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)
Debt Ratios
Coverage Ratios
Mosaic Co., solvency ratios
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
The solvency profile of Mosaic Co. from 2017 to 2021 is characterized by a general reduction in leverage and a significant recovery in debt-servicing capacity following a period of acute financial stress in 2019.
- Leverage and Capital Structure
- A general downward trend is observed across primary leverage metrics. The debt-to-equity ratio decreased from 0.58 in 2017 to 0.47 by 2021, while the debt-to-assets ratio declined from 0.30 to 0.23 over the same period. Debt-to-capital ratios mirrored this trajectory, ending the period at 0.32. These patterns indicate a strengthening balance sheet and a reduced reliance on borrowed funds relative to equity and total assets.
- Lease Liability Impact
- The inclusion of operating lease liabilities results in a marginal increase across all leverage ratios but does not alter the overall directional trend. The narrow variance between the standard debt ratios and those including lease liabilities suggests that operating leases represent a secondary component of the company's total liabilities.
- Financial Leverage
- Financial leverage remained relatively stable, fluctuating between 1.94 and 2.10. A slight increase occurred in 2019, peaking at 2.10, before stabilizing around 2.08 by 2021, suggesting a consistent approach to the overall multiplier effect of assets relative to equity.
- Coverage and Debt Servicing
- Debt serviceability experienced extreme volatility. Both interest coverage and fixed charge coverage ratios collapsed in 2019, reaching negative values of -5.09 and -1.83, respectively, which indicates an inability to cover interest and fixed obligations from earnings during that year. However, a robust recovery followed, with the interest coverage ratio escalating to 12.49 and the fixed charge coverage ratio rising to 6.50 by 2021, reflecting a substantial improvement in operational profitability and a heightened capacity to service debt.
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Debt to Equity
Mosaic Co., debt to equity calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Short-term debt | 302,800) | 100) | 41,600) | 11,500) | 6,100) | |
| Current maturities of long-term debt | 596,600) | 504,200) | 47,200) | 26,000) | 343,500) | |
| Structured accounts payable arrangements | 743,700) | 640,000) | 740,600) | 572,800) | 386,200) | |
| Long-term debt, less current maturities | 3,382,200) | 4,073,800) | 4,525,500) | 4,491,500) | 4,878,100) | |
| Total debt | 5,025,300) | 5,218,100) | 5,354,900) | 5,101,800) | 5,613,900) | |
| Total Mosaic stockholders’ equity | 10,604,100) | 9,581,400) | 9,185,500) | 10,397,300) | 9,617,500) | |
| Solvency Ratio | ||||||
| Debt to equity1 | 0.47 | 0.54 | 0.58 | 0.49 | 0.58 | |
| Benchmarks | ||||||
| Debt to Equity, Competitors2 | ||||||
| Linde plc | 0.33 | — | — | — | — | |
| Sherwin-Williams Co. | 3.95 | — | — | — | — | |
| Debt to Equity, Sector | ||||||
| Chemicals | 0.52 | — | — | — | — | |
| Debt to Equity, Industry | ||||||
| Materials | 0.55 | — | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Debt to equity = Total debt ÷ Total Mosaic stockholders’ equity
= 5,025,300 ÷ 10,604,100 = 0.47
2 Click competitor name to see calculations.
The analysis of solvency ratios from 2017 to 2021 indicates a general improvement in the long-term financial stability of the organization, characterized by a overall reduction in leverage and a strengthening of the equity base.
- Total Debt Analysis
- Total debt exhibited a general downward trajectory over the five-year period. Starting at 5,613,900 thousand in 2017, debt levels decreased to 5,025,300 thousand by 2021. Although a moderate increase occurred in 2019, the overall trend suggests a consistent effort to reduce total borrowed obligations.
- Total Stockholders' Equity Analysis
- Stockholders' equity demonstrated volatility, experiencing a peak in 2018 followed by a decline to a period low of 9,185,500 thousand in 2019. However, a strong recovery trend followed, with equity increasing annually through 2021 to reach 10,604,100 thousand. This growth indicates an expansion of the company's net asset base.
