Honeywell International Inc (HON)
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 | 1.43 | 3.88 | 3.60 | 3.35 | 3.63 |
Honeywell International Inc's solvency ratios indicate a strong financial position with consistently low levels of debt relative to assets, capital, and equity over the past five years. The Debt-to-assets ratio, Debt-to-capital ratio, and Debt-to-equity ratio all show a stable trend at 0.00 for each year from 2020 to 2024, indicating that the company has minimal debt obligations in relation to its total assets and capital structure.
Moreover, the Financial leverage ratio decreased from 3.63 in 2020 to 1.43 in 2024. This suggests that Honeywell International Inc has been reducing its reliance on debt financing and improving its solvency position by decreasing the proportion of debt in its capital structure. Overall, the company's solvency ratios reflect a healthy balance sheet and strong financial stability.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 7.82 | 9.26 | 16.41 | 22.09 | 17.75 |
Interest coverage ratio is a key financial metric used to evaluate a company's ability to meet its interest obligations on outstanding debt. It is calculated by dividing a company's earnings before interest and taxes (EBIT) by its interest expense.
Analyzing Honeywell International Inc's interest coverage ratio over the past five years shows a generally positive trend. The company's interest coverage ratio has fluctuated over the period:
- In 2020, the interest coverage ratio was 17.75, indicating that Honeywell's earnings were sufficient to cover its interest expenses about 17.75 times.
- By the end of 2021, the interest coverage ratio improved to 22.09, suggesting a stronger ability to meet interest obligations.
- However, in 2022, there was a slight decrease in the interest coverage ratio to 16.41, possibly indicating increased interest expenses relative to earnings.
- The interest coverage ratio continued to decline in 2023 to 9.26, signaling a potential decrease in the company's ability to cover its interest payments from its earnings.
- By the end of 2024, the interest coverage ratio further decreased to 7.82, reflecting a significant decline in the company's ability to cover interest expenses with operating income.
Overall, while Honeywell International Inc's interest coverage ratio has shown fluctuations, the decreasing trend in recent years raises concerns about its ability to comfortably meet its interest obligations from operating profits. Investors and creditors should closely monitor this ratio to assess the company's financial health and debt servicing capacity.