Stock Analysis on Net

Eaton Corp. plc (NYSE:ETN)

Analysis of Solvency Ratios

Microsoft Excel

Solvency Ratios (Summary)

Eaton Corp. plc, solvency ratios

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Debt Ratios
Debt to equity 0.49 0.51 0.52 0.54 0.52
Debt to equity (including operating lease liability) 0.52 0.54 0.55 0.57 0.55
Debt to capital 0.33 0.34 0.34 0.35 0.34
Debt to capital (including operating lease liability) 0.34 0.35 0.36 0.36 0.35
Debt to assets 0.24 0.25 0.25 0.25 0.25
Debt to assets (including operating lease liability) 0.26 0.26 0.27 0.27 0.27
Financial leverage 2.02 2.06 2.07 2.13 2.04
Coverage Ratios
Interest coverage 26.34 21.22 21.11 12.72 11.98
Fixed charge coverage 11.90 10.01 10.40 6.24 7.45

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).

Solvency ratio Description The company
Debt to equity ratio A solvency ratio calculated as total debt divided by total shareholders’ equity. Eaton Corp. plc debt to equity ratio improved from 2021 to 2022 and from 2022 to 2023.
Debt to equity ratio (including operating lease liability) A solvency ratio calculated as total debt (including operating lease liability) divided by total shareholders’ equity. Eaton Corp. plc debt to equity ratio (including operating lease liability) improved from 2021 to 2022 and from 2022 to 2023.
Debt to capital ratio A solvency ratio calculated as total debt divided by total debt plus shareholders’ equity. Eaton Corp. plc debt to capital ratio improved from 2021 to 2022 and from 2022 to 2023.
Debt to capital ratio (including operating lease liability) A solvency ratio calculated as total debt (including operating lease liability) divided by total debt (including operating lease liability) plus shareholders’ equity. Eaton Corp. plc debt to capital ratio (including operating lease liability) improved from 2021 to 2022 and from 2022 to 2023.
Debt to assets ratio A solvency ratio calculated as total debt divided by total assets. Eaton Corp. plc debt to assets ratio improved from 2021 to 2022 and from 2022 to 2023.
Debt to assets ratio (including operating lease liability) A solvency ratio calculated as total debt (including operating lease liability) divided by total assets. Eaton Corp. plc debt to assets ratio (including operating lease liability) improved from 2021 to 2022 and from 2022 to 2023.
Financial leverage ratio A solvency ratio calculated as total assets divided by total shareholders’ equity. Eaton Corp. plc financial leverage ratio decreased from 2021 to 2022 and from 2022 to 2023.

Solvency ratio Description The company
Interest coverage ratio A solvency ratio calculated as EBIT divided by interest payments. Eaton Corp. plc interest coverage ratio improved from 2021 to 2022 and from 2022 to 2023.
Fixed charge coverage ratio A solvency ratio calculated as earnings before fixed charges and tax divided by fixed charges. Eaton Corp. plc fixed charge coverage ratio deteriorated from 2021 to 2022 but then improved from 2022 to 2023 exceeding 2021 level.

Debt to Equity

Eaton Corp. plc, debt to equity calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Selected Financial Data (US$ in millions)
Short-term debt 8 324 13 1 255
Current portion of long-term debt 1,017 10 1,735 1,047 248
Long-term debt, excluding current portion 8,244 8,321 6,831 7,010 7,819
Total debt 9,269 8,655 8,579 8,058 8,322
 
Total Eaton shareholders’ equity 19,036 17,038 16,413 14,930 16,082
Solvency Ratio
Debt to equity1 0.49 0.51 0.52 0.54 0.52
Benchmarks
Debt to Equity, Competitors2
Boeing Co.
Caterpillar Inc. 1.94 2.33 2.29 2.42 2.58
GE Aerospace 0.77 0.89 0.87 2.11 3.21
Honeywell International Inc. 1.29 1.17 1.06 1.28 0.87
Lockheed Martin Corp. 2.55 1.68 1.07 2.02 4.05
RTX Corp. 0.73 0.44 0.43 0.44 1.04
Debt to Equity, Sector
Capital Goods 1.54 1.33 1.26 1.75 2.08
Debt to Equity, Industry
Industrials 1.43 1.32 1.25 1.73 1.86

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 ÷ Total Eaton shareholders’ equity
= 9,269 ÷ 19,036 = 0.49

2 Click competitor name to see calculations.

Solvency ratio Description The company
Debt to equity ratio A solvency ratio calculated as total debt divided by total shareholders’ equity. Eaton Corp. plc debt to equity ratio improved from 2021 to 2022 and from 2022 to 2023.