- Debt to Equity Ratio Interpretation
- The debt to equity ratio fluctuated between 0.47 and 0.58. The ratio remained stagnant at 0.58 in both 2017 and 2019, but showed a significant improvement by 2021, reaching its lowest point of 0.47. This downward movement signifies a strategic shift toward a more conservative capital structure, reducing reliance on external debt and enhancing the company's solvency profile.
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Debt to Equity (including Operating Lease Liability)
Mosaic Co., debt to equity (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Short-term debt | 302,800) | 100) | 41,600) | 11,500) | 6,100) | |
| Current maturities of long-term debt | 596,600) | 504,200) | 47,200) | 26,000) | 343,500) | |
| Structured accounts payable arrangements | 743,700) | 640,000) | 740,600) | 572,800) | 386,200) | |
| Long-term debt, less current maturities | 3,382,200) | 4,073,800) | 4,525,500) | 4,491,500) | 4,878,100) | |
| Total debt | 5,025,300) | 5,218,100) | 5,354,900) | 5,101,800) | 5,613,900) | |
| Short-term operating lease obligation | 59,700) | 64,000) | 67,100) | —) | —) | |
| Long-term operating lease obligation | 64,300) | 109,600) | 127,000) | —) | —) | |
| Total debt (including operating lease liability) | 5,149,300) | 5,391,700) | 5,549,000) | 5,101,800) | 5,613,900) | |
| Total Mosaic stockholders’ equity | 10,604,100) | 9,581,400) | 9,185,500) | 10,397,300) | 9,617,500) | |
| Solvency Ratio | ||||||
| Debt to equity (including operating lease liability)1 | 0.49 | 0.56 | 0.60 | 0.49 | 0.58 | |
| Benchmarks | ||||||
| Debt to Equity (including Operating Lease Liability), Competitors2 | ||||||
| Linde plc | 0.35 | — | — | — | — | |
| Sherwin-Williams Co. | 4.72 | — | — | — | — | |
| Debt to Equity (including Operating Lease Liability), Sector | ||||||
| Chemicals | 0.57 | — | — | — | — | |
| Debt to Equity (including Operating Lease Liability), Industry | ||||||
| Materials | 0.60 | — | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Debt to equity (including operating lease liability) = Total debt (including operating lease liability) ÷ Total Mosaic stockholders’ equity
= 5,149,300 ÷ 10,604,100 = 0.49
2 Click competitor name to see calculations.
The solvency profile between 2017 and 2021 reflects a general trend toward improved financial stability and a conservative capital structure. The debt-to-equity ratio consistently remained below 1.0, suggesting that equity financing played a primary role in funding operations and assets throughout the five-year period.
- Total Debt Trends
- Total debt, including operating lease liabilities, experienced moderate fluctuations, starting at $5.61 billion in 2017 and ending at $5.15 billion in 2021. While a temporary increase to $5.55 billion occurred in 2019, the subsequent two years saw a steady decline, indicating a strategic reduction in total liabilities.
- Stockholders' Equity Performance
- Stockholders' equity grew from $9.62 billion in 2017 to $10.60 billion by the end of 2021. A notable decline to $9.19 billion was observed in 2019; however, this was followed by a consistent upward trajectory, resulting in a strengthened equity base by the conclusion of the analyzed period.
- Debt-to-Equity Ratio Analysis
- The debt-to-equity ratio fluctuated between a high of 0.60 in 2019 and a low of 0.49 in 2018 and 2021. The 2019 peak was driven by the simultaneous occurrence of rising total debt and contracting stockholders' equity. The return to 0.49 by December 31, 2021, represents a return to the period's lowest leverage level, signaling an enhanced solvency position.
