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)
Johnson Controls International plc, solvency ratios
Based on: 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30).
- Debt to Equity
- The debt to equity ratio experienced a decline from 0.52 in 2018 to a low of 0.37 in 2019, indicating a reduction in leverage relative to equity. Following this, the ratio gradually increased, reaching 0.55 in 2022, before slightly decreasing to 0.53 in 2023. When including operating lease liabilities, the ratio shows a similar pattern but with generally higher values, rising from 0.52 in 2018 to 0.62 in 2023, reflecting the additional financial obligations from leases.
- Debt to Capital
- The debt to capital ratio mirrored the overall trend seen in debt to equity, declining from 0.34 in 2018 to 0.27 in 2019, then increasing steadily to 0.36 in 2022 and slightly reducing to 0.35 in 2023. Including operating lease liabilities adjusts this ratio upwards, following the same trajectory but yielding higher ratios, moving from 0.34 in 2018 to 0.38 in 2023.
- Debt to Assets
- Debt to assets decreased from 0.23 in 2018 to 0.17 in 2019, then moderately increased to 0.21 by 2022, remaining stable at 0.21 in 2023. When operating lease liabilities are included, the ratio stays consistently higher, rising from 0.23 in 2018 to 0.24 in 2023, indicating a slight increase in total debt relative to total assets over the period.
- Financial Leverage
- Financial leverage showed a decreasing trend from 2.31 in 2018 to 2.14 in 2019, followed by an upward trend peaking at 2.59 in 2022 before a slight reduction to 2.55 in 2023. This trend suggests an increasing reliance on debt financing relative to equity over the recent years.
- Interest Coverage
- Interest coverage ratios display more volatility. The ratio dropped significantly from 7.64 in 2018 to 4.15 in 2019, improved slightly to 4.76 in 2020, and then surged to 12.94 in 2021, indicating a much stronger ability to cover interest expenses during that year. However, it declined to 8.6 in 2022 and further to 6.57 in 2023, pointing towards a reduction in the buffer for interest payments more recently.
- Fixed Charge Coverage
- Fixed charge coverage also showed fluctuations, decreasing from 4.21 in 2018 to 2.34 in 2019 and remaining relatively stable at 2.41 in 2020. This was followed by a notable improvement to 5.33 in 2021, similar to the pattern in interest coverage. Subsequently, it decreased to 3.96 in 2022 and further to 3.47 in 2023, indicating a weakening capacity to cover fixed financial obligations over the past two years.
- Overall Analysis
- The financial leverage and debt ratios suggest a general trend of moderating leverage in 2019, followed by a gradual increase through 2022, with a slight reduction in 2023. The inclusion of operating lease liabilities consistently raises leverage metrics, underscoring the importance of considering these obligations in assessing financial risk. The coverage ratios exhibit significant volatility, peaking in 2021, which may reflect an exceptional operating performance or reduced interest expenses in that year, but have declined in subsequent years, indicating a tightening ability to meet interest and fixed charges. These trends highlight a cautious but increasing leverage posture combined with variable earnings capacity to service debt obligations.
Debt Ratios
Coverage Ratios
Debt to Equity
Johnson Controls International plc, debt to equity calculation, comparison to benchmarks
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | Sep 30, 2018 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Short-term debt | 385) | 669) | 8) | 31) | 10) | 1,315) | |
| Current portion of long-term debt | 645) | 865) | 226) | 262) | 501) | 26) | |
| Long-term debt, less current portion | 7,818) | 7,426) | 7,506) | 7,526) | 6,708) | 9,654) | |
| Total debt | 8,848) | 8,960) | 7,740) | 7,819) | 7,219) | 10,995) | |
| Shareholders’ equity attributable to Johnson Controls | 16,545) | 16,268) | 17,562) | 17,447) | 19,766) | 21,164) | |
| Solvency Ratio | |||||||
| Debt to equity1 | 0.53 | 0.55 | 0.44 | 0.45 | 0.37 | 0.52 | |
| Benchmarks | |||||||
| Debt to Equity, Competitors2 | |||||||
| Boeing Co. | — | — | — | — | — | — | |
| Caterpillar Inc. | 1.94 | 2.33 | 2.29 | 2.42 | — | — | |
| Eaton Corp. plc | 0.49 | 0.51 | 0.52 | 0.54 | — | — | |
| GE Aerospace | 0.77 | 0.89 | 0.87 | 2.11 | — | — | |
| Honeywell International Inc. | 1.29 | 1.17 | 1.06 | 1.28 | — | — | |
| Lockheed Martin Corp. | 2.55 | 1.68 | 1.07 | 2.02 | — | — | |
| RTX Corp. | 0.73 | 0.44 | 0.43 | 0.44 | — | — | |
| Debt to Equity, Sector | |||||||
| Capital Goods | 1.54 | 1.33 | 1.26 | 1.75 | — | — | |
| Debt to Equity, Industry | |||||||
| Industrials | 1.52 | 1.42 | 1.37 | 1.82 | — | — | |
Based on: 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30).
