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)
Kinder Morgan Inc., solvency ratios
Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
- Debt to equity
- The debt to equity ratio shows a consistent decline over the five-year period, decreasing from 1.23 in 2015 to 1.02 in 2019. This indicates a gradual reduction in leverage relative to shareholders' equity. When including operating lease liabilities, the ratio follows a similar downward trend, moving from 1.23 to 1.03, suggesting limited additional impact from lease liabilities on overall leverage.
- Debt to capital
- The debt to capital ratio also declines progressively, from 0.55 in 2015 to 0.50 in 2019. This trend is mirrored when including operating lease liabilities, which slightly adjusts the ratio upward to 0.51 in 2019, confirming consistent capital structure improvement through reduced reliance on debt financing.
- Debt to assets
- The ratio of debt to total assets exhibits a steady decrease from 0.51 in 2015 to 0.46 in 2019, reflecting a moderated use of debt relative to the asset base. Including operating lease liabilities results in a similar pattern, though the 2019 ratio remains slightly higher at 0.47, highlighting marginal impact of lease obligations on total indebtedness.
- Financial leverage
- The financial leverage ratio remains relatively stable throughout the period, fluctuating mildly around 2.3 before declining to 2.2 by the end of 2019. This suggests a modest reduction in the use of fixed financial obligations in driving asset financing relative to equity.
- Interest coverage
- The interest coverage ratio displays a clear upward trajectory, improving substantially from 1.38 in 2015 to 2.76 in 2019. This significant increase reflects enhanced ability to meet interest obligations from operating earnings, indicating improved profitability or reduced interest expenses over the analyzed period.
Debt Ratios
Coverage Ratios
Debt to Equity
Kinder Morgan Inc., debt to equity calculation, comparison to benchmarks
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current portion of debt | 2,477) | 3,388) | 2,828) | 2,696) | 821) | |
| Long-term debt, excluding current portion | 31,915) | 33,936) | 35,015) | 37,354) | 42,406) | |
| Total debt | 34,392) | 37,324) | 37,843) | 40,050) | 43,227) | |
| Total Kinder Morgan, Inc.’s stockholders’ equity | 33,742) | 33,678) | 33,636) | 34,431) | 35,119) | |
| Solvency Ratio | ||||||
| Debt to equity1 | 1.02 | 1.11 | 1.13 | 1.16 | 1.23 | |
| Benchmarks | ||||||
| Debt to Equity, Competitors2 | ||||||
| Chevron Corp. | — | — | — | — | — | |
| ConocoPhillips | — | — | — | — | — | |
| Exxon Mobil Corp. | — | — | — | — | — | |
| Occidental Petroleum Corp. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
1 2019 Calculation
Debt to equity = Total debt ÷ Total Kinder Morgan, Inc.’s stockholders’ equity
= 34,392 ÷ 33,742 = 1.02
2 Click competitor name to see calculations.
- Total Debt
- The total debt showed a consistent downward trend over the five-year period. Starting at $43,227 million in 2015, the debt decreased each year, reaching $34,392 million by the end of 2019. This represents a reduction of approximately 20.5%, indicating a strategic effort to deleverage the company’s financial obligations.
- Total Stockholders’ Equity
- The stockholders’ equity remained relatively stable during the period, with slight fluctuations. It started at $35,119 million in 2015 and experienced a minor decline until 2017, falling to $33,636 million. From 2018 onwards, equity stabilized around the $33,600 to $33,700 million mark, ending at $33,742 million in 2019. This stability suggests a consistent equity base without significant dilution or accumulation.
- Debt to Equity Ratio
- The debt to equity ratio steadily improved across the timeline, decreasing from 1.23 in 2015 to 1.02 in 2019. This indicates that the company reduced its reliance on debt financing relative to equity, moving towards a more balanced capital structure. The downward trend in this ratio aligns with the observed decrease in total debt and the stable equity base, reflecting enhanced financial strength and potentially lower financial risk.
