Analysis of Solvency Ratios
Quarterly Data
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 (quarterly data)
Based on: 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31).
- Debt to Equity Ratio
- The debt to equity ratio displays a clear downward trend from March 2017 through December 2021, falling from 2.5 to 0.44. This indicates a consistent reduction in reliance on debt relative to shareholders’ equity over the period. However, in the last two quarters (March 2022 and June 2022), the ratio increased slightly to 0.47 and 0.57, suggesting a minor reversal or temporary increase in leverage.
- Debt to Capital Ratio
- Similarly, the debt to capital ratio shows a steady decline from 0.71 at the start of 2017 to 0.31 by March 2022, indicating an improved capital structure with less debt as a proportion of total capital. The final quarter recorded a slight increase to 0.36, aligning with the uptick seen in the debt to equity ratio.
- Debt to Assets Ratio
- This ratio follows a comparable downward pattern, decreasing from 0.56 in early 2017 to a low of 0.20 by March 2022, reflecting a reduced debt load in relation to total assets. The most recent quarter shows an increase to 0.25, consistent with the other debt-related ratios’ slight reversal.
- Financial Leverage
- Financial leverage, defined by the ratio of total assets to equity, declines markedly from 4.44 in March 2017 to around 2.2-2.3 during 2021 and early 2022. This trend highlights an ongoing reduction in leverage and a strengthening equity base. The ratio remains relatively stable in the last few quarters, indicating consolidation of the company's capital structure.
- Interest Coverage Ratio
- The interest coverage ratio, which measures the company’s ability to meet interest obligations, is available from December 2017 onwards. It exhibits a strong upward trajectory, beginning at 5.8 and rising substantially to a peak of 22.99 in December 2021. This increase points to improved earnings or reduced interest expenses, enhancing financial stability. In the first two quarters of 2022, the ratio shows a slight decline to values around 20, but remains at a high and comfortable level.
- Summary Insights
- Over the analyzed period, the company demonstrates marked deleveraging and improved financial health, as evidenced by declining leverage and debt ratios alongside increasing interest coverage. The gradual reduction in debt relative to equity, capital, and assets suggests prudent balance sheet management. The significant improvement in interest coverage enhances creditworthiness and lowers financial risk. The minor uptick in leverage ratios in early 2022 may warrant monitoring but does not substantially alter the overall positive trend.
Debt Ratios
Coverage Ratios
Debt to Equity
Generac Holdings Inc., debt to equity calculation (quarterly data)
| Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||||||||||
| Short-term borrowings | 77,514) | 84,995) | 72,035) | 61,470) | 23,760) | 26,534) | 39,282) | 44,800) | 52,343) | 49,878) | 58,714) | 66,985) | 57,031) | 45,241) | 45,583) | 35,758) | 23,995) | 31,414) | 20,602) | 26,226) | 22,155) | 28,078) | |||||||
| Current portion of long-term borrowings and finance lease obligations | 3,674) | 4,279) | 5,930) | 4,945) | 4,233) | 4,053) | 4,147) | 3,421) | 3,032) | 4,261) | 2,383) | 2,554) | 2,456) | 2,203) | 1,977) | 51,886) | 1,372) | 1,593) | 1,572) | 104,682) | 7,700) | 14,515) | |||||||
| Long-term borrowings and finance lease obligations, excluding current portion | 1,286,499) | 1,002,685) | 902,091) | 843,426) | 842,607) | 841,516) | 841,764) | 841,341) | 841,116) | 839,380) | 837,767) | 884,315) | 883,476) | 882,483) | 876,396) | 859,625) | 908,066) | 907,459) | 906,548) | 908,101) | 1,007,235) | 1,007,898) | |||||||
| Total debt | 1,367,687) | 1,091,959) | 980,056) | 909,841) | 870,600) | 872,103) | 885,193) | 889,562) | 896,491) | 893,519) | 898,864) | 953,854) | 942,963) | 929,927) | 923,956) | 947,269) | 933,433) | 940,466) | 928,722) | 1,039,009) | 1,037,090) | 1,050,491) | |||||||
