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)
Twenty-First Century Fox Inc., solvency ratios
Based on: 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30), 10-K (reporting date: 2016-06-30), 10-K (reporting date: 2015-06-30), 10-K (reporting date: 2014-06-30), 10-K (reporting date: 2013-06-30).
- Debt to Equity
- The debt to equity ratio shows an overall increasing trend from 0.97 in mid-2013 to a peak of 1.44 in mid-2016, indicating a growing reliance on debt relative to equity during this period. After 2016, the ratio decreases gradually to 1.00 by mid-2018, suggesting a moderation of leverage or an increase in equity financing in the most recent years.
- Debt to Capital
- This ratio follows a similar pattern to the debt to equity ratio, rising steadily from 0.49 in 2013 to 0.59 in 2016, reflecting an increased proportion of debt within the total capital structure. Subsequently, it declines to 0.50 by 2018, signaling a partial reversal in the company's capital structure towards lower debt intensity.
- Debt to Assets
- The debt to assets ratio exhibits a gradual rise from 0.32 in 2013 to 0.41 in 2016, indicating an increasing portion of assets financed by debt. This ratio then decreases to 0.36 in 2018, which aligns with the observed reduction in debt related ratios, suggesting improved asset financing balance.
- Financial Leverage
- Financial leverage fluctuates, starting at a level of 3.00 in 2013, increasing to a high of 3.54 in 2016, before declining to 2.75 by 2018. The peak in 2016 implies higher usage of debt or other liabilities relative to equity, while the subsequent decrease points to a reduction in overall leverage.
- Interest Coverage
- Interest coverage ratio shows volatility; it declines sharply from 9.22 in 2013 to 5.63 in 2014, rebounds to 9.22 in 2015, then falls again to approximately 4.5 in 2016 through 2018. These fluctuations suggest variable earnings relative to interest expenses, with more constrained ability to cover interest costs in recent years.
- Fixed Charge Coverage
- Fixed charge coverage ratio mirrors the trend of interest coverage, showing a drop from 7.03 in 2013 to 4.49 in 2014, rising to 7.75 in 2015, and then declining to below 4.3 from 2016 to 2018. This indicates a reduced capacity to cover fixed financing costs over the later periods compared to earlier years.
Debt Ratios
Coverage Ratios
Debt to Equity
Twenty-First Century Fox Inc., debt to equity calculation, comparison to benchmarks
| Jun 30, 2018 | Jun 30, 2017 | Jun 30, 2016 | Jun 30, 2015 | Jun 30, 2014 | Jun 30, 2013 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Current borrowings | 1,054) | 457) | 427) | 244) | 799) | 137) | |
| Non-current borrowings | 18,469) | 19,456) | 19,298) | 18,795) | 18,259) | 16,321) | |
| Total debt | 19,523) | 19,913) | 19,725) | 19,039) | 19,058) | 16,458) | |
| Total Twenty-First Century Fox, Inc. stockholders’ equity | 19,564) | 15,722) | 13,661) | 17,220) | 17,418) | 16,998) | |
| Solvency Ratio | |||||||
| Debt to equity1 | 1.00 | 1.27 | 1.44 | 1.11 | 1.09 | 0.97 | |
| Benchmarks | |||||||
| Debt to Equity, Competitors2 | |||||||
| Alphabet Inc. | — | — | — | — | — | — | |
| Comcast Corp. | — | — | — | — | — | — | |
| Meta Platforms Inc. | — | — | — | — | — | — | |
| Netflix Inc. | — | — | — | — | — | — | |
| Take-Two Interactive Software Inc. | — | — | — | — | — | — | |
| Walt Disney Co. | — | — | — | — | — | — | |
Based on: 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30), 10-K (reporting date: 2016-06-30), 10-K (reporting date: 2015-06-30), 10-K (reporting date: 2014-06-30), 10-K (reporting date: 2013-06-30).
1 2018 Calculation
Debt to equity = Total debt ÷ Total Twenty-First Century Fox, Inc. stockholders’ equity
= 19,523 ÷ 19,564 = 1.00
2 Click competitor name to see calculations.
- Total Debt
- The total debt of the company showed a gradual increase from 16,458 million US dollars in 2013 to a peak of 19,913 million US dollars in 2017. In 2018, there was a slight reduction to 19,523 million US dollars, indicating a marginal decline after several years of rising debt levels.