Debt to Equity (including Operating Lease Liability)
Kinder Morgan Inc., debt to equity (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current portion of debt | 2,477) | 3,388) | 2,828) | 2,696) | 821) | |
| Long-term debt, excluding current portion | 31,915) | 33,936) | 35,015) | 37,354) | 42,406) | |
| Total debt | 34,392) | 37,324) | 37,843) | 40,050) | 43,227) | |
| Short-term operating lease liability (located in Other current liabilities) | 40) | —) | —) | —) | —) | |
| Long-term operating lease liability (located in Other long-term liabilities and deferred credits) | 289) | —) | —) | —) | —) | |
| Total debt (including operating lease liability) | 34,721) | 37,324) | 37,843) | 40,050) | 43,227) | |
| Total Kinder Morgan, Inc.’s stockholders’ equity | 33,742) | 33,678) | 33,636) | 34,431) | 35,119) | |
| Solvency Ratio | ||||||
| Debt to equity (including operating lease liability)1 | 1.03 | 1.11 | 1.13 | 1.16 | 1.23 | |
| Benchmarks | ||||||
| Debt to Equity (including Operating Lease Liability), Competitors2 | ||||||
| Chevron Corp. | — | — | — | — | — | |
| ConocoPhillips | — | — | — | — | — | |
| Exxon Mobil Corp. | — | — | — | — | — | |
| Occidental Petroleum Corp. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
1 2019 Calculation
Debt to equity (including operating lease liability) = Total debt (including operating lease liability) ÷ Total Kinder Morgan, Inc.’s stockholders’ equity
= 34,721 ÷ 33,742 = 1.03
2 Click competitor name to see calculations.
- Total Debt (Including Operating Lease Liability)
- The total debt of the company exhibited a consistent declining trend over the five-year period. Starting at 43,227 million US dollars in 2015, the debt decreased annually, reaching 34,721 million US dollars by the end of 2019. This represents a reduction of approximately 19.7% from the level observed in 2015, indicating the company's commitment to debt reduction or improved debt management.
- Total Stockholders’ Equity
- The stockholders’ equity remained relatively stable throughout the observed period. It started at 35,119 million US dollars in 2015 and showed minor fluctuations, slightly declining through 2017 but then stabilizing around 33,600 to 33,700 million US dollars in 2018 and 2019. The stability of equity suggests steady retained earnings or limited issuance/redemption of equity during this timeframe.
- Debt to Equity Ratio (Including Operating Lease Liability)
- The debt to equity ratio steadily decreased from 1.23 in 2015 to 1.03 in 2019, reflecting an improving leverage position. This consistent decrease aligns with the reduction in total debt while equity remained stable. The ratio nearing 1.0 suggests a more balanced capital structure with almost equal proportions of debt and equity financing, indicating potentially lower financial risk.
- Overall Observations
- The data indicates a deliberate and consistent effort to deleverage the company’s balance sheet, as seen in the reduction of total debt and improvement in the debt to equity ratio. Stability in equity positions the company on a sound financial footing. Such trends generally point towards a more conservative financial strategy, possibly enhancing the company’s creditworthiness and financial flexibility.
Debt to Capital
Kinder Morgan Inc., debt to capital calculation, comparison to benchmarks
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current portion of debt | 2,477) | 3,388) | 2,828) | 2,696) | 821) | |
| Long-term debt, excluding current portion | 31,915) | 33,936) | 35,015) | 37,354) | 42,406) | |
| Total debt | 34,392) | 37,324) | 37,843) | 40,050) | 43,227) | |
| Total Kinder Morgan, Inc.’s stockholders’ equity | 33,742) | 33,678) | 33,636) | 34,431) | 35,119) | |
| Total capital | 68,134) | 71,002) | 71,479) | 74,481) | 78,346) | |
| Solvency Ratio | ||||||
| Debt to capital1 | 0.50 | 0.53 | 0.53 | 0.54 | 0.55 | |
| Benchmarks | ||||||
| Debt to Capital, Competitors2 | ||||||
| Chevron Corp. | — | — | — | — | — | |
| ConocoPhillips | — | — | — | — | — | |
| Exxon Mobil Corp. | — | — | — | — | — | |
| Occidental Petroleum Corp. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
1 2019 Calculation
Debt to capital = Total debt ÷ Total capital
= 34,392 ÷ 68,134 = 0.50
2 Click competitor name to see calculations.
- Total Debt
- The total debt demonstrates a consistent downward trend from 2015 to 2019. Starting at 43,227 million US dollars in 2015, it declines steadily each year, reaching 34,392 million US dollars by the end of 2019. This indicates a reduction in the company’s leverage over the analyzed period.
