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)
YUM! Brands Inc., solvency ratios
Based on: 10-K (reporting date: 2015-12-26), 10-K (reporting date: 2014-12-27), 10-K (reporting date: 2013-12-28), 10-K (reporting date: 2012-12-29), 10-K (reporting date: 2011-12-31).
| Solvency ratio | Description | The company |
|---|---|---|
| Debt to equity ratio | A solvency ratio calculated as total debt divided by total shareholders’ equity. | YUM! Brands Inc. debt to equity ratio deteriorated from 2013 to 2014 and from 2014 to 2015. |
| Debt to capital ratio | A solvency ratio calculated as total debt divided by total debt plus shareholders’ equity. | YUM! Brands Inc. debt to capital ratio deteriorated from 2013 to 2014 and from 2014 to 2015. |
| Debt to assets ratio | A solvency ratio calculated as total debt divided by total assets. | YUM! Brands Inc. debt to assets ratio deteriorated from 2013 to 2014 and from 2014 to 2015. |
| Financial leverage ratio | A solvency ratio calculated as total assets divided by total shareholders’ equity. | YUM! Brands Inc. financial leverage ratio increased from 2013 to 2014 and from 2014 to 2015. |
| Solvency ratio | Description | The company |
|---|---|---|
| Interest coverage ratio | A solvency ratio calculated as EBIT divided by interest payments. | YUM! Brands Inc. interest coverage ratio improved from 2013 to 2014 and from 2014 to 2015. |
| Fixed charge coverage ratio | A solvency ratio calculated as earnings before fixed charges and tax divided by fixed charges. | YUM! Brands Inc. fixed charge coverage ratio improved from 2013 to 2014 and from 2014 to 2015. |
Debt to Equity
YUM! Brands Inc., debt to equity calculation, comparison to benchmarks
| Dec 26, 2015 | Dec 27, 2014 | Dec 28, 2013 | Dec 29, 2012 | Dec 31, 2011 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term borrowings | 923) | 267) | 71) | 10) | 320) | |
| Long-term debt | 3,054) | 3,077) | 2,918) | 2,932) | 2,997) | |
| Total debt | 3,977) | 3,344) | 2,989) | 2,942) | 3,317) | |
| Shareholders’ equity, YUM! Brands, Inc. | 911) | 1,547) | 2,166) | 2,154) | 1,823) | |
| Solvency Ratio | ||||||
| Debt to equity1 | 4.37 | 2.16 | 1.38 | 1.37 | 1.82 | |
| Benchmarks | ||||||
| Debt to Equity, Competitors2 | ||||||
| Airbnb Inc. | — | — | — | — | — | |
| Booking Holdings Inc. | — | — | — | — | — | |
| Chipotle Mexican Grill Inc. | — | — | — | — | — | |
| McDonald’s Corp. | — | — | — | — | — | |
| Starbucks Corp. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2015-12-26), 10-K (reporting date: 2014-12-27), 10-K (reporting date: 2013-12-28), 10-K (reporting date: 2012-12-29), 10-K (reporting date: 2011-12-31).
1 2015 Calculation
Debt to equity = Total debt ÷ Shareholders’ equity, YUM! Brands, Inc.
= 3,977 ÷ 911 = 4.37
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. | YUM! Brands Inc. debt to equity ratio deteriorated from 2013 to 2014 and from 2014 to 2015. |
Debt to Capital
YUM! Brands Inc., debt to capital calculation, comparison to benchmarks
| Dec 26, 2015 | Dec 27, 2014 | Dec 28, 2013 | Dec 29, 2012 | Dec 31, 2011 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term borrowings | 923) | 267) | 71) | 10) | 320) | |
| Long-term debt | 3,054) | 3,077) | 2,918) | 2,932) | 2,997) | |
| Total debt | 3,977) | 3,344) | 2,989) | 2,942) | 3,317) | |
| Shareholders’ equity, YUM! Brands, Inc. | 911) | 1,547) | 2,166) | 2,154) | 1,823) | |
| Total capital | 4,888) | 4,891) | 5,155) | 5,096) | 5,140) | |
| Solvency Ratio | ||||||
| Debt to capital1 | 0.81 | 0.68 | 0.58 | 0.58 | 0.65 | |
| Benchmarks | ||||||
| Debt to Capital, Competitors2 | ||||||
| Airbnb Inc. | — | — | — | — | — | |
| Booking Holdings Inc. | — | — | — | — | — | |
| Chipotle Mexican Grill Inc. | — | — | — | — | — | |
| McDonald’s Corp. | — | — | — | — | — | |
| Starbucks Corp. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2015-12-26), 10-K (reporting date: 2014-12-27), 10-K (reporting date: 2013-12-28), 10-K (reporting date: 2012-12-29), 10-K (reporting date: 2011-12-31).
