Time Warner Cable Inc. (NYSE:TWC)

The analysis of the financial ratios over the five-year period reveals several significant trends and insights related to the company’s leverage and coverage metrics.

Debt to Equity Ratio

The debt to equity ratio shows a moderately declining trend from 3.51 in 2011 to 2.5 in 2015. After a slight increase in 2012, the ratio begins a steady decrease, indicating a reduction in the reliance on debt relative to equity financing.

Debt to Capital Ratio

This ratio remains fairly stable initially, around 0.78 to 0.79 from 2011 to 2013, before declining to 0.71 by 2015. The downward movement implies a decreasing proportion of debt in the company’s total capital structure over time.

Debt to Assets Ratio

The debt to assets ratio exhibits a consistent decrease from 0.55 in 2011 to 0.46 in 2015. This suggests that the overall company assets are increasingly financed through means other than debt, reflecting improving asset coverage for debt obligations.

Financial Leverage

Financial leverage increases slightly from 6.41 in 2011 to a peak of 6.95 in 2013, followed by a notable decline to 5.48 in 2015. This pattern indicates that while the company was initially increasing leveraged positions, it subsequently improved its balance sheet strength by reducing leverage.

Interest Coverage Ratio

The interest coverage ratio exhibits moderate fluctuations, rising from 2.62 in 2011 to a peak of 3.29 in 2014, before a slight decrease to 3.13 in 2015. Overall, the ratio remains above 2.5, suggesting an adequate and stable ability to meet interest expenses throughout the period.

Fixed Charge Coverage Ratio

The fixed charge coverage ratio follows a similar trajectory to the interest coverage ratio, increasing from 2.43 in 2011 to a high of 2.89 in 2014, then slightly decreasing to 2.75 in 2015. This indicates that the company maintained a reasonably stable capacity to cover fixed charges, including interest and lease expenses.

Overall, the financial data suggests that the company has been gradually reducing its reliance on debt relative to equity and assets, while maintaining a solid ability to cover interest and fixed charges. The downward trends in leverage ratios combined with consistently adequate coverage ratios indicate strengthening financial stability over the reviewed period.

Total Debt

Total debt exhibited a downward trend over the five-year period. Starting at $26,442 million in 2011, it slightly increased to $26,689 million in 2012 but then consistently declined each subsequent year, reaching $22,502 million by the end of 2015. This represents an overall reduction of approximately 15% from the initial figure, indicating a strategic effort to decrease leverage or reduce financial obligations.

Total Shareholders’ Equity

Shareholders’ equity displayed some fluctuations but generally followed an upward trajectory. Beginning at $7,530 million in 2011, it decreased moderately during 2012 and 2013 to $7,279 million and $6,943 million, respectively. However, from 2013 onward, equity values increased significantly, reaching $8,013 million in 2014 and $8,995 million by 2015. This growth suggests improved retained earnings, capital contributions, or revaluation of assets over this period.

Debt to Equity Ratio

The debt to equity ratio reflects the interplay between total debt and shareholders' equity and reveals notable improvement in financial leverage. The ratio started at 3.51 in 2011, increased slightly to 3.67 in 2012, and then held relatively steady at 3.61 in 2013. Subsequently, there was a marked decline to 2.96 in 2014 and further to 2.5 in 2015. This downward trend suggests enhanced financial stability and reduced reliance on debt financing relative to equity during the latter years.

Overall Analysis

Over the period analyzed, the company demonstrated a deliberate reduction of total debt alongside an eventual strengthening of shareholders’ equity. The decline in the debt to equity ratio confirms a trend toward improved capital structure and risk profile. The initial dip in equity followed by substantial growth may indicate a period of reinvestment or strategic shifts enhancing net asset value. These patterns collectively suggest greater financial resilience and a move toward lower leverage in recent years.

The data reveals a consistent decrease in total debt for the periods analyzed. Starting from US$26,442 million at the end of 2011, total debt gradually declined each year to reach US$22,502 million by the end of 2015. This indicates a deliberate effort to reduce the company's indebtedness over the five-year span.

Total capital also showed a downward trend, albeit less pronounced than total debt. From US$33,972 million in 2011, total capital slightly decreased over time, reaching US$31,497 million in 2015. The reduction in total capital appears to be modest in comparison to the decline in total debt.

The debt to capital ratio provides insight into the company's leverage. It remained relatively stable at around 0.78 to 0.79 between 2011 and 2013, suggesting a consistent capital structure during these years. However, from 2014 onwards, the ratio decreased, reaching 0.71 by the end of 2015. This reduction indicates a lower reliance on debt financing relative to the company’s overall capital base.

Overall, the trends suggest that the company has been actively managing its capital structure to reduce leverage and improve financial stability. The consistent reduction in total debt and the corresponding decline in the debt to capital ratio indicate a strategic move towards lowering financial risk over the analyzed period.