| Stockholders’ equity attributable to Generac Holdings Inc. | 2,418,879) | 2,308,134) | 2,213,774) | 1,782,072) | 1,655,900) | 1,524,730) | 1,390,293) | 1,230,192) | 1,097,730) | 1,023,642) | 1,032,382) | 934,264) | 865,940) | 804,420) | 760,549) | 698,163) | 617,012) | 570,068) | 559,552) | 473,147) | 427,922) | 420,467) | |||||||
| Solvency Ratio | |||||||||||||||||||||||||||||
| Debt to equity1 | 0.57 | 0.47 | 0.44 | 0.51 | 0.53 | 0.57 | 0.64 | 0.72 | 0.82 | 0.87 | 0.87 | 1.02 | 1.09 | 1.16 | 1.21 | 1.36 | 1.51 | 1.65 | 1.66 | 2.20 | 2.42 | 2.50 | |||||||
| Benchmarks | |||||||||||||||||||||||||||||
| Debt to Equity, Competitors2 | |||||||||||||||||||||||||||||
| Boeing Co. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Caterpillar Inc. | 2.35 | 2.20 | 2.29 | 2.21 | 2.23 | 2.30 | 2.42 | 2.55 | 2.81 | 2.61 | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Eaton Corp. plc | 0.59 | 0.58 | 0.52 | 0.57 | 0.79 | 0.68 | 0.54 | 0.57 | 0.58 | 0.59 | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| GE Aerospace | 0.94 | 0.86 | 0.87 | 1.68 | 1.90 | 2.12 | 2.11 | 2.39 | 2.43 | 2.41 | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Honeywell International Inc. | 1.09 | 1.05 | 1.06 | 1.19 | 1.19 | 1.19 | 1.28 | 1.23 | 1.22 | 0.91 | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Lockheed Martin Corp. | 1.02 | 1.16 | 1.07 | 1.21 | 1.87 | 1.93 | 2.02 | 2.56 | 3.38 | 3.68 | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| RTX Corp. | 0.45 | 0.43 | 0.43 | 0.44 | 0.44 | 0.44 | 0.44 | 0.48 | 0.49 | 1.18 | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
Based on: 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31).
1 Q2 2022 Calculation
Debt to equity = Total debt ÷ Stockholders’ equity attributable to Generac Holdings Inc.
= 1,367,687 ÷ 2,418,879 = 0.57
2 Click competitor name to see calculations.
- Total Debt
- The total debt level demonstrated a general declining trend from March 31, 2017, through December 31, 2020. Initially, the debt decreased from approximately $1,050 million in early 2017 to about $885 million by the end of 2020. However, beginning in 2021, the debt level reversed course and started rising, reaching roughly $1,368 million by June 30, 2022. This indicates an increase in leverage or borrowing activity during the latter periods of the dataset.
- Stockholders’ Equity
- Stockholders’ equity showed consistent growth throughout the observed periods. Starting from around $420 million in March 2017, equity steadily increased each quarter and accelerated after 2019. By June 2022, stockholders’ equity was approximately $2,419 million, reflecting a strong upward trend and suggesting increased retained earnings or capital contributions over time.
- Debt to Equity Ratio
- The debt to equity ratio exhibited a notable decline from 2.5 in March 2017 to a low of about 0.44 by March 2022, indicating a reduction in leverage relative to shareholders’ equity. This downward trend corresponds with the increase in equity coupled with a reduction in debt during most of the period. However, in the final two quarters observed (March and June 2022), the ratio increased to 0.47 and then 0.57, reflecting a recent rise in debt relative to equity.
- Summary of Financial Position Trends
- Overall, the data depict a company improving its financial strength by growing its equity base significantly while reducing its debt levels over several years. The decreasing debt to equity ratio until early 2022 highlights a strengthening balance sheet and potentially lower financial risk over that time. The recent increase in total debt and the uptick in the debt to equity ratio in 2022 suggest a shift towards greater leverage, which may warrant further examination regarding the reasons behind increased borrowing and the company’s strategic financial decisions.
