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)
Generac Holdings Inc., solvency ratios
Based on: 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), 10-K (reporting date: 2017-12-31).
- Debt to equity
- The debt to equity ratio shows a consistent decline from 1.66 in 2017 to 0.44 in 2021, indicating a reduction in reliance on debt financing relative to shareholders' equity over the period. When including operating lease liabilities, the ratio follows a similar downward trend, decreasing from 1.66 to 0.49.
- Debt to capital
- The debt to capital ratio decreased steadily from 0.62 in 2017 to 0.31 in 2021. This implies that the proportion of debt in the company's total capital structure has been reduced. Including operating lease liabilities, the ratio demonstrates a comparable decline, from 0.62 to 0.33.
- Debt to assets
- The debt to assets ratio also declined markedly from 0.46 in 2017 to 0.20 in 2021, reflecting a lower degree of leverage against total assets. Including operating lease liabilities, this ratio decreased from 0.46 to 0.22 during the same period.
- Financial leverage
- Financial leverage decreased from 3.61 in 2017 to 2.20 in 2021, suggesting a reduction in the extent to which debt is used to finance assets relative to equity over time.
- Interest coverage
- The interest coverage ratio improved significantly from 5.8 in 2017 to 21.99 in 2021, indicating that the company’s earnings have become more than sufficient to cover interest expenses. This suggests enhanced financial stability and lower credit risk.
- Fixed charge coverage
- Fixed charge coverage rose from 4.83 in 2017 to 13.49 in 2021, highlighting a stronger ability to cover fixed financial obligations such as interest and lease payments with earnings before fixed charges. This increase demonstrates improving operational cash flow and financial robustness.
Debt Ratios
Coverage Ratios
Debt to Equity
Generac Holdings Inc., debt to equity calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Short-term borrowings | 72,035) | 39,282) | 58,714) | 45,583) | 20,602) | |
| Current portion of long-term borrowings and finance lease obligations | 5,930) | 4,147) | 2,383) | 1,977) | 1,572) | |
| Long-term borrowings and finance lease obligations, excluding current portion | 902,091) | 841,764) | 837,767) | 876,396) | 906,548) | |
| Total debt | 980,056) | 885,193) | 898,864) | 923,956) | 928,722) | |
| Stockholders’ equity attributable to Generac Holdings Inc. | 2,213,774) | 1,390,293) | 1,032,382) | 760,549) | 559,552) | |
| Solvency Ratio | ||||||
| Debt to equity1 | 0.44 | 0.64 | 0.87 | 1.21 | 1.66 | |
| Benchmarks | ||||||
| Debt to Equity, Competitors2 | ||||||
| Boeing Co. | — | — | — | — | — | |
| Caterpillar Inc. | 2.29 | 2.42 | — | — | — | |
| Eaton Corp. plc | 0.52 | 0.54 | — | — | — | |
| GE Aerospace | 0.87 | 2.11 | — | — | — | |
| Honeywell International Inc. | 1.06 | 1.28 | — | — | — | |
| Lockheed Martin Corp. | 1.07 | 2.02 | — | — | — | |
| RTX Corp. | 0.43 | 0.44 | — | — | — | |
| Debt to Equity, Sector | ||||||
| Capital Goods | 1.26 | 1.75 | — | — | — | |
| Debt to Equity, Industry | ||||||
| Industrials | 1.37 | 1.82 | — | — | — | |
Based on: 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), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Debt to equity = Total debt ÷ Stockholders’ equity attributable to Generac Holdings Inc.
= 980,056 ÷ 2,213,774 = 0.44
2 Click competitor name to see calculations.
The financial data reveals notable trends in the company's capital structure over the five-year period ending December 31, 2021. Total debt has remained relatively stable with minor fluctuations, starting at approximately $928.7 million in 2017 and slightly decreasing to about $885.2 million in 2020, before increasing again to nearly $980.1 million by the end of 2021.
In contrast, stockholders' equity attributable to the company has demonstrated a consistent and significant upward trajectory. It rose from around $559.6 million in 2017 to over $2.21 billion by 2021, marking a fourfold increase across the observed period.
