Ingersoll Rand Financial Model
Industrial Equipment Company Financials Example (Free Excel Download)
Ingersoll Rand Inc. is a global provider of mission-critical flow creation and industrial solutions, manufacturing air compressors, pumps, blowers, and fluid management systems.
professionals from Deloitte
Used by professionals from
About this model
This model evaluates Ingersoll Rand's equity valuation and debt capacity to determine whether its aggressive, serial M&A strategy and aftermarket expansion can drive its consolidated Adjusted EBITDA margin to the management target of 30% by 2027.
Ingersoll Rand Inc. is a global provider of mission-critical flow creation and industrial solutions, manufacturing air compressors, pumps, blowers, and fluid management systems. The company operates a highly resilient, asset-light business model underpinned by a massive installed base that generates lucrative, recurring aftermarket revenue.
The business is divided into two primary segments: Industrial Technologies and Services (IT&S), which contributes approximately 80% of total revenue, and Precision and Science Technologies (P&ST), which contributes the remaining 20%. The company operates globally, with significant exposure to the Americas, Europe, and Asia-Pacific regions. Ingersoll Rand's competitive position is bolstered by its proprietary operating system, Ingersoll Rand Execution Excellence (IRX), which drives continuous margin expansion and integration efficiency. The company is a prolific serial acquirer, having deployed hundreds of millions of dollars annually into bolt-on acquisitions (such as SSI Aeration and Dave Barry Plastics in 2024 and 2025) following its transformational merger with Gardner Denver in 2020.
The downloadable Ingersoll Rand financial model includes SEC-sourced historical financials, forecast assumptions, core operating schedules, and valuation outputs in an Excel workbook built for review and scenario analysis.
A turnkey financial model
Live formulas, no hardcoded values
Outputs are driven by live formulas, so the workbook updates from its assumptions instead of relying on hardcoded results.
All assumptions in one tab
Inputs are clearly marked in the Assumptions tab and separated from calculations, making it clear what to change and what to leave intact.
Statements always balancing
For integrated-statement models, the balance sheet, cash flow, and supporting schedules tie through properly.
Distinct schedules for clarity
Debt, working capital, taxes, and cash flow can get messy quickly. We group calculations in clear schedules, not across disconnected tabs.
No hidden macros or external links
There are no unexplained external workbook links or macros to undermine auditability or portability.
Changes flow through the model
Update a key driver and see the impact carry through the forecast, financing, and return outputs. We never use hardcoded numbers in formulas.
Historicals & AssumptionsIngersoll Rand financial modelCompany, Historicals & Assumptions used
Source: SEC EDGAR · values in USD
| Line item | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|---|
| Revenue | $5.15B | $5.92B | $6.88B | $7.24B | $7.65B |
| Gross profit | $1.99B | $2.33B | $2.88B | $3.17B | $3.34B |
| Operating income | $565.7M | $817.3M | $1.16B | $1.30B | $1.14B |
| Net income | $562.5M | $604.7M | $778.7M | $838.6M | $581.4M |
Forecast assumptions
Defaults used in the downloadable model. Forecast horizon: FY2026–FY2030.
See 8 moreSee less
How to build a detailed financial model for Ingersoll Rand
A complete walkthrough of every driver, margin, working-capital input, and capital-allocation assumption used in the downloadable model.
Revenue Deep Dive
Industrial Technologies and Services (IT&S)
- Segment name: Industrial Technologies and Services
- Revenue driver formula: (New Equipment Volume x Average Selling Price) + (Installed Base x Aftermarket Attachment Rate x Service Pricing)
- Historical growth rate: 4% to 7% CAGR (blended organic and inorganic)
- Key growth levers and headwinds: Driven by industrial capital expenditure cycles, energy efficiency upgrades, and aggressive bolt-on M&A. Tariffs and regional macroeconomic softness (particularly in China) serve as periodic headwinds.
- Pricing dynamics: Strong pricing power leveraged to offset inflation, though recent tariff impacts have temporarily pressured realisations.
- Revenue recognition: Equipment sales are recognised at a point in time upon delivery; extended warranties and service contracts are recognised over time.
- Seasonality: The fourth quarter is historically the strongest for orders and revenue due to year-end customer capital expenditure flushes.
Precision and Science Technologies (P&ST)
- Segment name: Precision and Science Technologies
- Revenue driver formula: (Life Sciences Volume x Price) + (Industrial/Aerospace Volume x Price)
- Historical growth rate: 5% to 8% CAGR
- Key growth levers and headwinds: Driven by secular trends in medical dosing, biopharma production, and aerospace recovery. Headwinds include destocking in life sciences channels.
