L3Harris Technologies Inc (LHX)
Solvency ratios
| Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Sep 30, 2019 | Jun 30, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.25 | 0.27 | 0.27 | 0.26 | 0.22 | 0.23 | 0.19 | 0.21 | 0.21 | 0.20 | 0.20 | 0.20 | 0.20 | 0.19 | 0.19 | 0.17 | 0.17 | 0.17 | 0.16 | 0.27 |
| Debt-to-capital ratio | 0.36 | 0.37 | 0.37 | 0.37 | 0.30 | 0.31 | 0.25 | 0.28 | 0.27 | 0.27 | 0.27 | 0.27 | 0.26 | 0.26 | 0.25 | 0.23 | 0.22 | 0.22 | 0.22 | 0.45 |
| Debt-to-equity ratio | 0.56 | 0.60 | 0.59 | 0.60 | 0.43 | 0.45 | 0.34 | 0.38 | 0.37 | 0.37 | 0.37 | 0.36 | 0.36 | 0.35 | 0.34 | 0.29 | 0.28 | 0.29 | 0.28 | 0.82 |
| Financial leverage ratio | 2.21 | 2.24 | 2.22 | 2.27 | 1.92 | 1.94 | 1.81 | 1.82 | 1.79 | 1.79 | 1.81 | 1.80 | 1.82 | 1.80 | 1.78 | 1.74 | 1.71 | 1.74 | 1.71 | 3.01 |
The solvency ratios of L3Harris Technologies Inc indicate the company's ability to meet its long-term financial obligations. The debt-to-assets ratio has remained relatively stable around 0.20 to 0.27 over the past few quarters, suggesting that the company is using around 20% to 27% of its total assets to finance its operations, with a slight upward trend in recent quarters.
The debt-to-capital ratio has also remained consistent, ranging from 0.25 to 0.37, indicating that between 25% to 37% of the company's capital structure is financed by debt. The trend shows a slight increase in recent quarters, suggesting a higher reliance on debt financing.
The debt-to-equity ratio has exhibited a similar trend, hovering around 0.34 to 0.60, indicating that the company's debt represents approximately 34% to 60% of its equity. The ratio increased in recent quarters, indicating a higher level of leverage in the company's capital structure.
Lastly, the financial leverage ratio, which measures the company's total assets relative to its equity, has also shown an increasing trend, ranging from 1.71 to 2.27. This indicates that the company is becoming more leveraged over time, as its assets are increasing at a faster pace than its equity.
Overall, the solvency ratios of L3Harris Technologies Inc suggest that the company has been gradually increasing its reliance on debt financing to support its operations and growth, which could pose some risks in terms of financial stability and may require close monitoring in the future.
Coverage ratios
| Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Sep 30, 2019 | Jun 30, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | 5.91 | 4.27 | 2.66 | 4.47 | 2.37 | 3.42 | 4.36 | 3.05 | 9.35 | 9.16 | 13.84 | -0.78 | 2.83 | 7.04 | 6.01 | 6.69 | 6.45 | 6.81 | 7.71 | 7.56 |
Interest coverage ratio is a crucial financial metric that indicates a company's ability to meet its interest obligations on outstanding debt using its operating income. L3Harris Technologies Inc's interest coverage ratio has shown fluctuations over the past few quarters.
In the most recent quarter ending June 30, 2024, the interest coverage ratio stood at 7.92, reflecting a strong ability to cover interest payments comfortably with operating earnings. This signifies a significant improvement compared to the previous quarter's ratio of 4.27, indicating better financial health.
Looking back over the past few quarters, the trend in L3Harris Technologies Inc's interest coverage ratio has been relatively volatile. While some quarters have shown robust coverage ratios above 5, there have also been periods with lower ratios, such as the significant decline to -0.78 in the fourth quarter of 2021, which signals potential financial distress.
The average interest coverage ratio over the period analyzed appears to be healthy, with occasional fluctuations. The highest interest coverage ratio was noted in the fourth quarter of 2021 at 13.84, indicating a very strong ability to pay interest obligations from operating income. However, the negative interest coverage ratio in that same quarter raises concerns about the company's financial stability and ability to service its debt.
Overall, while the recent interest coverage ratio of 7.92 for L3Harris Technologies Inc suggests a strong ability to meet interest payments, it is important to monitor future trends in this ratio closely to ensure continued financial stability and solvency.