Solvency ratios also known as long-term debt ratios measure a company ability to meet long-term obligations.
Paying user area
Try for free
Parker-Hannifin Corp. pages available for free this week:
- Analysis of Long-term (Investment) Activity Ratios
- Analysis of Reportable Segments
- Analysis of Geographic Areas
- Enterprise Value to EBITDA (EV/EBITDA)
- Dividend Discount Model (DDM)
- Net Profit Margin since 2005
- Return on Equity (ROE) since 2005
- Total Asset Turnover since 2005
- Price to Sales (P/S) since 2005
- Aggregate Accruals
The data is hidden behind: . Unhide it.
Get full access to the entire website from $10.42/mo, or
get 1-month access to Parker-Hannifin Corp. for $22.49.
This is a one-time payment. There is no automatic renewal.
We accept:
Solvency Ratios (Summary)
Based on: 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30).
The financial data indicates variability in leverage and coverage ratios over the six-year period ending in June 2022.
- Debt to Equity
- The debt to equity ratio fluctuates over time, starting at 1.12 in 2017, declining to a low of 0.78 in 2021, and then increasing again to 1.3 in 2022. The inclusion of operating lease liabilities slightly increases these ratios but follows the same pattern.
- Debt to Capital
- The ratio of debt to capital shows a similar trend as debt to equity, decreasing to 0.44 in 2021 from a high of 0.58 in 2020, then rising to 0.56 in 2022. Including operating lease liabilities marginally elevates the ratio but does not alter the overall trend.
- Debt to Assets
- This ratio indicates the proportion of assets financed by debt and also exhibits fluctuations. It begins at 0.38 in 2017, drops to 0.32 in 2018 and 2021, peaks at 0.44 in 2022. The inclusion of operating leases results in minimal increases.
- Financial Leverage
- Financial leverage shows variability, decreasing from 2.94 in 2017 to 2.42 in 2021, before rising again to 2.93 in 2022. This trend mirrors changes seen in debt ratios, reflecting changing use of debt in capital structure.
- Interest Coverage
- The interest coverage ratio demonstrates some volatility with a peak of 11.17 in 2019 and a notable dip to 5.91 in 2020. It recovers somewhat to 9.99 in 2021 but declines again to 7.32 in 2022, indicating variable ability to cover interest expenses from earnings.
- Fixed Charge Coverage
- The fixed charge coverage ratio follows a pattern similar to interest coverage, starting at 5.73 in 2017, increasing to 7.1 in 2019, dipping to 5.22 in 2020, climbing to 8.53 in 2021, and subsequently decreasing to 6.36 in 2022. This reflects fluctuating capacity to service fixed charges.
Overall, the data reveals that leverage ratios generally decreased up to 2021 before rising in 2022, while coverage ratios have exhibited volatility, with some deterioration in recent years. Such shifts may suggest changing capital structure strategies and variations in earnings relative to debt servicing obligations.
Debt Ratios
Coverage Ratios
Debt to Equity
Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | Jun 30, 2019 | Jun 30, 2018 | Jun 30, 2017 | ||
---|---|---|---|---|---|---|---|
Selected Financial Data (US$ in thousands) | |||||||
Notes payable and long-term debt payable within one year | |||||||
Long-term debt, excluding payable within one year | |||||||
Total debt | |||||||
Shareholders’ equity | |||||||
Solvency Ratio | |||||||
Debt to equity1 | |||||||
Benchmarks | |||||||
Debt to Equity, Competitors2 | |||||||
Boeing Co. | |||||||
Caterpillar Inc. | |||||||
Eaton Corp. plc | |||||||
GE Aerospace | |||||||
Honeywell International Inc. | |||||||
Lockheed Martin Corp. | |||||||
RTX Corp. | |||||||
Debt to Equity, Sector | |||||||
Capital Goods | |||||||
Debt to Equity, Industry | |||||||
Industrials |
Based on: 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30).
1 2022 Calculation
Debt to equity = Total debt ÷ Shareholders’ equity
= ÷ =
2 Click competitor name to see calculations.
- Total Debt
- The total debt shows significant fluctuations over the analyzed periods. Starting at approximately 5.87 billion US dollars in June 2017, it decreased to around 4.96 billion in 2018, then increased sharply to over 7.1 billion in 2019 and further to 8.46 billion in 2020. In 2021, the debt reduced to about 6.58 billion but rose substantially again in 2022 to reach nearly 11.48 billion. This pattern indicates periods of both debt reduction and notable increases, with the most considerable rise occurring between 2021 and 2022.
