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)
McKesson Corp., solvency ratios
Based on: 10-K (reporting date: 2016-03-31), 10-K (reporting date: 2015-03-31), 10-K (reporting date: 2014-03-31), 10-K (reporting date: 2013-03-31), 10-K (reporting date: 2012-03-31), 10-K (reporting date: 2011-03-31).
| Solvency ratio | Description | The company |
|---|---|---|
| Debt to equity ratio | A solvency ratio calculated as total debt divided by total shareholders’ equity. | McKesson Corp. debt to equity ratio improved from 2014 to 2015 and from 2015 to 2016. |
| Debt to capital ratio | A solvency ratio calculated as total debt divided by total debt plus shareholders’ equity. | McKesson Corp. debt to capital ratio improved from 2014 to 2015 and from 2015 to 2016. |
| Debt to assets ratio | A solvency ratio calculated as total debt divided by total assets. | McKesson Corp. debt to assets ratio improved from 2014 to 2015 and from 2015 to 2016. |
| Financial leverage ratio | A solvency ratio calculated as total assets divided by total shareholders’ equity. | McKesson Corp. financial leverage ratio increased from 2014 to 2015 but then slightly decreased from 2015 to 2016 not reaching 2014 level. |
| Solvency ratio | Description | The company |
|---|---|---|
| Interest coverage ratio | A solvency ratio calculated as EBIT divided by interest payments. | McKesson Corp. interest coverage ratio improved from 2014 to 2015 and from 2015 to 2016. |
| Fixed charge coverage ratio | A solvency ratio calculated as earnings before fixed charges and tax divided by fixed charges. | McKesson Corp. fixed charge coverage ratio deteriorated from 2014 to 2015 but then improved from 2015 to 2016 exceeding 2014 level. |
Debt to Equity
McKesson Corp., debt to equity calculation, comparison to benchmarks
| Mar 31, 2016 | Mar 31, 2015 | Mar 31, 2014 | Mar 31, 2013 | Mar 31, 2012 | Mar 31, 2011 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Short-term borrowings | 7) | 135) | 346) | —) | 400) | —) | |
| Current portion of long-term debt | 1,612) | 1,529) | 1,424) | 352) | 508) | 417) | |
| Long-term debt, excluding current portion | 6,535) | 8,180) | 8,949) | 4,521) | 3,072) | 3,587) | |
| Total debt | 8,154) | 9,844) | 10,719) | 4,873) | 3,980) | 4,004) | |
| Total McKesson Corporation stockholders’ equity | 8,924) | 8,001) | 8,522) | 7,070) | 6,831) | 7,220) | |
| Solvency Ratio | |||||||
| Debt to equity1 | 0.91 | 1.23 | 1.26 | 0.69 | 0.58 | 0.55 | |
| Benchmarks | |||||||
| Debt to Equity, Competitors2 | |||||||
| Abbott Laboratories | — | — | — | — | — | — | |
| Cigna Group | — | — | — | — | — | — | |
| CVS Health Corp. | — | — | — | — | — | — | |
| Elevance Health Inc. | — | — | — | — | — | — | |
| Humana Inc. | — | — | — | — | — | — | |
| Intuitive Surgical Inc. | — | — | — | — | — | — | |
| Medtronic PLC | — | — | — | — | — | — | |
| UnitedHealth Group Inc. | — | — | — | — | — | — | |
Based on: 10-K (reporting date: 2016-03-31), 10-K (reporting date: 2015-03-31), 10-K (reporting date: 2014-03-31), 10-K (reporting date: 2013-03-31), 10-K (reporting date: 2012-03-31), 10-K (reporting date: 2011-03-31).