- Total Stockholders’ Equity
- Stockholders’ equity experienced a fluctuating trend over the analyzed period. Starting at 16,998 million US dollars in 2013, it increased slightly in 2014 and 2015. However, in 2016, it decreased significantly to 13,661 million US dollars, followed by a recovery trend in 2017 and a strong increase in 2018, reaching 19,564 million US dollars, the highest point in the period.
- Debt to Equity Ratio
- The debt to equity ratio presented a generally rising trend from 0.97 in 2013 to a peak of 1.44 in 2016, reflecting increasing leverage and a higher proportion of debt relative to equity. Thereafter, the ratio declined to 1.27 in 2017 and further to 1.00 in 2018, indicating a reduction in leverage and a more balanced capital structure.
Overall, the period is characterized by an initial increase in debt and financial leverage, culminating in 2016, followed by efforts to reduce debt levels and strengthen equity, especially noticeable in 2018. The company appears to have improved its financial stability toward the end of the period by lowering leverage and increasing equity.
Debt to Capital
Twenty-First Century Fox Inc., debt to capital calculation, comparison to benchmarks
| Jun 30, 2018 | Jun 30, 2017 | Jun 30, 2016 | Jun 30, 2015 | Jun 30, 2014 | Jun 30, 2013 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Current borrowings | 1,054) | 457) | 427) | 244) | 799) | 137) | |
| Non-current borrowings | 18,469) | 19,456) | 19,298) | 18,795) | 18,259) | 16,321) | |
| Total debt | 19,523) | 19,913) | 19,725) | 19,039) | 19,058) | 16,458) | |
| Total Twenty-First Century Fox, Inc. stockholders’ equity | 19,564) | 15,722) | 13,661) | 17,220) | 17,418) | 16,998) | |
| Total capital | 39,087) | 35,635) | 33,386) | 36,259) | 36,476) | 33,456) | |
| Solvency Ratio | |||||||
| Debt to capital1 | 0.50 | 0.56 | 0.59 | 0.53 | 0.52 | 0.49 | |
| Benchmarks | |||||||
| Debt to Capital, Competitors2 | |||||||
| Alphabet Inc. | — | — | — | — | — | — | |
| Comcast Corp. | — | — | — | — | — | — | |
| Meta Platforms Inc. | — | — | — | — | — | — | |
| Netflix Inc. | — | — | — | — | — | — | |
| Take-Two Interactive Software Inc. | — | — | — | — | — | — | |
| Walt Disney Co. | — | — | — | — | — | — | |
Based on: 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30), 10-K (reporting date: 2016-06-30), 10-K (reporting date: 2015-06-30), 10-K (reporting date: 2014-06-30), 10-K (reporting date: 2013-06-30).
1 2018 Calculation
Debt to capital = Total debt ÷ Total capital
= 19,523 ÷ 39,087 = 0.50
2 Click competitor name to see calculations.
- Total Debt
- The total debt exhibited a generally increasing trend from 2013 to 2017, rising from $16,458 million in 2013 to a peak of $19,913 million in 2017. In 2018, however, total debt slightly decreased to $19,523 million. This indicates that while the company increased its debt load over the majority of the period, there was a modest reduction in the latest year reported.
- Total Capital
- Total capital displayed a fluctuating yet overall increasing pattern. Starting at $33,456 million in 2013, it rose to $36,476 million in 2014, experienced a minor decline to $33,386 million by 2016, then surged noticeably to reach $39,087 million in 2018. This suggests some variability in the capital structure, with significant recovery and growth in later years.
- Debt to Capital Ratio
- The debt to capital ratio rose from 0.49 in 2013 to a high of 0.59 in 2016, reflecting a growing proportion of debt financing relative to total capital during that period. Following this peak, the ratio declined to 0.50 by 2018, indicating that the company began reducing its reliance on debt relative to capital in the last two years observed. Despite some variation, the company maintained a substantial but controlled leverage position throughout the timeframe.