- Pricing dynamics: Highly specified, mission-critical components allow for premium pricing and contractual pass-throughs.
- Revenue recognition: Primarily point in time upon shipment of pumps and dosing equipment.
- Seasonality: Less pronounced than IT&S, but generally weighted towards the second half of the year.
Cost Structure
Variable Costs / COGS
- Line-by-line breakdown: Direct materials (steel, aluminium, motors, castings), direct manufacturing labour, factory overhead, freight, and import tariffs.
- Gross margin range: 40% to 42% over the last 3 years.
- Key input costs and commodity exposures: Highly exposed to industrial metals and electronic components; uses global sourcing to mitigate regional price spikes.
- How COGS scales with revenue: Operating leverage is strong due to the IRX system, but gross margin expansion is heavily dependent on the mix shift towards higher-margin aftermarket services (currently around 36.5% of total revenue).
Operating Expenses
- R&D: Approximately 2% of revenue, focused on energy efficiency, digitisation, and connected products.
- SG&A: Approximately 18% to 20% of revenue, encompassing sales, marketing, and commercial investments for growth.
- Depreciation & Amortisation: High (historically 5% to 7% of revenue) due to the heavy amortisation of intangible assets acquired through the Gardner Denver merger and subsequent bolt-on M&A.
- Stock-Based Compensation: Approximately 1% to 1.5% of revenue, utilised to align management with the ownership mindset culture.
- Restructuring / one-time charges: Frequent but moderate, typically related to M&A integration and facility rationalisation.
Margin Profile
- Gross margin: 40% to 42%.
- EBITDA margin (Adjusted): 27% to 28% (Targeting 30% by 2027).
- Operating margin (GAAP): 15% to 18% (depressed by intangible amortisation).
- Net margin: 7% to 10%.
- Margin trend: Expanding steadily due to IRX implementation, cost synergies from acquisitions, and a growing aftermarket mix, though temporarily diluted by tariffs in late 2025.
Balance Sheet Structure
- Total assets: Approximately $16 billion to $17 billion.
- Key asset categories: Goodwill and Intangible Assets dominate the balance sheet, representing over 60% of total assets due to the company's acquisitive history.
- Working capital profile:
- Days Sales Outstanding (DSO): 55 to 60 days.
- Days Inventory Outstanding (DIO): 80 to 90 days.
- Days Payable Outstanding (DPO): 60 to 70 days.
- Net working capital as % of revenue: Approximately 15% to 18%.
- Working capital dynamic: Positive working capital; the company consumes a modest amount of cash to fund inventory for organic growth, though IRX initiatives actively target inventory reduction.
- PP&E: Asset-light profile, representing only 10% to 12% of total assets. Useful lives range from 3 to 15 years for machinery and up to 40 years for buildings.
- Right-of-use assets: Material but manageable, representing leased facilities and service centres globally.
Capital Expenditure & Investment
- Capex as % of revenue: 1.5% to 2.0% (highly capital efficient).
- Maintenance capex vs. growth capex: Approximately 60% maintenance and 40% growth/productivity investments.
- Major capex programmes: Investments in automated machining, facility consolidation, and connected product IT infrastructure.
- Capitalised software: Minimal relative to total assets.
- M&A pattern: Aggressive serial bolt-on acquirer. The company routinely deploys $300 million to $600 million annually on acquisitions (e.g., $525 million spent in 2025).
- Typical acquisition multiple paid: 10x to 13x pre-synergy EBITDA, dropping to single digits post-synergies.
Debt & Capital Structure
- Total debt: Approximately $4.8 billion.
- Net debt: Approximately $3.6 billion (supported by $1.2 billion in cash).
- Debt/EBITDA ratio: Net debt to Adjusted EBITDA sits at 1.7x to 1.8x, well within management's target range of 1.5x to 2.0x.
- Key debt instruments: Senior unsecured notes and a large revolving credit facility ($2.6 billion undrawn capacity).
- Interest rate profile: Predominantly fixed-rate bonds with a weighted average cost of debt around 4.5% to 5.0%.
- Share repurchase programme: Highly active. The company returned over $1 billion to shareholders in 2025, primarily through share repurchases.
- Dividend policy: Pays a modest regular quarterly cash dividend; yield is typically below 0.5%, as capital is prioritised for M&A and buybacks.