Debt to Capital
Generac Holdings Inc., debt to capital calculation (quarterly data)
| Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||||||||||
| Short-term borrowings | 77,514) | 84,995) | 72,035) | 61,470) | 23,760) | 26,534) | 39,282) | 44,800) | 52,343) | 49,878) | 58,714) | 66,985) | 57,031) | 45,241) | 45,583) | 35,758) | 23,995) | 31,414) | 20,602) | 26,226) | 22,155) | 28,078) | |||||||
| Current portion of long-term borrowings and finance lease obligations | 3,674) | 4,279) | 5,930) | 4,945) | 4,233) | 4,053) | 4,147) | 3,421) | 3,032) | 4,261) | 2,383) | 2,554) | 2,456) | 2,203) | 1,977) | 51,886) | 1,372) | 1,593) | 1,572) | 104,682) | 7,700) | 14,515) | |||||||
| Long-term borrowings and finance lease obligations, excluding current portion | 1,286,499) | 1,002,685) | 902,091) | 843,426) | 842,607) | 841,516) | 841,764) | 841,341) | 841,116) | 839,380) | 837,767) | 884,315) | 883,476) | 882,483) | 876,396) | 859,625) | 908,066) | 907,459) | 906,548) | 908,101) | 1,007,235) | 1,007,898) | |||||||
| Total debt | 1,367,687) | 1,091,959) | 980,056) | 909,841) | 870,600) | 872,103) | 885,193) | 889,562) | 896,491) | 893,519) | 898,864) | 953,854) | 942,963) | 929,927) | 923,956) | 947,269) | 933,433) | 940,466) | 928,722) | 1,039,009) | 1,037,090) | 1,050,491) | |||||||
| Stockholders’ equity attributable to Generac Holdings Inc. | 2,418,879) | 2,308,134) | 2,213,774) | 1,782,072) | 1,655,900) | 1,524,730) | 1,390,293) | 1,230,192) | 1,097,730) | 1,023,642) | 1,032,382) | 934,264) | 865,940) | 804,420) | 760,549) | 698,163) | 617,012) | 570,068) | 559,552) | 473,147) | 427,922) | 420,467) | |||||||
| Total capital | 3,786,566) | 3,400,093) | 3,193,830) | 2,691,913) | 2,526,500) | 2,396,833) | 2,275,486) | 2,119,754) | 1,994,221) | 1,917,161) | 1,931,246) | 1,888,118) | 1,808,903) | 1,734,347) | 1,684,505) | 1,645,432) | 1,550,445) | 1,510,534) | 1,488,274) | 1,512,156) | 1,465,012) | 1,470,958) | |||||||
| Solvency Ratio | |||||||||||||||||||||||||||||
| Debt to capital1 | 0.36 | 0.32 | 0.31 | 0.34 | 0.34 | 0.36 | 0.39 | 0.42 | 0.45 | 0.47 | 0.47 | 0.51 | 0.52 | 0.54 | 0.55 | 0.58 | 0.60 | 0.62 | 0.62 | 0.69 | 0.71 | 0.71 | |||||||
| Benchmarks | |||||||||||||||||||||||||||||
| Debt to Capital, Competitors2 | |||||||||||||||||||||||||||||
| Boeing Co. | 1.35 | 1.36 | 1.35 | 1.30 | 1.36 | 1.40 | 1.40 | 1.24 | 1.23 | 1.33 | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Caterpillar Inc. | 0.70 | 0.69 | 0.70 | 0.69 | 0.69 | 0.70 | 0.71 | 0.72 | 0.74 | 0.72 | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Eaton Corp. plc | 0.37 | 0.37 | 0.34 | 0.36 | 0.44 | 0.40 | 0.35 | 0.36 | 0.37 | 0.37 | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| GE Aerospace | 0.48 | 0.46 | 0.47 | 0.63 | 0.65 | 0.68 | 0.68 | 0.70 | 0.71 | 0.71 | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Honeywell International Inc. | 0.52 | 0.51 | 0.51 | 0.54 | 0.54 | 0.54 | 0.56 | 0.55 | 0.55 | 0.48 | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Lockheed Martin Corp. | 0.50 | 0.54 | 0.52 | 0.55 | 0.65 | 0.66 | 0.67 | 0.72 | 0.77 | 0.79 | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| RTX Corp. | 0.31 | 0.30 | 0.30 | 0.30 | 0.31 | 0.31 | 0.31 | 0.32 | 0.33 | 0.54 | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
Based on: 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31).