- Shareholders’ Equity
- The shareholders' equity demonstrates an overall upward trend throughout the timeframe. Beginning at approximately 5.26 billion US dollars in June 2017, it increased steadily each year, reaching about 5.86 billion in 2018, 5.96 billion in 2019, and 6.11 billion in 2020. After a notable jump to approximately 8.4 billion in 2021, it continued to rise, albeit slower, to nearly 8.85 billion in 2022. This consistent growth reflects strengthening equity, especially with the significant increase in 2021.
- Debt to Equity Ratio
- The debt to equity ratio fluctuates substantially, reflecting the volatility in both debt and equity levels. Beginning at 1.12 in 2017, it decreased to 0.85 in 2018, indicating lower leverage. However, it rose again to 1.19 in 2019 and further to 1.38 in 2020, suggesting increased leverage during those years. A marked decrease to 0.78 occurred in 2021, implying reduced reliance on debt relative to equity. Nevertheless, it surged back to 1.3 in 2022, surpassing the initial 2017 ratio and indicating higher leverage. Overall, the ratio reflects significant changes in the company's capital structure over the period.
Debt to Equity (including Operating Lease Liability)
Parker-Hannifin Corp., debt to equity (including operating lease liability) calculation, comparison to benchmarks
Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | Jun 30, 2019 | Jun 30, 2018 | Jun 30, 2017 | ||
---|---|---|---|---|---|---|---|
Selected Financial Data (US$ in thousands) | |||||||
Notes payable and long-term debt payable within one year | |||||||
Long-term debt, excluding payable within one year | |||||||
Total debt | |||||||
Current operating lease liabilities (included within Other accrued liabilities) | |||||||
Long-term operating lease liabilities (included within Other liabilities) | |||||||
Total debt (including operating lease liability) | |||||||
Shareholders’ equity | |||||||
Solvency Ratio | |||||||
Debt to equity (including operating lease liability)1 | |||||||
Benchmarks | |||||||
Debt to Equity (including Operating Lease Liability), Competitors2 | |||||||
Boeing Co. | |||||||
Caterpillar Inc. | |||||||
Eaton Corp. plc | |||||||
GE Aerospace | |||||||
Honeywell International Inc. | |||||||
Lockheed Martin Corp. | |||||||
RTX Corp. | |||||||
Debt to Equity (including Operating Lease Liability), Sector | |||||||
Capital Goods | |||||||
Debt to Equity (including Operating Lease Liability), Industry | |||||||
Industrials |
Based on: 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30).
1 2022 Calculation
Debt to equity (including operating lease liability) = Total debt (including operating lease liability) ÷ Shareholders’ equity
= ÷ =
2 Click competitor name to see calculations.
- Total Debt (including operating lease liability)
- The total debt shows a fluctuating trend over the analyzed periods. It decreased from approximately 5.87 billion USD in June 2017 to about 4.96 billion USD in June 2018. However, it then increased significantly in June 2019 and further in 2020, reaching 8.60 billion USD. Following a reduction in 2021 to roughly 6.72 billion USD, the total debt surged again to approximately 11.62 billion USD by June 2022.
- Shareholders’ Equity
- Shareholders’ equity remained on an overall upward trajectory throughout the period. It increased steadily from about 5.26 billion USD in June 2017 to around 6.11 billion USD in June 2020. A notable jump occurred in June 2021, raising equity to roughly 8.40 billion USD, followed by a continued increase to approximately 8.85 billion USD in June 2022.
- Debt to Equity Ratio (including operating lease liability)
- The debt to equity ratio presents considerable volatility. Starting at 1.12 in June 2017, it declined to 0.85 by June 2018, indicating a relative reduction in leverage. The ratio then rose sharply to 1.19 in June 2019 and peaked at 1.41 in June 2020, reflecting increased debt relative to equity. A significant improvement occurred in June 2021, with the ratio dropping to 0.8, the lowest in the period, before climbing back to 1.31 in June 2022.