1 2023 Calculation
Debt to equity = Total debt ÷ Shareholders’ equity attributable to Johnson Controls
= 8,848 ÷ 16,545 = 0.53
2 Click competitor name to see calculations.
The analysis of the financial data reveals several key trends regarding the company's debt and equity position over the six-year period ending September 30, 2023.
- Total Debt
- The total debt experienced a significant decrease from US$10,995 million in 2018 to US$7,219 million in 2019, representing a substantial reduction in leverage. Following this, total debt displayed a modest upward trend, increasing to US$7,819 million in 2020 and slightly decreasing to US$7,740 million in 2021. The debt then rose again to US$8,960 million in 2022, before marginally declining to US$8,848 million in 2023. Overall, despite fluctuations, total debt in 2023 remained considerably lower than the 2018 level.
- Shareholders' Equity Attributable to Johnson Controls
- The shareholders' equity showed a declining trend throughout the period. Beginning at US$21,164 million in 2018, equity decreased progressively each year, falling to US$19,766 million in 2019 and continuing downward to US$17,447 million in 2020. This decline persisted, with equity values of US$17,562 million in 2021, US$16,268 million in 2022, and finally US$16,545 million in 2023. The consistent decrease in equity suggests potential challenges in retaining value or earnings over the analyzed timeframe.
- Debt to Equity Ratio
- The debt to equity ratio initially declined significantly from 0.52 in 2018 to 0.37 in 2019, reflecting the company's reduced leverage in relation to its equity base. Afterward, the ratio increased to 0.45 in 2020 and slightly decreased to 0.44 in 2021, followed by a notable rise to 0.55 in 2022. It then decreased modestly to 0.53 in 2023. This ratio movement aligns with the opposing trends in total debt and shareholders’ equity, indicating increased financial leverage in recent years compared to 2019, despite a reduction relative to 2018.
In summary, the data illustrates that the company initially undertook significant debt reduction while experiencing a gradual erosion of shareholders’ equity. Subsequently, total debt increased moderately, contributing to a higher debt to equity ratio in recent years. The overall trend underscores a shift towards a relatively more leveraged capital structure compared to 2019, while equity levels have steadily declined over the period analyzed.
Debt to Equity (including Operating Lease Liability)
Johnson Controls International plc, debt to equity (including operating lease liability) calculation, comparison to benchmarks
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | Sep 30, 2018 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Short-term debt | 385) | 669) | 8) | 31) | 10) | 1,315) | |
| Current portion of long-term debt | 645) | 865) | 226) | 262) | 501) | 26) | |
| Long-term debt, less current portion | 7,818) | 7,426) | 7,506) | 7,526) | 6,708) | 9,654) | |
| Total debt | 8,848) | 8,960) | 7,740) | 7,819) | 7,219) | 10,995) | |
| Operating lease liabilities, current (included in Other current liabilities) | 318) | 280) | 319) | 332) | —) | —) | |
| Operating lease liabilities, noncurrent (included in Other noncurrent liabilities) | 1,086) | 987) | 1,055) | 875) | —) | —) | |
| Total debt (including operating lease liability) | 10,252) | 10,227) | 9,114) | 9,026) | 7,219) | 10,995) | |
| Shareholders’ equity attributable to Johnson Controls | 16,545) | 16,268) | 17,562) | 17,447) | 19,766) | 21,164) | |
| Solvency Ratio | |||||||
| Debt to equity (including operating lease liability)1 | 0.62 | 0.63 | 0.52 | 0.52 | 0.37 | 0.52 | |
| Benchmarks | |||||||
| Debt to Equity (including Operating Lease Liability), Competitors2 | |||||||
| Boeing Co. | — | — | — | — | — | — | |
| Caterpillar Inc. | 1.97 | 2.37 | 2.33 | 2.46 | — | — | |
| Eaton Corp. plc | 0.52 | 0.54 | 0.55 | 0.57 | — | — | |
| GE Aerospace | 0.84 | 0.96 | 0.94 | 2.20 | — | — | |
| Honeywell International Inc. | 1.36 | 1.23 | 1.11 | 1.32 | — | — | |
| Lockheed Martin Corp. | 2.73 | 1.81 | 1.19 | 2.21 | — | — | |
| RTX Corp. | 0.76 | 0.47 | 0.46 | 0.47 | — | — | |
| Debt to Equity (including Operating Lease Liability), Sector | |||||||
| Capital Goods | 1.61 | 1.39 | 1.32 | 1.81 | — | — | |
| Debt to Equity (including Operating Lease Liability), Industry | |||||||
| Industrials | 1.71 | 1.59 | 1.54 | 2.00 | — | — | |
Based on: 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30).
