Advanced Micro Devices Inc. (NASDAQ:AMD)

Debt to Equity

The debt to equity ratio exhibits a generally low and declining trend from March 2020 to around March 2022, starting at 0.16 and reducing to a low of 0.03–0.04 range throughout most quarters. There is slight volatility noticeable in later periods, with a peak at 0.07 in March 2025 followed by a slight reduction to 0.05 in June 2025.

Debt to Equity (Including Operating Lease Liability)

This metric follows a similar pattern to the standard debt to equity ratio but at consistently higher values, reflecting the additional lease obligations. Initially at 0.23 in March 2020, it decreases steadily to approximately 0.04–0.05 between late 2021 and mid-2024. The ratio rises slightly towards 0.08 in March 2025 before decreasing marginally to 0.07 by June 2025.

Debt to Capital

The debt to capital ratio reflects a comparable trend to debt to equity, beginning at 0.14 in March 2020 and declining to a stable range of 0.03–0.04 across 2021 through early 2024. A notable increase occurs in early 2025, reaching a peak of 0.07 in March before decreasing again to 0.05 in the subsequent quarter.

Debt to Capital (Including Operating Lease Liability)

Including operating lease liabilities, this ratio is elevated relative to the basic debt to capital figures but moves in parallel, declining from 0.19 in March 2020 to a consistent 0.04–0.05 range spanning late 2021 through mid-2024. A similar uptick emerges in early 2025, rising to 0.08 in March before a modest decrease.

Debt to Assets

The debt to assets ratio begins low at 0.08 in early 2020 and further declines to a range around 0.02–0.04 through 2021 to mid-2024, indicating a conservative capital structure with limited reliance on debt financing relative to total assets. A spike is seen in March 2025 peaking at 0.06, then settling back to 0.04.

Debt to Assets (Including Operating Lease Liability)

When operating lease liabilities are included, the ratio tracks higher yet maintains a similar downward movement, falling from 0.12 in March 2020 to consistent 0.03–0.04 levels before a peak in early 2025 (0.07), subsequently marginally decreasing.

Financial Leverage

Financial leverage ratios reveal a decrease from near 2.0 in early 2020 down to approximately 1.2 between 2021 and mid-2024, suggesting a reduction in relative asset financing through debt or liabilities. The ratio remains relatively stable around this level with slight fluctuations and no significant spikes.

Interest Coverage

Interest coverage ratios demonstrate substantial variation. Available data from late 2020 show very high coverage, peaking at over 100 times in early 2022. However, a marked decline follows, reaching negative figures around late 2022 and early 2023, indicative of periods where operating income was insufficient to cover interest expenses. After these troughs, a recovery trend resumes with steady improvement in interest coverage through mid-2025, reaching approximately 25 times by June 2025.

Summary Insights

Throughout the reviewed periods, the company maintains low leverage ratios, reflected by consistently low debt relative to equity, capital, and assets. This conservative stance is reinforced by stable financial leverage ratios near 1.2 to 1.3 after initial declines. The spike in debt-related ratios in early 2025 suggests a temporary or strategic increase in debt obligations during that timeframe. The interest coverage ratio's volatility, particularly its sharp dip into negative territory, highlights periods of financial stress or reduced operating earnings, followed by a notable recovery phase, which implies an improving capacity to service debt over the latter periods. Overall, the company's capital structure remains conservative with effective management of debt costs as evidenced by recovering interest coverage.

Total Debt

The total debt exhibits considerable fluctuation over the reported periods. Starting at $488 million in March 2020, it peaked sharply to $2,777 million by June 2022, following a consistent increase from 2021 onward. Post this peak, the debt levels showed some reduction but remained elevated relative to early periods, declining to $1,719 million by June 2024 before increasing again to $4,164 million in March 2025. This pattern indicates phases of increased borrowing, potentially for strategic investments or refinancing, followed by partial deleveraging and subsequent rise in obligations.

Stockholders’ Equity

Stockholders’ equity demonstrates a strong upward trend throughout the period. Starting from $3,037 million in March 2020, equity steadily increased, with particularly notable growth between December 2020 and March 2022, jumping from roughly $7,497 million to over $55,000 million. After this substantial increase, equity levels stabilized somewhat, with gradual rises reaching $59,665 million by June 2025. This growth reflects robust retained earnings and/or capital injections, enhancing the company's net asset base significantly over time.

Debt to Equity Ratio

The debt to equity ratio started at moderate levels of 0.16 in March 2020 but declined rapidly to as low as 0.03 during late 2021 through mid-2024, reflecting a strengthening equity base relative to debt. Despite the rise in total debt towards the end of the timeline, the ratio increased moderately but remained low, at 0.07 in March 2025. This low ratio indicates a relatively conservative leverage position, suggesting that equity growth outpaced debt accumulation, maintaining a strong capital structure.