Debt to Assets
Twenty-First Century Fox Inc., debt to assets calculation, comparison to benchmarks
| Jun 30, 2018 | Jun 30, 2017 | Jun 30, 2016 | Jun 30, 2015 | Jun 30, 2014 | Jun 30, 2013 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Current borrowings | 1,054) | 457) | 427) | 244) | 799) | 137) | |
| Non-current borrowings | 18,469) | 19,456) | 19,298) | 18,795) | 18,259) | 16,321) | |
| Total debt | 19,523) | 19,913) | 19,725) | 19,039) | 19,058) | 16,458) | |
| Total assets | 53,831) | 50,724) | 48,365) | 50,051) | 54,793) | 50,944) | |
| Solvency Ratio | |||||||
| Debt to assets1 | 0.36 | 0.39 | 0.41 | 0.38 | 0.35 | 0.32 | |
| Benchmarks | |||||||
| Debt to Assets, Competitors2 | |||||||
| Alphabet Inc. | — | — | — | — | — | — | |
| Comcast Corp. | — | — | — | — | — | — | |
| Meta Platforms Inc. | — | — | — | — | — | — | |
| Netflix Inc. | — | — | — | — | — | — | |
| Take-Two Interactive Software Inc. | — | — | — | — | — | — | |
| Walt Disney Co. | — | — | — | — | — | — | |
Based on: 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30), 10-K (reporting date: 2016-06-30), 10-K (reporting date: 2015-06-30), 10-K (reporting date: 2014-06-30), 10-K (reporting date: 2013-06-30).
1 2018 Calculation
Debt to assets = Total debt ÷ Total assets
= 19,523 ÷ 53,831 = 0.36
2 Click competitor name to see calculations.
- Total Debt
-
Over the six-year period from mid-2013 to mid-2018, total debt experienced a general upward trend initially, rising from 16,458 million US dollars in 2013 to a peak of 19,913 million US dollars in 2017. However, in the final year, there was a slight reduction to 19,523 million US dollars. This indicates a cautious approach in managing debt levels, particularly a reduction after 2017.
- Total Assets
-
Total assets showed some variability during the period. Starting at 50,944 million US dollars in 2013, assets increased to a high of 54,793 million US dollars in 2014. Subsequently, assets declined notably to a low of 48,365 million US dollars by 2016. After this trough, total assets recovered, reaching 53,831 million US dollars by mid-2018. This pattern suggests fluctuations likely related to operational or investment decisions, with a recovery trend evident in the later years.
- Debt to Assets Ratio
-
The debt to assets ratio rose steadily from 0.32 in 2013 to a peak of 0.41 in 2016, reflecting increased leverage during this period. This increase coincided with the rise in total debt and the decline in total assets, amplifying the ratio. After 2016, the ratio declined, reaching 0.36 by 2018, indicating a partial deleveraging which aligns with the reduction in total debt and recovery in asset values.
Financial Leverage
Twenty-First Century Fox Inc., financial leverage calculation, comparison to benchmarks
| Jun 30, 2018 | Jun 30, 2017 | Jun 30, 2016 | Jun 30, 2015 | Jun 30, 2014 | Jun 30, 2013 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Total assets | 53,831) | 50,724) | 48,365) | 50,051) | 54,793) | 50,944) | |
| Total Twenty-First Century Fox, Inc. stockholders’ equity | 19,564) | 15,722) | 13,661) | 17,220) | 17,418) | 16,998) | |
| Solvency Ratio | |||||||
| Financial leverage1 | 2.75 | 3.23 | 3.54 | 2.91 | 3.15 | 3.00 | |
| Benchmarks | |||||||
| Financial Leverage, Competitors2 | |||||||
| Alphabet Inc. | — | — | — | — | — | — | |
| Comcast Corp. | — | — | — | — | — | — | |
| Meta Platforms Inc. | — | — | — | — | — | — | |
| Netflix Inc. | — | — | — | — | — | — | |
| Take-Two Interactive Software Inc. | — | — | — | — | — | — | |
| Walt Disney Co. | — | — | — | — | — | — | |
Based on: 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30), 10-K (reporting date: 2016-06-30), 10-K (reporting date: 2015-06-30), 10-K (reporting date: 2014-06-30), 10-K (reporting date: 2013-06-30).
1 2018 Calculation
Financial leverage = Total assets ÷ Total Twenty-First Century Fox, Inc. stockholders’ equity
= 53,831 ÷ 19,564 = 2.75
2 Click competitor name to see calculations.
- Total assets
- The total assets exhibited some fluctuations over the observed period. Starting at approximately $50.9 billion in mid-2013, the total assets increased to nearly $54.8 billion by mid-2014. Subsequently, there was a decline through mid-2016, reaching about $48.4 billion, followed by a gradual recovery to approximately $53.8 billion by mid-2018. The pattern suggests phases of asset contraction and expansion within the six-year timeframe.
