CNH Industrial N.V. (CNH)

Solvency ratios

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 Dec 31, 2019
Debt-to-assets ratio 0.62 0.61 0.61 0.59 0.58 0.58 0.58 0.58 0.58 0.58 0.58 3.11 0.50 0.50 0.51 0.53 0.55 0.54 0.54 0.52
Debt-to-capital ratio 0.78 0.78 0.78 0.77 0.75 0.77 0.76 0.77 0.77 0.78 0.79 0.75 0.79 0.80 0.81 0.84 0.84 0.80 0.81 0.80
Debt-to-equity ratio 3.51 3.50 3.47 3.32 3.08 3.26 3.16 3.29 3.26 3.56 3.77 3.08 3.77 4.04 4.32 5.18 5.10 4.10 4.16 4.04
Financial leverage ratio 5.67 5.74 5.71 5.62 5.30 5.59 5.44 5.65 5.59 6.10 6.45 0.99 7.58 8.10 8.48 9.69 9.31 7.55 7.76 7.69

Based on the solvency ratios of CNH Industrial N.V. over the past several quarters, we can observe the following trends:

1. Debt-to-assets ratio: The company's debt-to-assets ratio has been relatively stable, hovering around the range of 0.58 to 0.62, indicating that approximately 58% to 62% of the company's assets are financed by debt. This suggests a moderate reliance on debt to fund its operations and investments.

2. Debt-to-capital ratio: CNH Industrial N.V.'s debt-to-capital ratio has also remained fairly consistent, varying between 0.75 and 0.79. This ratio represents the proportion of the company's capital structure that is funded by debt, and the stability in this ratio indicates a steady mix of debt and equity financing.

3. Debt-to-equity ratio: The company's debt-to-equity ratio shows a fluctuating trend, with values ranging from 3.08 to 5.18. This ratio highlights the extent to which the company relies on debt relative to equity to finance its operations. The increasing trend in recent quarters may indicate a higher level of financial risk compared to previous periods.

4. Financial leverage ratio: CNH Industrial N.V.'s financial leverage ratio has also displayed variability, ranging from 5.30 to 9.69. This ratio measures the company's total assets relative to shareholders' equity and indicates the company's ability to weather financial challenges. The increasing trend in this ratio may suggest a higher level of leverage and financial risk.

Overall, while the company's debt-to-assets and debt-to-capital ratios have shown stability, the increasing trend in the debt-to-equity and financial leverage ratios warrants further attention, as it indicates a potentially higher level of financial risk and leverage in recent quarters. It would be important for stakeholders to monitor these ratios closely to ensure the company's solvency and financial health.

Coverage ratios

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 Dec 31, 2019
Interest coverage 2.29 2.55 2.90 3.20 3.57 3.97 4.38 4.78 4.72 4.52 4.81 4.76 4.71 2.23 1.32 0.38 0.15 1.62 1.90 2.44

Interest coverage ratio measures a company's ability to meet its interest payments on outstanding debt with its operating profits. For CNH Industrial N.V., the interest coverage ratio has varied over the past few quarters.

The interest coverage ratio was relatively stable and strong, consistently above 2.0, from December 2019 to June 2022. This indicated that the company was generating enough operating profits to cover its interest expenses at least twice over during this period.

However, there was a noticeable decline in interest coverage ratio in the subsequent quarters. The ratio dropped significantly in the latter half of 2022 and throughout 2023, reaching levels below 2.0. This decline could raise concerns about the company's ability to comfortably meet its interest payments from its operating profits alone during these periods.

The interest coverage ratio somewhat recovered in 2024, showing an increasing trend from March to September. Although the ratio remained above 2.0 during this period, it is important for CNH Industrial N.V. to continue monitoring and managing its interest coverage to ensure it remains at a healthy level to meet its debt obligations efficiently.