- Overall Analysis
- The financial data highlights cyclical adjustments in capital structure and debt management. The company's total debt and debt to equity ratio illustrate periods of increased leverage, especially in 2019-2020 and again in 2022. Conversely, shareholders' equity shows consistent growth, particularly notable in 2021 and 2022. The fluctuations in the debt to equity ratio imply a strategic balancing between debt and equity financing, with intermittent periods of higher indebtedness potentially related to capital investments or operational needs.
Debt to Capital
Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | Jun 30, 2019 | Jun 30, 2018 | Jun 30, 2017 | ||
---|---|---|---|---|---|---|---|
Selected Financial Data (US$ in thousands) | |||||||
Notes payable and long-term debt payable within one year | |||||||
Long-term debt, excluding payable within one year | |||||||
Total debt | |||||||
Shareholders’ equity | |||||||
Total capital | |||||||
Solvency Ratio | |||||||
Debt to capital1 | |||||||
Benchmarks | |||||||
Debt to Capital, Competitors2 | |||||||
Boeing Co. | |||||||
Caterpillar Inc. | |||||||
Eaton Corp. plc | |||||||
GE Aerospace | |||||||
Honeywell International Inc. | |||||||
Lockheed Martin Corp. | |||||||
RTX Corp. | |||||||
Debt to Capital, Sector | |||||||
Capital Goods | |||||||
Debt to Capital, Industry | |||||||
Industrials |
Based on: 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30).
1 2022 Calculation
Debt to capital = Total debt ÷ Total capital
= ÷ =
2 Click competitor name to see calculations.
- Total Debt
- The total debt demonstrates considerable fluctuations over the observed period. Initially, it decreased from approximately 5.87 billion in mid-2017 to about 4.96 billion in mid-2018. Following this decline, a notable increase occurred, rising steadily to roughly 8.46 billion by mid-2020. After a reduction to approximately 6.58 billion in mid-2021, the debt surged sharply, reaching a peak value of about 11.48 billion by mid-2022. This pattern indicates periods of both debt repayment and substantial borrowing, with the most recent year showing a significant increase in financial leverage.
- Total Capital
- Total capital showed an overall upward trend throughout the six-year span. Starting at around 11.13 billion in mid-2017, there was a slight decline by mid-2018 to approximately 10.82 billion. Subsequently, total capital increased consistently each year, reaching about 20.33 billion by mid-2022. This steady growth suggests successful capital accumulation, which could be attributed to either equity infusions, retained earnings, or other sources of financing augmenting the company's capital base over time.
- Debt to Capital Ratio
- The debt to capital ratio varied moderately during the period, reflecting changes in both debt levels and total capital. It started at 0.53 in mid-2017, declined to 0.46 by mid-2018, then increased to 0.54 in mid-2019 and reached a peak of 0.58 in mid-2020. A significant reduction to 0.44 occurred in mid-2021, followed by a rise to 0.56 in mid-2022. These fluctuations indicate periods where debt financing proportionally increased relative to capital, especially notable in mid-2020 and mid-2022, contrasted by a marked decrease in mid-2021, suggesting variations in the company’s financial leverage strategy across these years.
Debt to Capital (including Operating Lease Liability)
Parker-Hannifin Corp., debt to capital (including operating lease liability) calculation, comparison to benchmarks
Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | Jun 30, 2019 | Jun 30, 2018 | Jun 30, 2017 | ||
---|---|---|---|---|---|---|---|
Selected Financial Data (US$ in thousands) | |||||||
Notes payable and long-term debt payable within one year | |||||||
Long-term debt, excluding payable within one year | |||||||
Total debt | |||||||
Current operating lease liabilities (included within Other accrued liabilities) | |||||||
Long-term operating lease liabilities (included within Other liabilities) | |||||||
Total debt (including operating lease liability) | |||||||
Shareholders’ equity | |||||||
Total capital (including operating lease liability) | |||||||
Solvency Ratio | |||||||
Debt to capital (including operating lease liability)1 | |||||||
Benchmarks | |||||||
Debt to Capital (including Operating Lease Liability), Competitors2 | |||||||
Boeing Co. | |||||||
Caterpillar Inc. | |||||||
Eaton Corp. plc | |||||||
GE Aerospace | |||||||
Honeywell International Inc. | |||||||
Lockheed Martin Corp. | |||||||
RTX Corp. | |||||||
Debt to Capital (including Operating Lease Liability), Sector | |||||||
Capital Goods | |||||||
Debt to Capital (including Operating Lease Liability), Industry | |||||||
Industrials |
Based on: 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30).