1 Q2 2022 Calculation
Debt to capital = Total debt ÷ Total capital
= 1,367,687 ÷ 3,786,566 = 0.36
2 Click competitor name to see calculations.
- Total Debt
-
The total debt exhibits a generally stable to slightly declining trend from the first quarter of 2017 through the end of 2020, decreasing from approximately $1.05 billion to $885 million. This indicates a moderate reduction in leverage over the four-year span. Beginning in 2021, however, total debt rises noticeably, increasing from around $872 million in the first quarter to a significant $1.37 billion by mid-2022. This upward trajectory suggests a renewed reliance on debt financing or increased borrowing activities during this later period.
- Total Capital
-
Total capital shows a consistent growth pattern throughout the entire period. Starting near $1.47 billion in early 2017, it steadily rises each quarter, reaching approximately $3.79 billion by mid-2022. This upward trend reflects an overall expansion in the company's capital base by more than double over five years, indicating reinvestments, equity infusions, or accumulation of retained earnings alongside debt.
- Debt to Capital Ratio
-
The debt to capital ratio declines markedly from 0.71 in early 2017 to 0.31 by the first quarter of 2022. This consistent decrease implies that debt constitutes a smaller proportion of the total capital over time, signaling deleveraging or relatively stronger growth in equity and other capital components compared to debt obligations. Notably, after reaching the low point of 0.31, the ratio experiences a slight uptick to 0.36 by the mid-2022 quarter, mirroring the recent rise in total debt and suggesting a modest increase in financial leverage.
- Overall Analysis
-
The data reveals a strategic trend of gradually reducing debt reliance relative to the company’s overall capital through almost five years, enhancing capital structure robustness. The substantial growth in total capital indicates positive developments in asset base and possibly profitability or capital investments. The recent rise in both total debt and the debt to capital ratio in 2021–2022 suggests a shift, possibly to support expansion, acquisitions, or other capital-intensive activities, warranting monitoring of leverage levels going forward.
Debt to Assets
Generac Holdings Inc., debt to assets calculation (quarterly data)
| Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||||||||||
| Short-term borrowings | 77,514) | 84,995) | 72,035) | 61,470) | 23,760) | 26,534) | 39,282) | 44,800) | 52,343) | 49,878) | 58,714) | 66,985) | 57,031) | 45,241) | 45,583) | 35,758) | 23,995) | 31,414) | 20,602) | 26,226) | 22,155) | 28,078) | |||||||
| Current portion of long-term borrowings and finance lease obligations | 3,674) | 4,279) | 5,930) | 4,945) | 4,233) | 4,053) | 4,147) | 3,421) | 3,032) | 4,261) | 2,383) | 2,554) | 2,456) | 2,203) | 1,977) | 51,886) | 1,372) | 1,593) | 1,572) | 104,682) | 7,700) | 14,515) | |||||||
| Long-term borrowings and finance lease obligations, excluding current portion | 1,286,499) | 1,002,685) | 902,091) | 843,426) | 842,607) | 841,516) | 841,764) | 841,341) | 841,116) | 839,380) | 837,767) | 884,315) | 883,476) | 882,483) | 876,396) | 859,625) | 908,066) | 907,459) | 906,548) | 908,101) | 1,007,235) | 1,007,898) | |||||||
| Total debt | 1,367,687) | 1,091,959) | 980,056) | 909,841) | 870,600) | 872,103) | 885,193) | 889,562) | 896,491) | 893,519) | 898,864) | 953,854) | 942,963) | 929,927) | 923,956) | 947,269) | 933,433) | 940,466) | 928,722) | 1,039,009) | 1,037,090) | 1,050,491) | |||||||