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Debt to Capital
Mosaic Co., debt to capital calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Short-term debt | 302,800) | 100) | 41,600) | 11,500) | 6,100) | |
| Current maturities of long-term debt | 596,600) | 504,200) | 47,200) | 26,000) | 343,500) | |
| Structured accounts payable arrangements | 743,700) | 640,000) | 740,600) | 572,800) | 386,200) | |
| Long-term debt, less current maturities | 3,382,200) | 4,073,800) | 4,525,500) | 4,491,500) | 4,878,100) | |
| Total debt | 5,025,300) | 5,218,100) | 5,354,900) | 5,101,800) | 5,613,900) | |
| Total Mosaic stockholders’ equity | 10,604,100) | 9,581,400) | 9,185,500) | 10,397,300) | 9,617,500) | |
| Total capital | 15,629,400) | 14,799,500) | 14,540,400) | 15,499,100) | 15,231,400) | |
| Solvency Ratio | ||||||
| Debt to capital1 | 0.32 | 0.35 | 0.37 | 0.33 | 0.37 | |
| Benchmarks | ||||||
| Debt to Capital, Competitors2 | ||||||
| Linde plc | 0.25 | — | — | — | — | |
| Sherwin-Williams Co. | 0.80 | — | — | — | — | |
| Debt to Capital, Sector | ||||||
| Chemicals | 0.34 | — | — | — | — | |
| Debt to Capital, Industry | ||||||
| Materials | 0.36 | — | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Debt to capital = Total debt ÷ Total capital
= 5,025,300 ÷ 15,629,400 = 0.32
2 Click competitor name to see calculations.
The financial data between 2017 and 2021 indicates a general improvement in solvency and a reduction in the company's reliance on debt relative to its total capital. The overall trend reflects a strategic decrease in total debt coupled with a stable to increasing capital base, resulting in a lower risk profile by the end of the period.
- Total Debt Trends
- Total debt exhibited a general downward trajectory, decreasing from 5,613,900 thousand US$ in 2017 to 5,025,300 thousand US$ in 2021. Although a temporary increase occurred in 2019, where debt rose to 5,354,900 thousand US$, the subsequent two years saw consistent reductions, bringing the total debt to its lowest level within the analyzed five-year window.
- Total Capital Movements
- Total capital remained relatively stable with moderate fluctuations, starting at 15,231,400 thousand US$ in 2017 and concluding at 15,629,400 thousand US$ in 2021. A notable dip occurred in 2019, falling to 14,540,400 thousand US$, but this was followed by a steady recovery over the next two years, indicating a strengthening of the overall capital structure.
- Debt to Capital Ratio Analysis
- The debt to capital ratio reflects the company's solvency performance, starting at 0.37 in 2017 and ending at 0.32 in 2021. The ratio fluctuated between 0.33 and 0.37 from 2017 through 2020, but the decline to 0.32 in 2021 marks the most significant improvement in the ratio over the period. This downward trend suggests a successful shift toward a more equity-heavy or less leveraged capital structure, enhancing the company's long-term financial stability.
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Debt to Capital (including Operating Lease Liability)
Mosaic Co., debt to capital (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Short-term debt | 302,800) | 100) | 41,600) | 11,500) | 6,100) | |
| Current maturities of long-term debt | 596,600) | 504,200) | 47,200) | 26,000) | 343,500) | |
| Structured accounts payable arrangements | 743,700) | 640,000) | 740,600) | 572,800) | 386,200) | |
| Long-term debt, less current maturities | 3,382,200) | 4,073,800) | 4,525,500) | 4,491,500) | 4,878,100) | |
| Total debt | 5,025,300) | 5,218,100) | 5,354,900) | 5,101,800) | 5,613,900) | |
| Short-term operating lease obligation | 59,700) | 64,000) | 67,100) | —) | —) | |
| Long-term operating lease obligation | 64,300) | 109,600) | 127,000) | —) | —) | |
| Total debt (including operating lease liability) | 5,149,300) | 5,391,700) | 5,549,000) | 5,101,800) | 5,613,900) | |
| Total Mosaic stockholders’ equity | 10,604,100) | 9,581,400) | 9,185,500) | 10,397,300) | 9,617,500) | |
| Total capital (including operating lease liability) | 15,753,400) | 14,973,100) | 14,734,500) | 15,499,100) | 15,231,400) | |
| Solvency Ratio | ||||||
| Debt to capital (including operating lease liability)1 | 0.33 | 0.36 | 0.38 | 0.33 | 0.37 | |
| Benchmarks | ||||||
| Debt to Capital (including Operating Lease Liability), Competitors2 | ||||||
| Linde plc | 0.26 | — | — | — | — | |
| Sherwin-Williams Co. | 0.83 | — | — | — | — | |
| Debt to Capital (including Operating Lease Liability), Sector | ||||||
| Chemicals | 0.36 | — | — | — | — | |
| Debt to Capital (including Operating Lease Liability), Industry | ||||||
| Materials | 0.38 | — | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Debt to capital (including operating lease liability) = Total debt (including operating lease liability) ÷ Total capital (including operating lease liability)
