Analysis of Solvency Ratios
Solvency ratios also known as long-term debt ratios measure a company ability to meet long-term obligations.
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- Common-Size Balance Sheet: Assets
- Analysis of Profitability Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Dividend Discount Model (DDM)
- Present Value of Free Cash Flow to Equity (FCFE)
- Selected Financial Data since 2005
- Current Ratio since 2005
- Price to Book Value (P/BV) since 2005
- Analysis of Revenues
- Aggregate Accruals
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Solvency Ratios (Summary)
Amphenol Corp., solvency ratios
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
- Debt Ratios
- The debt to equity ratio shows a consistent downward trend over the five-year period, decreasing from 0.80 in 2019 to 0.52 in 2023. When including operating lease liability, the ratio follows a similar pattern, declining from 0.84 to 0.56. This indicates a gradual reduction in reliance on debt financing relative to shareholder equity.
- Debt to capital also reflects a decreasing trend, moving from 0.44 in 2019 to 0.34 in 2023. Including operating lease liability, the ratio exhibits a comparable decline from 0.46 to 0.36. This suggests a strategic approach towards lowering the proportion of debt in the company’s overall capital structure.
- Debt to assets ratio similarly decreases, from 0.33 in 2019 to 0.26 in 2023, and when operating lease liability is considered, it reduces from 0.35 to 0.28. This points to an improving asset base or a reduction in total debt obligations over the years.
- Financial Leverage
- Financial leverage demonstrates a downward movement, falling from 2.39 in 2019 to 1.98 in 2023. This decline indicates that the company is relying less on borrowed funds to finance its assets, potentially reflecting a more conservative capital management strategy.
- Coverage Ratios
- Interest coverage shows an overall increasing trend, rising from 13.72 in 2019 to a peak of 20.22 in 2022 before slightly decreasing to 18.60 in 2023. The increase indicates improving ability to meet interest expenses from operating earnings, reflecting strengthening profitability or reduced interest expenses.
- Fixed charge coverage also improves steadily from 7.95 in 2019 to 10.21 in 2023, with the highest level in 2022 at 10.88. This suggests enhanced capacity to cover fixed financial obligations, further supporting the company's improved financial health.
Debt Ratios
Coverage Ratios
Debt to Equity
Amphenol Corp., debt to equity calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Current portion of long-term debt | ||||||
| Long-term debt, less current portion | ||||||
| Total debt | ||||||
| Stockholders’ equity attributable to Amphenol Corporation | ||||||
| Solvency Ratio | ||||||
| Debt to equity1 | ||||||
| Benchmarks | ||||||
| Debt to Equity, Competitors2 | ||||||
| Apple Inc. | ||||||
| Arista Networks Inc. | ||||||
| Cisco Systems Inc. | ||||||
| Dell Technologies Inc. | ||||||
| Super Micro Computer Inc. | ||||||
| Debt to Equity, Sector | ||||||
| Technology Hardware & Equipment | ||||||
| Debt to Equity, Industry | ||||||
| Information Technology | ||||||
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Debt to equity = Total debt ÷ Stockholders’ equity attributable to Amphenol Corporation
= ÷ =
2 Click competitor name to see calculations.
- Total Debt
- The total debt shows a fluctuating, yet generally downward trend over the five-year period. The value increased from approximately 3.61 billion USD in 2019 to a peak of about 4.80 billion USD in 2021. After 2021, a decline is observed, with total debt reducing to approximately 4.58 billion USD in 2022 and further decreasing to around 4.34 billion USD by the end of 2023.
- Stockholders’ Equity Attributable to Amphenol Corporation
- Stockholders’ equity exhibits a consistent upward trend throughout the period. Starting at roughly 4.53 billion USD in 2019, equity increased each year, reaching about 8.35 billion USD at the end of 2023. This steady growth indicates strengthening equity position and possibly retained earnings accumulation or equity issuance.
- Debt to Equity Ratio
- The debt to equity ratio demonstrates a clear downward trajectory over the five years, reflecting improved financial leverage. The ratio decreased from 0.80 in 2019 to 0.52 in 2023. This decline is driven by both the reduction in total debt since 2021 and the continuous increase in stockholders’ equity, suggesting a stronger equity base relative to debt and potentially a more conservative capital structure.
- Overall Financial Trends
- The data indicate a strategic shift towards de-leveraging after 2021, with the company reducing its outstanding debt while simultaneously bolstering its equity position. This combination has favorably impacted the debt to equity ratio, signaling improved financial stability and lower leverage risk. The growth in equity coupled with declining debt levels may position the company well for future investment or resilience against economic fluctuations.
