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)
Reynolds American Inc., solvency ratios
Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).
| Solvency ratio | Description | The company |
|---|---|---|
| Debt to equity ratio | A solvency ratio calculated as total debt divided by total shareholders’ equity. | Reynolds American Inc. 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. | Reynolds American Inc. 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. | Reynolds American Inc. 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. | Reynolds American Inc. financial leverage ratio decreased from 2014 to 2015 and from 2015 to 2016. |
| Solvency ratio | Description | The company |
|---|---|---|
| Interest coverage ratio | A solvency ratio calculated as EBIT divided by interest payments. | Reynolds American Inc. 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. | Reynolds American Inc. fixed charge coverage ratio improved from 2014 to 2015 and from 2015 to 2016. |
Debt to Equity
Reynolds American Inc., debt to equity calculation, comparison to benchmarks
| Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current maturities of long-term debt | 501) | 506) | 450) | —) | 60) | |
| Long-term debt, less current maturities | 12,664) | 16,941) | 4,633) | 5,099) | 5,035) | |
| Total debt | 13,165) | 17,447) | 5,083) | 5,099) | 5,095) | |
| Shareholders’ equity | 21,711) | 18,252) | 4,522) | 5,167) | 5,257) | |
| Solvency Ratio | ||||||
| Debt to equity1 | 0.61 | 0.96 | 1.12 | 0.99 | 0.97 | |
| Benchmarks | ||||||
| Debt to Equity, Competitors2 | ||||||
| Altria Group Inc. | — | — | — | — | — | |
| Coca-Cola Co. | — | — | — | — | — | |
| PepsiCo Inc. | — | — | — | — | — | |
| Philip Morris International Inc. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).
1 2016 Calculation
Debt to equity = Total debt ÷ Shareholders’ equity
= 13,165 ÷ 21,711 = 0.61
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. | Reynolds American Inc. debt to equity ratio improved from 2014 to 2015 and from 2015 to 2016. |
Debt to Capital
Reynolds American Inc., debt to capital calculation, comparison to benchmarks
| Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current maturities of long-term debt | 501) | 506) | 450) | —) | 60) | |
| Long-term debt, less current maturities | 12,664) | 16,941) | 4,633) | 5,099) | 5,035) | |
| Total debt | 13,165) | 17,447) | 5,083) | 5,099) | 5,095) | |
| Shareholders’ equity | 21,711) | 18,252) | 4,522) | 5,167) | 5,257) | |
| Total capital | 34,876) | 35,699) | 9,605) | 10,266) | 10,352) | |
| Solvency Ratio | ||||||
| Debt to capital1 | 0.38 | 0.49 | 0.53 | 0.50 | 0.49 | |
| Benchmarks | ||||||
| Debt to Capital, Competitors2 | ||||||
| Altria Group Inc. | — | — | — | — | — | |
| Coca-Cola Co. | — | — | — | — | — | |
| PepsiCo Inc. | — | — | — | — | — | |
| Philip Morris International Inc. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).
1 2016 Calculation
Debt to capital = Total debt ÷ Total capital
= 13,165 ÷ 34,876 = 0.38
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. | Reynolds American Inc. debt to capital ratio improved from 2014 to 2015 and from 2015 to 2016. |
Debt to Assets
Reynolds American Inc., debt to assets calculation, comparison to benchmarks
| Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current maturities of long-term debt | 501) | 506) | 450) | —) | 60) | |
| Long-term debt, less current maturities | 12,664) | 16,941) | 4,633) | 5,099) | 5,035) | |
| Total debt | 13,165) | 17,447) | 5,083) | 5,099) | 5,095) | |
| Total assets | 51,095) | 53,224) | 15,196) | 15,402) | 16,557) | |
| Solvency Ratio | ||||||
| Debt to assets1 | 0.26 | 0.33 | 0.33 | 0.33 | 0.31 | |
| Benchmarks | ||||||
| Debt to Assets, Competitors2 | ||||||
| Altria Group Inc. | — | — | — | — | — | |
| Coca-Cola Co. | — | — | — | — | — | |
| PepsiCo Inc. | — | — | — | — | — | |
| Philip Morris International Inc. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).
