Johnson Controls International plc (NYSE:JCI)

Debt to equity

The debt to equity ratio displays some fluctuations over the analyzed periods. Starting at 0.61 at the end of 2017, it declined gradually to a low of 0.36 by mid-2019, indicating a reduction in relative debt compared to equity. From this point onward, the ratio trended upward variably, reaching 0.68 by the first quarter of 2024. This increase suggests that the company has progressively increased its reliance on debt financing relative to equity in recent quarters.

Debt to capital

This ratio mirrors the behavior of the debt to equity ratio but on a different scale. It decreased from 0.38 at the end of 2017 to a low of 0.26 in the mid-2019 period, suggesting an improvement in capital structure with less dependency on debt. However, since mid-2019, the ratio has increased again to 0.41 in early 2024, indicating a higher proportion of debt within the company's total capital.

Debt to assets

The debt to assets ratio remained relatively stable compared to other leverage measures. It started at 0.25 at the end of 2017, dropped modestly to 0.17 in mid-2019, and then rose to approximately 0.25 again by early 2024. This pattern suggests that the company’s total debt relative to its asset base decreased notably up to mid-2019 but has since returned to previous levels, implying an increasing use of debt in asset financing.

Financial leverage

Financial leverage, indicating total assets relative to equity, decreased from 2.42 at the end of 2017 to 2.12 in mid-2019, showing a trend of reduced leverage. After mid-2019, it increased steadily, reaching 2.78 by early 2024. This upward trend corresponds with increasing debt ratios and suggests a growing magnification of equity through liabilities, potentially increasing financial risk but possibly leveraging growth opportunities.

The financial data indicates notable fluctuations in total debt and shareholders’ equity over the reported periods, with corresponding variations in the debt to equity ratio. The analysis focuses on trends and patterns from late 2017 through early 2024.

Total Debt

Total debt initially showed a general declining trend from December 2017 (US$ 12,500 million) through September 2019 (US$ 7,219 million). This represents a significant reduction, almost halving the total debt in this interval. However, from the end of 2019, total debt exhibited volatility with increases and decreases, peaking again at US$ 10,723 million in March 2024 after some fluctuations. This suggests periods of increased borrowing or refinancing activities interspersed with debt repayments.

Shareholders' Equity

Shareholders’ equity saw a gradual decline from US$ 20,535 million in December 2017 to a level around US$ 15,988 million by June 2022. Equity remained relatively stable afterward, oscillating near the US$ 16,000 million mark with minor fluctuations through March 2024, ultimately resting at US$ 15,658 million. The gradual decrease over the years indicates pressure on retained earnings or changes due to other comprehensive income or equity transactions.

Debt to Equity Ratio

The debt to equity ratio mirrored some of the inverse movements between total debt and equity. It declined from 0.61 in December 2017 to a low of around 0.36-0.37 by mid to late 2019, reflecting reduced debt levels relative to shareholders’ equity. Subsequently, the ratio increased markedly, reaching a high of 0.68 by March 2024, indicating an increased leverage position. This rising leverage could be due to the incremental buildup of debt or declining equity, or a combination of both factors.

In summary, the company undertook a significant deleveraging from 2017 through 2019 but reversed this trend in subsequent years by increasing its debt levels while equity was decreasing or stabilizing at lower levels. The increased leverage towards the end of the period suggests a shift in capital structure strategy that may reflect financing needs or strategic investments requiring debt funding. Monitoring this ratio going forward will be important for assessing financial risk and capital management effectiveness.

Total Debt

The total debt experienced fluctuations over the periods observed. Beginning at approximately 12,500 million US dollars at the end of 2017, the value initially declined through 2018 and into early 2019, reaching a notable low point around mid-2019. From that low, total debt showed a recovery starting late 2019, with an upward trajectory evident through 2020 and into 2022. There was some volatility observed toward the end of 2022 and early 2023, with values rising and falling, but generally, the total debt remained elevated relative to the mid-2019 lows. As of the latest period in early 2024, debt returned to a level similar to the higher values seen earlier, close to 10,700 million US dollars.

Total Capital

Total capital displayed a gradual decline from late 2017 through 2019, dropping from over 33,000 million US dollars to a low just above 25,000 million during early 2020. After this period, total capital exhibited modest gains, peaking slightly above 26,000 million in early 2023. However, the trend toward the latter part of the data shows some downward pressure once again, with a decline back toward the mid-25,000 million range by early 2024. This indicates some instability and varying capital levels across the years, with a general tendency toward a lower capital base compared to the beginning of the period.