Debt to Equity (including Operating Lease Liability)
Amphenol Corp., debt to equity (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Current portion of long-term debt | ||||||
| Long-term debt, less current portion | ||||||
| Total debt | ||||||
| Operating lease liabilities (included in Other accrued expenses) | ||||||
| Operating lease liabilities (included in Other long-term liabilities) | ||||||
| Total debt (including operating lease liability) | ||||||
| Stockholders’ equity attributable to Amphenol Corporation | ||||||
| Solvency Ratio | ||||||
| Debt to equity (including operating lease liability)1 | ||||||
| Benchmarks | ||||||
| Debt to Equity (including Operating Lease Liability), Competitors2 | ||||||
| Apple Inc. | ||||||
| Arista Networks Inc. | ||||||
| Cisco Systems Inc. | ||||||
| Dell Technologies Inc. | ||||||
| Super Micro Computer Inc. | ||||||
| Debt to Equity (including Operating Lease Liability), Sector | ||||||
| Technology Hardware & Equipment | ||||||
| Debt to Equity (including Operating Lease Liability), Industry | ||||||
| Information Technology | ||||||
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Debt to equity (including operating lease liability) = Total debt (including operating lease liability) ÷ Stockholders’ equity attributable to Amphenol Corporation
= ÷ =
2 Click competitor name to see calculations.
- Total Debt (Including Operating Lease Liability)
- The total debt exhibited an upward trend from 2019 to 2021, increasing from approximately $3.81 billion to $5.05 billion. After peaking in 2021, the total debt showed a decline over the subsequent two years, falling to about $4.64 billion by the end of 2023. This suggests a strategic reduction of debt exposure following a period of accumulation.
- Stockholders’ Equity Attributable to Amphenol Corporation
- Stockholders’ equity demonstrated consistent and substantial growth throughout the entire period, rising steadily from $4.53 billion in 2019 to $8.35 billion in 2023. This continuous increase indicates strengthening equity capital and a potentially improving financial position over the five-year span.
- Debt to Equity Ratio (Including Operating Lease Liability)
- The debt to equity ratio showed a declining trend overall, starting at 0.84 in 2019 and decreasing to 0.56 in 2023. Despite a slight increase noted in 2021 up to 0.80, the ratio's general downward movement reflects a shift towards lower financial leverage and enhanced capitalization strength.
Debt to Capital
Amphenol Corp., debt to capital calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Current portion of long-term debt | ||||||
| Long-term debt, less current portion | ||||||
| Total debt | ||||||
| Stockholders’ equity attributable to Amphenol Corporation | ||||||
| Total capital | ||||||
| Solvency Ratio | ||||||
| Debt to capital1 | ||||||
| Benchmarks | ||||||
| Debt to Capital, Competitors2 | ||||||
| Apple Inc. | ||||||
| Arista Networks Inc. | ||||||
| Cisco Systems Inc. | ||||||
| Dell Technologies Inc. | ||||||
| Super Micro Computer Inc. | ||||||
| Debt to Capital, Sector | ||||||
| Technology Hardware & Equipment | ||||||
| Debt to Capital, Industry | ||||||
| Information Technology | ||||||
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Debt to capital = Total debt ÷ Total capital
= ÷ =
2 Click competitor name to see calculations.
- Total Debt
- The total debt exhibited an overall upward trend from 2019 to 2021, rising from approximately $3.61 billion to nearly $4.80 billion, indicating increased borrowing during this period. However, beginning in 2022, total debt started to decrease, falling to about $4.58 billion, and further declining to approximately $4.34 billion by the end of 2023. This suggests a strategic reduction in debt levels in the most recent years.
- Total Capital
- Total capital showed consistent growth throughout the five-year period. It increased steadily from $8.14 billion in 2019 to $12.68 billion in 2023. This signifies that the company's overall capitalization expanded considerably, reflecting either equity growth, retained earnings, or a combination of capital sources augmenting the company's financial base.
- Debt to Capital Ratio
- The debt to capital ratio decreased progressively from 0.44 in 2019 to 0.34 in 2023. This decline indicates an improving capital structure, with a reduced proportion of debt relative to total capital. The ratio's downward trend aligns with the reductions observed in total debt alongside growth in total capital, suggesting enhanced financial stability and possibly a lower financial risk profile over time.
