Analysis of Operating Leases
An operating lease is treated like a rental contract. Neither the leased asset nor the associated liability is reported on the lessee balance sheet, but the rights may be very similar to the rights of an owner. The lessee only records the lease payments as a rental expense in income statement.
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Emerson Electric Co. pages available for free this week:
- Income Statement
- Statement of Comprehensive Income
- Common-Size Balance Sheet: Assets
- Analysis of Reportable Segments
- Common Stock Valuation Ratios
- Enterprise Value to FCFF (EV/FCFF)
- Return on Equity (ROE) since 2005
- Return on Assets (ROA) since 2005
- Price to Earnings (P/E) since 2005
- Analysis of Debt
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Present Value of Future Operating Lease Payments (before Adoption of FASB Topic 842)
Emerson Electric Co., future operating lease payments (before adoption of FASB Topic 842)
US$ in millions
| Sep 30, 2019 | Sep 30, 2018 | Sep 30, 2017 | Sep 30, 2016 | Sep 30, 2015 | Sep 30, 2014 | ||
|---|---|---|---|---|---|---|---|
| Total undiscounted future operating lease payments | |||||||
| Discount rate1 | |||||||
| Total present value of future operating lease payments | |||||||
Based on: 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30), 10-K (reporting date: 2016-09-30), 10-K (reporting date: 2015-09-30), 10-K (reporting date: 2014-09-30).
1 Weighted-average interest rate for Emerson Electric Co. debt
| Year | Future operating lease payments (as reported) | Year | Future operating lease payments (estimated) | Present value at |
|---|---|---|---|---|
| 2020 | 2020 | |||
| 2021 | 2021 | |||
| 2022 | 2022 | |||
| 2023 | 2023 | |||
| 2024 | 2024 | |||
| 2025 and thereafter | 2025 | |||
| 2026 | ||||
| Total: |
Based on: 10-K (reporting date: 2019-09-30).
| Year | Future operating lease payments (as reported) | Year | Future operating lease payments (estimated) | Present value at |
|---|---|---|---|---|
| 2019 | 2019 | |||
| 2020 | 2020 | |||
| 2021 | 2021 | |||
| 2022 | 2022 | |||
| 2023 | 2023 | |||
| 2024 and thereafter | 2024 | |||
| 2025 | ||||
| 2026 | ||||
| Total: |
Based on: 10-K (reporting date: 2018-09-30).
| Year | Future operating lease payments (as reported) | Year | Future operating lease payments (estimated) | Present value at |
|---|---|---|---|---|
| 2018 | 2018 | |||
| 2019 | 2019 | |||
| 2020 | 2020 | |||
| 2021 | 2021 | |||
| 2022 | 2022 | |||
| 2023 and thereafter | 2023 | |||
| 2024 | ||||
| 2025 | ||||
| Total: |
Based on: 10-K (reporting date: 2017-09-30).
| Year | Future operating lease payments (as reported) | Year | Future operating lease payments (estimated) | Present value at |
|---|---|---|---|---|
| 2017 | 2017 | |||
| 2018 | 2018 | |||
| 2019 | 2019 | |||
| 2020 | 2020 | |||
| 2021 | 2021 | |||
| 2022 and thereafter | 2022 | |||
| 2023 | ||||
| 2024 | ||||
| Total: |
Based on: 10-K (reporting date: 2016-09-30).
| Year | Future operating lease payments (as reported) | Year | Future operating lease payments (estimated) | Present value at |
|---|---|---|---|---|
| 2016 | 2016 | |||
| 2017 | 2017 | |||
| 2018 | 2018 | |||
| 2019 | 2019 | |||
| 2020 | 2020 | |||
| 2021 and thereafter | 2021 | |||
| 2022 | ||||
| 2023 | ||||
| Total: |
Based on: 10-K (reporting date: 2015-09-30).
| Year | Future operating lease payments (as reported) | Year | Future operating lease payments (estimated) | Present value at |
|---|---|---|---|---|
| 2015 | 2015 | |||
| 2016 | 2016 | |||
| 2017 | 2017 | |||
| 2018 | 2018 | |||
| 2019 | 2019 | |||
| 2020 and thereafter | 2020 | |||
| 2021 | ||||
| 2022 | ||||
| 2023 | ||||
| Total: |
Based on: 10-K (reporting date: 2014-09-30).
