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)
Lockheed Martin Corp., solvency ratios
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
Over the five-year period examined, solvency ratios demonstrate a consistent trend of increasing debt utilization and decreasing coverage metrics. The company has taken on incrementally more debt relative to equity, capital, and assets. Simultaneously, its ability to cover interest and fixed charges has diminished, though remaining at acceptable levels.
- Debt Levels
- The Debt to Equity ratio increased substantially from 1.07 in 2021 to 3.23 in 2025, indicating a growing reliance on debt financing. This trend is mirrored in the Debt to Equity ratio including operating lease liability, rising from 1.19 to 3.39 over the same period. Debt to Capital ratios, both including and excluding operating lease liabilities, also show increases, moving from 0.52 and 0.54 respectively in 2021 to 0.76 and 0.77 in 2025. Debt to Assets ratios similarly increased, from 0.23 to 0.36 (excluding operating lease liability) and from 0.26 to 0.38 (including operating lease liability). These increases suggest a strategic shift towards greater financial leverage.
- Leverage
- Financial Leverage, a measure of the company’s asset base funded by equity, increased from 4.64 in 2021 to 8.90 in 2025. This confirms the increasing use of debt to finance assets and operations.
- Coverage Ratios
- Interest Coverage, representing the company’s ability to meet its interest obligations, declined from 14.27 in 2021 to 6.30 in 2025. While still above 1.0, this downward trend indicates a reduced margin of safety. Fixed Charge Coverage, encompassing both interest and other fixed obligations, followed a similar pattern, decreasing from 9.95 to 5.30 over the period. This suggests a weakening capacity to cover all fixed financial commitments.
The observed trends suggest a deliberate increase in financial leverage. While the company currently maintains adequate coverage of its fixed charges, the declining coverage ratios warrant continued monitoring to ensure long-term financial stability. The stabilization of Debt to Capital and Debt to Assets ratios in the final year suggests a potential plateauing of debt accumulation, but further observation is needed to confirm this.
Debt Ratios
Coverage Ratios
Debt to Equity
Lockheed Martin Corp., debt to equity calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current maturities of long-term debt | 1,168) | 643) | 168) | 118) | 6) | |
| Long-term debt, net, excluding current portion | 20,532) | 19,627) | 17,291) | 15,429) | 11,670) | |
| Total debt | 21,700) | 20,270) | 17,459) | 15,547) | 11,676) | |
| Stockholders’ equity | 6,721) | 6,333) | 6,835) | 9,266) | 10,959) | |
| Solvency Ratio | ||||||
| Debt to equity1 | 3.23 | 3.20 | 2.55 | 1.68 | 1.07 | |
| Benchmarks | ||||||
| Debt to Equity, Competitors2 | ||||||
| Boeing Co. | 9.92 | — | — | — | — | |
| Caterpillar Inc. | — | 1.97 | 1.94 | 2.33 | 2.29 | |
| Eaton Corp. plc | — | 0.50 | 0.49 | 0.51 | 0.52 | |
| GE Aerospace | 1.10 | 1.00 | 0.77 | 0.89 | 0.87 | |
| Honeywell International Inc. | — | 1.67 | 1.29 | 1.17 | 1.06 | |
| RTX Corp. | — | 0.69 | 0.73 | 0.44 | 0.43 | |
| Debt to Equity, Sector | ||||||
| Capital Goods | — | 1.54 | 1.54 | 1.33 | 1.26 | |
| Debt to Equity, Industry | ||||||
| Industrials | — | 1.39 | 1.52 | 1.42 | 1.37 | |
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Debt to equity = Total debt ÷ Stockholders’ equity
= 21,700 ÷ 6,721 = 3.23
2 Click competitor name to see calculations.
The Debt-to-Equity ratio exhibits a consistent upward trend over the five-year period. This indicates a growing reliance on debt financing relative to equity financing. The ratio increased from 1.07 in 2021 to 3.23 in 2025.
- Total Debt
- Total debt increased steadily throughout the period, rising from US$11,676 million in 2021 to US$21,700 million in 2025. The rate of increase appears to be accelerating, particularly between 2022 and 2024.
