Lockheed Martin Corporation (LMT)
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 | 8.78 | 7.67 | 5.71 | 4.64 | 8.43 |
Lockheed Martin Corporation has consistently maintained a strong solvency position over the years based on the provided data on solvency ratios. The Debt-to-assets ratio, Debt-to-capital ratio, and Debt-to-equity ratio have all remained at 0.00 from December 31, 2020, to December 31, 2024. This indicates that the company has no debt relative to its assets, capital, or equity during this period.
The Financial leverage ratio, however, shows some fluctuation over the same period, starting at 8.43 in 2020, decreasing to 4.64 in 2021, and then gradually increasing to 8.78 in 2024. Despite this fluctuation, the values indicate that the company is primarily financed through equity rather than debt.
Overall, the solvency ratios of Lockheed Martin Corporation suggest a conservative financial structure with minimal reliance on debt for funding its operations. This conservative approach to leverage can be seen as a positive indicator of financial stability and strength, providing a solid foundation for the company's long-term financial health and sustainability.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 7.00 | 9.29 | 11.72 | 14.27 | 14.93 |
Lockheed Martin Corporation's interest coverage ratio has been showing a declining trend over the past few years. As of December 31, 2020, the company had an interest coverage ratio of 14.93, indicating that it was able to cover its interest expenses nearly 15 times with its earnings before interest and taxes (EBIT). However, by December 31, 2024, this ratio had decreased to 7.00, suggesting a reduction in the company's ability to cover its interest obligations with its operating earnings.
A downward trend in the interest coverage ratio can signal potential concerns about the company's financial health and liquidity. It may indicate that Lockheed Martin's earnings are not keeping pace with its interest expenses, which could raise questions about its ability to meet debt obligations in the long term.
It is important for investors and stakeholders to monitor Lockheed Martin's interest coverage ratio closely to assess the company's ability to manage its debt and maintain financial stability. Management may need to implement strategies to improve profitability or reduce debt levels to enhance the company's overall financial position and mitigate risks associated with declining interest coverage ratios.