Debt to Capital (including Operating Lease Liability)
Amphenol Corp., debt to capital (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Current portion of long-term debt | ||||||
| Long-term debt, less current portion | ||||||
| Total debt | ||||||
| Operating lease liabilities (included in Other accrued expenses) | ||||||
| Operating lease liabilities (included in Other long-term liabilities) | ||||||
| Total debt (including operating lease liability) | ||||||
| Stockholders’ equity attributable to Amphenol Corporation | ||||||
| Total capital (including operating lease liability) | ||||||
| Solvency Ratio | ||||||
| Debt to capital (including operating lease liability)1 | ||||||
| Benchmarks | ||||||
| Debt to Capital (including Operating Lease Liability), Competitors2 | ||||||
| Apple Inc. | ||||||
| Arista Networks Inc. | ||||||
| Cisco Systems Inc. | ||||||
| Dell Technologies Inc. | ||||||
| Super Micro Computer Inc. | ||||||
| Debt to Capital (including Operating Lease Liability), Sector | ||||||
| Technology Hardware & Equipment | ||||||
| Debt to Capital (including Operating Lease Liability), Industry | ||||||
| Information Technology | ||||||
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Debt to capital (including operating lease liability) = Total debt (including operating lease liability) ÷ Total capital (including operating lease liability)
= ÷ =
2 Click competitor name to see calculations.
- Total Debt (including operating lease liability)
- The total debt increased steadily from 3,806,100 thousand US dollars in 2019 to a peak of 5,050,900 thousand US dollars in 2021. Subsequently, the debt decreased to 4,871,400 thousand US dollars in 2022 and further declined to 4,641,000 thousand US dollars in 2023. This indicates a trend of debt accumulation until 2021 followed by a gradual reduction over the following two years.
- Total Capital (including operating lease liability)
- Total capital demonstrated consistent growth over the period, rising from 8,336,400 thousand US dollars in 2019 to 12,987,500 thousand US dollars in 2023. This steady increase suggests expanding financial resources or equity base, supporting the company's capacity for investment, financing, or operations.
- Debt to Capital Ratio (including operating lease liability)
- The debt to capital ratio shows a declining trend, moving from 0.46 in 2019 down to 0.36 in 2023. This decrease implies an improved capital structure with relatively lower reliance on debt financing over time, indicating potentially lower financial risk and enhanced solvency.
Debt to Assets
Amphenol Corp., debt to assets calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Current portion of long-term debt | ||||||
| Long-term debt, less current portion | ||||||
| Total debt | ||||||
| Total assets | ||||||
| Solvency Ratio | ||||||
| Debt to assets1 | ||||||
| Benchmarks | ||||||
| Debt to Assets, Competitors2 | ||||||
| Apple Inc. | ||||||
| Arista Networks Inc. | ||||||
| Cisco Systems Inc. | ||||||
| Dell Technologies Inc. | ||||||
| Super Micro Computer Inc. | ||||||
| Debt to Assets, Sector | ||||||
| Technology Hardware & Equipment | ||||||
| Debt to Assets, Industry | ||||||
| Information Technology | ||||||
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Debt to assets = Total debt ÷ Total assets
= ÷ =
2 Click competitor name to see calculations.
- Total Debt
- The total debt exhibited an overall increasing trend from 2019 to 2021, starting at approximately 3.61 billion USD and rising to nearly 4.80 billion USD. This increase was followed by a decline in the subsequent two years, with debt levels decreasing to about 4.58 billion USD in 2022 and further down to approximately 4.34 billion USD in 2023.
- Total Assets
- Total assets showed a consistent and significant upward trend over the entire period. Starting at approximately 10.82 billion USD in 2019, assets grew steadily each year, reaching around 16.53 billion USD by the end of 2023. This represents a substantial expansion of the company’s asset base over the five-year span.
- Debt to Assets Ratio
- The debt to assets ratio demonstrated a decreasing trend over the period, indicating an improvement in the company’s leverage position relative to its asset size. The ratio decreased from 0.33 in 2019 to 0.26 in 2023, suggesting that despite fluctuations in total debt, the total assets increased at a faster rate, thereby reducing leverage.