Debt to Capital Ratio

The debt to capital ratio followed a pattern consistent with the movements in total debt and capital. Initially close to 0.38 at the end of 2017, the ratio decreased to around 0.26–0.28 during 2019, reflecting the period of reduced debt and relatively stable capital. From 2020 onward, the ratio gradually increased, indicating a higher proportion of debt relative to capital. By early 2022, the ratio had risen back to approximately 0.37 and continued its upward trend, reaching 0.41 by the first quarter of 2024. This escalation suggests a growing reliance on debt financing in the company’s capital structure over the recent years.

Summary of Trends

Overall, the data reveal a dynamic financial profile with variable leverage. The reduction in total debt and capital early in the timeline corresponded with a more conservative debt to capital ratio. However, the later increase in debt levels combined with relatively stable or slightly declining capital points to increased leverage and potentially higher financial risk. The ratio’s steady rise signals a shift toward greater debt dependency, which merits consideration in the context of the company’s overall financial strategy and market conditions.

The financial data reveals several notable trends in key balance sheet metrics over the analyzed periods. Total debt exhibits considerable fluctuations, initially decreasing from 12,500 million USD at the end of 2017 to a lower level close to 7,219 million USD by the third quarter of 2019. This represents a significant reduction in debt over nearly two years. Subsequently, total debt levels show an upward trajectory from late 2019 onward, reaching a peak around 10,723 million USD in the first quarter of 2024.

Total assets, on the other hand, show a gradual decline from approximately 49,767 million USD at the end of 2017 to a base near 40,402 million USD by the first quarter of 2020. After this low point, assets begin to recover, with a general upward trend that culminates near 43,457 million USD by early 2024. The fluctuation in total assets indicates possible divestitures or write-downs prior to 2020, followed by a period of asset accretion or revaluation.

The debt to assets ratio mirrors these dynamics closely. Starting at 0.25 at the end of 2017, the ratio declines steadily to a low of approximately 0.17 during the mid to late 2019 period. This reduction reflects the combination of falling debt and assets during those quarters, with debt declining at a faster rate relative to assets. Following this trough, the ratio gradually climbs again to around 0.25 by the first quarter of 2024, consistent with the observed increase in total debt and recovery in asset base. This rising leverage ratio suggests a modest increase in financial risk over the latter part of the timeline.

Overall, the trends imply strategic debt reduction efforts up through 2019, followed by renewed borrowing or capital structure changes driving debt upward subsequently. The recovery of total assets after their downturn suggests stabilization or improvement in the asset portfolio. The debt to assets ratio indicates a careful balance between leveraging opportunities and risk management, with current levels returning roughly to those seen at the beginning of the analysis period.

Total Debt

Decreased significantly from the end of 2017 to late 2019, then increased steadily through early 2024.

Total Assets

Gradually declined until early 2020, followed by a recovery phase reaching mid-2023 and early 2024 levels near the initial period.

Debt to Assets Ratio

Decreased from 0.25 to about 0.17 by 2019, then rose back to around 0.25 by 2024, indicating changing leverage patterns over time.

The analysis of the quarterly financial data reveals several notable trends in the company's financial position and capital structure over the observed periods.

Total Assets

Total assets exhibited a decreasing trend from December 31, 2017, through the end of 2019, declining from approximately 49.8 billion US dollars to around 42.5 billion. This reduction was interrupted by fluctuations in the following years, where total assets remained relatively stable with minor variations, generally hovering between 41 and 43 billion. The data from 2023 to the first quarter of 2024 shows a slight increase, reaching approximately 43.5 billion at December 31, 2023, before a modest decline to 43.46 billion in March 31, 2024.

Shareholders' Equity Attributable to Johnson Controls

Shareholders' equity experienced a downward trend over the period analyzed. Starting at about 20.5 billion US dollars at the end of 2017, equity levels generally declined, especially noticeable from the end of 2018 through 2020, when equity fell to approximately 17.4 billion. The equity remained relatively stable yet subdued around the 16 to 18 billion range through 2021 and early 2022, before declining further to roughly 15.7 billion in March 31, 2024. This consistent downward trend suggests either sustained equity reduction or distribution exceeding retained earnings.

Financial Leverage

The financial leverage ratio measured as total assets to shareholders’ equity shows a general increasing trend, indicating a growing reliance on debt relative to equity financing. Starting at around 2.42 in December 2017, the ratio fell slightly in 2018 but subsequently increased steadily, peaking several times above 2.6 in 2022 and early 2023. By March 31, 2024, the ratio reached approximately 2.78, the highest in the period analyzed. This increasing leverage suggests an increased financial risk profile by higher debt usage or declining equity base relative to assets.

Overall, the data indicate that the company has experienced a reduction in net asset base and equity over the observed timeline while increasing its financial leverage. This trend could reflect strategic financing decisions that involve greater debt utilization or underlying challenges affecting equity retention. The implications include elevated financial risk, which should be closely monitored in consideration of the company's capital structure and long-term financial health.