| Total assets | 5,472,951) | 5,151,533) | 4,877,780) | 4,100,430) | 3,706,926) | 3,422,138) | 3,235,423) | 2,974,075) | 2,767,625) | 2,654,077) | 2,665,669) | 2,594,121) | 2,523,109) | 2,473,722) | 2,426,314) | 2,332,673) | 2,209,275) | 2,077,468) | 2,019,964) | 2,000,974) | 1,887,530) | 1,867,265) | |||||||
| Solvency Ratio | |||||||||||||||||||||||||||||
| Debt to assets1 | 0.25 | 0.21 | 0.20 | 0.22 | 0.23 | 0.25 | 0.27 | 0.30 | 0.32 | 0.34 | 0.34 | 0.37 | 0.37 | 0.38 | 0.38 | 0.41 | 0.42 | 0.45 | 0.46 | 0.52 | 0.55 | 0.56 | |||||||
| Benchmarks | |||||||||||||||||||||||||||||
| Debt to Assets, Competitors2 | |||||||||||||||||||||||||||||
| Boeing Co. | 0.42 | 0.43 | 0.42 | 0.43 | 0.43 | 0.42 | 0.42 | 0.38 | 0.38 | 0.27 | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Caterpillar Inc. | 0.46 | 0.46 | 0.46 | 0.46 | 0.46 | 0.47 | 0.47 | 0.50 | 0.50 | 0.49 | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Eaton Corp. plc | 0.28 | 0.27 | 0.25 | 0.27 | 0.33 | 0.30 | 0.25 | 0.26 | 0.27 | 0.27 | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| GE Aerospace | 0.18 | 0.18 | 0.18 | 0.27 | 0.27 | 0.29 | 0.30 | 0.31 | 0.32 | 0.32 | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Honeywell International Inc. | 0.31 | 0.31 | 0.30 | 0.33 | 0.33 | 0.34 | 0.35 | 0.35 | 0.35 | 0.28 | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Lockheed Martin Corp. | 0.22 | 0.23 | 0.23 | 0.23 | 0.23 | 0.24 | 0.24 | 0.25 | 0.26 | 0.26 | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| RTX Corp. | 0.20 | 0.20 | 0.20 | 0.20 | 0.20 | 0.20 | 0.20 | 0.20 | 0.20 | 0.33 | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
Based on: 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31).
1 Q2 2022 Calculation
Debt to assets = Total debt ÷ Total assets
= 1,367,687 ÷ 5,472,951 = 0.25
2 Click competitor name to see calculations.
The financial data exhibits notable trends in the company's leverage and asset growth over the periods analyzed.
- Total Debt
- Total debt remained relatively stable from March 2017 through December 2020, fluctuating mostly between approximately 885 million and 1.05 billion US dollars. Beginning in early 2021, total debt exhibited a rising trend, moving from roughly 872 million in March 2021 to approximately 1.37 billion by June 2022, indicating increased borrowing or liabilities during this interval.
- Total Assets
- Total assets demonstrated consistent growth across all periods. Starting from about 1.87 billion US dollars in March 2017, assets grew steadily each quarter, reaching approximately 5.47 billion by June 2022. This reflects significant expansion of the company’s asset base over the five-year timeframe.
- Debt to Assets Ratio
- The ratio of debt to assets shows a declining trend from March 2017 to March 2022, decreasing from 0.56 to 0.20. This suggests a reduction in leverage relative to the asset base, indicative of improved balance sheet strength or asset growth outpacing debt accumulation. However, the ratio increased slightly to 0.25 by June 2022, corresponding with the rise in total debt observed during this later period. Despite this uptick, the overall long-term trend reflects a move toward lower leverage.
Overall, the data indicates sustained asset growth and an initial deleveraging phase followed by modest re-leveraging in the most recent quarters. The company appears to have strengthened its asset position considerably while maintaining controlled levels of debt relative to assets for the majority of the period analyzed.
Financial Leverage
Generac Holdings Inc., financial leverage calculation (quarterly data)
| Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | ||||||||
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| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||||||||||
