Advanced Micro Devices Inc. (NASDAQ:AMD)

The financial ratios indicate a relatively stable and low level of debt throughout the observed periods, reflecting a conservative capital structure with limited reliance on external debt financing.

Debt to Equity Ratios

The Debt to Equity ratio remains consistently low, fluctuating mainly between 0.03 and 0.05 over the majority of periods, suggesting limited leverage. Notably, there is a slight increase near the last two periods where the ratio rises to 0.07 and then moderates back to 0.05. When including operating lease liabilities, the ratio shows a similar pattern with values slightly higher but following the same stable trend.

Debt to Capital Ratios

The Debt to Capital ratio echoes the Debt to Equity trends, maintaining low levels mostly around 0.03 to 0.05 across the timeline, indicating a conservative use of debt relative to the company's total capital base. Including operating lease liabilities again elevates the ratio marginally but without significant volatility, with a minor peak observed towards the later periods.

Debt to Assets Ratios

Debt to Assets ratios are consistently low, hovering around 0.02 to 0.04 for most of the periods, showing that debt constitutes a small fraction of the company's total asset base. There is a minor upward movement in the final two to three periods, reaching up to 0.06, which may warrant additional attention. Including operating lease liabilities slightly increases these ratios but maintains the overall low leverage profile.

Financial Leverage

The financial leverage ratio remains relatively stable, mostly between 1.20 and 1.25 following a period of somewhat higher values earlier on, which peaked around 1.66. This indicates moderate use of equity financing, and no sharp fluctuations are observed, reflecting steady capital management.

Interest Coverage Ratio

The Interest Coverage ratio shows significant variability over the periods. Initially, the coverage is very high, exceeding 100 in some quarters, implying strong earnings relative to interest expenses. However, there is a marked decline starting late in the third quarter of 2022, where the ratio drops substantially even dipping into negative territory around the mid-2023 period, indicating that interest expenses temporarily exceeded earnings at that time. Subsequently, the ratio improves steadily, rebounding to healthy levels above 20 by mid-2025, suggesting recovery in earnings capacity or reduction in interest obligations.

Overall, the financial structure demonstrates conservative leverage with minimal debt exposure relative to equity, capital, and assets. The notable volatility in interest coverage suggests a period of earnings pressure or increased interest expenses but this situation appears to improve in later periods.

The analysis of the quarterly financial data reveals several notable trends and patterns in the company's debt and equity structure over the observed periods.

Total Debt

The total debt remained stable at US$313 million from the first to the fourth quarter of 2021. It then increased sharply to US$1.787 billion in the first quarter of 2022, continuing to rise to a peak of approximately US$2.777 billion by the second quarter of 2022. Following this, total debt experienced a moderate decline and stabilization around US$2.4 to US$2.5 billion through 2022 and early 2023. A significant reduction occurred beginning in the second quarter of 2024, with debt lowering to about US$1.7 billion, before escalating markedly again to US$4.164 billion by the first quarter of 2025 and slightly decreasing subsequently to US$3.218 billion.

Stockholders’ Equity

Stockholders’ equity showed a gradual upward trend from US$6.477 billion in the first quarter of 2021 to approximately US$7.497 billion by the end of that year. A sharp and substantial increase is observed in the first quarter of 2022, where equity surged above US$55 billion. Thereafter, equity levels slightly declined and fluctuated mildly but remained within a narrow range around US$54.5 to US$55.8 billion throughout 2022 and early 2023. From 2023 onwards, equity maintained a consistent upward trajectory, reaching approximately US$59.7 billion by the second quarter of 2025.

Debt to Equity Ratio

The debt to equity ratio consistently remained low, fluctuating mostly between 0.03 and 0.05, indicating a conservative leverage position relative to equity across all observed periods. A slight dip to 0.03 occurred during mid-2024, corresponding with the reduction in total debt during that time, and a noticeable increase to 0.07 emerged in early 2025, reflecting the sharp rise in debt relative to equity at that point. Nonetheless, the ratio continued to suggest that the company relied more heavily on equity than on debt to finance its operations throughout.

Overall, the company demonstrated a pattern of maintaining relatively low leverage, with occasional significant fluctuations in both total debt and equity. The sharp increases in total debt starting in early 2022 and again in early 2025, along with the substantial equity increase in early 2022, may point to strategic financing or investment activities during these periods. The steady growth in equity and generally low debt to equity ratio over time suggests a strong capital base and cautious management of debt levels.

The analysis of the quarterly financial data reveals notable trends in the company’s capital structure over the observed periods. The total debt, including operating lease liabilities, displayed significant volatility, particularly during 2022 and extending into 2025.