- Total Capital
- Total capital also shows a gradual decrease, beginning at 78,346 million US dollars in 2015 and decreasing to 68,134 million US dollars by 2019. Although the decline is less steep compared to total debt, this trend suggests a contraction in the overall capital base over these years.
- Debt to Capital Ratio
- The debt to capital ratio decreases from 0.55 in 2015 to 0.50 in 2019. This steady decline illustrates an improving capital structure with a lower proportion of debt financing relative to total capital. A reduction in this ratio over time generally points to a strengthening financial position.
- Overall Insights
- The data reveals a consistent strategy of reducing debt while total capital also decreases moderately. The lowering debt to capital ratio suggests a deliberate effort to improve financial stability by diminishing reliance on debt. This trend may enhance creditworthiness and reduce financial risk for the company.
Debt to Capital (including Operating Lease Liability)
Kinder Morgan Inc., debt to capital (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current portion of debt | 2,477) | 3,388) | 2,828) | 2,696) | 821) | |
| Long-term debt, excluding current portion | 31,915) | 33,936) | 35,015) | 37,354) | 42,406) | |
| Total debt | 34,392) | 37,324) | 37,843) | 40,050) | 43,227) | |
| Short-term operating lease liability (located in Other current liabilities) | 40) | —) | —) | —) | —) | |
| Long-term operating lease liability (located in Other long-term liabilities and deferred credits) | 289) | —) | —) | —) | —) | |
| Total debt (including operating lease liability) | 34,721) | 37,324) | 37,843) | 40,050) | 43,227) | |
| Total Kinder Morgan, Inc.’s stockholders’ equity | 33,742) | 33,678) | 33,636) | 34,431) | 35,119) | |
| Total capital (including operating lease liability) | 68,463) | 71,002) | 71,479) | 74,481) | 78,346) | |
| Solvency Ratio | ||||||
| Debt to capital (including operating lease liability)1 | 0.51 | 0.53 | 0.53 | 0.54 | 0.55 | |
| Benchmarks | ||||||
| Debt to Capital (including Operating Lease Liability), Competitors2 | ||||||
| Chevron Corp. | — | — | — | — | — | |
| ConocoPhillips | — | — | — | — | — | |
| Exxon Mobil Corp. | — | — | — | — | — | |
| Occidental Petroleum Corp. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
1 2019 Calculation
Debt to capital (including operating lease liability) = Total debt (including operating lease liability) ÷ Total capital (including operating lease liability)
= 34,721 ÷ 68,463 = 0.51
2 Click competitor name to see calculations.
- Total Debt (including operating lease liability)
- The total debt exhibits a clear downward trend over the five-year period. Beginning at 43,227 million USD at the end of 2015, the debt consistently decreases each year, reaching 34,721 million USD by the end of 2019. This represents a reduction of approximately 19.7% over the timeframe, indicating a strategic effort towards deleveraging or debt repayment.
- Total Capital (including operating lease liability)
- Total capital also shows a steady decline over the period, starting at 78,346 million USD in 2015 and falling to 68,463 million USD in 2019. This downward movement signals a reduction of nearly 12.6%. Although capital decreases each year, the reduction rate is less pronounced compared to the decrease in total debt.
- Debt to Capital Ratio (including operating lease liability)
- The debt to capital ratio trends downward from 0.55 in 2015 to 0.51 in 2019. This gradual decline reflects an improved capital structure with a decreasing proportion of debt relative to total capital. The ratio's reduction suggests a relatively stronger equity base or lower overall leverage, which may imply enhanced financial stability or reduced financial risk during the period.
Debt to Assets
Kinder Morgan Inc., debt to assets calculation, comparison to benchmarks
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current portion of debt | 2,477) | 3,388) | 2,828) | 2,696) | 821) | |
| Long-term debt, excluding current portion | 31,915) | 33,936) | 35,015) | 37,354) | 42,406) | |
| Total debt | 34,392) | 37,324) | 37,843) | 40,050) | 43,227) | |
| Total assets | 74,157) | 78,866) | 79,055) | 80,305) | 84,104) | |
| Solvency Ratio | ||||||
| Debt to assets1 | 0.46 | 0.47 | 0.48 | 0.50 | 0.51 | |
| Benchmarks | ||||||
| Debt to Assets, Competitors2 | ||||||
| Chevron Corp. | — | — | — | — | — | |
| ConocoPhillips | — | — | — | — | — | |
| Exxon Mobil Corp. | — | — | — | — | — | |
| Occidental Petroleum Corp. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
1 2019 Calculation
Debt to assets = Total debt ÷ Total assets
= 34,392 ÷ 74,157 = 0.46
2 Click competitor name to see calculations.
- Total Debt
-
The total debt of the company has shown a consistent decreasing trend over the five-year period. Beginning at $43,227 million at the end of 2015, it gradually declined each year, reaching $34,392 million by the end of 2019. This represents a reduction of approximately 20.5% over the timeframe, indicating a concerted effort to reduce leverage or refinance debt.