- Stockholders’ Equity
- Stockholders’ equity experienced a decline from 2021 to 2023, decreasing from US$10,959 million to US$6,835 million. While a slight recovery is observed in 2024 and 2025, reaching US$6,721 million, equity levels remain significantly lower than those recorded in 2021. This decrease in equity contributes substantially to the increasing Debt-to-Equity ratio.
- Debt-to-Equity Ratio Trend
- The Debt-to-Equity ratio more than tripled between 2021 and 2025. The most substantial increase occurred between 2022 and 2023, moving from 1.68 to 2.55. The increase from 2023 to 2024 was also significant, rising to 3.20. The ratio’s stabilization at 3.23 in 2025 suggests a potential plateauing of debt accumulation relative to equity, although at a considerably higher level than in prior years.
The combined effect of increasing debt and decreasing equity has resulted in a substantially more leveraged capital structure. Continued monitoring of these trends is warranted to assess potential financial risks associated with this increased leverage.
Debt to Equity (including Operating Lease Liability)
Lockheed Martin Corp., debt to equity (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current maturities of long-term debt | 1,168) | 643) | 168) | 118) | 6) | |
| Long-term debt, net, excluding current portion | 20,532) | 19,627) | 17,291) | 15,429) | 11,670) | |
| Total debt | 21,700) | 20,270) | 17,459) | 15,547) | 11,676) | |
| Current operating lease liabilities | 246) | 315) | 315) | 301) | 300) | |
| Noncurrent operating lease liabilities | 825) | 833) | 862) | 916) | 1,100) | |
| Total debt (including operating lease liability) | 22,771) | 21,418) | 18,636) | 16,764) | 13,076) | |
| Stockholders’ equity | 6,721) | 6,333) | 6,835) | 9,266) | 10,959) | |
| Solvency Ratio | ||||||
| Debt to equity (including operating lease liability)1 | 3.39 | 3.38 | 2.73 | 1.81 | 1.19 | |
| Benchmarks | ||||||
| Debt to Equity (including Operating Lease Liability), Competitors2 | ||||||
| Boeing Co. | 10.33 | — | — | — | — | |
| Caterpillar Inc. | — | 2.00 | 1.97 | 2.37 | 2.33 | |
| Eaton Corp. plc | — | 0.54 | 0.52 | 0.54 | 0.55 | |
| GE Aerospace | 1.15 | 1.05 | 0.84 | 0.96 | 0.94 | |
| Honeywell International Inc. | — | 1.73 | 1.36 | 1.23 | 1.11 | |
| RTX Corp. | — | 0.72 | 0.76 | 0.47 | 0.46 | |
| Debt to Equity (including Operating Lease Liability), Sector | ||||||
| Capital Goods | — | 1.60 | 1.61 | 1.39 | 1.32 | |
| Debt to Equity (including Operating Lease Liability), Industry | ||||||
| Industrials | — | 1.55 | 1.71 | 1.59 | 1.54 | |
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Debt to equity (including operating lease liability) = Total debt (including operating lease liability) ÷ Stockholders’ equity
= 22,771 ÷ 6,721 = 3.39
2 Click competitor name to see calculations.
The Debt to Equity ratio, including operating lease liability, demonstrates a clear increasing trend over the five-year period. Total debt has consistently risen, while stockholders’ equity has generally declined, contributing to this escalating ratio.
- Debt to Equity Ratio Trend
- The ratio began at 1.19 in 2021 and increased to 3.39 by 2025. This represents a more than threefold increase in the proportion of debt financing relative to equity financing over the observed timeframe.
- Total Debt
- Total debt, inclusive of operating lease liabilities, increased from US$13,076 million in 2021 to US$22,771 million in 2025. The rate of increase appears to have accelerated between 2022 and 2024, with increases of US$2,688 million and US$2,782 million respectively. The increase from 2024 to 2025 was comparatively smaller, at US$1,353 million.
