Honeywell International Inc (HON)
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 | 3.88 | 3.73 | 3.47 | 3.68 | 3.17 |
Honeywell International Inc's solvency ratios indicate the company's ability to meet its long-term financial obligations.
The debt-to-assets ratio has shown a slight increase over the past few years, reaching 0.33 in 2023. This ratio implies that 33% of the company's assets are financed by debt, indicating a moderate reliance on debt for funding its operations.
The debt-to-capital ratio has also been increasing steadily, standing at 0.56 in 2023. This ratio reveals that 56% of the company's capital structure is made up of debt. Although this suggests a higher level of debt compared to equity, the ratio has been relatively stable over the years.
The debt-to-equity ratio has seen fluctuations but has generally been on an upward trend, reaching 1.29 in 2023. This indicates that the company has $1.29 in debt for every $1 of equity. A higher debt-to-equity ratio may signify higher financial risk and dependence on debt financing.
The financial leverage ratio has been increasing over the years, indicating higher financial leverage. In 2023, the ratio stood at 3.88, suggesting that the company's assets are financed nearly four times over by debt. This may indicate a higher degree of financial risk and potential volatility in earnings.
Overall, Honeywell International Inc's solvency ratios demonstrate a moderate reliance on debt for funding its operations, with increasing levels of financial leverage. It is important for investors and stakeholders to monitor these ratios to assess the company's financial risk and ability to meet its debt obligations.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 377.05 | 304.71 | 299.62 | 220.48 | 250.07 |
Honeywell International Inc's interest coverage ratio has shown a declining trend over the past five years, with the ratio decreasing from 67.68 in 2019 to 16.18 in 2023. This indicates that the company's ability to cover its interest expenses with its operating income has weakened during this period.
However, despite the decline, Honeywell's interest coverage ratio remains relatively healthy, as it has consistently been above 1. A higher ratio is generally preferred as it suggests that the company is generating more than enough operating income to cover its interest payments, indicating financial stability and lower risk of default.
It is important for investors and creditors to monitor the trend of the interest coverage ratio over time to assess the company's ability to meet its debt obligations and manage financial risks effectively.