Eaton Corporation PLC (ETN)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| 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 | 2.02 | 2.06 | 2.07 | 2.13 | 2.04 |
The solvency ratios of Eaton Corporation plc indicate the company's ability to meet its long-term financial obligations and sustain its operations. The debt-to-assets ratio has shown a consistent downward trend over the past five years, decreasing from 0.25 in 2019 to 0.24 in 2023. This suggests that the company has been successful in reducing its reliance on debt to finance its assets.
Similarly, the debt-to-capital ratio has also exhibited a decreasing trend, declining from 0.34 in 2019 to 0.33 in 2023. This indicates that Eaton Corporation plc has become more efficient in utilizing its capital structure to support its operations.
The debt-to-equity ratio, which measures the proportion of debt to equity in the company's capital structure, has shown a decreasing trend as well. It decreased from 0.52 in 2019 to 0.49 in 2023, indicating a lower level of financial risk and a stronger equity base in the company.
The financial leverage ratio, which reflects the extent to which the company relies on debt financing, has shown some fluctuations but has generally decreased from 2.13 in 2020 to 2.02 in 2023. This implies that Eaton Corporation plc has been successful in managing its debt levels and reducing financial leverage over the years.
Overall, the solvency ratios of Eaton Corporation plc demonstrate a favorable trend, suggesting improved financial stability and a stronger financial position to meet its long-term obligations.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 3,823.00 | 2,908.00 | 21.10 | 12.68 | 14.01 |
Eaton Corporation plc's interest coverage ratio has shown a consistent increasing trend over the past five years, reflecting the company's ability to comfortably meet its interest obligations. The interest coverage ratio has improved from 12.13 in 2019 to 25.73 in 2023, indicating a significant enhancement in the company's ability to cover its interest expenses from operating income. This steady improvement suggests that Eaton Corporation plc's profitability and operating performance have been strengthening over the years, providing a strong cushion against potential downturns or fluctuations in its earnings. A higher interest coverage ratio is generally seen as favorable as it indicates a lower risk of defaulting on debt payments. Overall, the increasing trend in Eaton Corporation plc's interest coverage ratio reflects a positive financial performance and a sound financial position.