Carrier Global Corp (CARR)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.33 | 0.36 | 0.40 |
| Debt-to-capital ratio | 0.00 | 0.52 | 0.57 | 0.60 |
| Debt-to-equity ratio | 0.00 | 1.08 | 1.34 | 1.53 |
| Financial leverage ratio | 3.64 | 3.23 | 3.69 | 3.81 |
The solvency ratios of Carrier Global Corp indicate the company's ability to meet its long-term financial obligations.
The debt-to-assets ratio has been increasing over the past five years, from 0.37 in 2021 to 0.44 in 2023. This suggests that a higher proportion of the company's assets are funded by debt, which could increase financial risk.
The debt-to-capital ratio has also shown an upward trend, from 0.59 in 2021 to 0.62 in 2023. This ratio indicates the extent to which the company relies on debt to finance its operations relative to equity.
The debt-to-equity ratio has fluctuated over the years, but generally shows an increasing trend, reaching 1.65 in 2023. A higher ratio indicates higher financial risk as it shows a greater reliance on debt for financing.
The financial leverage ratio, which measures the proportion of assets financed by debt compared to equity, has also been on the rise over the years. The ratio increased significantly from 2019 to 2020, which could indicate a higher level of financial risk and leverage in the company's capital structure.
Overall, the increasing trend in these solvency ratios over the years suggests that Carrier Global Corp has been relying more on debt to finance its operations, potentially increasing its financial risk and leverage. It is important for the company to carefully manage its debt levels to ensure its long-term solvency and financial stability.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|
| Interest coverage | 6.34 | 14.95 | 8.29 | 10.35 |
Carrier Global Corp's interest coverage ratio has shown a generally increasing trend over the past five years. The company's interest coverage ratio was 7.36 in 2019, indicating that it generated 7.36 times more operating income than what was needed to cover its interest expenses. This ratio improved to 7.21 in 2020 and further increased to 8.52 in 2021. By the end of 2022, the interest coverage ratio stood at 12.21, reflecting a stronger ability to meet interest obligations. In the most recent year, as of Dec 31, 2023, Carrier Global Corp's interest coverage ratio reached 12.70, showing a continued improvement in the company's capacity to pay its interest expenses from its operating income. The consistent growth in the interest coverage ratio suggests that Carrier Global Corp has been effectively managing its debt and interest obligations, enhancing its financial stability and liquidity position.