- Stockholders’ Equity
- Stockholders’ equity experienced a decline from US$10,959 million in 2021 to US$6,721 million in 2025. A significant decrease occurred between 2021 and 2023, falling from US$10,959 million to US$6,835 million. Equity remained relatively stable between 2023 and 2025, fluctuating between US$6,333 million and US$6,721 million.
The combined effect of increasing debt and decreasing equity has resulted in a substantially more leveraged capital structure. The ratio’s stabilization between 2024 and 2025 suggests a potential slowing in the rate of leverage increase, although the overall level remains significantly higher than in 2021.
Debt to Capital
Lockheed Martin Corp., debt to capital calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current maturities of long-term debt | 1,168) | 643) | 168) | 118) | 6) | |
| Long-term debt, net, excluding current portion | 20,532) | 19,627) | 17,291) | 15,429) | 11,670) | |
| Total debt | 21,700) | 20,270) | 17,459) | 15,547) | 11,676) | |
| Stockholders’ equity | 6,721) | 6,333) | 6,835) | 9,266) | 10,959) | |
| Total capital | 28,421) | 26,603) | 24,294) | 24,813) | 22,635) | |
| Solvency Ratio | ||||||
| Debt to capital1 | 0.76 | 0.76 | 0.72 | 0.63 | 0.52 | |
| Benchmarks | ||||||
| Debt to Capital, Competitors2 | ||||||
| Boeing Co. | 0.91 | 1.08 | 1.49 | 1.39 | 1.35 | |
| Caterpillar Inc. | — | 0.66 | 0.66 | 0.70 | 0.70 | |
| Eaton Corp. plc | — | 0.33 | 0.33 | 0.34 | 0.34 | |
| GE Aerospace | 0.52 | 0.50 | 0.43 | 0.47 | 0.47 | |
| Honeywell International Inc. | — | 0.63 | 0.56 | 0.54 | 0.51 | |
| RTX Corp. | — | 0.41 | 0.42 | 0.31 | 0.30 | |
| Debt to Capital, Sector | ||||||
| Capital Goods | — | 0.61 | 0.61 | 0.57 | 0.56 | |
| Debt to Capital, Industry | ||||||
| Industrials | — | 0.58 | 0.60 | 0.59 | 0.58 | |
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Debt to capital = Total debt ÷ Total capital
= 21,700 ÷ 28,421 = 0.76
2 Click competitor name to see calculations.
The Debt to Capital ratio exhibits a clear increasing trend over the observed five-year period. Initially at 0.52 in 2021, the ratio steadily rose to 0.76 by 2024, where it remained constant through 2025.
- Debt to Capital Ratio Trend
- From 2021 to 2023, the ratio increased from 0.52 to 0.72, representing a 38.5% rise. This indicates a growing reliance on debt financing relative to capital. The rate of increase slowed between 2023 and 2024, with the ratio increasing to 0.76. The ratio stabilized at 0.76 in 2025, suggesting a potential plateau in the company’s leverage.
Total debt increased consistently throughout the period, rising from US$11,676 million in 2021 to US$21,700 million in 2025. Total capital also increased, but at a slower pace, contributing to the observed increase in the Debt to Capital ratio. While capital increased from US$22,635 million in 2021 to US$28,421 million in 2025, the growth in debt outpaced the growth in capital.
- Debt and Capital Components
- The absolute increase in total debt (US$10,024 million) was greater than the absolute increase in total capital (US$5,786 million) over the five-year period. This disparity is the primary driver of the increasing Debt to Capital ratio.
The stabilization of the Debt to Capital ratio at 0.76 in the final two years suggests a possible shift in financing strategy or a reaching of internal debt tolerance limits. Further investigation would be required to determine the underlying reasons for this stabilization.