Consequently, the debt to equity ratio has shown a clear declining trend, decreasing from 1.66 in 2017 to 0.44 in 2021. This decline reflects a strengthening equity base relative to debt, indicating an improvement in the company’s leverage position and suggesting a reduced financial risk profile.
- Total Debt
- Relatively steady with slight decrease through 2020 and a rebound in 2021.
- Stockholders’ Equity
- Consistent and strong growth, more than quadrupling over five years.
- Debt to Equity Ratio
- Significant reduction, indicating improved leverage and stronger equity capital.
Overall, the data signifies a strategic shift toward a more equity-driven capital structure, enhancing the company's financial stability and potentially improving its capacity to fund growth or absorb financial shocks.
Debt to Equity (including Operating Lease Liability)
Generac Holdings Inc., debt to equity (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Short-term borrowings | 72,035) | 39,282) | 58,714) | 45,583) | 20,602) | |
| Current portion of long-term borrowings and finance lease obligations | 5,930) | 4,147) | 2,383) | 1,977) | 1,572) | |
| Long-term borrowings and finance lease obligations, excluding current portion | 902,091) | 841,764) | 837,767) | 876,396) | 906,548) | |
| Total debt | 980,056) | 885,193) | 898,864) | 923,956) | 928,722) | |
| Operating lease liabilities, current (recorded in Other accrued liabilities) | 23,549) | 17,192) | 7,231) | —) | —) | |
| Operating lease liabilities, noncurrent (recorded in Operating lease and other long-term liabilities) | 80,370) | 46,558) | 29,778) | —) | —) | |
| Total debt (including operating lease liability) | 1,083,975) | 948,943) | 935,873) | 923,956) | 928,722) | |
| Stockholders’ equity attributable to Generac Holdings Inc. | 2,213,774) | 1,390,293) | 1,032,382) | 760,549) | 559,552) | |
| Solvency Ratio | ||||||
| Debt to equity (including operating lease liability)1 | 0.49 | 0.68 | 0.91 | 1.21 | 1.66 | |
| Benchmarks | ||||||
| Debt to Equity (including Operating Lease Liability), Competitors2 | ||||||
| Boeing Co. | — | — | — | — | — | |
| Caterpillar Inc. | 2.33 | 2.46 | — | — | — | |
| Eaton Corp. plc | 0.55 | 0.57 | — | — | — | |
| GE Aerospace | 0.94 | 2.20 | — | — | — | |
| Honeywell International Inc. | 1.11 | 1.32 | — | — | — | |
| Lockheed Martin Corp. | 1.19 | 2.21 | — | — | — | |
| RTX Corp. | 0.46 | 0.47 | — | — | — | |
| Debt to Equity (including Operating Lease Liability), Sector | ||||||
| Capital Goods | 1.32 | 1.81 | — | — | — | |
| Debt to Equity (including Operating Lease Liability), Industry | ||||||
| Industrials | 1.54 | 2.00 | — | — | — | |
Based on: 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), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Debt to equity (including operating lease liability) = Total debt (including operating lease liability) ÷ Stockholders’ equity attributable to Generac Holdings Inc.
= 1,083,975 ÷ 2,213,774 = 0.49
2 Click competitor name to see calculations.
The financial data reveals notable trends in the company's leverage and capital structure over the five-year period ending December 31, 2021.
- Total Debt (including operating lease liability)
-
The total debt level remained relatively stable from 2017 through 2020, fluctuating slightly around the $928 million to $949 million range. However, in 2021, total debt increased significantly to approximately $1.08 billion. This marks an approximate 14% increase from the previous year, suggesting an expansion in the company's borrowing or lease obligations during that period.
- Stockholders’ Equity Attributable to Generac Holdings Inc.
-
There is a clear upward trend in stockholders’ equity over the entire five-year span. Equity more than tripled from roughly $560 million in 2017 to approximately $2.21 billion in 2021. This substantial growth indicates increasing retained earnings, equity injections, or a rise in asset values contributing to shareholders' net worth, strengthening the company's capital base significantly.