= 5,149,300 ÷ 15,753,400 = 0.33
2 Click competitor name to see calculations.
The analysis of solvency metrics between 2017 and 2021 reveals a relatively stable capital structure characterized by modest fluctuations in leverage. Total debt and total capital levels maintained a consistent relationship, resulting in a debt-to-capital ratio that remained within a narrow range of 0.33 to 0.38.
- Total Debt Trends
- Total debt, including operating lease liabilities, experienced volatility over the five-year period. A decrease was noted from 5.61 billion US$ in 2017 to 5.10 billion US$ in 2018, followed by an increase to 5.55 billion US$ in 2019. A subsequent downward trajectory was established, with debt levels concluding at 5.15 billion US$ by December 31, 2021.
- Total Capital Evolution
- Total capital showed a general upward trend over the period, despite a temporary contraction in 2019. Starting at 15.23 billion US$ in 2017, the total capital base reached its highest point of 15.75 billion US$ in 2021. This suggests a gradual expansion of the overall funding base over the analyzed timeframe.
- Debt to Capital Ratio Analysis
- The debt to capital ratio exhibits a cyclical pattern. The ratio decreased from 0.37 in 2017 to 0.33 in 2018, before rising to a peak of 0.38 in 2019. A consistent reduction followed over the subsequent two years, returning to 0.33 by 2021. This return to the lower end of the observed range indicates a reduction in financial leverage relative to total capital by the end of the period.
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Debt to Assets
Mosaic Co., debt to assets calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Short-term debt | 302,800) | 100) | 41,600) | 11,500) | 6,100) | |
| Current maturities of long-term debt | 596,600) | 504,200) | 47,200) | 26,000) | 343,500) | |
| Structured accounts payable arrangements | 743,700) | 640,000) | 740,600) | 572,800) | 386,200) | |
| Long-term debt, less current maturities | 3,382,200) | 4,073,800) | 4,525,500) | 4,491,500) | 4,878,100) | |
| Total debt | 5,025,300) | 5,218,100) | 5,354,900) | 5,101,800) | 5,613,900) | |
| Total assets | 22,036,400) | 19,789,800) | 19,298,500) | 20,119,200) | 18,633,400) | |
| Solvency Ratio | ||||||
| Debt to assets1 | 0.23 | 0.26 | 0.28 | 0.25 | 0.30 | |
| Benchmarks | ||||||
| Debt to Assets, Competitors2 | ||||||
| Linde plc | 0.18 | — | — | — | — | |
| Sherwin-Williams Co. | 0.47 | — | — | — | — | |
| Debt to Assets, Sector | ||||||
| Chemicals | 0.23 | — | — | — | — | |
| Debt to Assets, Industry | ||||||
| Materials | 0.22 | — | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Debt to assets = Total debt ÷ Total assets
= 5,025,300 ÷ 22,036,400 = 0.23
2 Click competitor name to see calculations.
The solvency profile exhibits a general trend of improvement over the five-year period from 2017 to 2021. This is evidenced by a consistent reduction in the proportion of assets financed through debt, suggesting a strengthened balance sheet and a decreased reliance on external borrowing to fund operations and growth.
- Debt to Assets Ratio Trend
- The debt to assets ratio declined from 0.30 in 2017 to 0.23 by the end of 2021. While a slight increase to 0.28 occurred in 2019, the overall trajectory indicates a systematic reduction in financial leverage. The 2021 ratio represents the lowest level within the analyzed period, reflecting an improved capacity to cover total assets with equity rather than debt.