Total debt (including operating lease liability)

The total debt exhibited moderate fluctuations between March 2020 and December 2021, remaining in the range of approximately 500 to 900 million USD. Starting March 2022, a significant increase is notable, with debt more than tripling to over 2 billion USD. Peak debt levels occurred in the June 2022 quarter at 3.199 billion USD. This elevated level largely persisted throughout 2022 and early 2023, with minor declines and fluctuations around the 2.8 to 3.0 billion USD range. Beginning from March 2024, a sharp decline in total debt is observed, dropping to levels near 2.2 billion USD by the end of 2024, before rising again sharply to 4.7 billion USD in March 2025, followed by a decrease to 3.9 billion USD in June 2025.

Stockholders’ equity

Equity steadily increased throughout the entire period. From early 2020 through the end of 2021, equity grew from approximately 3 billion USD to roughly 7.5 billion USD. A notable and abrupt surge occurred starting in March 2022, with equity expanding dramatically to over 55 billion USD, maintaining this elevated level with marginal variation across subsequent quarters. The equity figure shows a gradual incremental increase from the end of 2022 through mid-2025, moving from about 54.5 billion USD to nearly 60 billion USD by June 2025.

Debt to equity (including operating lease liability)

The debt-to-equity ratio generally declined from 0.23 in March 2020 to a very low level of approximately 0.04-0.06 during most quarters between 2021 and early 2024, reflecting a substantial increase in equity relative to debt. A temporary increase occurred in the March 2025 quarter, where the ratio almost doubled from prior levels to 0.08, before declining slightly to 0.07 in June 2025. Overall, the low ratios indicate a conservative leverage position in recent years, despite the fluctuations in absolute debt levels.

General observations

The data indicates a strategic increase in equity capital beginning in early 2022, which dramatically altered the financial structure, resulting in substantially higher equity balances. Concurrently, debt levels also rose but at a less pronounced rate relative to equity, which explains the continued low debt-to-equity ratios. The last few quarters reveal some volatility with debt increasing sharply in early 2025 while equity continued a mild upward trend, causing a corresponding temporary increase in leverage. This pattern suggests possible debt financing for investment or operational needs during this period, though overall financial leverage remains modest compared to equity size.

The quarterly financial data reveals notable trends in the company's debt and capital structure over the observed periods.

Total Debt

Total debt showed variability with an initial increase from 488 million US dollars in March 2020 to a peak of 690 million in June 2020, followed by a general decline to a low of 313 million across multiple quarters in 2021.

Notably, a significant spike occurred in March 2022, with debt rising sharply to 1787 million, and it continued to increase reaching a peak of 2777 million in June 2022. Subsequently, total debt decreased moderately but remained elevated around 2400-2500 million throughout late 2022 and early 2023.

From late 2023 into early 2024, total debt values stabilized in the range of approximately 1700-1720 million but surged again in March 2025 to 4164 million before declining slightly to 3218 million by June 2025.

Total Capital

Total capital experienced steady growth from 3525 million in March 2020 to 7810 million by December 2021.

However, there was a dramatic and unusual increase starting in March 2022, with capital balances suddenly rising to over 57,000 million and maintaining levels in the high 57,000 to low 59,000 million range throughout 2022 and 2023.

In 2024 and into mid-2025, total capital continued a slight upward trajectory, reaching a peak of approximately 62,883 million by June 2025.

Debt to Capital Ratio

The debt to capital ratio began with values around 0.14 to 0.17 in early 2020, indicating modest leverage.

This ratio decreased significantly during 2020 and 2021, reaching very low levels around 0.03 to 0.05, reflecting a period of reduced financial leverage or increased capital base relative to debt.

Throughout 2022 and early 2023, the ratio remained relatively stable, hovering near 0.04, suggesting consistent capital structure management.

In 2024, the ratio further decreased marginally, settling between 0.03 and 0.04, before showing a rise to 0.07 in March 2025, followed by a reduction to 0.05 by June 2025; this indicates a short-term increase in leverage before a partial reversion.

Overall, the data suggests a company that managed to maintain low leverage ratios through expansion of capital, despite episodic increases in absolute debt levels. The sharp increases in both total capital and total debt around early 2022 likely reflect significant changes in financing or asset base, which ought to be explored further for underlying causes. The consistently low debt to capital ratios indicate conservative leverage relative to the expanded capital base during much of the period analyzed.