1 2022 Calculation
Debt to capital (including operating lease liability) = Total debt (including operating lease liability) ÷ Total capital (including operating lease liability)
= ÷ =
2 Click competitor name to see calculations.
- Total Debt (including operating lease liability)
- The total debt experienced fluctuations over the analyzed period. It decreased from 5,870,360 thousand US dollars in 2017 to 4,957,025 thousand in 2018, indicating a reduction in leverage. However, debt increased notably in 2019, reaching 7,107,845 thousand, and continued rising to 8,601,558 thousand in 2020. In 2021, there was a decline to 6,718,974 thousand, but by 2022, total debt surged significantly to 11,616,495 thousand, marking the highest level within the period.
- Total Capital (including operating lease liability)
- Total capital showed a general upward trend throughout the timeframe. Starting at 11,132,009 thousand US dollars in 2017, it slightly declined to 10,816,891 thousand in 2018. From 2019 onwards, capital increased steadily, reaching 13,069,814 thousand in 2019, followed by 14,715,541 thousand in 2020, and 15,117,281 thousand in 2021. The most pronounced growth occurred in 2022, with total capital rising to 20,464,506 thousand, the highest point in the observed data.
- Debt to Capital Ratio (including operating lease liability)
- The debt to capital ratio exhibited variability consistent with the changes in debt and capital levels. It started at 0.53 in 2017, decreased to 0.46 in 2018, indicating a lower proportion of debt relative to capital. The ratio then increased again to 0.54 in 2019 and further to 0.58 in 2020, reflecting a higher reliance on debt financing. In 2021, the ratio decreased to 0.44, representing the lowest leverage ratio within the period. However, in 2022, the ratio rose sharply to 0.57, almost reverting to the 2020 level, signifying an increased debt burden relative to overall capital.
- Summary of Trends
- Overall, the financial data reveals a trend of increasing total capital over the six-year period, with notable growth especially in 2022. Total debt fluctuated but demonstrated an overall increasing pattern with a significant spike in 2022. The debt to capital ratio mirrored these changes, reflecting fluctuating leverage with a tendency toward higher debt proportions in 2019, 2020, and 2022, and lower leverage in 2018 and 2021. This indicates a cycle of varying debt reliance, with the latest data suggesting a return to elevated gearing levels.
Debt to Assets
Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | Jun 30, 2019 | Jun 30, 2018 | Jun 30, 2017 | ||
---|---|---|---|---|---|---|---|
Selected Financial Data (US$ in thousands) | |||||||
Notes payable and long-term debt payable within one year | |||||||
Long-term debt, excluding payable within one year | |||||||
Total debt | |||||||
Total assets | |||||||
Solvency Ratio | |||||||
Debt to assets1 | |||||||
Benchmarks | |||||||
Debt to Assets, Competitors2 | |||||||
Boeing Co. | |||||||
Caterpillar Inc. | |||||||
Eaton Corp. plc | |||||||
GE Aerospace | |||||||
Honeywell International Inc. | |||||||
Lockheed Martin Corp. | |||||||
RTX Corp. | |||||||
Debt to Assets, Sector | |||||||
Capital Goods | |||||||
Debt to Assets, Industry | |||||||
Industrials |
Based on: 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30).
1 2022 Calculation
Debt to assets = Total debt ÷ Total assets
= ÷ =
2 Click competitor name to see calculations.
- Total Debt
- The total debt experienced fluctuations over the analyzed periods. It decreased from approximately 5.87 billion in mid-2017 to about 4.96 billion in mid-2018, indicating a reduction in debt obligations. However, from 2018 onward, total debt rose markedly, reaching over 7.1 billion by mid-2019 and continuing to increase to approximately 8.46 billion in mid-2020. A reduction was noted in mid-2021 with debt lowering to around 6.58 billion, followed by a significant surge in mid-2022, with total debt peaking at roughly 11.48 billion. This pattern suggests an overall increasing indebtedness with some intermittent decreases.
