Linde plc Ordinary Shares (LIN)
Solvency ratios
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.17 | 0.17 | 0.17 | 0.15 | 0.15 | 0.00 | 0.00 | 0.00 | 0.14 | 0.00 | 0.00 | 0.00 | 0.14 | 0.00 | 0.00 | 0.00 | 0.12 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.25 | 0.25 | 0.25 | 0.23 | 0.23 | 0.00 | 0.00 | 0.00 | 0.20 | 0.00 | 0.00 | 0.00 | 0.20 | 0.00 | 0.00 | 0.00 | 0.18 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.34 | 0.34 | 0.34 | 0.29 | 0.30 | 0.00 | 0.00 | 0.00 | 0.26 | 0.00 | 0.00 | 0.00 | 0.26 | 0.00 | 0.00 | 0.00 | 0.22 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 2.03 | 2.00 | 1.97 | 2.01 | 1.99 | 1.98 | 1.96 | 1.93 | 1.85 | 1.90 | 1.84 | 1.84 | 1.86 | 1.89 | 1.89 | 1.88 | 1.76 | 1.72 | 1.72 | 1.79 |
The solvency ratios of Linde Plc. provide valuable insights into the company's ability to meet its long-term financial obligations.
The debt-to-assets ratio has remained relatively stable over the quarters, ranging between 0.22 and 0.24. This indicates that, on average, around 22% to 24% of Linde's total assets are financed by debt. A lower debt-to-assets ratio suggests lower financial risk as it implies that a smaller portion of the company's assets are funded by debt.
The debt-to-capital ratio has also shown consistency, hovering between 0.29 and 0.33. This ratio represents the proportion of the company's capital that is financed through debt, with the rest coming from equity. Linde's debt-to-capital ratio indicates that approximately 29% to 33% of its capital structure is comprised of debt financing.
The debt-to-equity ratio, reflecting the relationship between debt and shareholders' equity, has exhibited a more varied trend, ranging from 0.38 to 0.49 over the quarters. A higher debt-to-equity ratio suggests more reliance on debt financing, which can increase financial risk due to higher interest payments and potential solvency concerns.
The financial leverage ratio, which measures the proportion of the company's assets that are financed by debt compared to equity, has been consistently above 1.9, indicating that Linde has a higher proportion of debt in its capital structure relative to equity. This implies that the company is more leveraged, which can magnify returns but also increase risks, especially in times of economic downturns.
Overall, the solvency ratios suggest that Linde Plc. has maintained a balanced approach to debt financing, with a moderate level of leverage to support its operations and growth. However, the varying debt-to-equity ratio indicates fluctuations in the company's capital structure that may warrant further monitoring to ensure sustainable and healthy financial health in the long term.
Coverage ratios
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | 40.12 | 48.02 | 52.49 | 63.98 | 85.22 | 79.67 | 88.64 | 79.56 | 64.73 | 57.73 | 39.22 | 34.25 | 28.89 | 33.50 | 56.21 | 67.93 | 66.66 | 51.06 | 35.74 | 29.28 |
Interest coverage measures a company's ability to meet its interest obligations with its operating income. It is calculated by dividing earnings before interest and taxes (EBIT) by the interest expense.
Looking at Linde Plc.'s interest coverage over the last eight quarters, we observe a consistently strong performance. The interest coverage ratio has been above 30 for all quarters, indicating that the company has a comfortable buffer to cover its interest payments.
In Q4 2023, the interest coverage ratio decreased to 38.30 from the previous quarter's 40.59 but remained at a healthy level. The ratio has been steadily declining since Q1 2023, where it stood at 56.37, but it is important to note that it is still well above the threshold of 1, which signifies that the company generates more than enough earnings to cover its interest expenses.
Comparing the latest quarter's ratio to the same quarter in the previous year, Q4 2022, where the ratio was 67.67, we can see a slight decrease. However, this reduction does not raise immediate concerns given that the ratio is at a relatively high level.
Overall, Linde Plc. has maintained a robust interest coverage ratio, demonstrating the company's ability to comfortably meet its interest obligations. Continued monitoring of this ratio will be essential to ensure the company maintains its financial health and liquidity position.