- Total Assets
-
Total assets also exhibited a downward trend throughout the period, although the decline was less pronounced than that of total debt. The asset base decreased from $84,104 million in 2015 to $74,157 million in 2019, equating to an approximate 11.9% reduction. This suggests some contraction or divestment in asset holdings or adjustments in asset valuation during this period.
- Debt to Assets Ratio
-
The debt to assets ratio has steadily declined from 0.51 in 2015 to 0.46 in 2019, indicating an improvement in the company's capital structure. The ratio's gradual reduction implies the company has become less leveraged over time, as its total debt is decreasing at a faster pace relative to its total assets. This trend reflects an enhanced balance sheet strength and a potentially lower financial risk profile.
Debt to Assets (including Operating Lease Liability)
Kinder Morgan Inc., debt to assets (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current portion of debt | 2,477) | 3,388) | 2,828) | 2,696) | 821) | |
| Long-term debt, excluding current portion | 31,915) | 33,936) | 35,015) | 37,354) | 42,406) | |
| Total debt | 34,392) | 37,324) | 37,843) | 40,050) | 43,227) | |
| Short-term operating lease liability (located in Other current liabilities) | 40) | —) | —) | —) | —) | |
| Long-term operating lease liability (located in Other long-term liabilities and deferred credits) | 289) | —) | —) | —) | —) | |
| Total debt (including operating lease liability) | 34,721) | 37,324) | 37,843) | 40,050) | 43,227) | |
| Total assets | 74,157) | 78,866) | 79,055) | 80,305) | 84,104) | |
| Solvency Ratio | ||||||
| Debt to assets (including operating lease liability)1 | 0.47 | 0.47 | 0.48 | 0.50 | 0.51 | |
| Benchmarks | ||||||
| Debt to Assets (including Operating Lease Liability), Competitors2 | ||||||
| Chevron Corp. | — | — | — | — | — | |
| ConocoPhillips | — | — | — | — | — | |
| Exxon Mobil Corp. | — | — | — | — | — | |
| Occidental Petroleum Corp. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
1 2019 Calculation
Debt to assets (including operating lease liability) = Total debt (including operating lease liability) ÷ Total assets
= 34,721 ÷ 74,157 = 0.47
2 Click competitor name to see calculations.
- Total debt (including operating lease liability)
- There is a consistent downward trend in total debt over the period from 2015 to 2019. The debt decreased from $43,227 million in 2015 to $34,721 million in 2019, reflecting an overall reduction of approximately 20%. This indicates a strategic effort to deleverage the balance sheet over these years.
- Total assets
- Total assets also show a decreasing trend during the same period. Starting at $84,104 million in 2015, assets declined steadily to $74,157 million by the end of 2019. This reduction of around 12% suggests either asset disposals, depreciation, or a slowdown in asset acquisition activities.
- Debt to assets (including operating lease liability)
- The debt to assets ratio decreased gradually from 0.51 in 2015 to 0.47 in 2019. This ratio reflects the proportion of the company's assets that are financed by debt, and its decline signals an improvement in the company's leverage position. The reduction is consistent with the decreases observed in both total debt and total assets, but the slightly faster pace of debt reduction relative to assets highlights a move towards a more conservative capital structure.
- Overall analysis
- The combined analysis of these financial metrics points to a clear strategic direction towards debt reduction and risk minimization. The balance sheet has become less leveraged, contributing potentially to improved financial stability. While total assets have also decreased, the proportionally greater decline in debt suggests a focus on strengthening the company’s financial health rather than asset growth.