- Total Assets
- Total assets displayed a consistent upward trajectory throughout the period examined. Starting at approximately 15.49 billion in mid-2017, assets slightly decreased by mid-2018 to around 15.32 billion, but then steadily increased each subsequent year. By mid-2022, total assets had grown substantially, reaching approximately 25.94 billion. This reflects expansion and accumulation of resources over time.
- Debt to Assets Ratio
- The debt to assets ratio mirrors the movements of total debt relative to asset growth. It decreased from 0.38 in mid-2017 to 0.32 in mid-2018, indicating improved leverage and potential reduction in financial risk. Following this, the ratio climbed to 0.40 in mid-2019 and further to 0.43 in mid-2020, demonstrating increasing leverage. A decrease occurred again in mid-2021, aligning with the reduction in total debt, bringing the ratio down to 0.32. However, by mid-2022, the ratio rose to 0.44, the highest level in the period under review, signifying elevated leverage and increased reliance on debt financing.
Debt to Assets (including Operating Lease Liability)
Parker-Hannifin Corp., debt to assets (including operating lease liability) calculation, comparison to benchmarks
Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | Jun 30, 2019 | Jun 30, 2018 | Jun 30, 2017 | ||
---|---|---|---|---|---|---|---|
Selected Financial Data (US$ in thousands) | |||||||
Notes payable and long-term debt payable within one year | |||||||
Long-term debt, excluding payable within one year | |||||||
Total debt | |||||||
Current operating lease liabilities (included within Other accrued liabilities) | |||||||
Long-term operating lease liabilities (included within Other liabilities) | |||||||
Total debt (including operating lease liability) | |||||||
Total assets | |||||||
Solvency Ratio | |||||||
Debt to assets (including operating lease liability)1 | |||||||
Benchmarks | |||||||
Debt to Assets (including Operating Lease Liability), Competitors2 | |||||||
Boeing Co. | |||||||
Caterpillar Inc. | |||||||
Eaton Corp. plc | |||||||
GE Aerospace | |||||||
Honeywell International Inc. | |||||||
Lockheed Martin Corp. | |||||||
RTX Corp. | |||||||
Debt to Assets (including Operating Lease Liability), Sector | |||||||
Capital Goods | |||||||
Debt to Assets (including Operating Lease Liability), Industry | |||||||
Industrials |
Based on: 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30).
1 2022 Calculation
Debt to assets (including operating lease liability) = Total debt (including operating lease liability) ÷ Total assets
= ÷ =
2 Click competitor name to see calculations.
- Total Debt (including operating lease liability)
-
The total debt level exhibits significant volatility over the analyzed period. It declined from approximately 5.87 billion USD in mid-2017 to around 4.96 billion USD in mid-2018, marking a notable reduction. This was followed by an increase to about 7.11 billion USD in 2019 and a further rise in 2020 to 8.60 billion USD. Subsequently, the debt decreased to approximately 6.72 billion USD in 2021 but surged again in 2022 to reach a peak of approximately 11.62 billion USD. Overall, the debt shows a pattern of alternating decreases and increases, with a pronounced upward spike in the final reported year.
- Total Assets
-
Total assets demonstrate a generally ascending trend throughout the period. Starting at around 15.49 billion USD in mid-2017, assets slightly declined to about 15.32 billion USD in 2018 but then increased steadily each year thereafter. By mid-2022, total assets reached approximately 25.94 billion USD, reflecting a cumulative growth of around 67.5% over the six-year span. This consistent increase suggests ongoing asset accumulation or appreciation despite variability in debt levels.
- Debt to Assets Ratio (including operating lease liability)
-
The debt to assets ratio fluctuates across the years, indicating changing leverage conditions. It decreased from 0.38 in 2017 to 0.32 in 2018, which implies reduced leverage during that interval. However, the ratio rose in 2019 to 0.40 and continued to increase to 0.44 in 2020, signifying higher reliance on debt relative to assets. A decrease followed in 2021 to 0.33, indicating deleveraging, but in 2022, the ratio climbed again to 0.45, the highest in the observed period. This pattern reflects periods of both deleveraging and increased indebtedness, with the 2022 level suggesting the highest leverage ratio over the six years.