Debt to Equity (including Operating Lease Liability)

Eaton Corp. plc, debt to equity (including operating lease liability) calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Selected Financial Data (US$ in millions)
Short-term debt 8 324 13 1 255
Current portion of long-term debt 1,017 10 1,735 1,047 248
Long-term debt, excluding current portion 8,244 8,321 6,831 7,010 7,819
Total debt 9,269 8,655 8,579 8,058 8,322
Current operating lease liabilities (included in Other current liabilities) 135 127 120 116 121
Noncurrent operating lease liabilities 533 459 337 326 331
Total debt (including operating lease liability) 9,937 9,241 9,036 8,500 8,774
 
Total Eaton shareholders’ equity 19,036 17,038 16,413 14,930 16,082
Solvency Ratio
Debt to equity (including operating lease liability)1 0.52 0.54 0.55 0.57 0.55
Benchmarks
Debt to Equity (including Operating Lease Liability), Competitors2
Boeing Co.
Caterpillar Inc. 1.97 2.37 2.33 2.46 2.62
GE Aerospace 0.84 0.96 0.94 2.20 3.32
Honeywell International Inc. 1.36 1.23 1.11 1.32 0.90
Lockheed Martin Corp. 2.73 1.81 1.19 2.21 4.40
RTX Corp. 0.76 0.47 0.46 0.47 1.11
Debt to Equity (including Operating Lease Liability), Sector
Capital Goods 1.61 1.39 1.32 1.81 2.17
Debt to Equity (including Operating Lease Liability), Industry
Industrials 1.61 1.47 1.39 1.89 1.96

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) ÷ Total Eaton shareholders’ equity
= 9,937 ÷ 19,036 = 0.52

2 Click competitor name to see calculations.

Solvency ratio Description The company
Debt to equity ratio (including operating lease liability) A solvency ratio calculated as total debt (including operating lease liability) divided by total shareholders’ equity. Eaton Corp. plc debt to equity ratio (including operating lease liability) improved from 2021 to 2022 and from 2022 to 2023.

Debt to Capital

Eaton Corp. plc, debt to capital calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Selected Financial Data (US$ in millions)
Short-term debt 8 324 13 1 255
Current portion of long-term debt 1,017 10 1,735 1,047 248
Long-term debt, excluding current portion 8,244 8,321 6,831 7,010 7,819
Total debt 9,269 8,655 8,579 8,058 8,322
Total Eaton shareholders’ equity 19,036 17,038 16,413 14,930 16,082
Total capital 28,305 25,693 24,992 22,988 24,404
Solvency Ratio
Debt to capital1 0.33 0.34 0.34 0.35 0.34
Benchmarks
Debt to Capital, Competitors2
Boeing Co. 1.49 1.39 1.35 1.40 1.46
Caterpillar Inc. 0.66 0.70 0.70 0.71 0.72
GE Aerospace 0.43 0.47 0.47 0.68 0.76
Honeywell International Inc. 0.56 0.54 0.51 0.56 0.46
Lockheed Martin Corp. 0.72 0.63 0.52 0.67 0.80
RTX Corp. 0.42 0.31 0.30 0.31 0.51
Debt to Capital, Sector
Capital Goods 0.61 0.57 0.56 0.64 0.68
Debt to Capital, Industry
Industrials 0.59 0.57 0.56 0.63 0.65

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
= 9,269 ÷ 28,305 = 0.33

2 Click competitor name to see calculations.

Solvency ratio Description The company
Debt to capital ratio A solvency ratio calculated as total debt divided by total debt plus shareholders’ equity. Eaton Corp. plc debt to capital ratio improved from 2021 to 2022 and from 2022 to 2023.

Debt to Capital (including Operating Lease Liability)

Eaton Corp. plc, debt to capital (including operating lease liability) calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Selected Financial Data (US$ in millions)
Short-term debt 8 324 13 1 255
Current portion of long-term debt 1,017 10 1,735 1,047 248
Long-term debt, excluding current portion 8,244 8,321 6,831 7,010 7,819
Total debt 9,269 8,655 8,579 8,058 8,322
Current operating lease liabilities (included in Other current liabilities) 135 127 120 116 121
Noncurrent operating lease liabilities 533 459 337 326 331
Total debt (including operating lease liability) 9,937 9,241 9,036 8,500 8,774
Total Eaton shareholders’ equity 19,036 17,038 16,413 14,930 16,082
Total capital (including operating lease liability) 28,973 26,279 25,449 23,430 24,856
Solvency Ratio
Debt to capital (including operating lease liability)1 0.34 0.35 0.36 0.36 0.35
Benchmarks
Debt to Capital (including Operating Lease Liability), Competitors2
Boeing Co. 1.47 1.37 1.34 1.39 1.43
Caterpillar Inc. 0.66 0.70 0.70 0.71 0.72
GE Aerospace 0.46 0.49 0.49 0.69 0.77
Honeywell International Inc. 0.58 0.55 0.53 0.57 0.47
Lockheed Martin Corp. 0.73 0.64 0.54 0.69 0.81
RTX Corp. 0.43 0.32 0.31 0.32 0.53
Debt to Capital (including Operating Lease Liability), Sector
Capital Goods 0.62 0.58 0.57 0.64 0.68
Debt to Capital (including Operating Lease Liability), Industry
Industrials 0.62 0.60 0.58 0.65 0.66