Debt to Assets (including Operating Lease Liability)
Amphenol Corp., debt to assets (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Current portion of long-term debt | ||||||
| Long-term debt, less current portion | ||||||
| Total debt | ||||||
| Operating lease liabilities (included in Other accrued expenses) | ||||||
| Operating lease liabilities (included in Other long-term liabilities) | ||||||
| Total debt (including operating lease liability) | ||||||
| Total assets | ||||||
| Solvency Ratio | ||||||
| Debt to assets (including operating lease liability)1 | ||||||
| Benchmarks | ||||||
| Debt to Assets (including Operating Lease Liability), Competitors2 | ||||||
| Apple Inc. | ||||||
| Arista Networks Inc. | ||||||
| Cisco Systems Inc. | ||||||
| Dell Technologies Inc. | ||||||
| Super Micro Computer Inc. | ||||||
| Debt to Assets (including Operating Lease Liability), Sector | ||||||
| Technology Hardware & Equipment | ||||||
| Debt to Assets (including Operating Lease Liability), Industry | ||||||
| Information Technology | ||||||
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Debt to assets (including operating lease liability) = Total debt (including operating lease liability) ÷ Total assets
= ÷ =
2 Click competitor name to see calculations.
- Total Debt (Including Operating Lease Liability)
- The total debt has shown fluctuations over the five-year period. It increased from 3,806,100 thousand USD at the end of 2019 to a peak of 5,050,900 thousand USD in 2021. Subsequently, it decreased to 4,871,400 thousand USD in 2022 and further to 4,641,000 thousand USD in 2023. This suggests a trend of debt reduction following a period of accumulation.
- Total Assets
- Total assets have exhibited consistent growth over the same period, rising from 10,815,500 thousand USD in 2019 to 16,526,400 thousand USD in 2023. This steady increase indicates company expansion or asset acquisition, contributing to overall balance sheet growth.
- Debt to Assets Ratio (Including Operating Lease Liability)
- The ratio of debt to assets declined gradually from 0.35 in 2019 to 0.28 in 2023. This decline reflects an improvement in the company’s leverage position, with the proportion of debt relative to total assets decreasing over time. The decreasing ratio aligns with the observed reduction in total debt and the growth in total assets, suggesting stronger financial stability and potentially improved creditworthiness.
Financial Leverage
Amphenol Corp., financial leverage calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Total assets | ||||||
| Stockholders’ equity attributable to Amphenol Corporation | ||||||
| Solvency Ratio | ||||||
| Financial leverage1 | ||||||
| Benchmarks | ||||||
| Financial Leverage, Competitors2 | ||||||
| Apple Inc. | ||||||
| Arista Networks Inc. | ||||||
| Cisco Systems Inc. | ||||||
| Dell Technologies Inc. | ||||||
| Super Micro Computer Inc. | ||||||
| Financial Leverage, Sector | ||||||
| Technology Hardware & Equipment | ||||||
| Financial Leverage, Industry | ||||||
| Information Technology | ||||||
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Financial leverage = Total assets ÷ Stockholders’ equity attributable to Amphenol Corporation
= ÷ =
2 Click competitor name to see calculations.
- Total Assets
- The total assets increased steadily over the five-year period, rising from approximately $10.8 billion in 2019 to roughly $16.5 billion in 2023. This represents a consistent upward trend, reflecting growth in the company’s asset base year over year, with particularly notable increases in 2021 and 2023.
- Stockholders’ Equity Attributable to Amphenol Corporation
- Stockholders’ equity showed a clear increasing trend throughout the period examined. Starting at about $4.53 billion in 2019, it rose to approximately $8.35 billion by the end of 2023. The growth trajectory is steady, indicating an improvement in the company’s net worth and shareholder investment value over the years.
- Financial Leverage
- The financial leverage ratio declined gradually from 2.39 in 2019 to 1.98 in 2023. This downward trend indicates a reduction in the relative amount of debt compared to equity. The decreasing ratio suggests that the company has been progressively strengthening its equity base relative to its total debt, thus potentially lowering financial risk.
Interest Coverage
Amphenol Corp., interest coverage calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net income attributable to Amphenol Corporation | ||||||
| Add: Net income attributable to noncontrolling interest | ||||||
| Less: Income from discontinued operations, net of income taxes | ||||||
| Add: Income tax expense | ||||||
| Add: Interest expense | ||||||
| Earnings before interest and tax (EBIT) | ||||||
| Solvency Ratio | ||||||
| Interest coverage1 | ||||||
| Benchmarks | ||||||
| Interest Coverage, Competitors2 | ||||||
| Apple Inc. | ||||||
| Arista Networks Inc. | ||||||
| Cisco Systems Inc. | ||||||
| Dell Technologies Inc. | ||||||
| Super Micro Computer Inc. | ||||||
| Interest Coverage, Sector | ||||||
| Technology Hardware & Equipment | ||||||
| Interest Coverage, Industry | ||||||
| Information Technology | ||||||
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Interest coverage = EBIT ÷ Interest expense
= ÷ =
2 Click competitor name to see calculations.
- Earnings Before Interest and Tax (EBIT)
- The EBIT exhibited a steady upward trend from 2019 to 2022, increasing from $1,613,500 thousand in 2019 to a peak of $2,595,800 thousand in 2022. However, in 2023, EBIT showed a slight decrease to $2,594,300 thousand, indicating a stabilization after significant growth over the prior years.