- Overall Analysis
-
The financial data indicates a dynamic balance between debt and asset levels. While assets generally increase steadily, debt levels show more pronounced swings, occasionally decreasing significantly before rising sharply. The leverage ratio corroborates this instability, displaying a pattern of fluctuations rather than a steady trend. The marked increase in debt and ratio in 2022 warrants attention, as it may reflect strategic financing decisions, acquisitions, or other capital structure adjustments. Monitoring these dynamics is essential to assess the company's financial risk and capital management strategies over time.
Financial Leverage
Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | Jun 30, 2019 | Jun 30, 2018 | Jun 30, 2017 | ||
---|---|---|---|---|---|---|---|
Selected Financial Data (US$ in thousands) | |||||||
Total assets | |||||||
Shareholders’ equity | |||||||
Solvency Ratio | |||||||
Financial leverage1 | |||||||
Benchmarks | |||||||
Financial Leverage, Competitors2 | |||||||
Boeing Co. | |||||||
Caterpillar Inc. | |||||||
Eaton Corp. plc | |||||||
GE Aerospace | |||||||
Honeywell International Inc. | |||||||
Lockheed Martin Corp. | |||||||
RTX Corp. | |||||||
Financial Leverage, Sector | |||||||
Capital Goods | |||||||
Financial Leverage, Industry | |||||||
Industrials |
Based on: 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30).
1 2022 Calculation
Financial leverage = Total assets ÷ Shareholders’ equity
= ÷ =
2 Click competitor name to see calculations.
- Total assets
- The total assets demonstrate a generally increasing trend over the six-year period. Beginning at approximately $15.49 billion in mid-2017, the total assets grew to about $25.94 billion by mid-2022. This reflects a significant increase, particularly noticeable from 2021 to 2022, where the assets rose sharply by nearly $5.6 billion. This upward trajectory suggests expansion or accumulation of resources, possibly through acquisitions, capital investments, or growth in operational scale.
- Shareholders’ equity
- Shareholders' equity similarly shows an increasing pattern, growing from approximately $5.26 billion in mid-2017 to nearly $8.85 billion in mid-2022. The growth is steady across the years with a notable jump between 2020 and 2021, where equity increased by over $2.2 billion. This indicates strengthening financial health and possibly retained earnings or new equity issuances. The rise in equity contributes positively to the company’s net worth and buffer against liabilities.
- Financial leverage
- The financial leverage ratio fluctuates across the timeline without a clear consistent trend. It starts at 2.94 in 2017, dips to 2.61 in 2018, rises again until reaching 3.23 in 2020, then falls to 2.42 in 2021, and climbs back to 2.93 in 2022. These variations imply changes in the proportion of debt to equity financing. The lower leverage ratio in 2021, coinciding with a sharp increase in equity, suggests a deleveraging effort or equity growth outpacing debt. In contrast, the higher leverage in 2020 and 2022 indicates increased reliance on debt financing during those years.
Interest Coverage
Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | Jun 30, 2019 | Jun 30, 2018 | Jun 30, 2017 | ||
---|---|---|---|---|---|---|---|
Selected Financial Data (US$ in thousands) | |||||||
Net income attributable to common shareholders | |||||||
Add: Net income attributable to noncontrolling interest | |||||||
Add: Income tax expense | |||||||
Add: Interest expense | |||||||
Earnings before interest and tax (EBIT) | |||||||
Solvency Ratio | |||||||
Interest coverage1 | |||||||
Benchmarks | |||||||
Interest Coverage, Competitors2 | |||||||
Boeing Co. | |||||||
Caterpillar Inc. | |||||||
Eaton Corp. plc | |||||||
GE Aerospace | |||||||
Honeywell International Inc. | |||||||
Lockheed Martin Corp. | |||||||
RTX Corp. | |||||||
Interest Coverage, Sector | |||||||
Capital Goods | |||||||
Interest Coverage, Industry | |||||||
Industrials |
Based on: 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30).
1 2022 Calculation
Interest coverage = EBIT ÷ Interest expense
= ÷ =
2 Click competitor name to see calculations.
- Earnings before interest and tax (EBIT)
- The EBIT values demonstrate a generally positive trend from 2017 to 2022, with some fluctuations. EBIT increased significantly from approximately 1.49 billion USD in 2017 to a peak of about 2.50 billion USD in 2021. However, there was a notable decline in 2022, dropping to roughly 1.87 billion USD. This indicates strong operational performance growth up to 2021, followed by a reversal in the most recent period.