Cash Flow Characteristics
- Operating cash flow conversion: OCF is typically 2.0x to 2.3x GAAP Net Income due to heavy non-cash amortisation charges.
- Free cash flow margin: 15% to 17% of revenue ($1.22 billion FCF generated in 2025).
- Major non-cash items: Amortisation of acquired intangibles, depreciation, and stock-based compensation.
- Working capital cash flow impact: Minor use of cash during periods of high organic growth.
- Capex intensity: Very low, driving exceptional free cash flow conversion.
- Cash tax rate vs. GAAP effective tax rate: Cash taxes are generally lower than the statutory rate due to tax-deductible amortisation and global tax planning.
Sheet Structure
- Assumptions: Hardcoded drivers for macroeconomic inputs, segment organic growth, M&A capital deployment, margins, and capital allocation policies.
- Revenue Build: Segment-level build for IT&S and P&ST, explicitly splitting organic volume, pricing, and inorganic (M&A) contribution. Must include a tracker for Aftermarket vs. Equipment revenue mix.
- Income Statement: Segment Adjusted EBITDA flowing down to Consolidated Adjusted EBITDA (deducting Corporate Costs), then bridging to GAAP Operating Income and Net Income.
- Balance Sheet: Standard presentation mirroring the 10-K, with specific schedules for Goodwill and Intangible Assets.
- Cash Flow Statement: Indirect method starting from GAAP Net Income, adding back D&A, and detailing M&A cash outflows and share repurchases.
- Working Capital Schedule: DSO, DIO, and DPO calculations driving the balance sheet and operating cash flow.
- Debt & Interest Schedule: Tranche-by-tranche debt build, tracking the revolving credit facility, senior notes, and interest expense.
- M&A & Intangibles Schedule: A dedicated sheet to model annual bolt-on acquisitions, acquired revenue, purchase price allocation to intangibles, and subsequent amortisation.
- DCF Valuation: Unlevered free cash flow build, WACC calculation, terminal value, and implied share price.
Key Financial Relationships
- "IT&S Revenue = Prior Year IT&S Revenue x (1 + IT&S Organic Growth % + IT&S M&A Contribution %)"
- "P&ST Revenue = Prior Year P&ST Revenue x (1 + P&ST Organic Growth % + P&ST M&A Contribution %)"
- "Consolidated Revenue = IT&S Revenue + P&ST Revenue"
- "Aftermarket Revenue = Consolidated Revenue x Aftermarket Mix %"
- "IT&S Adjusted EBITDA = IT&S Revenue x IT&S Adjusted EBITDA Margin"
- "P&ST Adjusted EBITDA = P&ST Revenue x P&ST Adjusted EBITDA Margin"
- "Consolidated Adjusted EBITDA = IT&S Adjusted EBITDA + P&ST Adjusted EBITDA - Unallocated Corporate Costs"
- "GAAP Operating Income = Consolidated Adjusted EBITDA - Depreciation - Amortisation of Intangibles - Restructuring Costs - Stock Based Compensation"
- "Free Cash Flow = Operating Cash Flow - Capital Expenditures"
- "Net Debt = Total Debt - Cash and Cash Equivalents"
- "Net Leverage Ratio = Net Debt / Consolidated Adjusted EBITDA"
- "Ending Shares Outstanding = Beginning Shares Outstanding - (Share Repurchase Amount / Average Share Price)"
Cross-Sheet Dependencies
- The Assumptions sheet dictates the growth and margin inputs on the Revenue Build and Income Statement.
- The M&A & Intangibles Schedule is a critical node; it feeds inorganic revenue to the Revenue Build, amortisation to the Income Statement, goodwill to the Balance Sheet, and investing outflows to the Cash Flow Statement.
- The Income Statement generates Net Income, which starts the Cash Flow Statement.
- The Cash Flow Statement determines the ending cash balance or revolver draw required on the Debt & Interest Schedule, which in turn feeds interest expense back to the Income Statement (creating a circular reference that requires an iterative calculation toggle).
- The Cash Flow Statement also feeds the ending cash balance and retained earnings to the Balance Sheet.
Sign Convention
- Revenue, assets, and equity are represented as positive numbers.
- Expenses (COGS, SG&A, Interest) are represented as positive numbers in their specific build schedules but subtracted in the Income Statement totals.
- On the Cash Flow Statement, cash inflows are positive. Cash outflows (Capital Expenditures, M&A consideration, Share Repurchases, Dividends) must be strictly negative.