| Total assets | 5,472,951) | 5,151,533) | 4,877,780) | 4,100,430) | 3,706,926) | 3,422,138) | 3,235,423) | 2,974,075) | 2,767,625) | 2,654,077) | 2,665,669) | 2,594,121) | 2,523,109) | 2,473,722) | 2,426,314) | 2,332,673) | 2,209,275) | 2,077,468) | 2,019,964) | 2,000,974) | 1,887,530) | 1,867,265) | |||||||
| Stockholders’ equity attributable to Generac Holdings Inc. | 2,418,879) | 2,308,134) | 2,213,774) | 1,782,072) | 1,655,900) | 1,524,730) | 1,390,293) | 1,230,192) | 1,097,730) | 1,023,642) | 1,032,382) | 934,264) | 865,940) | 804,420) | 760,549) | 698,163) | 617,012) | 570,068) | 559,552) | 473,147) | 427,922) | 420,467) | |||||||
| Solvency Ratio | |||||||||||||||||||||||||||||
| Financial leverage1 | 2.26 | 2.23 | 2.20 | 2.30 | 2.24 | 2.24 | 2.33 | 2.42 | 2.52 | 2.59 | 2.58 | 2.78 | 2.91 | 3.08 | 3.19 | 3.34 | 3.58 | 3.64 | 3.61 | 4.23 | 4.41 | 4.44 | |||||||
| Benchmarks | |||||||||||||||||||||||||||||
| Financial Leverage, Competitors2 | |||||||||||||||||||||||||||||
| Boeing Co. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Caterpillar Inc. | 5.16 | 4.82 | 5.02 | 4.85 | 4.85 | 4.87 | 5.11 | 5.13 | 5.57 | 5.35 | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Eaton Corp. plc | 2.15 | 2.12 | 2.07 | 2.14 | 2.39 | 2.27 | 2.13 | 2.14 | 2.14 | 2.17 | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| GE Aerospace | 5.35 | 4.92 | 4.93 | 6.33 | 7.09 | 7.30 | 7.13 | 7.64 | 7.62 | 7.43 | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Honeywell International Inc. | 3.55 | 3.45 | 3.47 | 3.60 | 3.56 | 3.53 | 3.68 | 3.51 | 3.50 | 3.25 | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Lockheed Martin Corp. | 4.53 | 5.15 | 4.64 | 5.38 | 7.99 | 8.15 | 8.43 | 10.25 | 13.22 | 14.29 | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| RTX Corp. | 2.26 | 2.20 | 2.21 | 2.23 | 2.23 | 2.24 | 2.25 | 2.37 | 2.40 | 3.54 | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
Based on: 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31).
1 Q2 2022 Calculation
Financial leverage = Total assets ÷ Stockholders’ equity attributable to Generac Holdings Inc.
= 5,472,951 ÷ 2,418,879 = 2.26
2 Click competitor name to see calculations.
- Total assets
-
Total assets exhibited a consistent upward trend throughout the analyzed periods, beginning at approximately $1.87 billion in March 2017 and reaching around $5.47 billion by June 2022. The growth demonstrates a steady expansion of the asset base, with particularly notable acceleration observed from December 2020 onwards, indicating possible strategic investments or acquisitions driving asset increases during this later period.
- Stockholders’ equity attributable to Generac Holdings Inc.
-
Stockholders' equity also showed a continuous increase over time, rising from about $420 million in March 2017 to nearly $2.42 billion in June 2022. This growth in equity appears consistently robust, with marked acceleration beginning in late 2019 and continuing through 2021 and into 2022. This pattern suggests sustained profitability or retained earnings, and possibly capital infusions, contributing to fortified equity levels.
- Financial leverage
-
The ratio of financial leverage demonstrated a notable decline from a high of 4.44 in March 2017 down to approximately 2.26 by June 2022. This steady reduction indicates a deleveraging trend, where the company may be reducing its reliance on debt relative to equity. The downward slope of this ratio was most pronounced between 2017 and 2020, after which it stabilized somewhat, fluctuating slightly around the lower 2.2 to 2.3 range.
Overall, the decreasing financial leverage ratio alongside increasing total assets and equity reflects an improving capital structure with less risk exposure related to debt financing over the periods examined.