1 2016 Calculation
Debt to assets = Total debt ÷ Total assets
= 13,165 ÷ 51,095 = 0.26
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. | Reynolds American Inc. debt to assets ratio improved from 2014 to 2015 and from 2015 to 2016. |
Financial Leverage
Reynolds American Inc., financial leverage calculation, comparison to benchmarks
| Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Total assets | 51,095) | 53,224) | 15,196) | 15,402) | 16,557) | |
| Shareholders’ equity | 21,711) | 18,252) | 4,522) | 5,167) | 5,257) | |
| Solvency Ratio | ||||||
| Financial leverage1 | 2.35 | 2.92 | 3.36 | 2.98 | 3.15 | |
| Benchmarks | ||||||
| Financial Leverage, Competitors2 | ||||||
| Altria Group Inc. | — | — | — | — | — | |
| Coca-Cola Co. | — | — | — | — | — | |
| PepsiCo Inc. | — | — | — | — | — | |
| Philip Morris International Inc. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).
1 2016 Calculation
Financial leverage = Total assets ÷ Shareholders’ equity
= 51,095 ÷ 21,711 = 2.35
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. | Reynolds American Inc. financial leverage ratio decreased from 2014 to 2015 and from 2015 to 2016. |
Interest Coverage
Reynolds American Inc., interest coverage calculation, comparison to benchmarks
| Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income | 6,073) | 3,253) | 1,470) | 1,718) | 1,272) | |
| Less: Income from discontinued operations, net of tax | —) | —) | 25) | —) | —) | |
| Add: Income tax expense | 3,618) | 3,131) | 817) | 1,023) | 681) | |
| Add: Interest and debt expense | 626) | 570) | 286) | 259) | 234) | |
| Earnings before interest and tax (EBIT) | 10,317) | 6,954) | 2,548) | 3,000) | 2,187) | |
| Solvency Ratio | ||||||
| Interest coverage1 | 16.48 | 12.20 | 8.91 | 11.58 | 9.35 | |
| Benchmarks | ||||||
| Interest Coverage, Competitors2 | ||||||
| Altria Group Inc. | — | — | — | — | — | |
| Coca-Cola Co. | — | — | — | — | — | |
| PepsiCo Inc. | — | — | — | — | — | |
| Philip Morris International Inc. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).
1 2016 Calculation
Interest coverage = EBIT ÷ Interest expense
= 10,317 ÷ 626 = 16.48
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. | Reynolds American Inc. interest coverage ratio improved from 2014 to 2015 and from 2015 to 2016. |
Fixed Charge Coverage
Reynolds American Inc., fixed charge coverage calculation, comparison to benchmarks
| Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income | 6,073) | 3,253) | 1,470) | 1,718) | 1,272) | |
| Less: Income from discontinued operations, net of tax | —) | —) | 25) | —) | —) | |
| Add: Income tax expense | 3,618) | 3,131) | 817) | 1,023) | 681) | |
| Add: Interest and debt expense | 626) | 570) | 286) | 259) | 234) | |
| Earnings before interest and tax (EBIT) | 10,317) | 6,954) | 2,548) | 3,000) | 2,187) | |
| Add: Rent expense | 27) | 26) | 25) | 24) | 19) | |
| Earnings before fixed charges and tax | 10,344) | 6,980) | 2,573) | 3,024) | 2,206) | |
| Interest and debt expense | 626) | 570) | 286) | 259) | 234) | |
| Rent expense | 27) | 26) | 25) | 24) | 19) | |
| Fixed charges | 653) | 596) | 311) | 283) | 253) | |
| Solvency Ratio | ||||||
| Fixed charge coverage1 | 15.84 | 11.71 | 8.27 | 10.69 | 8.72 | |
| Benchmarks | ||||||
| Fixed Charge Coverage, Competitors2 | ||||||
| Coca-Cola Co. | — | — | — | — | — | |
| PepsiCo Inc. | — | — | — | — | — | |
| Philip Morris International Inc. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).
1 2016 Calculation
Fixed charge coverage = Earnings before fixed charges and tax ÷ Fixed charges
= 10,344 ÷ 653 = 15.84
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. | Reynolds American Inc. fixed charge coverage ratio improved from 2014 to 2015 and from 2015 to 2016. |