1 2015 Calculation
Debt to capital = Total debt ÷ Total capital
= 3,977 ÷ 4,888 = 0.81
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. | YUM! Brands Inc. debt to capital ratio deteriorated from 2013 to 2014 and from 2014 to 2015. |
Debt to Assets
YUM! Brands Inc., debt to assets calculation, comparison to benchmarks
| Dec 26, 2015 | Dec 27, 2014 | Dec 28, 2013 | Dec 29, 2012 | Dec 31, 2011 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term borrowings | 923) | 267) | 71) | 10) | 320) | |
| Long-term debt | 3,054) | 3,077) | 2,918) | 2,932) | 2,997) | |
| Total debt | 3,977) | 3,344) | 2,989) | 2,942) | 3,317) | |
| Total assets | 8,075) | 8,345) | 8,695) | 9,011) | 8,834) | |
| Solvency Ratio | ||||||
| Debt to assets1 | 0.49 | 0.40 | 0.34 | 0.33 | 0.38 | |
| Benchmarks | ||||||
| Debt to Assets, Competitors2 | ||||||
| Airbnb Inc. | — | — | — | — | — | |
| Booking Holdings Inc. | — | — | — | — | — | |
| Chipotle Mexican Grill Inc. | — | — | — | — | — | |
| McDonald’s Corp. | — | — | — | — | — | |
| Starbucks Corp. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2015-12-26), 10-K (reporting date: 2014-12-27), 10-K (reporting date: 2013-12-28), 10-K (reporting date: 2012-12-29), 10-K (reporting date: 2011-12-31).
1 2015 Calculation
Debt to assets = Total debt ÷ Total assets
= 3,977 ÷ 8,075 = 0.49
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. | YUM! Brands Inc. debt to assets ratio deteriorated from 2013 to 2014 and from 2014 to 2015. |
Financial Leverage
YUM! Brands Inc., financial leverage calculation, comparison to benchmarks
| Dec 26, 2015 | Dec 27, 2014 | Dec 28, 2013 | Dec 29, 2012 | Dec 31, 2011 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Total assets | 8,075) | 8,345) | 8,695) | 9,011) | 8,834) | |
| Shareholders’ equity, YUM! Brands, Inc. | 911) | 1,547) | 2,166) | 2,154) | 1,823) | |
| Solvency Ratio | ||||||
| Financial leverage1 | 8.86 | 5.39 | 4.01 | 4.18 | 4.85 | |
| Benchmarks | ||||||
| Financial Leverage, Competitors2 | ||||||
| Airbnb Inc. | — | — | — | — | — | |
| Booking Holdings Inc. | — | — | — | — | — | |
| Chipotle Mexican Grill Inc. | — | — | — | — | — | |
| McDonald’s Corp. | — | — | — | — | — | |
| Starbucks Corp. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2015-12-26), 10-K (reporting date: 2014-12-27), 10-K (reporting date: 2013-12-28), 10-K (reporting date: 2012-12-29), 10-K (reporting date: 2011-12-31).
1 2015 Calculation
Financial leverage = Total assets ÷ Shareholders’ equity, YUM! Brands, Inc.