- Total Debt Dynamics
- Total debt experienced a net decrease, falling from 5,613,900 thousand US dollars in 2017 to 5,025,300 thousand US dollars in 2021. A temporary increase was noted in 2019, reaching 5,354,900 thousand US dollars, but this was followed by two consecutive years of debt reduction.
- Total Asset Growth
- The asset base expanded from 18,633,400 thousand US dollars in 2017 to 22,036,400 thousand US dollars in 2021. The growth in total assets, particularly the notable increase between 2020 and 2021, served as a primary driver in lowering the solvency ratio, as the growth in the asset base outpaced the changes in total debt levels.
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Debt to Assets (including Operating Lease Liability)
Mosaic Co., debt to assets (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Short-term debt | 302,800) | 100) | 41,600) | 11,500) | 6,100) | |
| Current maturities of long-term debt | 596,600) | 504,200) | 47,200) | 26,000) | 343,500) | |
| Structured accounts payable arrangements | 743,700) | 640,000) | 740,600) | 572,800) | 386,200) | |
| Long-term debt, less current maturities | 3,382,200) | 4,073,800) | 4,525,500) | 4,491,500) | 4,878,100) | |
| Total debt | 5,025,300) | 5,218,100) | 5,354,900) | 5,101,800) | 5,613,900) | |
| Short-term operating lease obligation | 59,700) | 64,000) | 67,100) | —) | —) | |
| Long-term operating lease obligation | 64,300) | 109,600) | 127,000) | —) | —) | |
| Total debt (including operating lease liability) | 5,149,300) | 5,391,700) | 5,549,000) | 5,101,800) | 5,613,900) | |
| Total assets | 22,036,400) | 19,789,800) | 19,298,500) | 20,119,200) | 18,633,400) | |
| Solvency Ratio | ||||||
| Debt to assets (including operating lease liability)1 | 0.23 | 0.27 | 0.29 | 0.25 | 0.30 | |
| Benchmarks | ||||||
| Debt to Assets (including Operating Lease Liability), Competitors2 | ||||||
| Linde plc | 0.19 | — | — | — | — | |
| Sherwin-Williams Co. | 0.56 | — | — | — | — | |
| Debt to Assets (including Operating Lease Liability), Sector | ||||||
| Chemicals | 0.26 | — | — | — | — | |
| Debt to Assets (including Operating Lease Liability), Industry | ||||||
| Materials | 0.24 | — | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Debt to assets (including operating lease liability) = Total debt (including operating lease liability) ÷ Total assets
= 5,149,300 ÷ 22,036,400 = 0.23
2 Click competitor name to see calculations.
An analysis of the solvency ratios from 2017 to 2021 indicates a general improvement in the financial leverage position. The interplay between total debt and asset growth has resulted in a reduction of the overall debt burden relative to the asset base.
- Total Debt Dynamics
- Total debt, including operating lease liabilities, remained relatively stable over the analyzed period. After an initial decrease from US$ 5,613,900 thousand in 2017 to US$ 5,101,800 thousand in 2018, the balance experienced a moderate increase in 2019 before trending downward to US$ 5,149,300 thousand by the end of 2021. This suggests a consistent approach to maintaining debt levels.
- Total Asset Expansion
- A general upward trend in total assets is observed, rising from US$ 18,633,400 thousand in 2017 to US$ 22,036,400 thousand in 2021. Despite a temporary contraction in 2019, the overall growth indicates an expansion of the balance sheet, which effectively increases the company's capacity to cover its obligations.
- Debt-to-Assets Ratio Performance
- The debt-to-assets ratio exhibits a downward trajectory, declining from 0.30 in 2017 to 0.23 in 2021. Although a fluctuation occurred in 2019 with a ratio of 0.29, the subsequent decline to 0.23 marks the lowest leverage level within the five-year window. This trend confirms that asset growth has outpaced debt accumulation, thereby enhancing the overall solvency profile.