The analysis of the financial data reveals the following key trends and insights related to the company's debt and capital structure over the periods presented:

Total Debt (Including Operating Lease Liability)

The total debt exhibited significant fluctuations. From March 2020 through December 2021, debt values remained relatively stable, ranging between approximately $500 million and $660 million, with a peak in December 2021 at $661 million. However, starting in March 2022, a marked increase occurred, with debt sharply rising to $2,157 million and peaking at $3,199 million in June 2022. Subsequently, debt declined gradually but remained elevated compared to earlier periods, fluctuating around $2,800 to $3,000 million until December 2023.

From March 2024 onwards, total debt exhibited volatility again, with a notable surge to $4,731 million by March 2025, before declining to $3,886 million by June 2025. This pattern indicates episodic increases in leverage during 2022 and early 2025.

Total Capital (Including Operating Lease Liability)

Total capital showed a steady upward trend throughout the entire timeframe. Starting at $3,736 million in March 2020, capital increased consistently, reaching $8,158 million in December 2021. There was then a dramatic escalation from March 2022 onward, with capital expanding to approximately $57,490 million and sustaining this elevated level through mid-2025, with modest incremental growth, ending at $63,551 million in June 2025.

This significant capital growth accompanying the surge in debt from 2022 onward may reflect larger financing activities, asset acquisitions, or revaluation strategies.

Debt to Capital Ratio (Including Operating Lease Liability)

The ratio of debt to capital decreased from 0.19 in March 2020 to a low of approximately 0.04 to 0.05 during most quarters from March 2022 to December 2024. Despite the increases in absolute debt during this period, the ratio stabilized at relatively low levels, suggesting that the substantial rise in capital far outpaced the increase in debt.

Notably, bursts in the debt to capital ratio occurred at the beginning and end of the dataset, reaching 0.08 in December 2024 and 0.06 in June 2025, corresponding to spikes in total debt. Overall, the leverage level remains moderate relative to capital throughout the timeline examined.

In summary, the company demonstrated strong capital growth while managing its debt levels with temporary increases in leverage. The consistent decline in the debt to capital ratio until early 2025 underscores a solid capital base relative to debt obligations, although recent increases in debt warrant attention to potential leverage risks going forward.

Total Debt

The total debt exhibited notable fluctuations over the observed periods. Initially, it increased from 488 million USD in March 2020 to a peak of 690 million USD in June 2020, then decreased steadily to 313 million USD by December 2020, maintaining this level through December 2021. Beginning in March 2022, debt sharply increased to 1787 million USD and continued rising to a maximum of 2777 million USD in June 2022. Following this peak, debt modestly declined and stabilized around 2467-2468 million USD up until December 2023. In early 2024, debt levels dropped to approximately 1719-1721 million USD before spiking again to 4164 million USD in March 2025 and then falling to 3218 million USD in June 2025. This pattern indicates periods of strategic borrowing and repayments, with considerable volatility in the later quarters evidenced by sharp increases and decreases.

Total Assets

Total assets displayed consistent growth throughout the period. From an initial 5864 million USD in March 2020, assets increased steadily each quarter, reaching approximately 12419 million USD by December 2021. A significant jump is observed in March 2022, with assets rising dramatically to 66915 million USD and maintaining a relatively stable range slightly above 67000 million USD through mid-2023. By late 2024 and early 2025, assets further increased to the 70000 million USD range, peaking at 74820 million USD in June 2025. This overall upward trend reflects expansion in asset base, possibly through acquisitions, capital investments, or other asset growth initiatives.

Debt to Assets Ratio

The debt to assets ratio remained low and relatively stable through much of the timeline, starting at 0.08 in March 2020, declining to as low as 0.02 in March 2025, indicative of a conservative leverage position with assets substantially exceeding debt. Despite fluctuations in total debt and significant asset growth, the ratio mostly hovered between 0.03 and 0.04, suggesting proportionate changes in both debt and assets. Noteworthy deviations include a lower ratio around early 2024 (0.02) reflecting either reduced debt or increased assets, and a transient increase to 0.06 in March 2025, corresponding with the spike in total debt. Overall, leverage has remained modest relative to assets, with temporary increases corresponding to short-term debt spikes.

The analysis of the quarterly financial data reveals several key trends in the company's leverage and asset growth over the observed periods.

Total Debt (Including Operating Lease Liability)

The total debt exhibits moderate fluctuations over time, initially ranging from approximately $531 million to $661 million in the earlier quarters of 2020 and 2021. A sharp increase is observable starting in the first quarter of 2022, with debt peaking above $3 billion in some quarters. However, after this peak, the debt levels show some reduction and variability, ending with amounts fluctuating around $2 to $4.7 billion towards the end of the last observed periods in 2024 and 2025.

