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A. O. Smith key statistics and ratios

In fiscal 2025, A. O. Smith had return on equity of 29.2%, an operating margin of 19.0%, debt equal to 8.3% of equity and a current ratio of 1.50. Each ratio below is calculated from the figures on its income statement, balance sheet and cash flow pages.

Financial ratios

US$ thousands unless shown otherwise. Fiscal years, plus the last twelve months (LTM) when newer.

Fiscal year2009Dec 20092010Dec 20102011Dec 20112012Dec 20122013Dec 20132014Dec 20142015Dec 20152016Dec 20162017Dec 20172018Dec 20182019Dec 20192020Dec 20202021Dec 20212022Dec 20222023Dec 20232024Dec 20242025Dec 2025LTMSept 2026
Gross margin28.7%29.9%30.0%33.6%35.9%36.5%39.8%41.5%41.1%41.0%39.5%38.3%37.0%35.4%38.5%38.1%38.8%38.6%
Operating margin—8.9%11.5%13.4%13.9%14.7%17.9%19.2%19.3%19.2%17.7%17.4%19.3%9.6%19.3%18.5%19.0%17.5%
Net margin5.9%7.5%17.9%8.2%7.9%8.8%11.2%12.2%9.9%13.9%12.4%11.9%13.8%6.3%14.4%14.0%14.3%13.0%
Free-cash-flow margin16.0%4.8%0.3%3.8%8.4%7.6%11.0%13.6%7.7%11.4%13.1%17.5%16.0%8.6%15.5%12.4%14.3%14.8%
Return on equity10.3%13.4%31.1%13.9%13.5%15.3%20.0%22.1%18.8%26.4%21.9%19.6%26.5%13.2%31.0%28.6%29.2%26.9%
Return on assets4.1%5.5%13.7%6.9%7.3%8.5%11.0%11.8%9.7%14.2%12.1%11.1%14.7%6.9%17.0%16.5%17.1%14.6%
Asset turnover0.700.730.770.840.920.960.990.970.981.020.980.931.071.101.181.181.201.12
Current ratio1.511.672.362.202.042.182.152.042.232.091.961.831.571.751.591.551.501.64
Debt to equity32.1%29.6%42.5%20.4%14.4%16.2%17.3%21.4%24.9%12.9%17.0%6.1%10.7%19.7%6.9%10.3%8.3%36.9%
Interest cover (operating income ÷ interest)—19.3x21.1x28.2x52.6x60.6x61.2x70.5x57.2x73.0x48.1x68.9x158.6x38.5x62.1x105.6x54.0x26.3x
Effective tax rate20.8%23.3%31.1%30.5%28.2%27.5%29.7%29.4%43.1%20.4%21.6%22.3%22.1%−5.4%24.1%23.9%23.6%22.7%
R&D as % of revenue2.3%2.5%2.5%2.7%2.7%2.9%2.9%3.0%2.9%2.9%2.9%2.8%2.7%2.4%2.5%2.7%2.5%—
SG&A as % of revenue21.2%22.1%21.8%23.2%24.4%24.3%24.1%24.7%24.1%23.6%23.9%22.8%19.8%17.9%18.9%19.4%19.8%20.5%
Capital spending as % of revenue3.1%3.6%3.1%3.6%4.5%3.7%2.9%3.0%3.1%2.7%2.2%2.0%2.1%1.9%1.9%2.8%1.8%1.3%
Free cash flow ÷ net income270.8%63.8%1.7%46.6%107.2%85.6%98.6%112.1%78.3%81.9%105.9%146.5%116.2%136.2%107.4%88.8%100.0%113.6%
Dividends ÷ net income26.3%22.1%9.1%20.9%25.1%26.2%24.0%25.8%32.7%29.3%40.3%46.0%34.9%75.2%33.0%35.7%35.8%40.3%
Dividends and buybacks ÷ free cash flow9.7%34.6%984.6%74.7%63.9%88.9%70.2%60.0%101.6%91.5%111.5%42.6%94.8%180.8%82.0%104.7%109.2%93.5%

Returns use average equity or assets over the year. Return on equity is left blank when equity is negative or so small that the ratio says nothing (above ±200%); interest cover is left blank above 200 times. Price-based ratios such as P/E are on the valuation page.

Financial health

5 of 7 checks passed · September 30, 2026
What it owns · $3.7bn
Short-term assets $1.4bnLonger-term assets $2.2bn
What it owes, and who funded it · $3.7bn
Short-term liabilities $862mLonger-term liabilities $970mShareholders' equity $1.8bn
  • Short-term assets cover short-term liabilities $1.4bn of assets due within a year against $862m of liabilities due within a year.
  • Short-term assets cover long-term liabilities $1.4bn short-term assets against $970m of longer-dated liabilities.
  • More cash than debt $234m of cash against $673m of debt.
  • Debt below 40% of shareholders' equity Debt is 37% of equity.
  • Debt burden no higher than five years ago Debt to equity moved from 16% to 37% over five years.
  • A year's operating cash flow covers at least 20% of debt $612m of operating cash flow against $673m of debt.
  • Operating profit covers interest at least five times over Operating income of $665m against $25m of interest.

From A. O. Smith's latest balance sheet as filed. Checks are fixed, documented rules (methodology), counted only where the company reports the figures — a dot means the filing doesn't break the item out. Descriptions of reported data, not advice.

Moat

80 /100

Strong moat

How hard A. O. Smith's competitive advantage looks for rivals to wear away, judged from 10 years of its own filings: returns on capital, pricing power, profit durability, cash conversion and discipline.

  • Returns on capital 20 / 20

    Net income has been a median 13.4% of total assets over 10 years.

  • Pricing power 14 / 20

    Gross margin has been a median 38.5%, moving by 1.6 percentage points (standard deviation) across 10 years.

  • Durability 15 / 20

    Operating margin has been a median 18.6%; its worst year was 12.1%.

  • Cash conversion 17 / 20

    Free cash flow was positive in 10 of 10 years, at a median 13.5% of revenue.

  • Discipline 20 / 20

    The diluted share count fell 14.7% over five years; stock-based pay has been a median 0.4% of revenue.

AI disruption exposure: Medium. In this industry, AI could change how the product is made or sold, without replacing the core asset. The score above includes a 5-point deduction for that exposure (85 before it).

A rules-based reading of reported figures, not a forecast and not investment advice. How the score is built: methodology.

Compare with peers

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Figures from A. O. Smith's SEC filings (10-K and 10-Q), retrieved October 30, 2026. How we read and check them: methodology and data sources. Not investment advice. Back to A. O. Smith.