- Debt to Equity Ratio (including operating lease liability)
-
The debt to equity ratio shows a consistent, steady decline each year, moving from 1.66 in 2017 down to 0.49 in 2021. This reflects a reduction in the relative amount of debt compared to equity, indicating the company’s leverage position has improved markedly. Despite the rise in absolute debt in 2021, the much larger increase in equity caused the leverage ratio to decrease, implying a more conservative financial structure and potentially reduced financial risk.
In summary, while total debt remained stable initially with an uptick in the final year, the company's equity expanded significantly more rapidly, leading to a consistent decrease in leverage ratio. This combination points to improved financial strength and decreasing reliance on debt financing relative to equity over the period analyzed.
Debt to Capital
Generac Holdings Inc., debt to capital calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Short-term borrowings | 72,035) | 39,282) | 58,714) | 45,583) | 20,602) | |
| Current portion of long-term borrowings and finance lease obligations | 5,930) | 4,147) | 2,383) | 1,977) | 1,572) | |
| Long-term borrowings and finance lease obligations, excluding current portion | 902,091) | 841,764) | 837,767) | 876,396) | 906,548) | |
| Total debt | 980,056) | 885,193) | 898,864) | 923,956) | 928,722) | |
| Stockholders’ equity attributable to Generac Holdings Inc. | 2,213,774) | 1,390,293) | 1,032,382) | 760,549) | 559,552) | |
| Total capital | 3,193,830) | 2,275,486) | 1,931,246) | 1,684,505) | 1,488,274) | |
| Solvency Ratio | ||||||
| Debt to capital1 | 0.31 | 0.39 | 0.47 | 0.55 | 0.62 | |
| Benchmarks | ||||||
| Debt to Capital, Competitors2 | ||||||
| Boeing Co. | 1.35 | 1.40 | — | — | — | |
| Caterpillar Inc. | 0.70 | 0.71 | — | — | — | |
| Eaton Corp. plc | 0.34 | 0.35 | — | — | — | |
| GE Aerospace | 0.47 | 0.68 | — | — | — | |
| Honeywell International Inc. | 0.51 | 0.56 | — | — | — | |
| Lockheed Martin Corp. | 0.52 | 0.67 | — | — | — | |
| RTX Corp. | 0.30 | 0.31 | — | — | — | |
| Debt to Capital, Sector | ||||||
| Capital Goods | 0.56 | 0.64 | — | — | — | |
| Debt to Capital, Industry | ||||||
| Industrials | 0.58 | 0.65 | — | — | — | |
Based on: 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), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Debt to capital = Total debt ÷ Total capital
= 980,056 ÷ 3,193,830 = 0.31
2 Click competitor name to see calculations.
The financial data reveals several key trends in the company's capital structure over the five-year period ending in 2021.
- Total debt
- The total debt figure fluctuated slightly from 2017 to 2020, showing a gradual decline from approximately $929 million to $885 million. However, in 2021, total debt increased significantly to about $980 million, reaching the highest level in this timeframe.
- Total capital
- Total capital experienced a consistent and substantial increase throughout the period. Starting at roughly $1.49 billion in 2017, it grew steadily each year, reaching approximately $3.19 billion by the end of 2021. This represents a strong upward trend in the company’s capital base.
- Debt to capital ratio
- The debt to capital ratio exhibited a declining pattern from 0.62 in 2017 to 0.31 in 2021. This reflects a steady reduction in the proportion of debt financing relative to total capital, indicating an overall deleveraging trend despite the uptick in absolute debt levels in 2021. The ratio's decrease suggests the company has been increasing equity or other forms of capital at a proportionally greater rate than debt.
In summary, the company has expanded its capital base considerably over the period, reducing reliance on debt financing relative to its total capital. While total debt remained relatively stable or slightly decreased from 2017 through 2020, the sharp increase in 2021 should be monitored in the context of its overall capital growth and strategic financing decisions. The consistently declining debt to capital ratio overall points to a strengthening financial structure with potentially improved credit metrics.