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)
= 9,937 ÷ 28,973 = 0.34

2 Click competitor name to see calculations.

Solvency ratio Description The company
Debt to capital ratio (including operating lease liability) A solvency ratio calculated as total debt (including operating lease liability) divided by total debt (including operating lease liability) plus shareholders’ equity. Eaton Corp. plc debt to capital ratio (including operating lease liability) improved from 2021 to 2022 and from 2022 to 2023.

Debt to Assets

Eaton Corp. plc, debt to assets calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Selected Financial Data (US$ in millions)
Short-term debt 8 324 13 1 255
Current portion of long-term debt 1,017 10 1,735 1,047 248
Long-term debt, excluding current portion 8,244 8,321 6,831 7,010 7,819
Total debt 9,269 8,655 8,579 8,058 8,322
 
Total assets 38,432 35,014 34,027 31,824 32,805
Solvency Ratio
Debt to assets1 0.24 0.25 0.25 0.25 0.25
Benchmarks
Debt to Assets, Competitors2
Boeing Co. 0.38 0.42 0.42 0.42 0.20
Caterpillar Inc. 0.43 0.45 0.46 0.47 0.48
GE Aerospace 0.13 0.17 0.18 0.30 0.34
Honeywell International Inc. 0.33 0.31 0.30 0.35 0.27
Lockheed Martin Corp. 0.33 0.29 0.23 0.24 0.27
RTX Corp. 0.27 0.20 0.20 0.20 0.31
Debt to Assets, Sector
Capital Goods 0.29 0.28 0.28 0.32 0.31
Debt to Assets, Industry
Industrials 0.30 0.29 0.29 0.32 0.32

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
= 9,269 ÷ 38,432 = 0.24

2 Click competitor name to see calculations.

Solvency ratio Description The company
Debt to assets ratio A solvency ratio calculated as total debt divided by total assets. Eaton Corp. plc debt to assets ratio improved from 2021 to 2022 and from 2022 to 2023.

Debt to Assets (including Operating Lease Liability)

Eaton Corp. plc, debt to assets (including operating lease liability) calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Selected Financial Data (US$ in millions)
Short-term debt 8 324 13 1 255
Current portion of long-term debt 1,017 10 1,735 1,047 248
Long-term debt, excluding current portion 8,244 8,321 6,831 7,010 7,819
Total debt 9,269 8,655 8,579 8,058 8,322
Current operating lease liabilities (included in Other current liabilities) 135 127 120 116 121
Noncurrent operating lease liabilities 533 459 337 326 331
Total debt (including operating lease liability) 9,937 9,241 9,036 8,500 8,774
 
Total assets 38,432 35,014 34,027 31,824 32,805
Solvency Ratio
Debt to assets (including operating lease liability)1 0.26 0.26 0.27 0.27 0.27
Benchmarks
Debt to Assets (including Operating Lease Liability), Competitors2
Boeing Co. 0.40 0.43 0.43 0.43 0.21
Caterpillar Inc. 0.44 0.46 0.46 0.48 0.49
GE Aerospace 0.14 0.19 0.19 0.31 0.35
Honeywell International Inc. 0.35 0.33 0.32 0.36 0.28
Lockheed Martin Corp. 0.36 0.32 0.26 0.26 0.29
RTX Corp. 0.28 0.21 0.21 0.21 0.33
Debt to Assets (including Operating Lease Liability), Sector
Capital Goods 0.30 0.30 0.29 0.33 0.33
Debt to Assets (including Operating Lease Liability), Industry
Industrials 0.33 0.33 0.32 0.35 0.34

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
= 9,937 ÷ 38,432 = 0.26

2 Click competitor name to see calculations.

Solvency ratio Description The company
Debt to assets ratio (including operating lease liability) A solvency ratio calculated as total debt (including operating lease liability) divided by total assets. Eaton Corp. plc debt to assets ratio (including operating lease liability) improved from 2021 to 2022 and from 2022 to 2023.