Debt to Capital (including Operating Lease Liability)
Lockheed Martin Corp., debt to capital (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current maturities of long-term debt | 1,168) | 643) | 168) | 118) | 6) | |
| Long-term debt, net, excluding current portion | 20,532) | 19,627) | 17,291) | 15,429) | 11,670) | |
| Total debt | 21,700) | 20,270) | 17,459) | 15,547) | 11,676) | |
| Current operating lease liabilities | 246) | 315) | 315) | 301) | 300) | |
| Noncurrent operating lease liabilities | 825) | 833) | 862) | 916) | 1,100) | |
| Total debt (including operating lease liability) | 22,771) | 21,418) | 18,636) | 16,764) | 13,076) | |
| Stockholders’ equity | 6,721) | 6,333) | 6,835) | 9,266) | 10,959) | |
| Total capital (including operating lease liability) | 29,492) | 27,751) | 25,471) | 26,030) | 24,035) | |
| Solvency Ratio | ||||||
| Debt to capital (including operating lease liability)1 | 0.77 | 0.77 | 0.73 | 0.64 | 0.54 | |
| Benchmarks | ||||||
| Debt to Capital (including Operating Lease Liability), Competitors2 | ||||||
| Boeing Co. | 0.91 | 1.08 | 1.47 | 1.37 | 1.34 | |
| Caterpillar Inc. | — | 0.67 | 0.66 | 0.70 | 0.70 | |
| Eaton Corp. plc | — | 0.35 | 0.34 | 0.35 | 0.36 | |
| GE Aerospace | 0.54 | 0.51 | 0.46 | 0.49 | 0.49 | |
| Honeywell International Inc. | — | 0.63 | 0.58 | 0.55 | 0.53 | |
| RTX Corp. | — | 0.42 | 0.43 | 0.32 | 0.31 | |
| Debt to Capital (including Operating Lease Liability), Sector | ||||||
| Capital Goods | — | 0.62 | 0.62 | 0.58 | 0.57 | |
| Debt to Capital (including Operating Lease Liability), Industry | ||||||
| Industrials | — | 0.61 | 0.63 | 0.61 | 0.61 | |
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Debt to capital (including operating lease liability) = Total debt (including operating lease liability) ÷ Total capital (including operating lease liability)
= 22,771 ÷ 29,492 = 0.77
2 Click competitor name to see calculations.
The Debt to Capital ratio, inclusive of operating lease liabilities, demonstrates a clear increasing trend over the five-year period. Total debt and total capital both increased in absolute terms, but debt grew at a faster rate, resulting in a higher ratio.
- Debt to Capital Ratio Trend
- The ratio began at 0.54 in 2021 and rose to 0.64 in 2022, representing a notable increase. This upward trajectory continued into 2023, reaching 0.73. Further increases were observed in 2024, with the ratio reaching 0.77. The ratio remained stable at 0.77 in 2025, suggesting a potential stabilization of the company’s leverage.
The consistent rise in the Debt to Capital ratio indicates an increasing reliance on debt financing relative to equity and other capital sources. While the ratio stabilized in the most recent year, the overall trend suggests a growing level of financial leverage. This could be due to strategic investments, acquisitions, or other factors influencing the capital structure.
- Total Debt Growth
- Total debt, including operating lease liability, increased from US$13,076 million in 2021 to US$22,771 million in 2025. This represents a cumulative increase of approximately 74.1% over the five-year period.
- Total Capital Growth
- Total capital, including operating lease liability, increased from US$24,035 million in 2021 to US$29,492 million in 2025. This represents a cumulative increase of approximately 22.7% over the five-year period. The slower growth of total capital compared to total debt is a key driver of the increasing Debt to Capital ratio.
The observed pattern suggests that the company has been funding a larger proportion of its growth through debt rather than equity or retained earnings. Continued monitoring of this ratio is recommended to assess the long-term sustainability of the capital structure and potential financial risks associated with increased leverage.