Debt to Capital (including Operating Lease Liability)
Generac Holdings Inc., debt to capital (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Short-term borrowings | 72,035) | 39,282) | 58,714) | 45,583) | 20,602) | |
| Current portion of long-term borrowings and finance lease obligations | 5,930) | 4,147) | 2,383) | 1,977) | 1,572) | |
| Long-term borrowings and finance lease obligations, excluding current portion | 902,091) | 841,764) | 837,767) | 876,396) | 906,548) | |
| Total debt | 980,056) | 885,193) | 898,864) | 923,956) | 928,722) | |
| Operating lease liabilities, current (recorded in Other accrued liabilities) | 23,549) | 17,192) | 7,231) | —) | —) | |
| Operating lease liabilities, noncurrent (recorded in Operating lease and other long-term liabilities) | 80,370) | 46,558) | 29,778) | —) | —) | |
| Total debt (including operating lease liability) | 1,083,975) | 948,943) | 935,873) | 923,956) | 928,722) | |
| Stockholders’ equity attributable to Generac Holdings Inc. | 2,213,774) | 1,390,293) | 1,032,382) | 760,549) | 559,552) | |
| Total capital (including operating lease liability) | 3,297,749) | 2,339,236) | 1,968,255) | 1,684,505) | 1,488,274) | |
| Solvency Ratio | ||||||
| Debt to capital (including operating lease liability)1 | 0.33 | 0.41 | 0.48 | 0.55 | 0.62 | |
| Benchmarks | ||||||
| Debt to Capital (including Operating Lease Liability), Competitors2 | ||||||
| Boeing Co. | 1.34 | 1.39 | — | — | — | |
| Caterpillar Inc. | 0.70 | 0.71 | — | — | — | |
| Eaton Corp. plc | 0.36 | 0.36 | — | — | — | |
| GE Aerospace | 0.49 | 0.69 | — | — | — | |
| Honeywell International Inc. | 0.53 | 0.57 | — | — | — | |
| Lockheed Martin Corp. | 0.54 | 0.69 | — | — | — | |
| RTX Corp. | 0.31 | 0.32 | — | — | — | |
| Debt to Capital (including Operating Lease Liability), Sector | ||||||
| Capital Goods | 0.57 | 0.64 | — | — | — | |
| Debt to Capital (including Operating Lease Liability), Industry | ||||||
| Industrials | 0.61 | 0.67 | — | — | — | |
Based on: 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), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Debt to capital (including operating lease liability) = Total debt (including operating lease liability) ÷ Total capital (including operating lease liability)
= 1,083,975 ÷ 3,297,749 = 0.33
2 Click competitor name to see calculations.
- Total Debt (including operating lease liability)
- The total debt remained relatively stable from 2017 to 2020, with values fluctuating modestly between approximately 928.7 million and 949 million US dollars. However, a notable increase occurred in 2021, with total debt rising significantly to about 1.08 billion US dollars.
- Total Capital (including operating lease liability)
- Total capital exhibited a consistent upward trend throughout the five-year span. Starting at approximately 1.49 billion US dollars in 2017, it increased steadily each year, reaching nearly 3.30 billion US dollars by the end of 2021. This suggests substantial growth in the company's capital base over the period.
- Debt to Capital Ratio (including operating lease liability)
- The debt to capital ratio demonstrated a continuous and marked decline from 0.62 in 2017 to 0.33 in 2021. This declining ratio indicates that despite the increase in total debt in 2021, the increase in total capital was proportionally greater, resulting in reduced leverage and potentially improving financial stability.
- Summary of Trends
- The company maintained a relatively stable total debt level for four years, followed by a significant rise in the final year. Concurrently, total capital increased substantially each year, more than doubling over the five-year period. The declining debt to capital ratio reflects a strategic shift toward a stronger capital structure and lower leverage. The substantial growth in capital relative to debt in 2021 suggests enhanced capacity for financing and possibly a more conservative approach to debt management.
