnings before fixed charges and tax ÷ Fixed charges
= 1,523,100 ÷ 241,100 = 6.32
2 Click competitor name to see calculations.
The solvency profile of the organization between 2018 and 2022 is characterized by fluctuating earnings capacity and varying fixed obligations, resulting in a volatile but generally healthy fixed charge coverage ratio.
- Earnings Before Fixed Charges and Tax
- A significant peak in earnings occurred in 2019, reaching US$ 2,479,900 thousand, which represented a substantial increase from 2018 levels. However, this was followed by a sharp correction in 2020, where earnings decreased to US$ 1,496,700 thousand. From 2020 through 2022, earnings remained relatively stable, fluctuating within a narrow range between approximately US$ 1.50 billion and US$ 1.57 billion.
- Fixed Charge Obligations
- Fixed charges exhibited a steady upward trend from 2018 to 2021, rising from US$ 243,800 thousand to a peak of US$ 298,700 thousand. This growth in obligations coincided with the period of earnings contraction in 2020. A reversal occurred in 2022, with fixed charges decreasing to US$ 241,100 thousand, the lowest level recorded during the five-year period.
- Fixed Charge Coverage Ratio
- The coverage ratio peaked at 9.82 in 2019, driven by the exceptional increase in earnings. The ratio experienced a notable decline in 2020 to 5.21, reflecting the simultaneous drop in earnings and the increase in fixed charges. Following a period of stagnation in 2021 at 5.26, the ratio improved to 6.32 by the end of 2022. This recovery was primarily attributed to the reduction in total fixed charges rather than an increase in earnings capacity.
Overall, the organization maintains a capacity to meet its fixed obligations, as the coverage ratio remained above 5.0 throughout the analyzed period. The most recent data indicates a strengthening of solvency margins due to improved cost management of fixed charges.
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