1 2023 Calculation
Debt to equity (including operating lease liability) = Total debt (including operating lease liability) ÷ Shareholders’ equity attributable to Johnson Controls
= 10,252 ÷ 16,545 = 0.62
2 Click competitor name to see calculations.
- Total Debt (including operating lease liability)
- The total debt exhibits a fluctuating pattern over the reported periods. Initially, there is a significant decline from 10,995 million USD in 2018 to 7,219 million USD in 2019, indicating a substantial reduction in leverage. Following this, total debt rises again in 2020 to 9,026 million USD and remains relatively stable around the 9,100 million USD mark in 2021. The debt continues to increase, reaching 10,227 million USD in 2022 and stabilizing marginally higher at 10,252 million USD in 2023. This trend suggests an initial deleveraging followed by a steady increase and stabilization of debt levels in more recent years.
- Shareholders’ Equity Attributable to Johnson Controls
- Shareholders’ equity shows a consistent downward trend throughout the periods. Starting from 21,164 million USD in 2018, equity decreases each year with minor fluctuations. By 2019, it falls to 19,766 million USD and continues to decline significantly to 17,447 million USD by 2020. The downward trend persists with equity at 17,562 million USD in 2021, dropping further to 16,268 million USD in 2022. A slight increase is observed in 2023 with equity rising to 16,545 million USD. Overall, this indicates a gradual erosion of equity value over the six years, with a modest stabilization or recovery in the latest year.
- Debt to Equity Ratio (including operating lease liability)
- The debt to equity ratio reflects the interplay between total debt and shareholders’ equity. It starts at 0.52 in 2018, then shows a marked decline to 0.37 in 2019, consistent with the significant reduction in total debt relative to equity. This low ratio is followed by a rebound to 0.52 in 2020, aligning with increased debt and reduced equity. The ratio remains stable at 0.52 in 2021, before rising to 0.63 in 2022, indicating increased leverage due to the combined effect of rising debt and falling equity. There is a slight decline to 0.62 in 2023, suggesting a marginal improvement in leverage but still higher than earlier years. The overall pattern shows that leverage has increased over time, particularly in the last three years, reflecting a higher reliance on debt financing relative to equity.
Debt to Capital
Johnson Controls International plc, debt to capital calculation, comparison to benchmarks
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | Sep 30, 2018 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Short-term debt | 385) | 669) | 8) | 31) | 10) | 1,315) | |
| Current portion of long-term debt | 645) | 865) | 226) | 262) | 501) | 26) | |
| Long-term debt, less current portion | 7,818) | 7,426) | 7,506) | 7,526) | 6,708) | 9,654) | |
| Total debt | 8,848) | 8,960) | 7,740) | 7,819) | 7,219) | 10,995) | |
| Shareholders’ equity attributable to Johnson Controls | 16,545) | 16,268) | 17,562) | 17,447) | 19,766) | 21,164) | |
| Total capital | 25,393) | 25,228) | 25,302) | 25,266) | 26,985) | 32,159) | |
| Solvency Ratio | |||||||
| Debt to capital1 | 0.35 | 0.36 | 0.31 | 0.31 | 0.27 | 0.34 | |
| Benchmarks | |||||||
| Debt to Capital, Competitors2 | |||||||
| Boeing Co. | 1.49 | 1.39 | 1.35 | 1.40 | — | — | |
| Caterpillar Inc. | 0.66 | 0.70 | 0.70 | 0.71 | — | — | |
| Eaton Corp. plc | 0.33 | 0.34 | 0.34 | 0.35 | — | — | |
| GE Aerospace | 0.43 | 0.47 | 0.47 | 0.68 | — | — | |
| Honeywell International Inc. | 0.56 | 0.54 | 0.51 | 0.56 | — | — | |
| Lockheed Martin Corp. | 0.72 | 0.63 | 0.52 | 0.67 | — | — | |
| RTX Corp. | 0.42 | 0.31 | 0.30 | 0.31 | — | — | |
| Debt to Capital, Sector | |||||||
| Capital Goods | 0.61 | 0.57 | 0.56 | 0.64 | — | — | |
| Debt to Capital, Industry | |||||||
| Industrials | 0.60 | 0.59 | 0.58 | 0.65 | — | — | |
Based on: 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30).
1 2023 Calculation
Debt to capital = Total debt ÷ Total capital
= 8,848 ÷ 25,393 = 0.35
2 Click competitor name to see calculations.
The analysis of the financial data over the six-year period reveals distinct trends in the company's debt levels, capital structure, and leverage ratio.
- Total Debt
- The total debt exhibited a significant decline from US$10,995 million in 2018 to US$7,219 million in 2019, reflecting a reduction in leverage or debt obligations. Following this decrease, the total debt saw a moderate increase over the subsequent years, rising to US$7,819 million in 2020, slightly decreasing to US$7,740 million in 2021, then increasing again to US$8,960 million in 2022 before a slight reduction to US$8,848 million in 2023. This suggests a period of relative stability with gradual increases in debt after the initial drop.