Adjustments to Financial Statements for Operating Leases
Emerson Electric Co., adjustments to financial statements
US$ in millions
Based on: 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30), 10-K (reporting date: 2016-09-30), 10-K (reporting date: 2015-09-30), 10-K (reporting date: 2014-09-30).
1, 2 Equal to total present value of future operating lease payments.
Emerson Electric Co., Financial Data: Reported vs. Adjusted
Adjusted Financial Ratios for Operating Leases (Summary)
Emerson Electric Co., adjusted financial ratios
Based on: 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30), 10-K (reporting date: 2016-09-30), 10-K (reporting date: 2015-09-30), 10-K (reporting date: 2014-09-30).
| Financial ratio | Description | The company |
|---|---|---|
| Adjusted total asset turnover | An activity ratio calculated as total revenue divided by adjusted total assets. | Emerson Electric Co. adjusted total asset turnover ratio improved from 2017 to 2018 and from 2018 to 2019. |
| Adjusted debt to equity | A solvency ratio calculated as adjusted total debt divided by total shareholders’ equity. | Emerson Electric Co. adjusted debt to equity ratio deteriorated from 2017 to 2018 and from 2018 to 2019. |
| Adjusted ROA | A profitability ratio calculated as net income divided by adjusted total assets. | Emerson Electric Co. adjusted ROA improved from 2017 to 2018 and from 2018 to 2019. |
Emerson Electric Co., Financial Ratios: Reported vs. Adjusted
Adjusted Total Asset Turnover
Based on: 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30), 10-K (reporting date: 2016-09-30), 10-K (reporting date: 2015-09-30), 10-K (reporting date: 2014-09-30).
2019 Calculations
1 Total asset turnover = Net sales ÷ Total assets
= ÷ =
2 Adjusted total asset turnover = Net sales ÷ Adjusted total assets
= ÷ =
| Activity ratio | Description | The company |
|---|---|---|
| Adjusted total asset turnover | An activity ratio calculated as total revenue divided by adjusted total assets. | Emerson Electric Co. adjusted total asset turnover ratio improved from 2017 to 2018 and from 2018 to 2019. |
Adjusted Debt to Equity
Based on: 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30), 10-K (reporting date: 2016-09-30), 10-K (reporting date: 2015-09-30), 10-K (reporting date: 2014-09-30).
2019 Calculations
1 Debt to equity = Total debt ÷ Common stockholders’ equity
= ÷ =
2 Adjusted debt to equity = Adjusted total debt ÷ Common stockholders’ equity
= ÷ =
| Solvency ratio | Description | The company |
|---|---|---|
| Adjusted debt-to-equity | A solvency ratio calculated as adjusted total debt divided by total shareholders’ equity. | Emerson Electric Co. adjusted debt-to-equity ratio deteriorated from 2017 to 2018 and from 2018 to 2019. |
Adjusted Return on Assets (ROA)
Based on: 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30), 10-K (reporting date: 2016-09-30), 10-K (reporting date: 2015-09-30), 10-K (reporting date: 2014-09-30).
2019 Calculations
1 ROA = 100 × Net earnings common stockholders ÷ Total assets
= 100 × ÷ =
2 Adjusted ROA = 100 × Net earnings common stockholders ÷ Adjusted total assets
= 100 × ÷ =
| Profitability ratio | Description | The company |
|---|---|---|
| Adjusted ROA | A profitability ratio calculated as net income divided by adjusted total assets. | Emerson Electric Co. adjusted ROA improved from 2017 to 2018 and from 2018 to 2019. |