= 8,075 ÷ 911 = 8.86
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. | YUM! Brands Inc. financial leverage ratio increased from 2013 to 2014 and from 2014 to 2015. |
Interest Coverage
YUM! Brands Inc., interest coverage calculation, comparison to benchmarks
| Dec 26, 2015 | Dec 27, 2014 | Dec 28, 2013 | Dec 29, 2012 | Dec 31, 2011 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income, YUM! Brands, Inc. | 1,293) | 1,051) | 1,091) | 1,597) | 1,319) | |
| Add: Net income attributable to noncontrolling interest | 5) | (30) | (27) | 11) | 16) | |
| Add: Income tax expense | 489) | 406) | 487) | 537) | 324) | |
| Add: Interest expense | 155) | 152) | 270) | 169) | 184) | |
| Earnings before interest and tax (EBIT) | 1,942) | 1,579) | 1,821) | 2,314) | 1,843) | |
| Solvency Ratio | ||||||
| Interest coverage1 | 12.53 | 10.39 | 6.74 | 13.69 | 10.02 | |
| Benchmarks | ||||||
| Interest Coverage, Competitors2 | ||||||
| Airbnb Inc. | — | — | — | — | — | |
| Booking Holdings Inc. | — | — | — | — | — | |
| Chipotle Mexican Grill Inc. | — | — | — | — | — | |
| McDonald’s Corp. | — | — | — | — | — | |
| Starbucks Corp. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2015-12-26), 10-K (reporting date: 2014-12-27), 10-K (reporting date: 2013-12-28), 10-K (reporting date: 2012-12-29), 10-K (reporting date: 2011-12-31).
1 2015 Calculation
Interest coverage = EBIT ÷ Interest expense
= 1,942 ÷ 155 = 12.53
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. | YUM! Brands Inc. interest coverage ratio improved from 2013 to 2014 and from 2014 to 2015. |
Fixed Charge Coverage
YUM! Brands Inc., fixed charge coverage calculation, comparison to benchmarks
| Dec 26, 2015 | Dec 27, 2014 | Dec 28, 2013 | Dec 29, 2012 | Dec 31, 2011 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income, YUM! Brands, Inc. | 1,293) | 1,051) | 1,091) | 1,597) | 1,319) | |
| Add: Net income attributable to noncontrolling interest | 5) | (30) | (27) | 11) | 16) | |
| Add: Income tax expense | 489) | 406) | 487) | 537) | 324) | |
| Add: Interest expense | 155) | 152) | 270) | 169) | 184) | |
| Earnings before interest and tax (EBIT) | 1,942) | 1,579) | 1,821) | 2,314) | 1,843) | |
| Add: Rental expense, minimum | 737) | 766) | 759) | 721) | 625) | |
| Earnings before fixed charges and tax | 2,679) | 2,345) | 2,580) | 3,035) | 2,468) | |
| Interest expense | 155) | 152) | 270) | 169) | 184) | |
| Rental expense, minimum | 737) | 766) | 759) | 721) | 625) | |
| Fixed charges | 892) | 918) | 1,029) | 890) | 809) | |
| Solvency Ratio | ||||||
| Fixed charge coverage1 | 3.00 | 2.55 | 2.51 | 3.41 | 3.05 | |
| Benchmarks | ||||||
| Fixed Charge Coverage, Competitors2 | ||||||
| Airbnb Inc. | — | — | — | — | — | |
| Booking Holdings Inc. | — | — | — | — | — | |
| Chipotle Mexican Grill Inc. | — | — | — | — | — | |
| McDonald’s Corp. | — | — | — | — | — | |
| Starbucks Corp. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2015-12-26), 10-K (reporting date: 2014-12-27), 10-K (reporting date: 2013-12-28), 10-K (reporting date: 2012-12-29), 10-K (reporting date: 2011-12-31).
1 2015 Calculation
Fixed charge coverage = Earnings before fixed charges and tax ÷ Fixed charges
= 2,679 ÷ 892 = 3.00
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. | YUM! Brands Inc. fixed charge coverage ratio improved from 2013 to 2014 and from 2014 to 2015. |