- Total Capital
- Total capital started at US$32,159 million in 2018 and consistently declined to a low of US$25,266 million in 2020. It then stabilized around the US$25,000 million mark through 2021 to 2023, with minor fluctuations. This downward trend in capital indicates either a contraction in the company’s equity and debt base combined or a strategic adjustment in capital structure.
- Debt to Capital Ratio
- The debt to capital ratio experienced a marked reduction from 0.34 in 2018 to 0.27 in 2019, aligning with the significant decrease in total debt. Subsequently, the ratio increased to 0.31 in 2020 and remained steady at this level in 2021. Starting in 2022, a notable rise occurred to 0.36, before slightly decreasing to 0.35 in 2023. This progression indicates a moderate increase in leverage relative to the company's capital base during the last two years, suggesting a shift towards higher financial risk or increased debt utilization.
Overall, the data portrays a company that initially reduced its debt substantially but then returned to a moderate increase in debt levels while maintaining a relatively stable capital base. The leverage ratio trends indicate cautious management of financial risk, though the increase in recent years warrants monitoring for potential impacts on financial stability.
Debt to Capital (including Operating Lease Liability)
Johnson Controls International plc, debt to capital (including operating lease liability) calculation, comparison to benchmarks
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | Sep 30, 2018 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Short-term debt | 385) | 669) | 8) | 31) | 10) | 1,315) | |
| Current portion of long-term debt | 645) | 865) | 226) | 262) | 501) | 26) | |
| Long-term debt, less current portion | 7,818) | 7,426) | 7,506) | 7,526) | 6,708) | 9,654) | |
| Total debt | 8,848) | 8,960) | 7,740) | 7,819) | 7,219) | 10,995) | |
| Operating lease liabilities, current (included in Other current liabilities) | 318) | 280) | 319) | 332) | —) | —) | |
| Operating lease liabilities, noncurrent (included in Other noncurrent liabilities) | 1,086) | 987) | 1,055) | 875) | —) | —) | |
| Total debt (including operating lease liability) | 10,252) | 10,227) | 9,114) | 9,026) | 7,219) | 10,995) | |
| Shareholders’ equity attributable to Johnson Controls | 16,545) | 16,268) | 17,562) | 17,447) | 19,766) | 21,164) | |
| Total capital (including operating lease liability) | 26,797) | 26,495) | 26,676) | 26,473) | 26,985) | 32,159) | |
| Solvency Ratio | |||||||
| Debt to capital (including operating lease liability)1 | 0.38 | 0.39 | 0.34 | 0.34 | 0.27 | 0.34 | |
| Benchmarks | |||||||
| Debt to Capital (including Operating Lease Liability), Competitors2 | |||||||
| Boeing Co. | 1.47 | 1.37 | 1.34 | 1.39 | — | — | |
| Caterpillar Inc. | 0.66 | 0.70 | 0.70 | 0.71 | — | — | |
| Eaton Corp. plc | 0.34 | 0.35 | 0.36 | 0.36 | — | — | |
| GE Aerospace | 0.46 | 0.49 | 0.49 | 0.69 | — | — | |
| Honeywell International Inc. | 0.58 | 0.55 | 0.53 | 0.57 | — | — | |
| Lockheed Martin Corp. | 0.73 | 0.64 | 0.54 | 0.69 | — | — | |
| RTX Corp. | 0.43 | 0.32 | 0.31 | 0.32 | — | — | |
| Debt to Capital (including Operating Lease Liability), Sector | |||||||
| Capital Goods | 0.62 | 0.58 | 0.57 | 0.64 | — | — | |
| Debt to Capital (including Operating Lease Liability), Industry | |||||||
| Industrials | 0.63 | 0.61 | 0.61 | 0.67 | — | — | |
Based on: 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30).
1 2023 Calculation
Debt to capital (including operating lease liability) = Total debt (including operating lease liability) ÷ Total capital (including operating lease liability)
= 10,252 ÷ 26,797 = 0.38
2 Click competitor name to see calculations.
- Total Debt (including operating lease liability)
- The total debt experienced a significant decrease from 10,995 million USD in 2018 to 7,219 million USD in 2019. However, from 2019 onwards, there was a general upward trend in total debt, increasing to 9,026 million USD in 2020, staying relatively stable in 2021 at 9,114 million USD, then rising again to 10,227 million USD in 2022 and 10,252 million USD in 2023. This suggests a period of debt reduction followed by a gradual increase and stabilization around the 10,000 million USD level in the later years.
- Total Capital (including operating lease liability)
- Total capital showed a decreasing trend from 32,159 million USD in 2018 to 26,985 million USD in 2019, with only minor fluctuations in subsequent years. The values mostly stabilized around the 26,400 to 26,800 million USD range from 2020 to 2023, indicating a contraction in capital base compared to 2018, but relative stability since 2019.