Debt to Assets
Generac Holdings Inc., debt to assets calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Short-term borrowings | 72,035) | 39,282) | 58,714) | 45,583) | 20,602) | |
| Current portion of long-term borrowings and finance lease obligations | 5,930) | 4,147) | 2,383) | 1,977) | 1,572) | |
| Long-term borrowings and finance lease obligations, excluding current portion | 902,091) | 841,764) | 837,767) | 876,396) | 906,548) | |
| Total debt | 980,056) | 885,193) | 898,864) | 923,956) | 928,722) | |
| Total assets | 4,877,780) | 3,235,423) | 2,665,669) | 2,426,314) | 2,019,964) | |
| Solvency Ratio | ||||||
| Debt to assets1 | 0.20 | 0.27 | 0.34 | 0.38 | 0.46 | |
| Benchmarks | ||||||
| Debt to Assets, Competitors2 | ||||||
| Boeing Co. | 0.42 | 0.42 | — | — | — | |
| Caterpillar Inc. | 0.46 | 0.47 | — | — | — | |
| Eaton Corp. plc | 0.25 | 0.25 | — | — | — | |
| GE Aerospace | 0.18 | 0.30 | — | — | — | |
| Honeywell International Inc. | 0.30 | 0.35 | — | — | — | |
| Lockheed Martin Corp. | 0.23 | 0.24 | — | — | — | |
| RTX Corp. | 0.20 | 0.20 | — | — | — | |
| Debt to Assets, Sector | ||||||
| Capital Goods | 0.28 | 0.32 | — | — | — | |
| Debt to Assets, Industry | ||||||
| Industrials | 0.30 | 0.33 | — | — | — | |
Based on: 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), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Debt to assets = Total debt ÷ Total assets
= 980,056 ÷ 4,877,780 = 0.20
2 Click competitor name to see calculations.
The financial data demonstrates significant changes in total debt, total assets, and the debt-to-assets ratio over the five-year period ending December 31, 2021.
- Total Debt
- Total debt figures show a slight decline from 928,722 thousand USD in 2017 to 885,193 thousand USD in 2020, representing a gradual reduction over the four-year span. However, in 2021, total debt increased noticeably to 980,056 thousand USD, exceeding the 2017 level.
- Total Assets
- Total assets exhibit a consistent upward trend throughout the entire period. Starting at 2,019,964 thousand USD in 2017, assets increased steadily each year, culminating in a substantial rise to 4,877,780 thousand USD by the end of 2021. This more than doubling of assets indicates significant growth and expansion of the company's asset base.
- Debt to Assets Ratio
- The debt-to-assets ratio declined markedly from 0.46 in 2017 to 0.20 in 2021. This trend reflects an improvement in financial leverage, showing that the company has reduced its reliance on debt relative to its asset base. The drop is consistent and continuous each year, with a more pronounced decline between 2019 and 2021, consistent with the rapid growth in total assets outpacing the increase in total debt.
Overall, the data illustrates a trend of expanding asset base paired with relatively stable or decreasing debt levels until 2020, followed by an uptick in debt in 2021. The continuous reduction in the debt-to-assets ratio indicates improved solvency and potentially lower financial risk, despite the increase in total debt in the final year analyzed.