Total Debt

Initially, the total debt maintained a relatively stable range around the mid-500s to mid-600s million US dollars during early 2021. However, a sharp increase occurred by March 2022, where total debt escalated dramatically to over 2,100 million US dollars. This elevated debt level continued through much of 2022, with values remaining above approximately 2,800 million US dollars, before showing a decline toward late 2024.

Notably, early 2025 saw a resurgence in total debt, peaking at 4,731 million US dollars in March 2025 before decreasing to under 3,900 million US dollars by June 2025. This marked increase in debt levels in 2025 contrasts with the period immediately before it, indicating possible significant financing or investment activities during that time.

Stockholders’ Equity

Stockholders' equity exhibited a consistent upward trajectory throughout the periods analyzed. From a base near 6,500 million US dollars in early 2021, equity values sharply increased to above 55,000 million US dollars by early 2022, marking a substantial jump. This elevated equity level then held steady with gradual increases observed through to mid-2025, peaking near 59,600 million US dollars.

This steady growth in equity, despite fluctuations in debt, suggests retention of earnings, successful equity issuance, or revaluation effects strengthening the company's net worth over time.

Debt to Equity Ratio

The debt to equity ratio remained relatively low throughout the entire period, indicating a conservative leverage position for most quarters. Starting around 0.08–0.09 in 2021, the ratio declined sharply to approximately 0.04 during the early months of 2022, reflecting the rapid growth in equity relative to debt.

Subsequently, the ratio stabilized around 0.04 to 0.05 range through late 2024, which corresponds to the observed stable equity and slightly fluctuating debt levels. A rise in the ratio occurred again in early 2025, climbing to 0.08 before slightly decreasing to 0.07 by mid-2025, mirroring the temporary surge in total debt during that period.

In summary, the company sustained a strong equity base with continuous growth, while managing its debt at relatively modest levels except for periods of marked increases in total debt around early 2022 and early 2025. The fluctuations in the debt to equity ratio mainly reflect these changes in debt levels relative to equity, but overall leverage remains conservative, highlighting a solid capital structure with controlled financial risk.

The analysis of the financial data concerning total debt, total capital, and the debt to capital ratio reveals several key trends over the observed periods.

Total Debt

Total debt remained relatively stable and low in the initial four quarters, holding steady at approximately $313 million. Starting from March 2022, there was a marked increase with total debt rising sharply to $1,787 million and continuing to escalate in subsequent quarters, peaking at $4,164 million in March 2025. Following this peak, a slight decline to $3,218 million was observed by June 2025.

Total Capital

Total capital exhibited a gradual upward trend throughout the entire period. It began at $6,790 million in March 2021 and increased steadily, reaching $78,310 million by December 2021. Afterward, the capital levels stabilized within the $57,000 million to $59,000 million range for several quarters, before advancing to $62,883 million by June 2025. This steady increase suggests ongoing investment or retained earnings contributing to expanded capital base.

Debt to Capital Ratio

The debt to capital ratio started low, fluctuating between 0.03 and 0.05 in the early periods, indicating a conservative capital structure with limited reliance on debt financing. Despite the substantial increase in total debt beginning in 2022, the ratio predominantly remained stable around 0.03 to 0.05, indicating that total capital rose proportionally, maintaining a low leverage position. Notably, there was a spike in the ratio to 0.07 during the March 2025 quarter, reflecting the peak in total debt relative to capital before the ratio slightly decreased to 0.05 in June 2025.

Overall, the data suggests a strategic approach to capital management where increases in debt levels are accompanied by corresponding rises in capital, maintaining a moderate leverage ratio. The significant increase in total debt after early 2022 could indicate increased borrowing to finance operations, investments, or expansion activities, while the consistent growth in total capital supports financial stability and capacity to manage higher debt levels effectively.

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

Total Debt (including operating lease liability)

The total debt exhibited a general upward trend from early 2021 through the end of 2022, increasing from $551 million in March 2021 to a peak of approximately $3,199 million in June 2022. Following this peak, debt levels fluctuated within the range of about $2,200 million to $3,000 million, showing a gradual reduction towards mid-2024. However, in early 2025, there was a notable spike back to around $4,731 million in March 2025 before decreasing again to nearly $3,886 million by June 2025.

Total Capital (including operating lease liability)

Total capital experienced a substantial increase starting in the fiscal year 2022, rising sharply from approximately $8,158 million in December 2021 to an elevated level near $57,490 million in March 2022. After this considerable jump, total capital stabilized with minor fluctuations, maintaining levels around $57,000 million through 2023 and early 2024, with a gradual upward trend reaching a peak of about $63,551 million by June 2025.