- Contra-asset accounts (Accumulated Depreciation) are positive in schedules but subtracted from gross assets.
Things Most Likely to Go Wrong
- Ignoring the M&A Engine: Modelling only organic growth will severely understate revenue. The model must include a structural placeholder for annual M&A revenue contribution (historically adding 3% to 5% to the top line).
- GAAP vs. Adjusted Confusion: Ingersoll Rand's GAAP earnings are heavily depressed by intangible amortisation. Valuing the company on GAAP P/E is a mistake; the model must clearly bridge to Adjusted EBITDA and Adjusted EPS.
- Corporate Cost Omission: Segment Adjusted EBITDA does not sum to Consolidated Adjusted EBITDA. The model must deduct unallocated corporate costs (running at approximately $160 million annually).
- Static Share Count: The company repurchased over $1 billion in stock in 2025. Failing to model a dynamic, decreasing share count will artificially depress future EPS calculations.
- Tariff Margin Dilution: Recent quarters showed margin pressure from tariffs. The model must allow for temporary COGS inflation before pricing actions catch up.
- Aftermarket Mix Miscalculation: The management target of 30% Adjusted EBITDA margins by 2027 relies heavily on the aftermarket mix exceeding 37%. The model must link margin expansion to this mix shift.
- Currency Translation: With massive global operations, FX swings can alter reported revenue by 1% to 3%. The model should note that growth inputs are on a constant-currency basis.
- Working Capital Drag: Assuming working capital scales linearly with M&A revenue can overstate cash needs, as acquired companies are quickly integrated into the more efficient IRX working capital framework.
Validation Checks
- "Consolidated Adjusted EBITDA Margin must trend towards the 30.0% management target by 2027; flag if it exceeds 31% or drops below 27%."
- "Free Cash Flow Margin (FCF / Revenue) should remain between 15.0% and 17.0%."
- "Net Debt to Adjusted EBITDA must remain between 1.5x and 2.0x; flag if leverage exceeds 2.5x."
- "Capital Expenditures as a % of Revenue should not exceed 2.5% (historically ~2.0%)."
- "Aftermarket Revenue as a % of Total Revenue should be >36.5% and trending upwards."
- "The Balance Sheet must balance: Total Assets = Total Liabilities + Shareholders' Equity in every forecast period."
- "Operating Cash Flow / GAAP Net Income should consistently be >1.5x due to high non-cash amortisation."
- "Unallocated Corporate Costs should be at least $150 million annually."
Key Assumptions (Default Values)
| Assumption | Default Value | Unit | Rationale |
|---|---|---|---|
| IT&S Organic Revenue Growth | 2.0 | % | Blended expectation based on recent low-single-digit organic performance. |
| P&ST Organic Revenue Growth | 3.0 | % | Normalised growth following life sciences destocking recovery. |
| Annual M&A Revenue Contribution | 375.0 | $M | Management guidance for 2026 inorganic contribution. |
| IT&S Adjusted EBITDA Margin | 29.5 | % | Based on recent historical segment performance and IRX efficiencies. |
| P&ST Adjusted EBITDA Margin | 30.5 | % | Based on recent historical segment performance. |
| Unallocated Corporate Costs | 160.0 | $M | Run-rate based on 2025 actuals and 2026 guidance. |
| Capex as % of Revenue | 2.0 | % | Management guidance for 2026 capital intensity. |
| Days Sales Outstanding (DSO) | 58.0 | Days | Calculated from 2025 year-end accounts receivable. |
| Days Inventory Outstanding (DIO) | 85.0 | Days | Calculated from 2025 year-end inventory levels. |
| Days Payable Outstanding (DPO) | 65.0 | Days | Calculated from 2025 year-end accounts payable. |
| Effective Tax Rate | 22.0 | % | Historical average adjusted effective tax rate. |
| Annual Share Repurchases | 850.0 | $M | Conservative estimate based on $1.05B total return in 2025. |
| Annual Dividend per Share | 0.08 | $ | Based on recent quarterly declarations of $0.02 per share. |
| Weighted Average Cost of Debt | 4.8 | % | Blended rate of existing senior notes and revolver facilities. |
| WACC | 8.5 | % | Standard industrial machinery discount rate. |
| Terminal Growth Rate | 2.5 | % | Aligns with long-term global GDP and industrial production growth. |
Data Sources & Benchmarks
- SEC EDGAR: Ingersoll Rand Inc. (IR) 10-K and 10-Q filings for historical segment data and balance sheet actuals.
