Eaton Corporation PLC (ETN)
Solvency ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 2.08 | 2.02 | 2.06 | 2.07 | 2.13 |
Eaton Corporation PLC's solvency ratios indicate a strong financial position with consistently low debt levels relative to its assets, capital, and equity. The Debt-to-assets ratio remained at 0.00 from 2020 to 2024, suggesting that the company has no significant financial obligations in relation to its total assets.
Similarly, the Debt-to-capital ratio and Debt-to-equity ratio also stood at 0.00 across the five-year period, indicating that Eaton Corporation PLC has not relied heavily on debt to finance its operations and investments. This low debt burden signifies a stable financial structure and sound management of financial risk.
The Financial leverage ratio, which provides insight into the company's reliance on debt financing, ranged between 2.02 and 2.13 over the five-year period. Although this ratio increased slightly in 2024 compared to previous years, it still remains at a moderate level, implying that Eaton Corporation PLC has a balanced mix of debt and equity in its capital structure.
Overall, the solvency ratios suggest that Eaton Corporation PLC is efficiently managing its financial obligations and maintaining a healthy financial position, which is crucial for sustainable growth and resilience in the face of economic challenges.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 35.59 | 25.31 | 14.42 | 10.42 | 5.79 |
Interest coverage is a crucial financial ratio used to evaluate a company's ability to meet interest expenses on its outstanding debt. Eaton Corporation PLC's interest coverage has shown a positive trend over the years. In 2020, the interest coverage stood at 5.79, indicating that the company generated operating income 5.79 times larger than its interest expenses.
By the end of 2024, Eaton Corporation PLC's interest coverage had significantly improved to 35.59, suggesting that the company's operating income was 35.59 times greater than its interest expenses. This increase in interest coverage reflects Eaton's strong financial health and ability to comfortably cover its interest obligations. Overall, the rising trend in interest coverage signifies improved financial stability and efficient management of debt obligations by Eaton Corporation PLC.