- Interest Expense
- The interest expense remained relatively stable between 2019 and 2021, fluctuating marginally around $115,000 thousand. From 2021 onwards, there was a consistent increase, reaching $139,500 thousand in 2023, which reflects a rising cost of debt or increased borrowing during this period.
- Interest Coverage Ratio
- This ratio, indicating the company’s ability to cover interest expenses with operating earnings, improved progressively from 13.72 in 2019 to a high of 20.22 in 2022. Despite the increase in interest expenses, the EBIT growth outpaced this, maintaining strong coverage. In 2023, the ratio slightly declined to 18.6 but remained at a robust level, suggesting continued comfortable coverage of interest obligations.
- Summary
- Overall, the financial data reflects solid operational earnings growth through 2022 with a marginal plateau in 2023. Interest expenses have increased moderately in recent years, but the company has consistently maintained a strong ability to service its interest obligations, as demonstrated by the interest coverage ratio remaining well above 15. The slight decline in EBIT and interest coverage in the latest year may warrant monitoring but does not yet indicate significant financial stress.
Fixed Charge Coverage
Amphenol Corp., fixed charge coverage calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net income attributable to Amphenol Corporation | ||||||
| Add: Net income attributable to noncontrolling interest | ||||||
| Less: Income from discontinued operations, net of income taxes | ||||||
| Add: Income tax expense | ||||||
| Add: Interest expense | ||||||
| Earnings before interest and tax (EBIT) | ||||||
| Add: Operating lease cost | ||||||
| Earnings before fixed charges and tax | ||||||
| Interest expense | ||||||
| Operating lease cost | ||||||
| Fixed charges | ||||||
| Solvency Ratio | ||||||
| Fixed charge coverage1 | ||||||
| Benchmarks | ||||||
| Fixed Charge Coverage, Competitors2 | ||||||
| Apple Inc. | ||||||
| Arista Networks Inc. | ||||||
| Cisco Systems Inc. | ||||||
| Dell Technologies Inc. | ||||||
| Super Micro Computer Inc. | ||||||
| Fixed Charge Coverage, Sector | ||||||
| Technology Hardware & Equipment | ||||||
| Fixed Charge Coverage, Industry | ||||||
| Information Technology | ||||||
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Fixed charge coverage = Earnings before fixed charges and tax ÷ Fixed charges
= ÷ =
2 Click competitor name to see calculations.
- Earnings before Fixed Charges and Tax
- Over the five-year period, earnings before fixed charges and tax demonstrated a consistent upward trend. Starting at approximately $1.71 billion in 2019, this figure rose moderately to about $1.74 billion in 2020 despite a challenging economic environment. A significant increase was observed in 2021, reaching around $2.22 billion, followed by continued growth to approximately $2.72 billion in both 2022 and 2023. The stabilization of earnings between 2022 and 2023 suggests a plateauing effect after a strong expansion phase.
- Fixed Charges
- Fixed charges showed a gradual increase from $215.2 million in 2019 to $266.6 million in 2023. The rise was steady each year, suggesting incremental growth in financial obligations or fixed expenses. The incremental increase ranged from about $2 million to $6.8 million annually, indicating manageable growth in fixed charges relative to earnings.
- Fixed Charge Coverage Ratio
- The fixed charge coverage ratio, reflecting the company’s ability to cover fixed financial obligations through operating earnings, improved consistently from 7.95 in 2019 to a peak of 10.88 in 2022. Despite a slight decline to 10.21 in 2023, the ratio remained robust and significantly above initial levels. This suggests enhanced financial stability and a stronger buffer to meet fixed charges through operating income over the period.
- Overall Financial Trends
- The company displayed strong growth in operating earnings accompanied by a moderate and controlled increase in fixed charges. The fixed charge coverage ratio improved markedly, indicating an increasing capacity to service fixed costs. The peak in earnings and coverage in 2022 followed by a marginal decline in coverage for 2023 may reflect initial market saturation or rising fixed costs, though the overall financial health remains solid.