Financial Leverage

Eaton Corp. plc, financial leverage calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Selected Financial Data (US$ in millions)
Total assets 38,432 35,014 34,027 31,824 32,805
Total Eaton shareholders’ equity 19,036 17,038 16,413 14,930 16,082
Solvency Ratio
Financial leverage1 2.02 2.06 2.07 2.13 2.04
Benchmarks
Financial Leverage, Competitors2
Boeing Co.
Caterpillar Inc. 4.49 5.16 5.02 5.11 5.38
GE Aerospace 5.96 5.16 4.93 7.13 9.40
Honeywell International Inc. 3.88 3.73 3.47 3.68 3.17
Lockheed Martin Corp. 7.67 5.71 4.64 8.43 15.20
RTX Corp. 2.71 2.19 2.21 2.25 3.34
Financial Leverage, Sector
Capital Goods 5.35 4.71 4.55 5.54 6.65
Financial Leverage, Industry
Industrials 4.81 4.49 4.33 5.35 5.76

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 ÷ Total Eaton shareholders’ equity
= 38,432 ÷ 19,036 = 2.02

2 Click competitor name to see calculations.

Solvency ratio Description The company
Financial leverage ratio A solvency ratio calculated as total assets divided by total shareholders’ equity. Eaton Corp. plc financial leverage ratio decreased from 2021 to 2022 and from 2022 to 2023.

Interest Coverage

Eaton Corp. plc, interest coverage calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Selected Financial Data (US$ in millions)
Net income attributable to Eaton ordinary shareholders 3,218 2,462 2,144 1,410 2,211
Add: Net income attributable to noncontrolling interest 5 4 2 5 2
Add: Income tax expense 604 445 750 331 378
Add: Interest expense, net 151 144 144 149 236
Earnings before interest and tax (EBIT) 3,978 3,055 3,040 1,895 2,827
Solvency Ratio
Interest coverage1 26.34 21.22 21.11 12.72 11.98
Benchmarks
Interest Coverage, Competitors2
Boeing Co. 0.18 -0.98 -0.88 -5.71 -2.19
Caterpillar Inc. 26.66 20.80 17.88 8.80 19.62
GE Aerospace 10.12 1.88 -0.96 2.59 1.27
Honeywell International Inc. 10.36 16.41 22.09 17.75 22.17
Lockheed Martin Corp. 9.84 11.72 14.27 14.93 12.09
RTX Corp. 3.32 5.64 4.71 -0.65 5.65
Interest Coverage, Sector
Capital Goods 6.84 4.84 3.98 1.99 4.85
Interest Coverage, Industry
Industrials 7.24 5.53 6.00 2.04 4.37

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
= 3,978 ÷ 151 = 26.34

2 Click competitor name to see calculations.

Solvency ratio Description The company
Interest coverage ratio A solvency ratio calculated as EBIT divided by interest payments. Eaton Corp. plc interest coverage ratio improved from 2021 to 2022 and from 2022 to 2023.

Fixed Charge Coverage

Eaton Corp. plc, fixed charge coverage calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Selected Financial Data (US$ in millions)
Net income attributable to Eaton ordinary shareholders 3,218 2,462 2,144 1,410 2,211
Add: Net income attributable to noncontrolling interest 5 4 2 5 2
Add: Income tax expense 604 445 750 331 378
Add: Interest expense, net 151 144 144 149 236
Earnings before interest and tax (EBIT) 3,978 3,055 3,040 1,895 2,827
Add: Operating lease cost 200 179 164 184 166
Earnings before fixed charges and tax 4,178 3,234 3,204 2,079 2,993
 
Interest expense, net 151 144 144 149 236
Operating lease cost 200 179 164 184 166
Fixed charges 351 323 308 333 402
Solvency Ratio
Fixed charge coverage1 11.90 10.01 10.40 6.24 7.45
Benchmarks
Fixed Charge Coverage, Competitors2
Boeing Co. 0.31 -0.70 -0.64 -4.75 -1.19
Caterpillar Inc. 19.73 14.92 12.73 6.58 13.01
GE Aerospace 5.25 1.35 -0.22 1.93 1.09
Honeywell International Inc. 8.13 11.00 13.67 11.49 14.06
Lockheed Martin Corp. 7.81 8.44 9.95 11.12 9.12
RTX Corp. 2.81 4.40 3.66 -0.22 4.31
Fixed Charge Coverage, Sector
Capital Goods 5.14 3.61 3.06 1.66 3.63
Fixed Charge Coverage, Industry
Industrials 4.62 3.58 3.93 1.59 2.96

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
= 4,178 ÷ 351 = 11.90

2 Click competitor name to see calculations.

Solvency ratio Description The company
Fixed charge coverage ratio A solvency ratio calculated as earnings before fixed charges and tax divided by fixed charges. Eaton Corp. plc fixed charge coverage ratio deteriorated from 2021 to 2022 but then improved from 2022 to 2023 exceeding 2021 level.