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Financial Leverage
Mosaic Co., financial leverage calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Total assets | 22,036,400) | 19,789,800) | 19,298,500) | 20,119,200) | 18,633,400) | |
| Total Mosaic stockholders’ equity | 10,604,100) | 9,581,400) | 9,185,500) | 10,397,300) | 9,617,500) | |
| Solvency Ratio | ||||||
| Financial leverage1 | 2.08 | 2.07 | 2.10 | 1.94 | 1.94 | |
| Benchmarks | ||||||
| Financial Leverage, Competitors2 | ||||||
| Linde plc | 1.85 | — | — | — | — | |
| Sherwin-Williams Co. | 8.48 | — | — | — | — | |
| Financial Leverage, Sector | ||||||
| Chemicals | 2.20 | — | — | — | — | |
| Financial Leverage, Industry | ||||||
| Materials | 2.49 | — | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Financial leverage = Total assets ÷ Total Mosaic stockholders’ equity
= 22,036,400 ÷ 10,604,100 = 2.08
2 Click competitor name to see calculations.
The financial position between 2017 and 2021 demonstrates a general expansion of the balance sheet, characterized by growth in both total assets and stockholders' equity, despite a period of contraction in 2019. The capital structure exhibits a shift toward higher leverage starting in 2019, which remained relatively stable through 2021.
- Asset and Equity Growth
- Total assets increased from US$ 18.63 billion in 2017 to US$ 22.04 billion in 2021. This growth was mirrored by stockholders' equity, which rose from US$ 9.62 billion to US$ 10.60 billion over the same period. Both metrics experienced a synchronized dip in 2019, with assets falling to US$ 19.30 billion and equity declining to US$ 9.19 billion, before returning to a growth trajectory in 2020 and 2021.
- Financial Leverage Trends
- The financial leverage ratio remained static at 1.94 during 2017 and 2018. A notable increase occurred in 2019, where the ratio peaked at 2.10, indicating a higher proportion of assets funded by debt relative to equity. Following this peak, the ratio stabilized, recording 2.07 in 2020 and 2.08 in 2021.
- Solvency Interpretation
- The increase in the leverage ratio from 2018 to 2019 suggests a strategic shift or a necessitated increase in liabilities as equity decreased. The stabilization of the ratio above 2.00 from 2019 through 2021 indicates that the organization has maintained a more leveraged capital structure compared to the 2017-2018 baseline.
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Interest Coverage
Mosaic Co., interest coverage calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net earnings (loss) attributable to Mosaic | 1,630,600) | 666,100) | (1,067,400) | 470,000) | (107,200) | |
| Add: Net income attributable to noncontrolling interest | 4,300) | (500) | (23,400) | (100) | 3,000) | |
| Add: Income tax expense | 597,700) | (578,500) | (224,700) | 77,100) | 494,900) | |
| Add: Interest expense | 194,300) | 214,100) | 216,000) | 215,800) | 171,300) | |
| Earnings before interest and tax (EBIT) | 2,426,900) | 301,200) | (1,099,500) | 762,800) | 562,000) | |
| Solvency Ratio | ||||||
| Interest coverage1 | 12.49 | 1.41 | -5.09 | 3.53 | 3.28 | |
| Benchmarks | ||||||
| Interest Coverage, Competitors2 | ||||||
| Linde plc | 45.60 | — | — | — | — | |
| Sherwin-Williams Co. | 7.72 | — | — | — | — | |
| Interest Coverage, Sector | ||||||
| Chemicals | 17.53 | — | — | — | — | |
| Interest Coverage, Industry | ||||||
| Materials | 15.36 | — | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Interest coverage = EBIT ÷ Interest expense
= 2,426,900 ÷ 194,300 = 12.49
2 Click competitor name to see calculations.
The analysis of interest coverage from 2017 to 2021 reveals a period of significant volatility characterized by a sharp contraction in 2019 followed by a robust recovery through 2021.
- Earnings Before Interest and Tax (EBIT) Trends
- Operating income showed modest growth between 2017 and 2018 before experiencing a severe decline in 2019, where EBIT fell to negative US$ 1,099.5 million. A subsequent recovery occurred in 2020, culminating in a substantial increase to US$ 2,426.9 million by the end of 2021, marking a significant expansion in operating profitability.