Debt to Assets
Lockheed Martin Corp., debt to assets calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current maturities of long-term debt | 1,168) | 643) | 168) | 118) | 6) | |
| Long-term debt, net, excluding current portion | 20,532) | 19,627) | 17,291) | 15,429) | 11,670) | |
| Total debt | 21,700) | 20,270) | 17,459) | 15,547) | 11,676) | |
| Total assets | 59,840) | 55,617) | 52,456) | 52,880) | 50,873) | |
| Solvency Ratio | ||||||
| Debt to assets1 | 0.36 | 0.36 | 0.33 | 0.29 | 0.23 | |
| Benchmarks | ||||||
| Debt to Assets, Competitors2 | ||||||
| Boeing Co. | 0.32 | 0.34 | 0.38 | 0.42 | 0.42 | |
| Caterpillar Inc. | — | 0.44 | 0.43 | 0.45 | 0.46 | |
| Eaton Corp. plc | — | 0.24 | 0.24 | 0.25 | 0.25 | |
| GE Aerospace | 0.16 | 0.16 | 0.13 | 0.17 | 0.18 | |
| Honeywell International Inc. | — | 0.41 | 0.33 | 0.31 | 0.30 | |
| RTX Corp. | — | 0.25 | 0.27 | 0.20 | 0.20 | |
| Debt to Assets, Sector | ||||||
| Capital Goods | — | 0.31 | 0.29 | 0.28 | 0.28 | |
| Debt to Assets, Industry | ||||||
| Industrials | — | 0.31 | 0.31 | 0.31 | 0.30 | |
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Debt to assets = Total debt ÷ Total assets
= 21,700 ÷ 59,840 = 0.36
2 Click competitor name to see calculations.
The Debt-to-Assets ratio exhibits a clear upward trend over the observed five-year period. Initially, the ratio stood at 0.23 in 2021, indicating that 23% of the company’s assets were financed by debt. Throughout the period, the ratio increased consistently, reaching 0.36 in both 2024 and 2025.
- Trend Analysis
- From 2021 to 2023, the Debt-to-Assets ratio increased from 0.23 to 0.33, representing a 43.5% rise. The rate of increase slowed somewhat between 2023 and 2024, with the ratio climbing to 0.36. The ratio remained stable at 0.36 in 2025, suggesting a potential stabilization of the company’s leverage.
- Debt and Asset Movements
- Total debt increased consistently throughout the period, rising from US$11,676 million in 2021 to US$21,700 million in 2025. Total assets also increased, but at a slower pace, moving from US$50,873 million in 2021 to US$59,840 million in 2025. The comparatively faster growth of debt relative to assets is the primary driver of the increasing Debt-to-Assets ratio.
The consistent increase in the Debt-to-Assets ratio suggests a growing reliance on debt financing. While a moderate level of debt can be beneficial, the observed trend warrants continued monitoring to assess potential risks associated with higher leverage. The stabilization of the ratio in the final two years of the period may indicate a deliberate effort to control debt levels or a natural consequence of asset growth catching up to debt accumulation.
Debt to Assets (including Operating Lease Liability)
Lockheed Martin Corp., debt to assets (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current maturities of long-term debt | 1,168) | 643) | 168) | 118) | 6) | |
| Long-term debt, net, excluding current portion | 20,532) | 19,627) | 17,291) | 15,429) | 11,670) | |
| Total debt | 21,700) | 20,270) | 17,459) | 15,547) | 11,676) | |
| Current operating lease liabilities | 246) | 315) | 315) | 301) | 300) | |
| Noncurrent operating lease liabilities | 825) | 833) | 862) | 916) | 1,100) | |
| Total debt (including operating lease liability) | 22,771) | 21,418) | 18,636) | 16,764) | 13,076) | |
| Total assets | 59,840) | 55,617) | 52,456) | 52,880) | 50,873) | |
| Solvency Ratio | ||||||
| Debt to assets (including operating lease liability)1 | 0.38 | 0.39 | 0.36 | 0.32 | 0.26 | |
| Benchmarks | ||||||
| Debt to Assets (including Operating Lease Liability), Competitors2 | ||||||
| Boeing Co. | 0.34 | 0.36 | 0.40 | 0.43 | 0.43 | |
| Caterpillar Inc. | — | 0.44 | 0.44 | 0.46 | 0.46 | |
| Eaton Corp. plc | — | 0.26 | 0.26 | 0.26 | 0.27 | |
| GE Aerospace | 0.17 | 0.17 | 0.14 | 0.19 | 0.19 | |
| Honeywell International Inc. | — | 0.43 | 0.35 | 0.33 | 0.32 | |
| RTX Corp. | — | 0.27 | 0.28 | 0.21 | 0.21 | |
| Debt to Assets (including Operating Lease Liability), Sector | ||||||
| Capital Goods | — | 0.32 | 0.30 | 0.30 | 0.29 | |
| Debt to Assets (including Operating Lease Liability), Industry | ||||||
| Industrials | — | 0.35 | 0.35 | 0.34 | 0.34 | |
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Debt to assets (including operating lease liability) = Total debt (including operating lease liability) ÷ Total assets
