L3Harris Technologies Inc (LHX)
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 | 2.15 | 2.22 | 1.81 | 1.81 | 1.78 |
The solvency ratios of L3Harris Technologies Inc indicate a consistently strong financial position over the years. The Debt-to-assets ratio has remained at 0.00 for all years provided, suggesting that the company has no debt relative to its total assets. This indicates a low financial risk associated with the company's capital structure.
Similarly, the Debt-to-capital ratio and Debt-to-equity ratio have also maintained a stable 0.00 over the years, demonstrating that the company's capital and equity are not significantly financed by debt. This further supports the notion of a low-risk financial structure.
The Financial leverage ratio, on the other hand, shows a slight increase from 1.78 in 2020 to 2.15 in 2024, indicating a higher utilization of debt financing relative to equity. However, the ratio remains relatively low, suggesting that the company's financial leverage is still within reasonable limits.
Overall, the solvency ratios of L3Harris Technologies Inc reflect a conservative approach to financial management, with minimal debt usage and a strong reliance on equity to fund its operations. This indicates a stable and secure financial position, providing investors and stakeholders with confidence in the company's ability to meet its financial obligations.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 3.37 | 3.25 | 5.56 | 9.62 | 6.27 |
The interest coverage ratio for L3Harris Technologies Inc has shown fluctuations over the last five years. In December 2020, the ratio was 6.27, indicating that the company generated 6.27 times more operating profits than it needed to cover its interest expenses. The ratio improved in December 2021 to 9.62, reflecting a stronger ability to meet interest obligations from operating income.
However, there was a notable decline in the interest coverage ratio in December 2022 to 5.56, suggesting a potential decrease in the company's ability to handle its interest payments with operating earnings alone. This trend continued in December 2023, with the ratio falling further to 3.25, indicating a significant drop in the company's ability to cover interest expenses.
While there was a slight improvement in December 2024 to 3.37, it remains below the levels seen in previous years, indicating ongoing challenges for L3Harris Technologies Inc in meeting its interest obligations from operating profits. It is essential for the company to monitor and manage its interest coverage ratio to ensure financial stability and sustainability in the long term.