- Interest Expense Stability
- Interest expenses remained relatively stable throughout the observed period. After an initial increase from US$ 171.3 million in 2017 to a peak of US$ 216.0 million in 2019, the expense trended slightly downward to US$ 194.3 million by 2021.
- Interest Coverage Ratio Performance
- The interest coverage ratio exhibited extreme variance, moving from 3.28 in 2017 to 3.53 in 2018, then plummeting to -5.09 in 2019. This negative value indicates a period where operating losses rendered the company unable to cover its interest obligations from EBIT. A recovery to 1.41 in 2020 provided a narrow margin of safety, which expanded dramatically to 12.49 in 2021, representing a strong improvement in debt-servicing capacity.
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Fixed Charge Coverage
Mosaic Co., fixed charge coverage calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net earnings (loss) attributable to Mosaic | 1,630,600) | 666,100) | (1,067,400) | 470,000) | (107,200) | |
| Add: Net income attributable to noncontrolling interest | 4,300) | (500) | (23,400) | (100) | 3,000) | |
| Add: Income tax expense | 597,700) | (578,500) | (224,700) | 77,100) | 494,900) | |
| Add: Interest expense | 194,300) | 214,100) | 216,000) | 215,800) | 171,300) | |
| Earnings before interest and tax (EBIT) | 2,426,900) | 301,200) | (1,099,500) | 762,800) | 562,000) | |
| Add: Rental expense | 211,800) | 226,900) | 249,100) | 270,300) | 114,000) | |
| Earnings before fixed charges and tax | 2,638,700) | 528,100) | (850,400) | 1,033,100) | 676,000) | |
| Interest expense | 194,300) | 214,100) | 216,000) | 215,800) | 171,300) | |
| Rental expense | 211,800) | 226,900) | 249,100) | 270,300) | 114,000) | |
| Fixed charges | 406,100) | 441,000) | 465,100) | 486,100) | 285,300) | |
| Solvency Ratio | ||||||
| Fixed charge coverage1 | 6.50 | 1.20 | -1.83 | 2.13 | 2.37 | |
| Benchmarks | ||||||
| Fixed Charge Coverage, Competitors2 | ||||||
| Linde plc | 13.02 | — | — | — | — | |
| Sherwin-Williams Co. | 3.77 | — | — | — | — | |
| Fixed Charge Coverage, Sector | ||||||
| Chemicals | 6.99 | — | — | — | — | |
| Fixed Charge Coverage, Industry | ||||||
| Materials | 8.75 | — | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Fixed charge coverage = Earnings before fixed charges and tax ÷ Fixed charges
= 2,638,700 ÷ 406,100 = 6.50
2 Click competitor name to see calculations.
The analysis of solvency ratios between 2017 and 2021 reveals a period of significant volatility in the ability to meet fixed obligations, characterized by a severe contraction in 2019 followed by a robust recovery by the end of the period.
- Earnings before fixed charges and tax
- Earnings exhibited extreme fluctuations throughout the five-year period. After an initial increase from US$ 676 million in 2017 to US$ 1.03 billion in 2018, a sharp reversal occurred in 2019, with earnings falling to a deficit of US$ 850.4 million. A strong recovery trend followed, with earnings returning to a positive US$ 528.1 million in 2020 and surging to a peak of US$ 2.64 billion in 2021.
- Fixed charge obligations
- Fixed charges saw a substantial increase between 2017 and 2018, rising from US$ 285.3 million to US$ 486.1 million. Following this peak, fixed charges entered a gradual downward trend, decreasing steadily to US$ 406.1 million by December 31, 2021. This reduction in obligations occurred concurrently with the recovery in earnings, further enhancing solvency.
- Fixed charge coverage ratio
- The coverage ratio mirrors the volatility of earnings, starting at a stable 2.37 in 2017 and dipping slightly to 2.13 in 2018. The ratio collapsed to -1.83 in 2019, indicating that earnings were insufficient to cover fixed charges during that fiscal year. Recovery began in 2020 with a ratio of 1.20, before expanding rapidly to 6.50 in 2021. The final value represents a significant improvement in the solvency margin, providing a substantial buffer against fixed financial commitments.
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