Parker-Hannifin Corporation (PH)
Solvency ratios
| Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 2.16 | 2.16 | 2.16 | 2.30 | 2.43 | 2.55 | 2.63 | 2.80 | 2.90 | 3.12 | 3.27 | 3.42 | 2.93 | 2.52 | 2.56 | 2.38 | 2.42 | 2.68 | 2.79 | 3.03 |
The provided financial ratios indicate that Parker-Hannifin Corporation exhibits a consistent and notable profile of minimal leverage across the analyzed periods. Specifically, the debt-to-assets, debt-to-capital, and debt-to-equity ratios are uniformly reported as zero throughout all dates from September 2020 to June 2025. This suggests that the company has not employed borrowed funds or debt financing during this entire time frame, relying entirely on equity or internal resources to finance its operations and investments.
In contrast, the financial leverage ratio presents a different perspective, remaining substantially above 1 throughout the periods analyzed, with a declining trend observed over time. The ratio starts at 3.03 in September 2020 and gradually decreases to approximately 2.16 by June 2025. This ratio reflects how many times the company's operating income or assets are amplified relative to shareholders' equity, and its persistent level above 2 indicates a moderate level of operating leverage, albeit decreasing over the specified periods.
The divergence between the ratios suggests that while Parker-Hannifin maintains an extremely conservative debt position—effectively zero leverage—the financial leverage ratio may be influenced by other factors, such as operational leverage or accounting policies, rather than actual debt levels. The declining trend in financial leverage ratio could imply improvements in operational efficiency, changes in asset structure, or strategic shifts toward reduced risk exposure.
In summary, Parker-Hannifin Corporation's solvency ratios from September 2020 through June 2025 reflect a debt-free capital structure, with no utilization of financial leverage in terms of debt. Nonetheless, the observed financial leverage ratio indicates a moderate amount of operational or accounting leverage, decreasing gradually over time, which may suggest enhancements in financial stability or efficiency.
Coverage ratios
| Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | 11.05 | 10.37 | 9.64 | 8.52 | 8.10 | 7.45 | 6.85 | 6.07 | 5.67 | 4.88 | 4.94 | 5.93 | 7.32 | 9.82 | 10.58 | 10.88 | 9.98 | 8.41 | 7.39 | 5.91 |
The analysis of Parker-Hannifin Corporation's interest coverage ratios over the specified periods reveals a generally positive trend in the company's ability to meet interest obligations. The ratio, which measures the company's earnings before interest and taxes (EBIT) relative to interest expenses, has demonstrated notable fluctuations but remains comfortably above critical thresholds that signal financial stability.
Between September 2020 and December 2021, the interest coverage ratio exhibits consistent growth, rising from 5.91 to 10.58. This upward trend indicates an improving capacity to cover interest expenses, reflecting strengthening earnings and possibly efficient management of debt levels during this period. The peak in March 2022 at 9.82 suggests that while earnings remained robust, there was a slight decline from the previous quarter.
From March 2022 onwards, the ratio experienced a decreasing trajectory, reaching a low of 4.94 by December 2022. This dip could imply increased interest obligations, a temporary decline in EBIT, or a combination of both. However, the ratio did not fall below conventional distress thresholds (often considered to be around 1.5 to 2), indicating that the company maintained an acceptable buffer to cover its interest expenses.
Post-December 2022, the ratio enters a gradual recovery phase, with values ascending to 6.85 in December 2023, and further improving to 10.37 by March 2025. These increases suggest an enhancement in earnings relative to interest costs, reinforcing the company's strengthening financial robustness.
Overall, the interest coverage ratio for Parker-Hannifin illustrates a pattern of initial robust improvement, a period of modest decline, followed by a consistent recovery. The ratios across the analyzed periods imply sound interest payment capacity and prudent financial management, with levels remaining well above common distress indications. This stability in interest coverage enhances confidence in the company's ability to service its debt obligations over the forecasted periods.
See also:
Parker-Hannifin Corporation Solvency Ratios (Quarterly Data)