- Debt to Capital Ratio (including operating lease liability)
- The debt to capital ratio decreased notably from 0.34 in 2018 to a low of 0.27 in 2019, aligning with the decrease in total debt relative to capital during that period. Following 2019, the ratio increased to 0.34 in 2020 and 2021, before rising further to 0.39 in 2022, and then slightly declining to 0.38 in 2023. This increase in the ratio over recent years reflects a higher proportion of debt financing relative to total capital, suggesting a shift towards greater leverage.
Debt to Assets
Johnson Controls International plc, debt to assets calculation, comparison to benchmarks
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | Sep 30, 2018 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Short-term debt | 385) | 669) | 8) | 31) | 10) | 1,315) | |
| Current portion of long-term debt | 645) | 865) | 226) | 262) | 501) | 26) | |
| Long-term debt, less current portion | 7,818) | 7,426) | 7,506) | 7,526) | 6,708) | 9,654) | |
| Total debt | 8,848) | 8,960) | 7,740) | 7,819) | 7,219) | 10,995) | |
| Total assets | 42,242) | 42,158) | 41,890) | 40,815) | 42,287) | 48,797) | |
| Solvency Ratio | |||||||
| Debt to assets1 | 0.21 | 0.21 | 0.18 | 0.19 | 0.17 | 0.23 | |
| Benchmarks | |||||||
| Debt to Assets, Competitors2 | |||||||
| Boeing Co. | 0.38 | 0.42 | 0.42 | 0.42 | — | — | |
| Caterpillar Inc. | 0.43 | 0.45 | 0.46 | 0.47 | — | — | |
| Eaton Corp. plc | 0.24 | 0.25 | 0.25 | 0.25 | — | — | |
| GE Aerospace | 0.13 | 0.17 | 0.18 | 0.30 | — | — | |
| Honeywell International Inc. | 0.33 | 0.31 | 0.30 | 0.35 | — | — | |
| Lockheed Martin Corp. | 0.33 | 0.29 | 0.23 | 0.24 | — | — | |
| RTX Corp. | 0.27 | 0.20 | 0.20 | 0.20 | — | — | |
| Debt to Assets, Sector | |||||||
| Capital Goods | 0.29 | 0.28 | 0.28 | 0.32 | — | — | |
| Debt to Assets, Industry | |||||||
| Industrials | 0.31 | 0.31 | 0.30 | 0.33 | — | — | |
Based on: 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30).
1 2023 Calculation
Debt to assets = Total debt ÷ Total assets
= 8,848 ÷ 42,242 = 0.21
2 Click competitor name to see calculations.
- Total Debt
- The total debt experienced a significant decline from 10,995 million USD in 2018 to 7,219 million USD in 2019. Following this sharp decrease, the debt slightly increased to 7,819 million USD in 2020, then remained relatively stable with a marginal reduction in 2021 at 7,740 million USD. From 2021 to 2022, total debt rose again to 8,960 million USD before slightly decreasing to 8,848 million USD in 2023.
- Total Assets
- Total assets showed a downward trend from 48,797 million USD in 2018 to 42,287 million USD in 2019, continuing to decline to 40,815 million USD in 2020. From 2020 onwards, assets displayed a modest recovery, increasing to 41,890 million USD in 2021, 42,158 million USD in 2022, and stabilizing at 42,242 million USD in 2023.
- Debt to Assets Ratio
- The debt to assets ratio decreased significantly from 0.23 in 2018 to 0.17 in 2019, reflecting the substantial reduction in debt relative to assets. The ratio then increased modestly to 0.19 in 2020 and showed a slight decline to 0.18 in 2021. However, it rose again to 0.21 in both 2022 and 2023, indicating that the proportion of debt relative to assets has been increasing slightly in the most recent two years.
Debt to Assets (including Operating Lease Liability)
Johnson Controls International plc, debt to assets (including operating lease liability) calculation, comparison to benchmarks
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | Sep 30, 2018 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Short-term debt | 385) | 669) | 8) | 31) | 10) | 1,315) | |
| Current portion of long-term debt | 645) | 865) | 226) | 262) | 501) | 26) | |
| Long-term debt, less current portion | 7,818) | 7,426) | 7,506) | 7,526) | 6,708) | 9,654) | |
| Total debt | 8,848) | 8,960) | 7,740) | 7,819) | 7,219) | 10,995) | |
| Operating lease liabilities, current (included in Other current liabilities) | 318) | 280) | 319) | 332) | —) | —) | |
| Operating lease liabilities, noncurrent (included in Other noncurrent liabilities) | 1,086) | 987) | 1,055) | 875) | —) | —) | |
| Total debt (including operating lease liability) | 10,252) | 10,227) | 9,114) | 9,026) | 7,219) | 10,995) | |
| Total assets | 42,242) | 42,158) | 41,890) | 40,815) | 42,287) | 48,797) | |
| Solvency Ratio | |||||||
| Debt to assets (including operating lease liability)1 | 0.24 | 0.24 | 0.22 | 0.22 | 0.17 | 0.23 | |
| Benchmarks | |||||||
| Debt to Assets (including Operating Lease Liability), Competitors2 | |||||||
| Boeing Co. | 0.40 | 0.43 | 0.43 | 0.43 | — | — | |
| Caterpillar Inc. | 0.44 | 0.46 | 0.46 | 0.48 | — | — | |
| Eaton Corp. plc | 0.26 | 0.26 | 0.27 | 0.27 | — | — | |
| GE Aerospace | 0.14 | 0.19 | 0.19 | 0.31 | — | — | |
| Honeywell International Inc. | 0.35 | 0.33 | 0.32 | 0.36 | — | — | |
| Lockheed Martin Corp. | 0.36 | 0.32 | 0.26 | 0.26 | — | — | |
| RTX Corp. | 0.28 | 0.21 | 0.21 | 0.21 | — | — | |
| Debt to Assets (including Operating Lease Liability), Sector | |||||||
| Capital Goods | 0.30 | 0.30 | 0.29 | 0.33 | — | — | |
| Debt to Assets (including Operating Lease Liability), Industry | |||||||
| Industrials | 0.35 | 0.34 | 0.34 | 0.36 | — | — | |
Based on: 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30).