1 2016 Calculation
Debt to equity = Total debt ÷ Total McKesson Corporation stockholders’ equity
= 8,154 ÷ 8,924 = 0.91
2 Click competitor name to see calculations.
| Solvency ratio | Description | The company |
|---|---|---|
| Debt to equity ratio | A solvency ratio calculated as total debt divided by total shareholders’ equity. | McKesson Corp. debt to equity ratio improved from 2014 to 2015 and from 2015 to 2016. |
Debt to Capital
McKesson Corp., debt to capital calculation, comparison to benchmarks
| Mar 31, 2016 | Mar 31, 2015 | Mar 31, 2014 | Mar 31, 2013 | Mar 31, 2012 | Mar 31, 2011 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Short-term borrowings | 7) | 135) | 346) | —) | 400) | —) | |
| Current portion of long-term debt | 1,612) | 1,529) | 1,424) | 352) | 508) | 417) | |
| Long-term debt, excluding current portion | 6,535) | 8,180) | 8,949) | 4,521) | 3,072) | 3,587) | |
| Total debt | 8,154) | 9,844) | 10,719) | 4,873) | 3,980) | 4,004) | |
| Total McKesson Corporation stockholders’ equity | 8,924) | 8,001) | 8,522) | 7,070) | 6,831) | 7,220) | |
| Total capital | 17,078) | 17,845) | 19,241) | 11,943) | 10,811) | 11,224) | |
| Solvency Ratio | |||||||
| Debt to capital1 | 0.48 | 0.55 | 0.56 | 0.41 | 0.37 | 0.36 | |
| Benchmarks | |||||||
| Debt to Capital, Competitors2 | |||||||
| Abbott Laboratories | — | — | — | — | — | — | |
| Cigna Group | — | — | — | — | — | — | |
| CVS Health Corp. | — | — | — | — | — | — | |
| Elevance Health Inc. | — | — | — | — | — | — | |
| Humana Inc. | — | — | — | — | — | — | |
| Intuitive Surgical Inc. | — | — | — | — | — | — | |
| Medtronic PLC | — | — | — | — | — | — | |
| UnitedHealth Group Inc. | — | — | — | — | — | — | |
Based on: 10-K (reporting date: 2016-03-31), 10-K (reporting date: 2015-03-31), 10-K (reporting date: 2014-03-31), 10-K (reporting date: 2013-03-31), 10-K (reporting date: 2012-03-31), 10-K (reporting date: 2011-03-31).
1 2016 Calculation
Debt to capital = Total debt ÷ Total capital
= 8,154 ÷ 17,078 = 0.48
2 Click competitor name to see calculations.
| Solvency ratio | Description | The company |
|---|---|---|
| Debt to capital ratio | A solvency ratio calculated as total debt divided by total debt plus shareholders’ equity. | McKesson Corp. debt to capital ratio improved from 2014 to 2015 and from 2015 to 2016. |
Debt to Assets
McKesson Corp., debt to assets calculation, comparison to benchmarks
| Mar 31, 2016 | Mar 31, 2015 | Mar 31, 2014 | Mar 31, 2013 | Mar 31, 2012 | Mar 31, 2011 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Short-term borrowings | 7) | 135) | 346) | —) | 400) | —) | |
| Current portion of long-term debt | 1,612) | 1,529) | 1,424) | 352) | 508) | 417) | |
| Long-term debt, excluding current portion | 6,535) | 8,180) | 8,949) | 4,521) | 3,072) | 3,587) | |
| Total debt | 8,154) | 9,844) | 10,719) | 4,873) | 3,980) | 4,004) | |
| Total assets | 56,563) | 53,870) | 51,759) | 34,786) | 33,093) | 30,886) | |
| Solvency Ratio | |||||||
| Debt to assets1 | 0.14 | 0.18 | 0.21 | 0.14 | 0.12 | 0.13 | |
| Benchmarks | |||||||
| Debt to Assets, Competitors2 | |||||||
| Abbott Laboratories | — | — | — | — | — | — | |
| Cigna Group | — | — | — | — | — | — | |
| CVS Health Corp. | — | — | — | — | — | — | |
| Elevance Health Inc. | — | — | — | — | — | — | |
| Humana Inc. | — | — | — | — | — | — | |
| Intuitive Surgical Inc. | — | — | — | — | — | — | |
| Medtronic PLC | — | — | — | — | — | — | |
| UnitedHealth Group Inc. | — | — | — | — | — | — | |
Based on: 10-K (reporting date: 2016-03-31), 10-K (reporting date: 2015-03-31), 10-K (reporting date: 2014-03-31), 10-K (reporting date: 2013-03-31), 10-K (reporting date: 2012-03-31), 10-K (reporting date: 2011-03-31).