= 22,771 ÷ 59,840 = 0.38
2 Click competitor name to see calculations.
The Debt to Assets ratio, including operating lease liability, demonstrates a clear increasing trend over the observed five-year period. Total debt has consistently risen, while total assets have exhibited more moderate growth, resulting in a higher proportion of assets financed by debt.
- Overall Trend
- From 2021 to 2024, the ratio increased from 0.26 to 0.39, representing a 50% increase. While the increase slowed in 2025, the ratio remained elevated at 0.38, indicating a sustained reliance on debt financing.
- Debt Growth
- Total debt increased from US$13,076 million in 2021 to US$22,771 million in 2025, representing a 74% increase over the period. The largest single-year increase occurred between 2022 and 2023, with an addition of US$1,872 million. Growth slowed in 2024 and 2025, but remained positive.
- Asset Growth
- Total assets grew from US$50,873 million in 2021 to US$59,840 million in 2025, a 17.6% increase. Asset growth was most pronounced between 2023 and 2024, with an increase of US$3,161 million. The rate of asset growth has not kept pace with the growth in total debt.
- Ratio Stabilization
- The rate of increase in the Debt to Assets ratio decelerated in 2025. The ratio moved from 0.39 in 2024 to 0.38 in 2025, suggesting a potential stabilization, although the ratio remains at a relatively high level compared to 2021.
The observed trend suggests an increasing financial leverage. Continued monitoring of this ratio is recommended to assess potential risks associated with higher debt levels and the company’s ability to meet its financial obligations.
Financial Leverage
Lockheed Martin Corp., financial leverage calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Total assets | 59,840) | 55,617) | 52,456) | 52,880) | 50,873) | |
| Stockholders’ equity | 6,721) | 6,333) | 6,835) | 9,266) | 10,959) | |
| Solvency Ratio | ||||||
| Financial leverage1 | 8.90 | 8.78 | 7.67 | 5.71 | 4.64 | |
| Benchmarks | ||||||
| Financial Leverage, Competitors2 | ||||||
| Boeing Co. | 30.85 | — | — | — | — | |
| Caterpillar Inc. | — | 4.50 | 4.49 | 5.16 | 5.02 | |
| Eaton Corp. plc | — | 2.08 | 2.02 | 2.06 | 2.07 | |
| GE Aerospace | 6.97 | 6.37 | 5.96 | 5.16 | 4.93 | |
| Honeywell International Inc. | — | 4.04 | 3.88 | 3.73 | 3.47 | |
| RTX Corp. | — | 2.71 | 2.71 | 2.19 | 2.21 | |
| Financial Leverage, Sector | ||||||
| Capital Goods | — | 5.05 | 5.35 | 4.71 | 4.55 | |
| Financial Leverage, Industry | ||||||
| Industrials | — | 4.49 | 4.94 | 4.65 | 4.52 | |
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Financial leverage = Total assets ÷ Stockholders’ equity
= 59,840 ÷ 6,721 = 8.90
2 Click competitor name to see calculations.
An increasing trend in financial leverage is observed over the five-year period. Simultaneously, stockholders’ equity has generally decreased, while total assets have shown an overall increase. These movements suggest a growing reliance on debt financing relative to equity.
- Financial Leverage
- The financial leverage ratio exhibits a consistent upward trajectory, rising from 4.64 in 2021 to 8.90 in 2025. This indicates that the company is utilizing a greater proportion of debt to finance its assets. The most significant increase occurred between 2022 and 2023, jumping from 5.71 to 7.67. While the rate of increase slows between 2023 and 2025, the ratio continues to climb, suggesting continued reliance on debt.
