CNH Industrial N.V. (CNH)
Solvency ratios
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.50 | 0.50 | 0.51 | 0.53 | 0.55 | 0.54 | 0.54 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.79 | 0.80 | 0.81 | 0.84 | 0.84 | 0.80 | 0.81 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 3.77 | 4.04 | 4.32 | 5.18 | 5.10 | 4.10 | 4.16 |
| Financial leverage ratio | 5.61 | 5.76 | 5.83 | 5.79 | 5.71 | 5.39 | 5.69 | 5.54 | 5.69 | 5.64 | 6.16 | 6.51 | 7.29 | 7.58 | 8.10 | 8.48 | 9.69 | 9.31 | 7.55 | 7.76 |
The solvency ratios of CNH Industrial N.V. indicate the company's ability to meet its long-term financial obligations.
1. Debt-to-assets ratio: The trend shows a decreasing ratio from 0.54 in March 2020 to 0.00 by December 2021, which is maintained at 0.00 through 2024. This suggests a significant improvement in the company's ability to finance its assets without relying heavily on debt.
2. Debt-to-capital ratio: Similarly, the ratio decreases from 0.81 in March 2020 to 0.00 by December 2021 and remains at 0.00 thereafter. This indicates a shift towards a capital structure with lower debt levels and higher equity contributions.
3. Debt-to-equity ratio: There is a consistent downward trend from 4.16 in March 2020 to 0.00 by December 2021 and remains at 0.00 in subsequent periods. This signifies a decreasing reliance on debt financing in relation to equity, reflecting a strengthening financial position.
4. Financial leverage ratio: The ratio declines steadily from 7.76 in March 2020 to 5.61 by December 2024. This indicates a reduction in the company's financial leverage over the years, implying a lower risk of financial distress due to excessive debt.
Overall, the solvency ratios of CNH Industrial N.V. demonstrate a positive trend towards lower debt levels, increased financial stability, and improved long-term sustainability.
Coverage ratios
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | 1.90 | 2.12 | 2.30 | 2.64 | 2.98 | 3.39 | 3.88 | 4.39 | 5.06 | 4.89 | 4.56 | 4.83 | 4.49 | 4.71 | 2.23 | 1.32 | 0.38 | 0.15 | 1.62 | 1.90 |
Interest coverage ratio measures the company's ability to meet interest expenses on its outstanding debt obligations. It is calculated by dividing earnings before interest and taxes (EBIT) by the interest expense.
Looking at the data provided for CNH Industrial N.V., we observe fluctuations in the interest coverage ratio over the quarters. In March 2020, the interest coverage was 1.90, indicating that the company's EBIT was 1.90 times its interest expense. The ratio declined in the following quarters, hitting a low of 0.15 in September 2020, suggesting a significant decline in EBIT relative to interest expenses.
However, the interest coverage ratio started to recover from March 2021 onwards, reaching 5.06 by December 2022. This upward trend indicates that CNH Industrial N.V. has been able to generate more earnings to cover its interest costs effectively.
The fluctuations in the interest coverage ratio can be attributed to changes in the company's financial performance, including variations in EBIT and interest expenses. A ratio below 1 indicates that the company is not generating enough earnings to cover its interest expenses, which may raise concerns about its financial health.
Overall, monitoring the interest coverage ratio is crucial for assessing CNH Industrial N.V.'s ability to meet its interest obligations and manage its debt efficiently.