1 2016 Calculation
Debt to assets = Total debt ÷ Total assets
= 8,154 ÷ 56,563 = 0.14
2 Click competitor name to see calculations.
| Solvency ratio | Description | The company |
|---|---|---|
| Debt to assets ratio | A solvency ratio calculated as total debt divided by total assets. | McKesson Corp. debt to assets ratio improved from 2014 to 2015 and from 2015 to 2016. |
Financial Leverage
McKesson Corp., financial leverage calculation, comparison to benchmarks
| Mar 31, 2016 | Mar 31, 2015 | Mar 31, 2014 | Mar 31, 2013 | Mar 31, 2012 | Mar 31, 2011 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Total assets | 56,563) | 53,870) | 51,759) | 34,786) | 33,093) | 30,886) | |
| Total McKesson Corporation stockholders’ equity | 8,924) | 8,001) | 8,522) | 7,070) | 6,831) | 7,220) | |
| Solvency Ratio | |||||||
| Financial leverage1 | 6.34 | 6.73 | 6.07 | 4.92 | 4.84 | 4.28 | |
| Benchmarks | |||||||
| Financial Leverage, Competitors2 | |||||||
| Abbott Laboratories | — | — | — | — | — | — | |
| Cigna Group | — | — | — | — | — | — | |
| CVS Health Corp. | — | — | — | — | — | — | |
| Elevance Health Inc. | — | — | — | — | — | — | |
| Humana Inc. | — | — | — | — | — | — | |
| Intuitive Surgical Inc. | — | — | — | — | — | — | |
| Medtronic PLC | — | — | — | — | — | — | |
| UnitedHealth Group Inc. | — | — | — | — | — | — | |
Based on: 10-K (reporting date: 2016-03-31), 10-K (reporting date: 2015-03-31), 10-K (reporting date: 2014-03-31), 10-K (reporting date: 2013-03-31), 10-K (reporting date: 2012-03-31), 10-K (reporting date: 2011-03-31).
1 2016 Calculation
Financial leverage = Total assets ÷ Total McKesson Corporation stockholders’ equity
= 56,563 ÷ 8,924 = 6.34
2 Click competitor name to see calculations.
| Solvency ratio | Description | The company |
|---|---|---|
| Financial leverage ratio | A solvency ratio calculated as total assets divided by total shareholders’ equity. | McKesson Corp. financial leverage ratio increased from 2014 to 2015 but then slightly decreased from 2015 to 2016 not reaching 2014 level. |
Interest Coverage
McKesson Corp., interest coverage calculation, comparison to benchmarks
| Mar 31, 2016 | Mar 31, 2015 | Mar 31, 2014 | Mar 31, 2013 | Mar 31, 2012 | Mar 31, 2011 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Net income attributable to McKesson Corporation | 2,258) | 1,476) | 1,263) | 1,338) | 1,403) | 1,202) | |
| Add: Net income attributable to noncontrolling interest | 52) | 67) | (5) | —) | —) | —) | |
| Less: Income (loss) from discontinued operations, net of tax | (32) | (299) | (96) | —) | —) | 72) | |
| Add: Income tax expense | 908) | 815) | 742) | 581) | 516) | 505) | |
| Add: Interest expense | 353) | 374) | 303) | 240) | 251) | 222) | |
| Earnings before interest and tax (EBIT) | 3,603) | 3,031) | 2,399) | 2,159) | 2,170) | 1,857) | |
| Solvency Ratio | |||||||
| Interest coverage1 | 10.21 | 8.10 | 7.92 | 9.00 | 8.65 | 8.36 | |
| Benchmarks | |||||||
| Interest Coverage, Competitors2 | |||||||
| Abbott Laboratories | — | — | — | — | — | — | |
| Cigna Group | — | — | — | — | — | — | |
| CVS Health Corp. | — | — | — | — | — | — | |
| Elevance Health Inc. | — | — | — | — | — | — | |
| Humana Inc. | — | — | — | — | — | — | |
| Intuitive Surgical Inc. | — | — | — | — | — | — | |
| Medtronic PLC | — | — | — | — | — | — | |
| UnitedHealth Group Inc. | — | — | — | — | — | — | |
Based on: 10-K (reporting date: 2016-03-31), 10-K (reporting date: 2015-03-31), 10-K (reporting date: 2014-03-31), 10-K (reporting date: 2013-03-31), 10-K (reporting date: 2012-03-31), 10-K (reporting date: 2011-03-31).