Financial Leverage
Kinder Morgan Inc., financial leverage calculation, comparison to benchmarks
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Total assets | 74,157) | 78,866) | 79,055) | 80,305) | 84,104) | |
| Total Kinder Morgan, Inc.’s stockholders’ equity | 33,742) | 33,678) | 33,636) | 34,431) | 35,119) | |
| Solvency Ratio | ||||||
| Financial leverage1 | 2.20 | 2.34 | 2.35 | 2.33 | 2.39 | |
| Benchmarks | ||||||
| Financial Leverage, Competitors2 | ||||||
| Chevron Corp. | — | — | — | — | — | |
| ConocoPhillips | — | — | — | — | — | |
| Exxon Mobil Corp. | — | — | — | — | — | |
| Occidental Petroleum Corp. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
1 2019 Calculation
Financial leverage = Total assets ÷ Total Kinder Morgan, Inc.’s stockholders’ equity
= 74,157 ÷ 33,742 = 2.20
2 Click competitor name to see calculations.
- Total Assets
- The total assets showed a general declining trend over the five-year period. Starting at 84,104 million US dollars at the end of 2015, the assets decreased each year reaching 74,157 million US dollars by the end of 2019. This indicates a reduction in the asset base of approximately 11.9% over the timeframe under review.
- Total Stockholders’ Equity
- The stockholders’ equity demonstrated relative stability throughout the period. It started at 35,119 million US dollars at the end of 2015, experienced minor fluctuations, declining slightly to 33,636 million in 2017, then recovering somewhat to 33,742 million by the end of 2019. Overall, equity remained nearly constant with a slight downward deviation but stabilizing towards the end.
- Financial Leverage
- Financial leverage ratios remained fairly stable, exhibiting a modest declining trend. Starting from a ratio of 2.39 in 2015, it slightly decreased and hovered around 2.33 to 2.34 in the middle years, before falling to 2.20 in 2019. This suggests a slight reduction in the reliance on debt financing relative to equity over the period, indicating a gradual improvement in the capital structure.
Interest Coverage
Kinder Morgan Inc., interest coverage calculation, comparison to benchmarks
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income attributable to Kinder Morgan, Inc. | 2,190) | 1,609) | 183) | 708) | 253) | |
| Add: Net income attributable to noncontrolling interest | 49) | 310) | 40) | 13) | (45) | |
| Add: Income tax expense | 926) | 587) | 1,938) | 917) | 564) | |
| Add: Interest, net | 1,801) | 1,917) | 1,832) | 1,806) | 2,051) | |
| Earnings before interest and tax (EBIT) | 4,966) | 4,423) | 3,993) | 3,444) | 2,823) | |
| Solvency Ratio | ||||||
| Interest coverage1 | 2.76 | 2.31 | 2.18 | 1.91 | 1.38 | |
| Benchmarks | ||||||
| Interest Coverage, Competitors2 | ||||||
| Chevron Corp. | — | — | — | — | — | |
| ConocoPhillips | — | — | — | — | — | |
| Exxon Mobil Corp. | — | — | — | — | — | |
| Occidental Petroleum Corp. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
1 2019 Calculation
Interest coverage = EBIT ÷ Interest expense
= 4,966 ÷ 1,801 = 2.76
2 Click competitor name to see calculations.
- Earnings before Interest and Tax (EBIT)
- The EBIT shows a consistent upward trend over the five-year period. Starting from US$2,823 million in 2015, it increased steadily each year, reaching US$4,966 million by the end of 2019. This represents a significant growth, indicating an improving operational performance and potential expansion or increased profitability.
- Interest, Net
- The net interest expense fluctuated over the years but remained relatively stable without a clear upward or downward trend. It was US$2,051 million in 2015, decreased to US$1,806 million in 2016, and then varied slightly in the subsequent years, ending at US$1,801 million in 2019. The overall pattern suggests some management of interest expenses or refinancing during the period, maintaining the costs at a consistent level despite the growth in EBIT.
- Interest Coverage Ratio
- The interest coverage ratio exhibited a continuous and notable improvement from 1.38 in 2015 to 2.76 in 2019. This ratio, which measures the company's ability to meet interest obligations from earnings, more than doubled over the period. The increase reflects stronger earnings relative to interest expenses, indicating enhanced financial stability and reduced risk from interest burden.
- Summary of Trends
- Overall, the financial indicators suggest a positive trajectory in operational profitability and capacity to service debt. The consistent growth in EBIT coupled with relatively stable interest expenses resulted in an increasing interest coverage ratio. These trends imply strengthening financial health and improved creditworthiness over the analyzed timeframe.