- Stockholders’ Equity
- Stockholders’ equity experienced a decline from US$10,959 million in 2021 to US$6,333 million in 2023. A slight recovery is noted in 2025, with equity reaching US$6,721 million, but remains significantly below the 2021 level. This decrease in equity contributes to the increasing financial leverage, as the proportion of debt financing rises with a smaller equity base.
- Total Assets
- Total assets increased from US$50,873 million in 2021 to US$59,840 million in 2025. This growth in assets, coupled with the declining stockholders’ equity, further exacerbates the increase in financial leverage. The increase in assets does not appear to be funded by a corresponding increase in equity, leading to greater debt dependence.
The combined effect of increasing assets, decreasing equity, and a rising financial leverage ratio suggests a shift in the company’s capital structure towards greater financial risk. Continued monitoring of these trends is warranted to assess the long-term sustainability of this financing approach.
Interest Coverage
Lockheed Martin Corp., interest coverage calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net earnings | 5,017) | 5,336) | 6,920) | 5,732) | 6,315) | |
| Add: Income tax expense | 905) | 884) | 1,178) | 948) | 1,235) | |
| Add: Interest expense | 1,118) | 1,036) | 916) | 623) | 569) | |
| Earnings before interest and tax (EBIT) | 7,040) | 7,256) | 9,014) | 7,303) | 8,119) | |
| Solvency Ratio | ||||||
| Interest coverage1 | 6.30 | 7.00 | 9.84 | 11.72 | 14.27 | |
| Benchmarks | ||||||
| Interest Coverage, Competitors2 | ||||||
| Boeing Co. | 1.95 | -3.48 | 0.18 | -0.98 | -0.88 | |
| Caterpillar Inc. | — | 27.21 | 26.66 | 20.80 | 17.88 | |
| Eaton Corp. plc | — | 36.12 | 26.34 | 21.22 | 21.11 | |
| GE Aerospace | 12.86 | 8.73 | 10.12 | 1.88 | -0.96 | |
| Honeywell International Inc. | — | 7.82 | 10.36 | 16.41 | 22.09 | |
| RTX Corp. | — | 4.14 | 3.32 | 5.64 | 4.71 | |
| Interest Coverage, Sector | ||||||
| Capital Goods | — | 4.92 | 6.84 | 4.84 | 3.98 | |
| Interest Coverage, Industry | ||||||
| Industrials | — | 5.79 | 6.64 | 4.98 | 5.14 | |
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Interest coverage = EBIT ÷ Interest expense
= 7,040 ÷ 1,118 = 6.30
2 Click competitor name to see calculations.
The interest coverage ratio demonstrates a consistent decline over the five-year period. While remaining above a level generally considered acceptable by creditors, the trend warrants attention. Earnings before interest and tax (EBIT) fluctuated, while interest expense steadily increased, contributing to the observed decrease in the ratio.
- Earnings Before Interest and Tax (EBIT)
- EBIT began at US$8,119 million in 2021, decreased to US$7,303 million in 2022, then increased significantly to US$9,014 million in 2023. A subsequent decline to US$7,256 million in 2024 and a further decrease to US$7,040 million in 2025 was observed. This volatility in EBIT contributes to the fluctuations in the interest coverage ratio.
- Interest Expense
- Interest expense exhibited a consistent upward trend throughout the period. Starting at US$569 million in 2021, it rose to US$623 million in 2022, US$916 million in 2023, US$1,036 million in 2024, and reached US$1,118 million in 2025. This steady increase in interest expense places downward pressure on the interest coverage ratio.
- Interest Coverage Ratio
- The interest coverage ratio decreased from 14.27 in 2021 to 11.72 in 2022, then to 9.84 in 2023. The decline continued to 7.00 in 2024 and further to 6.30 in 2025. This indicates a diminishing ability to meet interest obligations from current earnings. While the ratio remains positive, the rate of decline suggests a potential weakening in the company’s ability to service its debt.