1 2023 Calculation
Debt to assets (including operating lease liability) = Total debt (including operating lease liability) ÷ Total assets
= 10,252 ÷ 42,242 = 0.24
2 Click competitor name to see calculations.
- Total debt (including operating lease liability)
- The total debt experienced a notable decline from 10,995 million USD in 2018 to 7,219 million USD in 2019, indicating a significant reduction in leverage or debt repayment during that period. However, from 2019 onwards, debt levels increased steadily, reaching 10,252 million USD by 2023. This trend suggests a period of increased borrowing or financing activities after the initial reduction.
- Total assets
- Total assets decreased markedly from 48,797 million USD in 2018 to 42,287 million USD in 2019, reflecting a substantial contraction in the asset base. Subsequently, asset levels remained relatively stable with minor fluctuations, ranging between approximately 40,815 million USD in 2020 and 42,242 million USD in 2023, indicating a period of asset stabilization following the earlier decline.
- Debt to assets (including operating lease liability)
- The debt to assets ratio declined from 0.23 in 2018 to 0.17 in 2019, aligning with the simultaneous reduction in total debt and assets, but with debt decreasing proportionally more. From 2019 to 2023, the ratio increased gradually, stabilizing around 0.24 in the last two years. This upward trend suggests a relative increase in leverage compared to the asset base, indicating a slight increase in financial risk or a greater reliance on debt financing.
Financial Leverage
Johnson Controls International plc, financial leverage calculation, comparison to benchmarks
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | Sep 30, 2018 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Total assets | 42,242) | 42,158) | 41,890) | 40,815) | 42,287) | 48,797) | |
| Shareholders’ equity attributable to Johnson Controls | 16,545) | 16,268) | 17,562) | 17,447) | 19,766) | 21,164) | |
| Solvency Ratio | |||||||
| Financial leverage1 | 2.55 | 2.59 | 2.39 | 2.34 | 2.14 | 2.31 | |
| Benchmarks | |||||||
| Financial Leverage, Competitors2 | |||||||
| Boeing Co. | — | — | — | — | — | — | |
| Caterpillar Inc. | 4.49 | 5.16 | 5.02 | 5.11 | — | — | |
| Eaton Corp. plc | 2.02 | 2.06 | 2.07 | 2.13 | — | — | |
| GE Aerospace | 5.96 | 5.16 | 4.93 | 7.13 | — | — | |
| Honeywell International Inc. | 3.88 | 3.73 | 3.47 | 3.68 | — | — | |
| Lockheed Martin Corp. | 7.67 | 5.71 | 4.64 | 8.43 | — | — | |
| RTX Corp. | 2.71 | 2.19 | 2.21 | 2.25 | — | — | |
| Financial Leverage, Sector | |||||||
| Capital Goods | 5.35 | 4.71 | 4.55 | 5.54 | — | — | |
| Financial Leverage, Industry | |||||||
| Industrials | 4.94 | 4.65 | 4.52 | 5.49 | — | — | |
Based on: 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30).
1 2023 Calculation
Financial leverage = Total assets ÷ Shareholders’ equity attributable to Johnson Controls
= 42,242 ÷ 16,545 = 2.55
2 Click competitor name to see calculations.
- Total Assets
- Total assets decreased from 48,797 million USD in 2018 to 40,815 million USD in 2020, reflecting a notable decline over the first three years. Subsequently, there was a modest recovery, with assets increasing gradually to 42,242 million USD by 2023. Overall, there is a downward trend from 2018 to 2023, though the latter years show stabilization and slight growth.
- Shareholders’ Equity Attributable to Johnson Controls
- Shareholders’ equity consistently declined over the entire period, falling from 21,164 million USD in 2018 to 16,545 million USD in 2023. This indicates a reduction of approximately 22% over six years. The most significant decreases occurred during the first three years, followed by smaller declines and relative stabilization after 2021.