The financial data over the five-year period demonstrates a consistent trend of decreasing total debt, with values declining from $26,442 million in 2011 to $22,502 million in 2015. This indicates a gradual reduction in leverage over the years.

Total assets experienced minor fluctuations but remained relatively stable, starting at $48,276 million in 2011 and reaching $49,277 million in 2015. The asset base did not show significant growth or contraction, suggesting a steady asset position.

The debt to assets ratio reveals a clear downward trend, decreasing from 0.55 in 2011 to 0.46 in 2015. This decline reflects an improving capital structure with reduced reliance on debt financing relative to the company's asset base.

Overall, the data indicate a strategic effort towards deleveraging, accompanied by stable asset levels, resulting in a stronger balance sheet position over the analyzed period.

Total assets

The total assets of the company remained relatively stable over the five-year period. The value slightly increased from 48,276 million US dollars at the end of 2011 to 49,277 million US dollars at the end of 2015, with minor fluctuations observed in the intermediate years. This indicates a stable asset base with no significant expansions or contractions during this period.

Total shareholders’ equity

Shareholders’ equity showed a declining trend from 7,530 million US dollars at the end of 2011 to 6,943 million in 2013, followed by a notable recovery reaching 8,995 million US dollars by the end of 2015. The initial decline suggests potential losses or increased distributions to shareholders during the early years, whereas the subsequent increase indicates improved profitability or capital injections contributing to enhanced equity over the last two years.

Financial leverage

The financial leverage ratio exhibited a decreasing trend over the period. It started at 6.41 in 2011, peaked slightly at 6.95 in 2013, and then declined to 5.48 by the end of 2015. This downward movement in leverage signifies a reduction in the reliance on debt relative to equity, likely reflecting efforts to strengthen the balance sheet by lowering debt levels or increasing equity.

Overall analysis

Overall, the data suggests that the company maintained a stable asset base while improving its equity position and reducing financial leverage in the latter years. The decline and recovery in shareholders’ equity, combined with a reduction in leverage, may indicate strategic financial management aimed at enhancing financial stability and reducing risk exposure.

Earnings before interest and tax (EBIT)

The Earnings before interest and tax exhibited an overall increasing trend from 2011 to 2015, with values rising from 3,986 million USD in 2011 to a peak of 4,950 million USD in 2012. A decline followed in subsequent years, with EBIT decreasing to 4,594 million USD in 2013, slightly increasing to 4,667 million USD in 2014, and then declining again to 4,390 million USD by the end of 2015. Despite fluctuations, the EBIT in 2015 remained above the 2011 level.

Interest Expense

Interest expense showed a generally stable pattern with a slight decrease over the five-year period. Starting at 1,524 million USD in 2011, it increased to 1,614 million USD in 2012, then gradually declined to 1,555 million USD in 2013, 1,419 million USD in 2014, and 1,402 million USD in 2015. This indicates a moderation in interest costs, particularly from 2012 onwards.

Interest Coverage Ratio

The interest coverage ratio improved from 2.62 in 2011 to 3.07 in 2012, reflecting stronger ability to cover interest expenses from operational earnings. Although there was a minor dip to 2.95 in 2013, it increased again to reach a peak of 3.29 in 2014, before slightly declining to 3.13 in 2015. Overall, the interest coverage ratio maintained healthy levels above 2.5 throughout the period, indicating consistently sufficient earnings to meet interest obligations.

Earnings before fixed charges and tax

The earnings before fixed charges and tax displayed fluctuations over the five-year period. Starting at 4,188 million US dollars at the end of 2011, the amount increased significantly to 5,187 million in 2012. Subsequently, it decreased to 4,851 million in 2013, followed by a slight increase to 4,965 million in 2014. In 2015, the earnings declined again to 4,695 million. Overall, after an initial sharp rise, earnings showed a general downward trend from 2012 onward.

Fixed charges

Fixed charges showed a modest upward trend initially, rising from 1,726 million US dollars in 2011 to a peak of 1,851 million in 2012. Thereafter, fixed charges gradually decreased over the remaining years, declining to 1,812 million in 2013, then to 1,717 million in 2014, and finally to 1,707 million in 2015. The data suggests a slight reduction in the company's fixed cost burden after 2012.

Fixed charge coverage ratio

The fixed charge coverage ratio, measuring the ability to cover fixed charges from earnings, showed improvement overall during the period. It increased from 2.43 times in 2011 to a high of 2.89 times in 2014, indicating enhanced capacity to meet fixed charges in that year. There was a minor decrease to 2.75 times in 2015, but coverage remained stronger than at the start of the period. This trend suggests relatively stable financial health with regard to fixed charges coverage despite fluctuations in earnings.