The combination of fluctuating earnings and rising interest expense has resulted in a notable reduction in the interest coverage ratio. Continued monitoring of these trends is recommended to assess any potential risks to financial stability.
Fixed Charge Coverage
Lockheed Martin Corp., fixed charge coverage calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net earnings | 5,017) | 5,336) | 6,920) | 5,732) | 6,315) | |
| Add: Income tax expense | 905) | 884) | 1,178) | 948) | 1,235) | |
| Add: Interest expense | 1,118) | 1,036) | 916) | 623) | 569) | |
| Earnings before interest and tax (EBIT) | 7,040) | 7,256) | 9,014) | 7,303) | 8,119) | |
| Add: Operating lease expense | 258) | 260) | 273) | 275) | 275) | |
| Earnings before fixed charges and tax | 7,298) | 7,516) | 9,287) | 7,578) | 8,394) | |
| Interest expense | 1,118) | 1,036) | 916) | 623) | 569) | |
| Operating lease expense | 258) | 260) | 273) | 275) | 275) | |
| Fixed charges | 1,376) | 1,296) | 1,189) | 898) | 844) | |
| Solvency Ratio | ||||||
| Fixed charge coverage1 | 5.30 | 5.80 | 7.81 | 8.44 | 9.95 | |
| Benchmarks | ||||||
| Fixed Charge Coverage, Competitors2 | ||||||
| Boeing Co. | 1.58 | -2.69 | 0.31 | -0.70 | -0.64 | |
| Caterpillar Inc. | — | 20.25 | 19.73 | 14.92 | 12.73 | |
| Eaton Corp. plc | — | 13.79 | 11.90 | 10.01 | 10.40 | |
| GE Aerospace | 9.14 | 6.19 | 5.25 | 1.35 | -0.22 | |
| Honeywell International Inc. | — | 6.44 | 8.13 | 11.00 | 13.67 | |
| RTX Corp. | — | 3.59 | 2.81 | 4.40 | 3.66 | |
| Fixed Charge Coverage, Sector | ||||||
| Capital Goods | — | 4.03 | 5.14 | 3.61 | 3.06 | |
| Fixed Charge Coverage, Industry | ||||||
| Industrials | — | 3.96 | 4.32 | 3.30 | 3.44 | |
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Fixed charge coverage = Earnings before fixed charges and tax ÷ Fixed charges
= 7,298 ÷ 1,376 = 5.30
2 Click competitor name to see calculations.
The fixed charge coverage ratio demonstrates a consistent decline over the five-year period. While initially strong, the ability to meet fixed obligations from earnings has diminished progressively. This trend warrants further investigation into the underlying factors contributing to the decreasing coverage.
- Earnings Before Fixed Charges and Tax
- Earnings before fixed charges and tax experienced a decrease from US$8,394 million in 2021 to US$7,578 million in 2022. A subsequent increase to US$9,287 million was observed in 2023, but earnings then declined again, reaching US$7,298 million in 2025. This volatility in earnings contributes to the overall trend in fixed charge coverage.
- Fixed Charges
- Fixed charges exhibited a steady increase throughout the period, rising from US$844 million in 2021 to US$1,376 million in 2025. This consistent growth in fixed obligations, coupled with the fluctuating earnings, exerts downward pressure on the fixed charge coverage ratio.
- Fixed Charge Coverage Ratio
- The fixed charge coverage ratio began at 9.95 in 2021, indicating a robust capacity to cover fixed charges. However, the ratio decreased to 8.44 in 2022, and continued to fall to 7.81 in 2023. The rate of decline accelerated in the later years, with the ratio reaching 5.80 in 2024 and further decreasing to 5.30 in 2025. This represents a significant reduction in the cushion available to meet fixed financial obligations.
The combined effect of increasing fixed charges and fluctuating earnings has resulted in a substantial weakening of the fixed charge coverage ratio. While the ratio remains above 1.0 in all observed periods, the downward trajectory suggests a potential increase in financial risk if these trends continue.