Otis Worldwide Corp (OTIS)

The solvency ratios of Otis Worldwide Corp provide insights into the company's ability to meet its long-term financial obligations.

1. Debt-to-assets ratio: This ratio has increased steadily from 0.00 in 2019 to 0.68 in 2023, indicating that 68% of the company's assets are financed by debt. This suggests a higher reliance on debt to fund its assets over the years.

2. Debt-to-capital ratio: Similarly, the debt-to-capital ratio has shown an upward trend from 0.02 in 2019 to 3.49 in 2023, indicating that debt accounts for 349% of the company's capital structure. This signifies a significant increase in the proportion of debt used to finance the company's operations.

3. Debt-to-equity ratio: The data shows that the debt-to-equity ratio was not reported in the provided table. This ratio is important as it indicates the proportion of debt and equity in a company's capital structure.

4. Financial leverage ratio: The financial leverage ratio was notably high in 2019 at 5.70, illustrating that the company used significant leverage to support its operations and investments. The lack of data for subsequent years limits the ability to analyze changes in this ratio over time.

Overall, the increasing trend in debt-based solvency ratios such as debt-to-assets and debt-to-capital ratios for Otis Worldwide Corp indicates a growing reliance on debt financing. This may raise concerns about the company's financial risk and ability to manage debt effectively in the long run. Further analysis, including comparisons with industry benchmarks and peer companies, would provide a more comprehensive understanding of Otis Worldwide Corp's solvency position.

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Coverage ratios

The interest coverage ratio for Otis Worldwide Corp has shown a consistent and healthy trend over the past five years. The ratio has ranged from 11.06 to 15.34, indicating that the company has consistently generated more than enough operating income to cover its interest expenses. This reflects the company's strong ability to meet its interest obligations, providing a positive signal to creditors and investors regarding its financial stability and liquidity. The improvement in the interest coverage ratio over the years suggests that Otis Worldwide Corp has managed its debt levels effectively and has been able to generate sufficient earnings to service its debt commitments comfortably. Overall, the trend in the interest coverage ratio demonstrates the company's financial strength and ability to manage its debt efficiently.