- Interest expense
- Interest expense exhibits variability across the periods. Starting at around 162 million USD in 2017, it increased steadily through 2018 and 2020, reaching over 308 million USD in 2020, before slightly decreasing but remaining elevated in the subsequent years, with values near 250 million USD in 2021 and 255 million USD in 2022. This reflects increased borrowing costs or higher debt levels in recent years compared to earlier periods.
- Interest coverage ratio
- The interest coverage ratio, which measures the ability to cover interest expenses from EBIT, shows fluctuations corresponding to the trends in EBIT and interest expense. It started at a high level of approximately 9.18 in 2017 and remained relatively stable around 9 in 2018. There was an improvement in 2019 to 11.17, signifying stronger coverage. However, the ratio declined sharply to 5.91 in 2020, recovering somewhat to 9.99 in 2021, but dropped again to 7.32 in 2022. These changes suggest varying degrees of financial stress relating to interest obligations, with the lowest coverage occurring in 2020.
- Summary
- The data indicates that operational earnings grew steadily through 2021 but faced a downturn in 2022. Meanwhile, interest expenses rose substantially from 2017 to 2020 and then remained high. The interest coverage ratio reflects these movements, showing the company's fluctuating ability to meet interest costs from its operating earnings. The periods of reduced coverage, particularly in 2020 and 2022, may warrant closer attention to financial risk and debt management.
Fixed Charge Coverage
Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | Jun 30, 2019 | Jun 30, 2018 | Jun 30, 2017 | ||
---|---|---|---|---|---|---|---|
Selected Financial Data (US$ in thousands) | |||||||
Net income attributable to common shareholders | |||||||
Add: Net income attributable to noncontrolling interest | |||||||
Add: Income tax expense | |||||||
Add: Interest expense | |||||||
Earnings before interest and tax (EBIT) | |||||||
Add: Operating lease expense | |||||||
Earnings before fixed charges and tax | |||||||
Interest expense | |||||||
Operating lease expense | |||||||
Fixed charges | |||||||
Solvency Ratio | |||||||
Fixed charge coverage1 | |||||||
Benchmarks | |||||||
Fixed Charge Coverage, Competitors2 | |||||||
Boeing Co. | |||||||
Caterpillar Inc. | |||||||
Eaton Corp. plc | |||||||
GE Aerospace | |||||||
Honeywell International Inc. | |||||||
Lockheed Martin Corp. | |||||||
RTX Corp. | |||||||
Fixed Charge Coverage, Sector | |||||||
Capital Goods | |||||||
Fixed Charge Coverage, Industry | |||||||
Industrials |
Based on: 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30).
1 2022 Calculation
Fixed charge coverage = Earnings before fixed charges and tax ÷ Fixed charges
= ÷ =
2 Click competitor name to see calculations.
- Earnings before fixed charges and tax
- The earnings before fixed charges and tax exhibited a generally positive trend from 2017 to 2021, increasing from approximately 1.61 billion USD in 2017 to a peak of about 2.55 billion USD in 2021. However, there was a noticeable decline in 2022, with earnings dropping to around 1.92 billion USD, indicating volatility in operational profitability in the most recent period.
- Fixed charges
- Fixed charges showed fluctuations over the observed years, starting at roughly 281 million USD in 2017, rising to over 340 million USD in 2018, and then experiencing variations, decreasing somewhat in 2021 to approximately 298 million USD before slightly increasing again in 2022 to about 301 million USD. This suggests some variability in the costs related to fixed financial obligations without a clear upward or downward long-term trend.
- Fixed charge coverage ratio
- The fixed charge coverage ratio, which measures the ability to cover fixed charges from earnings, presented some variability as well. Starting at 5.73 in 2017, the ratio increased to a high of 8.53 in 2021, reflecting improved ability to service fixed charges that year. However, it declined to 6.36 in 2022, indicating a reduced but still strong coverage capacity compared to earlier years. The fluctuations in this ratio correspond with the changes in earnings before fixed charges and tax and fixed charges, highlighting the impact of earnings variability on the company's financial health.