L3Harris Technologies Inc (LHX)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Jun 30, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.27 | 0.19 | 0.20 | 0.19 | 0.27 |
| Debt-to-capital ratio | 0.37 | 0.25 | 0.27 | 0.25 | 0.45 |
| Debt-to-equity ratio | 0.59 | 0.34 | 0.37 | 0.34 | 0.82 |
| Financial leverage ratio | 2.22 | 1.81 | 1.81 | 1.78 | 3.01 |
The solvency ratios of L3Harris Technologies Inc provide insights into the company's ability to meet its long-term financial obligations and fund its operations effectively.
The Debt-to-assets ratio has been trending upwards from 0.19 in 2020 to 0.27 in 2023, indicating that the proportion of the company's assets financed by debt has increased over the years. This suggests a higher reliance on debt to finance its operations and investments.
The Debt-to-capital ratio has also shown an increasing trend, rising from 0.25 in 2020 to 0.37 in 2023. This ratio reflects the company's capital structure and indicates the percentage of the total capital that is financed by debt. The increasing trend suggests a higher proportion of debt capital relative to total capital, which may increase the company's financial risk.
The Debt-to-equity ratio has followed a similar trend, increasing from 0.34 in 2020 to 0.59 in 2023. A higher Debt-to-equity ratio implies a greater reliance on debt financing compared to equity financing. This could indicate a potentially higher financial risk for the company, as a higher debt burden may lead to increased interest expense and debt repayment obligations.
Lastly, the Financial leverage ratio has fluctuated over the years, but has generally decreased from 3.01 in 2019 to 2.22 in 2023. This ratio reflects the extent to which the company is using debt to finance its assets. A decreasing trend in the Financial leverage ratio may signify a lower financial risk as the company is relying less on debt to support its operations and investments.
Overall, the increasing trends in the Debt-to-assets, Debt-to-capital, and Debt-to-equity ratios suggest a higher level of debt financing for L3Harris Technologies Inc, which may increase the company's financial risk. However, the decreasing trend in the Financial leverage ratio indicates a potential improvement in the company's financial health in terms of debt management.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Jun 30, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 2.63 | 6.54 | 10.47 | 6.01 | 7.56 |
Based on the provided data, we observe that the interest coverage ratio for L3Harris Technologies Inc has not been explicitly disclosed for the years 2021, 2022, and 2023. However, based on the available information, we can see a decreasing trend in the interest coverage ratio over the years.
In 2020, the interest coverage ratio was 6.01, indicating that the company generated operating income 6.01 times greater than its interest expenses for that year. This ratio further improved to 7.56 in 2019, suggesting a stronger ability to cover interest payments with operating income.
The lack of data for the most recent years limits a comprehensive assessment of the company's current ability to cover its interest obligations. The decreasing trend in the interest coverage ratio raises a red flag as it suggests a potential deterioration in the company's ability to service its debt through operating income.
It would be advisable for stakeholders and investors to closely monitor the interest coverage ratio in future financial reports to assess the company's financial health and its capacity to meet debt obligations.