- Financial Leverage Ratio
- The financial leverage ratio exhibited fluctuations with a general upward trend. It decreased from 2.31 in 2018 to 2.14 in 2019, then increased to 2.59 in 2022, indicating a higher level of debt relative to equity. A slight decrease to 2.55 occurred in 2023. The increasing leverage ratio suggests a growing reliance on debt financing relative to equity over the period, particularly pronounced from 2020 onward.
Interest Coverage
Johnson Controls International plc, interest coverage calculation, comparison to benchmarks
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | Sep 30, 2018 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Net income attributable to Johnson Controls | 1,849) | 1,532) | 1,637) | 631) | 5,674) | 2,162) | |
| Add: Net income attributable to noncontrolling interest | 184) | 191) | 233) | 164) | 213) | 221) | |
| Less: Income from discontinued operations, net of tax | —) | —) | 124) | —) | 4,598) | —) | |
| Add: Income tax expense | (323) | (13) | 868) | 108) | (233) | 518) | |
| Add: Interest expense, net of capitalized interest costs | 307) | 225) | 219) | 240) | 335) | 437) | |
| Earnings before interest and tax (EBIT) | 2,017) | 1,935) | 2,833) | 1,143) | 1,391) | 3,338) | |
| Solvency Ratio | |||||||
| Interest coverage1 | 6.57 | 8.60 | 12.94 | 4.76 | 4.15 | 7.64 | |
| Benchmarks | |||||||
| Interest Coverage, Competitors2 | |||||||
| Boeing Co. | 0.18 | -0.98 | -0.88 | -5.71 | — | — | |
| Caterpillar Inc. | 26.66 | 20.80 | 17.88 | 8.80 | — | — | |
| Eaton Corp. plc | 26.34 | 21.22 | 21.11 | 12.72 | — | — | |
| GE Aerospace | 10.12 | 1.88 | -0.96 | 2.59 | — | — | |
| Honeywell International Inc. | 10.36 | 16.41 | 22.09 | 17.75 | — | — | |
| Lockheed Martin Corp. | 9.84 | 11.72 | 14.27 | 14.93 | — | — | |
| RTX Corp. | 3.32 | 5.64 | 4.71 | -0.65 | — | — | |
| Interest Coverage, Sector | |||||||
| Capital Goods | 6.84 | 4.84 | 3.98 | 1.99 | — | — | |
| Interest Coverage, Industry | |||||||
| Industrials | 6.64 | 4.98 | 5.14 | 1.25 | — | — | |
Based on: 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30).
1 2023 Calculation
Interest coverage = EBIT ÷ Interest expense
= 2,017 ÷ 307 = 6.57
2 Click competitor name to see calculations.
The financial data reveals notable fluctuations in the company's earnings before interest and tax (EBIT) over the six-year period ending in 2023. Initially, EBIT experienced a sharp decline from 3,338 million USD in 2018 to 1,391 million USD in 2019 and further decreased to 1,143 million USD in 2020. This downward trend was followed by a significant recovery in 2021, with EBIT increasing to 2,833 million USD. However, the subsequent years saw a decline again to 1,935 million USD in 2022, and a slight increase to 2,017 million USD in 2023.
Interest expense net of capitalized interest costs generally trended downward from 437 million USD in 2018 to 219 million USD in 2021, indicating a reduction in financing costs or improved capital structure during this period. Nevertheless, interest expenses rose to 225 million USD in 2022 and further to 307 million USD in 2023, suggesting increased borrowing costs or higher debt levels in the most recent years.
The interest coverage ratio, which measures the company's ability to meet interest payments from EBIT, reflects these variations clearly. After a high coverage of 7.64 in 2018, the ratio dropped significantly to 4.15 in 2019, signaling reduced capability to cover interest expenses. A slight improvement to 4.76 occurred in 2020, followed by a sharp increase to 12.94 in 2021, driven by the rebound in EBIT and lower interest costs. The ratio then declined to 8.6 in 2022 and further to 6.57 in 2023, indicating a moderate but consistent decrease in interest coverage capacity in the last two years.
- EBIT Analysis
- Experienced substantial volatility with an initial sharp decline from 2018 to 2020, strong recovery in 2021, followed by a moderate decline and slight improvement through 2023.
- Interest Expense Trend
- Decreased steadily until 2021, then reversed to an upward trend in 2022 and 2023.
- Interest Coverage Ratio
- Mirrored fluctuations in EBIT and interest expenses, with a notable peak in 2021 and gradual decline thereafter, suggesting variable but resilient ability to cover interest obligations.
Overall, the company demonstrated resilient operational earnings capacity, with fluctuating profitability and varying interest expense levels impacting interest coverage. The 2021 financial results stood out as a period of strong EBIT performance combined with reduced interest burdens, enhancing financial stability. Recent years indicate a need to monitor interest expense growth and its influence on coverage ratios to maintain sound financial health.