1 2016 Calculation
Interest coverage = EBIT ÷ Interest expense
= 3,603 ÷ 353 = 10.21
2 Click competitor name to see calculations.
| Solvency ratio | Description | The company |
|---|---|---|
| Interest coverage ratio | A solvency ratio calculated as EBIT divided by interest payments. | McKesson Corp. interest coverage ratio improved from 2014 to 2015 and from 2015 to 2016. |
Fixed Charge Coverage
McKesson Corp., fixed charge coverage calculation, comparison to benchmarks
| Mar 31, 2016 | Mar 31, 2015 | Mar 31, 2014 | Mar 31, 2013 | Mar 31, 2012 | Mar 31, 2011 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Net income attributable to McKesson Corporation | 2,258) | 1,476) | 1,263) | 1,338) | 1,403) | 1,202) | |
| Add: Net income attributable to noncontrolling interest | 52) | 67) | (5) | —) | —) | —) | |
| Less: Income (loss) from discontinued operations, net of tax | (32) | (299) | (96) | —) | —) | 72) | |
| Add: Income tax expense | 908) | 815) | 742) | 581) | 516) | 505) | |
| Add: Interest expense | 353) | 374) | 303) | 240) | 251) | 222) | |
| Earnings before interest and tax (EBIT) | 3,603) | 3,031) | 2,399) | 2,159) | 2,170) | 1,857) | |
| Add: Rental expense under operating leases | 433) | 440) | 298) | 242) | 240) | 157) | |
| Earnings before fixed charges and tax | 4,036) | 3,471) | 2,697) | 2,401) | 2,410) | 2,014) | |
| Interest expense | 353) | 374) | 303) | 240) | 251) | 222) | |
| Rental expense under operating leases | 433) | 440) | 298) | 242) | 240) | 157) | |
| Fixed charges | 786) | 814) | 601) | 482) | 491) | 379) | |
| Solvency Ratio | |||||||
| Fixed charge coverage1 | 5.13 | 4.26 | 4.49 | 4.98 | 4.91 | 5.31 | |
| Benchmarks | |||||||
| Fixed Charge Coverage, Competitors2 | |||||||
| Abbott Laboratories | — | — | — | — | — | — | |
| Cigna Group | — | — | — | — | — | — | |
| CVS Health Corp. | — | — | — | — | — | — | |
| Elevance Health Inc. | — | — | — | — | — | — | |
| Humana Inc. | — | — | — | — | — | — | |
| Intuitive Surgical Inc. | — | — | — | — | — | — | |
| Medtronic PLC | — | — | — | — | — | — | |
| UnitedHealth Group Inc. | — | — | — | — | — | — | |
Based on: 10-K (reporting date: 2016-03-31), 10-K (reporting date: 2015-03-31), 10-K (reporting date: 2014-03-31), 10-K (reporting date: 2013-03-31), 10-K (reporting date: 2012-03-31), 10-K (reporting date: 2011-03-31).
1 2016 Calculation
Fixed charge coverage = Earnings before fixed charges and tax ÷ Fixed charges
= 4,036 ÷ 786 = 5.13
2 Click competitor name to see calculations.
| Solvency ratio | Description | The company |
|---|---|---|
| Fixed charge coverage ratio | A solvency ratio calculated as earnings before fixed charges and tax divided by fixed charges. | McKesson Corp. fixed charge coverage ratio deteriorated from 2014 to 2015 but then improved from 2015 to 2016 exceeding 2014 level. |