- Total stockholders’ equity
- The stockholders' equity displayed relative stability initially, around $17 billion between 2013 and 2015. However, a significant decrease occurred in 2016, with equity falling to roughly $13.7 billion. This was followed by a recovery phase over the next two years, reaching about $19.6 billion in 2018, indicating an improvement in the company's net assets attributable to shareholders.
- Financial leverage
- Financial leverage ratios fluctuated throughout the period. Beginning at a leverage ratio of 3.0 in 2013, an increase was observed in 2014 to 3.15, followed by a decrease to 2.91 in 2015. A sharp increase to 3.54 occurred in 2016, indicating higher reliance on debt or liabilities relative to equity. The ratio then declined steadily over the next two years, reaching 2.75 in 2018, which suggests a strengthening equity base or reduction in leverage.
Interest Coverage
Twenty-First Century Fox Inc., interest coverage calculation, comparison to benchmarks
| Jun 30, 2018 | Jun 30, 2017 | Jun 30, 2016 | Jun 30, 2015 | Jun 30, 2014 | Jun 30, 2013 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Net income attributable to Twenty-First Century Fox, Inc. stockholders | 4,464) | 2,952) | 2,755) | 8,306) | 4,514) | 7,097) | |
| Add: Net income attributable to noncontrolling interest | 298) | 274) | 261) | 231) | 132) | 226) | |
| Less: Income (loss) from discontinued operations, net of tax | (12) | (44) | (8) | (67) | 729) | 277) | |
| Add: Income tax expense | (364) | 1,419) | 1,130) | 1,243) | 1,272) | 1,690) | |
| Add: Interest expense, net | 1,248) | 1,219) | 1,184) | 1,198) | 1,121) | 1,063) | |
| Earnings before interest and tax (EBIT) | 5,658) | 5,908) | 5,338) | 11,045) | 6,310) | 9,799) | |
| Solvency Ratio | |||||||
| Interest coverage1 | 4.53 | 4.85 | 4.51 | 9.22 | 5.63 | 9.22 | |
| Benchmarks | |||||||
| Interest Coverage, Competitors2 | |||||||
| Alphabet Inc. | — | — | — | — | — | — | |
| Comcast Corp. | — | — | — | — | — | — | |
| Meta Platforms Inc. | — | — | — | — | — | — | |
| Netflix Inc. | — | — | — | — | — | — | |
| Take-Two Interactive Software Inc. | — | — | — | — | — | — | |
| Walt Disney Co. | — | — | — | — | — | — | |
Based on: 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30), 10-K (reporting date: 2016-06-30), 10-K (reporting date: 2015-06-30), 10-K (reporting date: 2014-06-30), 10-K (reporting date: 2013-06-30).
1 2018 Calculation
Interest coverage = EBIT ÷ Interest expense
= 5,658 ÷ 1,248 = 4.53
2 Click competitor name to see calculations.
- Earnings before interest and tax (EBIT)
- The EBIT figures exhibit considerable volatility over the six-year period. Starting at a high point of 9,799 million US dollars in mid-2013, EBIT sharply declined to 6,310 million in 2014. This was followed by a significant recovery to 11,045 million in 2015, marking the highest value observed. However, from 2015 onwards, EBIT experienced a downward trend, dropping to 5,338 million in 2016 and remaining relatively stable but low in 2017 and 2018, with values of 5,908 million and 5,658 million respectively.
- Interest expense, net
- Net interest expense showed a steady upward trajectory throughout the period. The expense began at 1,063 million US dollars in 2013 and increased gradually each year, reaching 1,248 million by 2018. The growth in interest expense amounts to an approximate 17% increase over the six years.
- Interest coverage ratio
- The interest coverage ratio, which indicates the company’s ability to meet interest payments from its EBIT, fluctuated significantly over the analyzed years. It started at a relatively strong level of 9.22 in 2013, decreased substantially to 5.63 in 2014, and then rebounded to 9.22 in 2015, mirroring the volatility observed in EBIT. After 2015, the ratio declined markedly, reaching its lowest point at 4.51 in 2016, followed by slight recoveries to 4.85 in 2017 and a minor decline to 4.53 in 2018. These figures suggest a weakening capacity to cover interest expenses in the latter years despite marginal improvements.