Fixed Charge Coverage
Johnson Controls International plc, fixed charge coverage calculation, comparison to benchmarks
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | Sep 30, 2018 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Net income attributable to Johnson Controls | 1,849) | 1,532) | 1,637) | 631) | 5,674) | 2,162) | |
| Add: Net income attributable to noncontrolling interest | 184) | 191) | 233) | 164) | 213) | 221) | |
| Less: Income from discontinued operations, net of tax | —) | —) | 124) | —) | 4,598) | —) | |
| Add: Income tax expense | (323) | (13) | 868) | 108) | (233) | 518) | |
| Add: Interest expense, net of capitalized interest costs | 307) | 225) | 219) | 240) | 335) | 437) | |
| Earnings before interest and tax (EBIT) | 2,017) | 1,935) | 2,833) | 1,143) | 1,391) | 3,338) | |
| Add: Operating lease cost | 384) | 352) | 384) | 399) | 452) | 467) | |
| Earnings before fixed charges and tax | 2,401) | 2,287) | 3,217) | 1,542) | 1,843) | 3,805) | |
| Interest expense, net of capitalized interest costs | 307) | 225) | 219) | 240) | 335) | 437) | |
| Operating lease cost | 384) | 352) | 384) | 399) | 452) | 467) | |
| Fixed charges | 691) | 577) | 603) | 639) | 787) | 904) | |
| Solvency Ratio | |||||||
| Fixed charge coverage1 | 3.47 | 3.96 | 5.33 | 2.41 | 2.34 | 4.21 | |
| Benchmarks | |||||||
| Fixed Charge Coverage, Competitors2 | |||||||
| Boeing Co. | 0.31 | -0.70 | -0.64 | -4.75 | — | — | |
| Caterpillar Inc. | 19.73 | 14.92 | 12.73 | 6.58 | — | — | |
| Eaton Corp. plc | 11.90 | 10.01 | 10.40 | 6.24 | — | — | |
| GE Aerospace | 5.25 | 1.35 | -0.22 | 1.93 | — | — | |
| Honeywell International Inc. | 8.13 | 11.00 | 13.67 | 11.49 | — | — | |
| Lockheed Martin Corp. | 7.81 | 8.44 | 9.95 | 11.12 | — | — | |
| RTX Corp. | 2.81 | 4.40 | 3.66 | -0.22 | — | — | |
| Fixed Charge Coverage, Sector | |||||||
| Capital Goods | 5.14 | 3.61 | 3.06 | 1.66 | — | — | |
| Fixed Charge Coverage, Industry | |||||||
| Industrials | 4.32 | 3.30 | 3.44 | 1.12 | — | — | |
Based on: 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30).
1 2023 Calculation
Fixed charge coverage = Earnings before fixed charges and tax ÷ Fixed charges
= 2,401 ÷ 691 = 3.47
2 Click competitor name to see calculations.
Analysis of the financial data reveals several important trends and changes over the six-year period from 2018 to 2023.
- Earnings Before Fixed Charges and Tax (EBFCT)
- The earnings before fixed charges and tax exhibited notable fluctuations. Starting at 3805 million US dollars in 2018, there was a significant decline in 2019 to 1843 million, followed by a further drop in 2020 to 1542 million. However, a strong recovery occurred in 2021 when earnings increased sharply to 3217 million. This was succeeded by a decrease in 2022 to 2287 million, with a slight increase to 2401 million in 2023. Overall, the earnings show volatility but a partial rebound after the low point in 2020.
- Fixed Charges
- Fixed charges showed a general downward trend from 904 million US dollars in 2018 to 577 million in 2022, indicating a reduction in fixed financial obligations over this period. However, in 2023, fixed charges increased modestly to 691 million, reversing the prior decline. The overall trend suggests some improvement in managing fixed costs until 2022, with a slight pressure arising in the most recent year.
- Fixed Charge Coverage Ratio
- This ratio, which measures the ability to cover fixed charges from earnings before fixed charges and tax, reflected considerable variability. It was highest in 2018 at 4.21, then declined significantly to 2.34 in 2019 and remained relatively stable at 2.41 in 2020. A remarkable improvement occurred in 2021 with the ratio peaking at 5.33, coinciding with the recovery in earnings. Subsequently, the ratio decreased to 3.96 in 2022 and further to 3.47 in 2023. Despite the decline from the peak, the coverage ratio remains above the low levels of 2019 and 2020, indicating a better capacity to meet fixed charges in recent years.
In summary, the company experienced earnings volatility with a low in 2020 and a recovery phase afterward. Fixed charges were progressively reduced until 2022 but increased slightly in 2023. The fixed charge coverage ratio aligned with earnings fluctuations, reflecting improved coverage in the recovery period but with some moderation in recent years. These trends suggest a dynamic financial environment characterized by initial challenges, partial recovery, and evolving cost management.