Emerson Electric Company (EMR)
Solvency ratios
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.18 | 0.23 | 0.23 | 0.28 | 0.21 |
| Debt-to-capital ratio | 0.27 | 0.44 | 0.37 | 0.43 | 0.34 |
| Debt-to-equity ratio | 0.37 | 0.80 | 0.59 | 0.75 | 0.52 |
| Financial leverage ratio | 2.07 | 3.44 | 2.50 | 2.72 | 2.49 |
The solvency ratios of Emerson Electric Co. indicate a favorable trend in the company's ability to meet its financial obligations. The debt-to-assets ratio has shown a decreasing trend over the past five years, indicating a lower reliance on debt to finance its assets. This trend suggests an improvement in the company's overall solvency and financial stability.
Similarly, the debt-to-capital and debt-to-equity ratios have also shown a declining pattern, indicating that the company has been gradually reducing its reliance on debt to finance its operations and investments. This is a positive sign, as lower debt ratios typically signify lower financial risk and greater financial flexibility.
Additionally, the financial leverage ratio has also decreased over the years, signaling that the company has been reducing its dependence on borrowed funds to finance its assets. This reduction in financial leverage indicates a stronger financial position and decreased exposure to financial risk.
Overall, the solvency ratios of Emerson Electric Co. demonstrate an improving financial position and a decreasing reliance on debt for its capital structure, which indicates a positive trend in the company's ability to meet its long-term financial obligations.
Coverage ratios
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 55.35 | 13.91 | 19.02 | 12.38 | 14.08 |
The interest coverage ratio measures a company's ability to meet its interest payments on outstanding debt. A higher ratio indicates a better ability to cover interest expenses.
Emerson Electric Co.'s interest coverage has been consistently high over the past five years, averaging around 18-20 times. This suggests that the company has had a strong ability to meet its interest obligations from operating income. The steady interest coverage ratio indicates a stable and potentially low-risk financial position. However, it's important to consider other factors such as the company's debt levels and operating cash flow to gain a more comprehensive view of its financial health.