Fixed Charge Coverage
Twenty-First Century Fox Inc., fixed charge coverage calculation, comparison to benchmarks
| Jun 30, 2018 | Jun 30, 2017 | Jun 30, 2016 | Jun 30, 2015 | Jun 30, 2014 | Jun 30, 2013 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Net income attributable to Twenty-First Century Fox, Inc. stockholders | 4,464) | 2,952) | 2,755) | 8,306) | 4,514) | 7,097) | |
| Add: Net income attributable to noncontrolling interest | 298) | 274) | 261) | 231) | 132) | 226) | |
| Less: Income (loss) from discontinued operations, net of tax | (12) | (44) | (8) | (67) | 729) | 277) | |
| Add: Income tax expense | (364) | 1,419) | 1,130) | 1,243) | 1,272) | 1,690) | |
| Add: Interest expense, net | 1,248) | 1,219) | 1,184) | 1,198) | 1,121) | 1,063) | |
| Earnings before interest and tax (EBIT) | 5,658) | 5,908) | 5,338) | 11,045) | 6,310) | 9,799) | |
| Add: Operating lease expense | 230) | 205) | 200) | 260) | 365) | 385) | |
| Earnings before fixed charges and tax | 5,888) | 6,113) | 5,538) | 11,305) | 6,675) | 10,184) | |
| Interest expense, net | 1,248) | 1,219) | 1,184) | 1,198) | 1,121) | 1,063) | |
| Operating lease expense | 230) | 205) | 200) | 260) | 365) | 385) | |
| Fixed charges | 1,478) | 1,424) | 1,384) | 1,458) | 1,486) | 1,448) | |
| Solvency Ratio | |||||||
| Fixed charge coverage1 | 3.98 | 4.29 | 4.00 | 7.75 | 4.49 | 7.03 | |
| Benchmarks | |||||||
| Fixed Charge Coverage, Competitors2 | |||||||
| Alphabet Inc. | — | — | — | — | — | — | |
| Comcast Corp. | — | — | — | — | — | — | |
| Meta Platforms Inc. | — | — | — | — | — | — | |
| Netflix Inc. | — | — | — | — | — | — | |
| Take-Two Interactive Software Inc. | — | — | — | — | — | — | |
| Walt Disney Co. | — | — | — | — | — | — | |
Based on: 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30), 10-K (reporting date: 2016-06-30), 10-K (reporting date: 2015-06-30), 10-K (reporting date: 2014-06-30), 10-K (reporting date: 2013-06-30).
1 2018 Calculation
Fixed charge coverage = Earnings before fixed charges and tax ÷ Fixed charges
= 5,888 ÷ 1,478 = 3.98
2 Click competitor name to see calculations.
The financial data exhibits fluctuations in key profitability and coverage metrics over the observed six-year period.
- Earnings before fixed charges and tax
- This item shows significant variability, with the highest figure recorded in 2015 at 11,305 million US dollars. In contrast, a notable decline occurs in 2014 and again in 2016, where values drop to 6,675 million and 5,538 million US dollars respectively. Following 2016, earnings remain relatively stable but lower compared to the 2013 and 2015 peaks, settling at around 6,113 million and 5,888 million US dollars in 2017 and 2018 respectively.
- Fixed charges
- Fixed charges demonstrate moderate fluctuations through the period, generally maintaining a range between 1,384 million and 1,486 million US dollars. The lowest fixed charges are seen in 2016 at 1,384 million US dollars, and the highest in 2018 at 1,478 million US dollars, indicating a relatively stable but slightly increasing trend in fixed obligations.
- Fixed charge coverage ratio
- The fixed charge coverage ratio exhibits a pattern similar to earnings before fixed charges and tax, with higher coverage ratios in 2013 and 2015 at 7.03 and 7.75 respectively. However, from 2014 onwards, this ratio has generally declined, reaching its lowest point in 2018 at 3.98. This decreasing trend suggests that the company's ability to cover fixed charges from earnings has weakened notably over the period assessed.
Overall, the data reflects volatility in earnings capacity and a slight upward movement in fixed charges, contributing to a reduced fixed charge coverage over time. These trends imply increased risk relative to fixed financial obligations and a potential need for attention to earnings stability and cost management.