Debt to Assets (including Operating Lease Liability)
Generac Holdings Inc., debt to assets (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Short-term borrowings | 72,035) | 39,282) | 58,714) | 45,583) | 20,602) | |
| Current portion of long-term borrowings and finance lease obligations | 5,930) | 4,147) | 2,383) | 1,977) | 1,572) | |
| Long-term borrowings and finance lease obligations, excluding current portion | 902,091) | 841,764) | 837,767) | 876,396) | 906,548) | |
| Total debt | 980,056) | 885,193) | 898,864) | 923,956) | 928,722) | |
| Operating lease liabilities, current (recorded in Other accrued liabilities) | 23,549) | 17,192) | 7,231) | —) | —) | |
| Operating lease liabilities, noncurrent (recorded in Operating lease and other long-term liabilities) | 80,370) | 46,558) | 29,778) | —) | —) | |
| Total debt (including operating lease liability) | 1,083,975) | 948,943) | 935,873) | 923,956) | 928,722) | |
| Total assets | 4,877,780) | 3,235,423) | 2,665,669) | 2,426,314) | 2,019,964) | |
| Solvency Ratio | ||||||
| Debt to assets (including operating lease liability)1 | 0.22 | 0.29 | 0.35 | 0.38 | 0.46 | |
| Benchmarks | ||||||
| Debt to Assets (including Operating Lease Liability), Competitors2 | ||||||
| Boeing Co. | 0.43 | 0.43 | — | — | — | |
| Caterpillar Inc. | 0.46 | 0.48 | — | — | — | |
| Eaton Corp. plc | 0.27 | 0.27 | — | — | — | |
| GE Aerospace | 0.19 | 0.31 | — | — | — | |
| Honeywell International Inc. | 0.32 | 0.36 | — | — | — | |
| Lockheed Martin Corp. | 0.26 | 0.26 | — | — | — | |
| RTX Corp. | 0.21 | 0.21 | — | — | — | |
| Debt to Assets (including Operating Lease Liability), Sector | ||||||
| Capital Goods | 0.29 | 0.33 | — | — | — | |
| Debt to Assets (including Operating Lease Liability), Industry | ||||||
| Industrials | 0.34 | 0.36 | — | — | — | |
Based on: 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), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Debt to assets (including operating lease liability) = Total debt (including operating lease liability) ÷ Total assets
= 1,083,975 ÷ 4,877,780 = 0.22
2 Click competitor name to see calculations.
The financial data reflects the following key trends and observations regarding the company's leverage and asset base over the five-year period from 2017 to 2021.
- Total Debt (including operating lease liability)
- The total debt remained relatively stable from 2017 through 2020, fluctuating slightly around the $920 million to $950 million range. However, in 2021, there was a notable increase to approximately $1.08 billion, representing a rise after years of relative consistency.
- Total Assets
- Total assets exhibited a continuous and significant upward trend over the entire period. Starting at nearly $2.02 billion in 2017, assets grew steadily each year, reaching nearly $4.88 billion in 2021. This more than doubling of the asset base indicates considerable expansion and asset accumulation by the company.
- Debt to Assets Ratio (including operating lease liability)
- The debt-to-assets ratio declined markedly over the five years, moving from 0.46 in 2017 down to 0.22 in 2021. This steady decline suggests the company's leverage relative to its asset base has been reducing despite the increase in absolute total debt observed in the final year. The reduction implies improved capital structure and potentially lower financial risk, as assets have grown at a faster rate than debt.
In summary, while absolute debt levels have remained stable for several years before rising notably in 2021, the company's asset base has expanded substantially each year, resulting in a significant decrease in the debt-to-assets ratio over the observed period. This trend points toward strengthening balance sheet health and a decreasing reliance on debt financing relative to asset growth.
Financial Leverage
Generac Holdings Inc., financial leverage calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Total assets | 4,877,780) | 3,235,423) | 2,665,669) | 2,426,314) | 2,019,964) | |
| Stockholders’ equity attributable to Generac Holdings Inc. | 2,213,774) | 1,390,293) | 1,032,382) | 760,549) | 559,552) | |
| Solvency Ratio | ||||||
| Financial leverage1 | 2.20 | 2.33 | 2.58 | 3.19 | 3.61 | |
| Benchmarks | ||||||
| Financial Leverage, Competitors2 | ||||||
| Boeing Co. | — | — | — | — | — | |
| Caterpillar Inc. | 5.02 | 5.11 | — | — | — | |
| Eaton Corp. plc | 2.07 | 2.13 | — | — | — | |
| GE Aerospace | 4.93 | 7.13 | — | — | — | |
| Honeywell International Inc. | 3.47 | 3.68 | — | — | — | |
| Lockheed Martin Corp. | 4.64 | 8.43 | — | — | — | |
| RTX Corp. | 2.21 | 2.25 | — | — | — | |
| Financial Leverage, Sector | ||||||
| Capital Goods | 4.55 | 5.54 | — | — | — | |
| Financial Leverage, Industry | ||||||
| Industrials | 4.52 | 5.49 | — | — | — | |
Based on: 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), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Financial leverage = Total assets ÷ Stockholders’ equity attributable to Generac Holdings Inc.