- Investor Relations: IR presentations, specifically the Q4 2025 Earnings Presentation (released February 12, 2026) for 2026 guidance and IRX margin targets.
- Key Peers for Benchmarking: Atlas Copco (ATCO), IDEX Corporation (IEX), Dover Corporation (DOV), and Flowserve (FLS).
- Consensus Estimates: FactSet or Bloomberg for forward-looking EPS and EBITDA consensus to validate model outputs.
- Industry Data: Purchasing Managers' Index (PMI) data for regional industrial health, and Dodge Construction Network for non-residential construction starts.
Sources
Do more with the Ingersoll Rand model
Frequently asked
What does Ingersoll Rand do?+
Ingersoll Rand is a global provider of mission-critical flow creation and industrial solutions, manufacturing products like air compressors, pumps, and fluid management systems. The company operates an asset-light business model, generating significant recurring revenue from its large installed base through aftermarket services.
How does Ingersoll Rand generate revenue?+
Ingersoll Rand generates revenue primarily through its Industrial Technologies and Services segment, which contributes approximately 80% of total revenue, and its Precision and Science Technologies segment. A significant portion of its revenue is recurring, derived from aftermarket services for its massive installed base of industrial equipment.
What are the key assumptions for Ingersoll Rand's capital expenditures in the financial model?+
The financial model assumes Ingersoll Rand's capital expenditures as a percentage of revenue to be approximately 1.46%. This reflects the company's highly capital-efficient, asset-light business model, with roughly 60% allocated to maintenance and 40% to growth investments.
What is the primary objective of the Ingersoll Rand financial model?+
The primary objective of the Ingersoll Rand financial model is to evaluate the company's equity valuation and debt capacity. It specifically assesses whether its aggressive M&A strategy and aftermarket expansion can help achieve a consolidated Adjusted EBITDA margin target of 30% by 2027.
Can I download an Excel financial model for Ingersoll Rand?+
Yes, an Excel financial model for Ingersoll Rand is available for download. This model provides a forecast horizon from FY2026 to FY2030, allowing for detailed analysis of the company's future financial performance.
How does Ingersoll Rand's M&A strategy impact its balance sheet?+
Ingersoll Rand's aggressive serial acquisition strategy, involving $300 million to $600 million annually in bolt-on acquisitions, significantly impacts its balance sheet. This approach leads to goodwill and intangible assets dominating the balance sheet, representing over 60% of total assets.
Have more financial modelling questions? Contact us
Created by ex-finance professionals
Hey, I’m Alex and I created Finamodel.
Over my years in the finance industry I kept building the same models over and over again. Same structure, same assumptions, different logo. So I started building frameworks to turn them into clean, reusable templates.
Every model here is one I’d actually use for a client, and I personally vet each one before it goes up.
I’m not an expert in every industry, but I’ve built enough models to know what belongs in one. And when something is completely foreign to me, I reach out to my network for experts to work on our models with us.
Having a template library on hand cuts a first build from hours to minutes.
Need help finding your model? You’ll find me in the Finamodel app!
Other Industrial Equipment Company Financial Models
Browse another company in the same sector.
Ametek
Ametek is a global manufacturer of highly engineered electronic instruments and electromechanical devices, serving niche industrial markets through organic innovation and disciplined acquisitions.
Caterpillar
Caterpillar is the world's leading manufacturer of construction and mining equipment, off-highway diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives.
Cummins
Cummins designs, manufactures, distributes, and services a broad portfolio of power solutions, from diesel and natural gas engines to electric and hybrid powertrains, for commercial vehicle and industrial markets.
Deere & Company
Deere & Company is a global leader in the manufacturing of agricultural, construction, and forestry equipment, operating under the iconic John Deere brand.
Dover
Dover Corporation is a diversified global manufacturer delivering innovative equipment, consumable supplies, aftermarket parts, and software solutions.
Emerson Electric
Emerson Electric is a global technology and software company providing advanced automation solutions for process, hybrid, and discrete manufacturing industries, helping customers optimise operations, reduce emissions, and improve safety through proprietary hardware and software.
Fastenal
Fastenal Company is a leading North American wholesale distributor of industrial and construction supplies, operating through a dense network of branches and customer-specific Onsite locations.
Fortive
Fortive is a diversified industrial technology conglomerate that provides essential technologies for connected workflow solutions across industrial and healthcare applications.
Explore more Manufacturing financial model templates.