Interest Coverage
Generac Holdings Inc., interest coverage calculation (quarterly data)
| Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||||||||||
| Net income attributable to Generac Holdings Inc. | 156,359) | 113,858) | 142,895) | 131,570) | 127,036) | 148,993) | 125,001) | 114,970) | 66,145) | 44,460) | 69,614) | 75,574) | 61,958) | 44,861) | 75,575) | 75,776) | 53,261) | 33,645) | 81,175) | 39,709) | 25,660) | 12,842) | |||||||
| Add: Net income attributable to noncontrolling interest | 1,278) | 3,038) | 3,067) | 1,183) | 873) | 952) | (21) | 265) | (2,553) | (1,049) | 322) | (677) | (252) | 908) | 1,122) | 746) | 970) | 125) | 1,316) | 341) | 85) | 7) | |||||||
| Add: Income tax expense | 45,826) | 28,608) | 20,616) | 32,611) | 46,362) | 35,368) | 39,006) | 32,050) | 18,473) | 9,444) | 13,423) | 20,064) | 18,827) | 14,985) | 19,986) | 20,072) | 18,382) | 11,416) | 607) | 20,581) | 14,114) | 8,251) | |||||||
| Add: Interest expense | 10,235) | 9,554) | 9,529) | 7,980) | 7,721) | 7,723) | 7,910) | 8,096) | 7,932) | 9,053) | 10,116) | 10,704) | 10,452) | 10,272) | 10,017) | 9,824) | 11,002) | 10,113) | 10,314) | 10,672) | 10,893) | 10,788) | |||||||
| Earnings before interest and tax (EBIT) | 213,698) | 155,058) | 176,107) | 173,344) | 181,992) | 193,036) | 171,896) | 155,381) | 89,997) | 61,908) | 93,475) | 105,665) | 90,985) | 71,026) | 106,700) | 106,418) | 83,615) | 55,299) | 93,412) | 71,303) | 50,752) | 31,888) | |||||||
| Solvency Ratio | |||||||||||||||||||||||||||||
| Interest coverage1 | 19.26 | 19.74 | 21.99 | 22.99 | 22.33 | 19.28 | 14.52 | 11.39 | 9.29 | 8.73 | 8.69 | 9.03 | 9.25 | 8.94 | 8.60 | 8.21 | 7.21 | 6.45 | 5.80 | — | — | — | |||||||
| Benchmarks | |||||||||||||||||||||||||||||
| Interest Coverage, Competitors2 | |||||||||||||||||||||||||||||
| Boeing Co. | -1.40 | -1.31 | -0.88 | -2.29 | -2.55 | -4.26 | -5.71 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Caterpillar Inc. | 20.08 | 19.10 | 17.88 | 14.11 | 11.79 | 9.28 | 8.80 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Eaton Corp. plc | 24.31 | 22.57 | 21.11 | 20.08 | 15.71 | 11.87 | 12.72 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| GE Aerospace | -1.16 | -1.49 | -0.96 | 2.15 | 1.11 | 0.65 | 2.59 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Honeywell International Inc. | 20.60 | 21.35 | 22.09 | 20.98 | 18.89 | 16.79 | 17.75 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Lockheed Martin Corp. | 10.88 | 14.12 | 14.27 | 13.67 | 15.97 | 15.44 | 14.93 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
Based on: 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31).
1 Q2 2022 Calculation
Interest coverage
= (EBITQ2 2022
+ EBITQ1 2022
+ EBITQ4 2021
+ EBITQ3 2021)
÷ (Interest expenseQ2 2022
+ Interest expenseQ1 2022
+ Interest expenseQ4 2021
+ Interest expenseQ3 2021)
= (213,698 + 155,058 + 176,107 + 173,344)
÷ (10,235 + 9,554 + 9,529 + 7,980)
= 19.26
2 Click competitor name to see calculations.
The earnings before interest and tax (EBIT) for the analyzed period display a general upward trajectory with certain fluctuations. Starting from approximately $31.9 million in the first quarter of 2017, EBIT increased significantly reaching highs above $170 million by the end of 2020. The trend continues with EBIT values fluctuating around the range of $155 million to $213.7 million through mid-2022, indicating growth in operational profitability over the years despite some quarters showing a slight dip compared to previous peaks.
Interest expense remains relatively stable throughout the entire period, with values mostly oscillating between $7.7 million and $11 million. This steadiness in interest expenses implies controlled financing costs without major spikes or declines, even as EBIT grew substantially.
The interest coverage ratio, which measures the company’s ability to cover interest expenses with its EBIT, exhibits a strong and improving trend. This ratio starts at about 5.8 in early 2017 and rises consistently to reach figures above 19 from late 2020 onward, peaking at 22.99 in December 2021. Such an increase indicates enhanced financial flexibility and reduced risk related to interest obligations, likely contributed by strong EBIT growth and modest interest expenses.
- Earnings Before Interest and Tax (EBIT)
- Shows a marked improvement over the reporting period, with overall growth and seasonal fluctuations.
- From around $32 million in early 2017 to over $210 million by mid-2022.
- Some quarters demonstrate a decrease compared to previous peaks but generally trend upward.
- Interest Expense
- Remains fairly consistent, reflecting stable debt management and financing costs.
- Ranges approximately between $7.7 million and $11 million without significant volatility.
- Interest Coverage Ratio
- Improves substantially over time, indicating stronger ability to service debt from operating income.
- Increases from around 5.8 to nearly 23, showing enhanced financial health and reduced leverage risk.