= 4,877,780 ÷ 2,213,774 = 2.20
2 Click competitor name to see calculations.
- Total assets
- The total assets demonstrated a consistent upward trend over the five-year period. Starting at approximately $2.02 billion at the end of 2017, the assets grew each year, reaching nearly $4.88 billion by the end of 2021. This significant increase reflects substantial growth in the company’s asset base, more than doubling over the timeframe considered.
- Stockholders’ equity attributable to Generac Holdings Inc.
- Stockholders’ equity also increased steadily from about $560 million at the end of 2017 to approximately $2.21 billion at the close of 2021. This represents nearly a fourfold increase in equity, indicating strong retention of earnings or capital injections contributing to the company’s net worth growth. The upward trend is consistent, with no periods of decline noted.
- Financial leverage
- The financial leverage ratio showed a clear downward trend during the period analyzed. Starting at 3.61 in 2017, the ratio decreased each year, reaching 2.2 by 2021. This suggests that while assets and equity both increased, the proportion of debt relative to equity declined, indicating a strengthening equity position and reduced reliance on debt financing.
Interest Coverage
Generac Holdings Inc., interest coverage calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net income attributable to Generac Holdings Inc. | 550,494) | 350,576) | 252,007) | 238,257) | 159,386) | |
| Add: Net income attributable to noncontrolling interest | 6,075) | (3,358) | 301) | 2,963) | 1,749) | |
| Add: Income tax expense | 134,957) | 98,973) | 67,299) | 69,856) | 43,553) | |
| Add: Interest expense | 32,953) | 32,991) | 41,544) | 40,956) | 42,667) | |
| Earnings before interest and tax (EBIT) | 724,479) | 479,182) | 361,151) | 352,032) | 247,355) | |
| Solvency Ratio | ||||||
| Interest coverage1 | 21.99 | 14.52 | 8.69 | 8.60 | 5.80 | |
| Benchmarks | ||||||
| Interest Coverage, Competitors2 | ||||||
| Boeing Co. | -0.88 | -5.71 | — | — | — | |
| Caterpillar Inc. | 17.88 | 8.80 | — | — | — | |
| Eaton Corp. plc | 21.11 | 12.72 | — | — | — | |
| GE Aerospace | -0.96 | 2.59 | — | — | — | |
| Honeywell International Inc. | 22.09 | 17.75 | — | — | — | |
| Lockheed Martin Corp. | 14.27 | 14.93 | — | — | — | |
| RTX Corp. | 4.71 | -0.65 | — | — | — | |
| Interest Coverage, Sector | ||||||
| Capital Goods | 3.98 | 1.99 | — | — | — | |
| Interest Coverage, Industry | ||||||
| Industrials | 5.14 | 1.25 | — | — | — | |
Based on: 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), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Interest coverage = EBIT ÷ Interest expense
= 724,479 ÷ 32,953 = 21.99
2 Click competitor name to see calculations.
- Earnings before interest and tax (EBIT)
- The EBIT has shown a consistent and substantial upward trend over the five-year period. Starting at approximately $247 million in 2017, it increased to around $352 million in 2018 and then to $361 million in 2019. The growth accelerated notably in 2020, reaching nearly $479 million and further climbed to an impressive $724 million in 2021. This indicates strong operational performance and an increasing ability to generate earnings before the impact of interest and tax expenses.
- Interest expense
- The interest expense exhibited a slight decrease over the period. Beginning at about $42.7 million in 2017, the expense remained relatively stable, with minor fluctuations, declining to roughly $41.0 million in 2018 and $41.5 million in 2019. A more pronounced reduction occurred in 2020 and 2021, with interest expenses decreasing to approximately $33.0 million and $32.9 million respectively. This decline may suggest improved debt management or refinancing activities leading to lower interest costs.