Total Assets

Total assets show a consistent and significant upward trend throughout the entire period. From initial values close to $6 billion, assets steadily grow, with a marked jump occurring between late 2021 and early 2022, exceeding $66 billion and maintaining growth thereafter. By the end of the observed periods, total assets reach approximately $74.8 billion, indicating substantial expansion in the asset base.

Debt to Assets Ratio (Including Operating Lease Liability)

The debt-to-assets ratio starts modestly at around 0.12 and declines significantly over the earlier quarters, reaching values near 0.03 to 0.05 during most of the timeframe. This decline reflects the relatively stronger growth in assets compared to debt during the majority of the period. There is a slight rise in this ratio towards the very end, with the ratio increasing to 0.07 before settling back to around 0.05, signaling some increase in leverage but still remaining at a generally low level in comparison to assets.

Overall, the data indicates that while the company increased its total debt notably around early 2022, this increase was outpaced by the growth in total assets, resulting in a relatively low and fairly stable debt-to-assets ratio over time. The company appears to maintain a conservative leverage position relative to its growing asset base despite the periodic increases in total debt.

The analysis of the quarterly financial data reveals several significant trends in the company's balance sheet components over the observed periods.

Total assets

Total assets exhibit a steady upward trajectory from March 2020 through December 2021, rising from approximately $5.9 billion to $12.4 billion. A marked and substantial increase occurs starting March 2022, where assets jump dramatically to around $66.9 billion and remain relatively stable through subsequent quarters, fluctuating slightly but staying above $67 billion. Toward the end of the observed period, a gradual increase is noted again, reaching approximately $74.8 billion by June 2025.

Stockholders’ equity

Stockholders’ equity follows a similar pattern to total assets. From March 2020 to December 2021, equity increases steadily from about $3 billion to $7.5 billion. A notable surge is observed starting March 2022, where equity jumps sharply to roughly $55.3 billion, maintaining this elevated level with minor fluctuations through late 2023 and the following quarters. Toward the end of the timeline, equity continues a gradual upward trend, reaching approximately $59.7 billion by June 2025.

Financial leverage

Financial leverage, represented as the ratio of total assets to stockholders’ equity, shows a declining trend from 1.93 at the start of the period in March 2020 down to approximately 1.21-1.25 during the later quarters from 2022 onward. This decrease in leverage indicates a strengthening equity base relative to the company’s assets. The ratio remains stable in the range of 1.2 to 1.25 through to mid-2025, suggesting consistent capital structure management and relatively low reliance on debt financing.

Overall, the data reflects a period of significant asset and equity expansion beginning in early 2022, possibly due to acquisitions, capital investments, or revaluation events not detailed here. The financial leverage ratio's decline and subsequent stability imply improved financial stability and potential enhanced creditworthiness. These changes point to a strategic scaling of the company’s financial position while maintaining a conservative leverage approach.

The analysis of the quarterly financial data reveals several notable trends and fluctuations in the earnings before interest and tax (EBIT), interest expense, and interest coverage ratio over the observed periods.

Earnings before interest and tax (EBIT)

EBIT demonstrated a general upward trajectory from March 2020 through December 2021, rising from 181 million USD to a peak of 1211 million USD. This indicates strong earnings growth over this period. However, from March 2022 onwards, EBIT experiences significant volatility, including periods of negative values, such as -38 million USD in September 2022 and -114 million USD in December 2022. Although partial recoveries follow, these fluctuations continue toward the latest periods. Notably, after a high point in December 2021, EBIT declined overall and turned negative by mid to late 2025, implying challenges in sustaining profitability.

Interest Expense

Interest expense remained relatively stable and moderate in the initial periods, ranging mostly between 7 million USD and 14 million USD until late 2021. Starting from 2022, interest expense increased markedly, reaching as high as 38 million USD by December 2025. This rising trend in interest costs suggests either increased borrowing or unfavorable financing conditions over time, placing additional financial burdens on earnings.

Interest Coverage Ratio

The interest coverage ratio, which measures the ability to cover interest expense with EBIT, showed exceptionally strong values during 2020 and 2021, peaking above 100 in the last quarters of 2021. This indicates a robust capacity to meet interest obligations during the earnings growth phase. However, from 2022 onward, the ratio declines sharply, reflecting the combined effects of falling EBIT and rising interest expense. The coverage ratio even turns negative in December 2022, affirming the erosion of earnings cushions to cover interest payments. Despite some improvement in early 2023, the ratio remains volatile and does not return to previous highs, indicating continued pressure on financial stability.

In summary, the data point to a period of strong earnings growth complemented by manageable interest costs until the end of 2021, followed by a phase of earnings stress and increasing financing costs starting in 2022. This has substantially weakened the interest coverage, potentially signaling elevated financial risk and challenges in maintaining profitability and debt servicing capacity in recent and projected quarters.