Parker-Hannifin Corporation (PH)

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 Dec 31, 2019 Sep 30, 2019
Debt-to-assets ratio 0.29 0.36 0.36 0.36 0.29 0.39 0.41 0.43 0.38 0.29 0.30 0.33 0.32 0.33 0.33 0.36 0.38 0.40 0.39 0.38
Debt-to-capital ratio 0.41 0.48 0.49 0.50 0.46 0.55 0.57 0.59 0.52 0.42 0.43 0.44 0.44 0.47 0.48 0.52 0.55 0.56 0.56 0.55
Debt-to-equity ratio 0.70 0.91 0.94 1.01 0.85 1.21 1.33 1.45 1.10 0.74 0.76 0.78 0.78 0.90 0.93 1.08 1.23 1.29 1.29 1.21
Financial leverage ratio 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 3.19 3.23 3.32 3.21

Parker-Hannifin Corporation's solvency ratios show the company's ability to meet its long-term financial obligations. Over the past few quarters, the debt-to-assets ratio has remained relatively stable around 0.30 to 0.40, indicating that the company relies on debt to finance its operations while maintaining a significant portion of its assets financed by equity.

The debt-to-capital ratio has also exhibited stability, ranging from 0.40 to 0.60, showing that a significant portion of Parker-Hannifin's capital structure is funded by debt. The increasing trend in this ratio suggests a higher level of financial leverage over time.

The debt-to-equity ratio has displayed more variability, fluctuating between 0.70 to 1.45, with a recent peak in the latest quarter. This ratio indicates the proportion of debt and equity used to finance the company's assets, with higher values indicating a greater reliance on debt financing.

The financial leverage ratio, measuring the company's total debt relative to its equity, has shown a consistent upward trend from 2.38 to 3.32, indicating an increasing level of financial risk as the company takes on more debt relative to its equity.

Overall, the solvency ratios of Parker-Hannifin Corporation suggest that the company has been progressively increasing its debt levels relative to its assets, capital, and equity, which may indicate a higher risk profile and increased financial leverage. Investors and stakeholders should closely monitor these ratios to assess the company's ability to manage its debt obligations effectively.

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 Dec 31, 2019 Sep 30, 2019
Interest coverage 8.03 7.38 6.80 6.09 5.93 6.49 7.60 9.78 11.66 11.89 11.54 11.21 10.06 8.41 7.41 5.91 5.91 6.86 7.89 9.85

The interest coverage ratio of Parker-Hannifin Corporation has shown a fluctuating trend over the past several quarters. The ratio measures the company's ability to pay its interest expenses on outstanding debt with its earnings before interest and taxes (EBIT).

From December 2019 to June 2020, the interest coverage ratio increased steadily from 6.86 to 11.66, indicating an improving ability to cover interest payments with operating income. However, from June 2020 to March 2021, there was a decrease in the ratio to 7.41, suggesting a slight weakening in the company's ability to cover interest expenses.

Subsequently, from March 2021 to June 2022, there was a notable increase in the interest coverage ratio, reaching a peak of 11.89 in March 2022. This was followed by a gradual decline in the ratio, reaching 6.80 in December 2023.

Overall, despite some fluctuations, the interest coverage ratio of Parker-Hannifin Corporation has generally remained at healthy levels above 5, indicating that the company has sufficient earnings to cover its interest obligations. However, management should continue to monitor changes in the ratio to ensure the company maintains its ability to meet its debt obligations without financial strain.

See also:

Parker-Hannifin Corporation Solvency Ratios (Quarterly Data)