- Interest coverage ratio
- The interest coverage ratio, which measures the company's ability to meet interest obligations from EBIT, improved significantly throughout the period. Starting at a moderate level of 5.8 in 2017, it increased to 8.6 in 2018 and marginally to 8.69 in 2019. A substantial improvement occurred in 2020 as the ratio rose sharply to 14.52, followed by an even stronger increase to nearly 22 in 2021. This notable enhancement reflects both the growing EBIT and the reduced interest expense, indicating a much stronger capacity to cover interest obligations over time.
Fixed Charge Coverage
Generac Holdings Inc., fixed charge coverage calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net income attributable to Generac Holdings Inc. | 550,494) | 350,576) | 252,007) | 238,257) | 159,386) | |
| Add: Net income attributable to noncontrolling interest | 6,075) | (3,358) | 301) | 2,963) | 1,749) | |
| Add: Income tax expense | 134,957) | 98,973) | 67,299) | 69,856) | 43,553) | |
| Add: Interest expense | 32,953) | 32,991) | 41,544) | 40,956) | 42,667) | |
| Earnings before interest and tax (EBIT) | 724,479) | 479,182) | 361,151) | 352,032) | 247,355) | |
| Add: Operating lease cost | 22,432) | 18,648) | 9,647) | 10,739) | 10,845) | |
| Earnings before fixed charges and tax | 746,911) | 497,830) | 370,798) | 362,771) | 258,200) | |
| Interest expense | 32,953) | 32,991) | 41,544) | 40,956) | 42,667) | |
| Operating lease cost | 22,432) | 18,648) | 9,647) | 10,739) | 10,845) | |
| Fixed charges | 55,385) | 51,639) | 51,191) | 51,695) | 53,512) | |
| Solvency Ratio | ||||||
| Fixed charge coverage1 | 13.49 | 9.64 | 7.24 | 7.02 | 4.83 | |
| Benchmarks | ||||||
| Fixed Charge Coverage, Competitors2 | ||||||
| Boeing Co. | -0.64 | -4.75 | — | — | — | |
| Caterpillar Inc. | 12.73 | 6.58 | — | — | — | |
| Eaton Corp. plc | 10.40 | 6.24 | — | — | — | |
| GE Aerospace | -0.22 | 1.93 | — | — | — | |
| Honeywell International Inc. | 13.67 | 11.49 | — | — | — | |
| Lockheed Martin Corp. | 9.95 | 11.12 | — | — | — | |
| RTX Corp. | 3.66 | -0.22 | — | — | — | |
| Fixed Charge Coverage, Sector | ||||||
| Capital Goods | 3.06 | 1.66 | — | — | — | |
| Fixed Charge Coverage, Industry | ||||||
| Industrials | 3.44 | 1.12 | — | — | — | |
Based on: 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), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Fixed charge coverage = Earnings before fixed charges and tax ÷ Fixed charges
= 746,911 ÷ 55,385 = 13.49
2 Click competitor name to see calculations.
- Earnings before fixed charges and tax
- The earnings before fixed charges and tax exhibit a consistent upward trend over the analyzed period. Starting at 258,200 thousand US dollars in 2017, this figure increased steadily each year, reaching 746,911 thousand US dollars by the end of 2021. Notably, the most substantial growth occurred between 2020 and 2021, indicating a significant enhancement in operational profitability or income before deduction of fixed charges and taxes.
- Fixed charges
- Fixed charges remained relatively stable throughout the five years, ranging narrowly from approximately 51,191 thousand US dollars in 2019 to 55,385 thousand US dollars in 2021. This stability suggests that the company's obligations related to fixed financial costs, such as interest and lease payments, did not undergo significant fluctuations despite the increasing earnings across the same period.
- Fixed charge coverage ratio
- The fixed charge coverage ratio demonstrated a marked improvement, rising from 4.83 in 2017 to 13.49 in 2021. This indicates an enhanced ability to cover fixed financial obligations through earnings before fixed charges and taxes. The ratio’s increase reflects stronger financial health and improved risk coverage, likely stemming from the substantial rise in earnings while fixed charges remained stable.