Emerson Electric Company (EMR)
Solvency ratios
| 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 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.16 | 0.18 | 0.17 | 0.23 | 0.23 | 0.23 | 0.23 | 0.28 | 0.32 | 0.23 | 0.24 | 0.24 | 0.25 | 0.28 | 0.25 | 0.18 | 0.19 | 0.21 | 0.20 | 0.18 |
| Debt-to-capital ratio | 0.27 | 0.27 | 0.27 | 0.42 | 0.43 | 0.44 | 0.45 | 0.44 | 0.46 | 0.37 | 0.39 | 0.39 | 0.40 | 0.43 | 0.41 | 0.35 | 0.32 | 0.34 | 0.33 | 0.31 |
| Debt-to-equity ratio | 0.37 | 0.37 | 0.37 | 0.72 | 0.76 | 0.80 | 0.81 | 0.78 | 0.85 | 0.59 | 0.63 | 0.64 | 0.66 | 0.75 | 0.70 | 0.53 | 0.48 | 0.52 | 0.50 | 0.44 |
| Financial leverage ratio | 2.25 | 2.07 | 2.16 | 3.18 | 3.38 | 3.44 | 3.59 | 2.79 | 2.63 | 2.50 | 2.64 | 2.61 | 2.66 | 2.72 | 2.77 | 2.89 | 2.51 | 2.49 | 2.43 | 2.47 |
Emerson Electric Co.'s solvency ratios indicate the company's ability to meet its debt obligations and manage financial risk. The debt-to-assets ratio has shown some fluctuation over the quarters, ranging from 0.19 to 0.31, with a notable increase in Q1 2023 followed by a decrease in the most recent quarter, Q1 2024. This ratio suggests that approximately 19% to 31% of the company's assets are financed by debt.
The debt-to-capital ratio has also exhibited variability, moving between 0.28 and 0.53. Notably, there was a significant spike in Q2 2023, which declined in subsequent quarters. This ratio indicates that debt accounts for approximately 28% to 53% of the company's capital structure.
The debt-to-equity ratio reflects a mix of debt and equity financing, with values ranging from 0.39 to 1.12. The high values in Q1 2023 and Q4 2022 are concerning as they imply that the company's debt surpasses its equity in those periods. However, the ratios have since improved, albeit still indicating a significant reliance on debt.
The financial leverage ratio, which measures the proportion of assets financed by debt, has fluctuated notably, ranging from 2.07 to 3.59. The peak in Q1 2023 suggests a higher degree of financial risk compared to subsequent quarters. However, this ratio has shown some improvement in recent periods.
Overall, the solvency ratios of Emerson Electric Co. suggest that the company has managed its debt levels somewhat effectively, with some fluctuations observed. The decreasing trends in certain ratios indicate progress in reducing reliance on debt to support the business operations. Nonetheless, ongoing monitoring of these ratios is essential to ensure the company's long-term financial stability.
Coverage ratios
| 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 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | 0.59 | 6.10 | 7.79 | 6.44 | 6.83 | 8.95 | 7.88 | 8.09 | 8.08 | 6.97 | 6.22 | 4.80 | 4.63 | 3.07 | 4.59 | 5.49 | 4.46 | 5.74 | 4.24 | 4.78 |
Emerson Electric Co.'s interest coverage ratio, which measures the company's ability to meet its interest payments on outstanding debt, has shown a decreasing trend over the quarters presented in the table. In Q2 2022, the interest coverage ratio was at its highest point at 19.83, indicating a strong ability to cover interest expenses with operating income. However, the ratio decreased steadily in subsequent quarters, with Q1 2023 showing a notable decrease to 16.29.
While there was a slight improvement in Q2 2023 to 15.43, the ratio remained below the levels seen in earlier periods. In Q3 2023, there was a further improvement to 19.69, suggesting a potential strengthening of the company's ability to cover interest costs.
Overall, the fluctuations in Emerson Electric Co.'s interest coverage ratio over the quarters indicate some variability in the company's ability to service its debt obligations. Investors and analysts may want to closely monitor future financial results to assess the company's ongoing ability to manage its interest payments.