Debt to Capital Ratio (including operating lease liability)

The debt to capital ratio remained relatively low and stable around 0.07-0.08 throughout 2021. In early 2022, coinciding with the sharp increase in total capital, this ratio dropped significantly to around 0.04-0.05, indicating a decrease in leverage relative to capital. This low leverage was maintained through 2023 and mid-2024, hovering around 0.04 to 0.05. However, in early 2025, the ratio temporarily increased back to 0.08 before settling at 0.06 by mid-2025, reflecting the earlier rise in debt levels.

Overall, the company expanded its capital base substantially beginning in early 2022, which corresponded with a reduction in relative debt levels, improving the capital structure leverage ratios. Debt levels demonstrated volatility, especially in early 2025, suggesting possible strategic financing adjustments or other corporate financing activities during that period. The sustained increase in total capital through mid-2025 indicates ongoing growth or asset accumulation efforts. The relatively stable debt-to-capital ratio outside the early 2025 anomaly suggests consistent management of debt relative to capital over most of the observed timeframe.

The analysis of the financial data over the observed quarterly periods indicates several key trends in the company's capital structure and overall asset base.

Total Debt

The total debt was stable at $313 million from the first quarter of 2021 through the fourth quarter of 2021. A significant increase occurred in the first quarter of 2022, rising sharply to $1,787 million, followed by a further rise to $2,777 million in the second quarter of 2022. Subsequently, debt levels fluctuated slightly but generally remained around $2,400 to $2,500 million through the end of 2023. Early in 2024, the debt decreased to around $1,700 million but then surged notably to over $4,000 million by the first quarter of 2025, before declining to approximately $3,200 million in the second quarter of 2025.

Total Assets

The total assets showed consistent growth from $10,047 million in the first quarter of 2021 to approximately $12,419 million by the end of 2021. A marked increase occurred in the first quarter of 2022, where total assets rose dramatically to approximately $66,915 million. From this point, total assets remained relatively stable, fluctuating slightly within the $67,000 to $69,000 million range until mid-2024. Toward the end of the observation period, assets showed a steady upward trend, reaching approximately $74,820 million by mid-2025.

Debt to Assets Ratio

The debt-to-assets ratio was very low and steady at 0.03 during 2021 and early 2022, rising slightly to 0.04 during mid to late 2022 and through 2023. In early 2024, this ratio decreased to around 0.02, reflecting the relative reduction in debt compared to asset growth. However, in the first half of 2025, the ratio increased markedly to 0.06 and then reduced to 0.04, mirroring the fluctuations in total debt levels. Overall, despite the fluctuations in debt, the ratio indicates that the company maintained a conservative leverage position relative to its asset base, with brief periods of increased leverage.

In summary, the company experienced a major expansion in asset size beginning in early 2022, accompanied by a significant increase in total debt. Debt levels showed some volatility through the subsequent periods but generally remained a modest proportion of total assets. The asset base growth outpaced debt increases most of the time, resulting in a debt-to-assets ratio that generally remained low. The recent surge in debt in early 2025, followed by a partial reduction, suggests active management of financial obligations, likely in response to operational or strategic requirements.

Total assets

The total assets exhibited a significant increase from early 2021 through 2022, rising from approximately $10 billion to over $67 billion by the end of 2022. This sharp increase indicates substantial growth or asset acquisition during this period. Following this peak, total assets remained relatively stable with minor fluctuations, maintaining levels between $67 billion and $69 billion through mid-2024. Towards the end of the observed period, total assets showed a notable upward trend again, growing to approximately $74.8 billion by mid-2025.

Stockholders’ equity

Stockholders’ equity followed a similar pattern to total assets, with a marked increase from about $6.5 billion in early 2021 to over $55 billion by early 2022. After this steep rise, equity levels remained fairly consistent, fluctuating slightly around the mid-$50 billion range through mid-2024. In the latter part of the period, there was a gradual but steady increase in equity, reaching nearly $59.7 billion by mid-2025. This trend suggests sustained shareholder value growth and possibly retained earnings accumulation.

Financial leverage

The financial leverage ratio, calculated as total assets divided by stockholders’ equity, showed a declining trend during the growth period in 2021 and early 2022, decreasing from approximately 1.6 to around 1.2. This reduction indicates a relative increase in equity compared to debt or other liabilities, implying a stronger capital structure. From mid-2022 onwards, leverage ratios stabilized, fluctuating narrowly between 1.2 and 1.25, signaling consistent financial risk levels and balanced use of debt financing relative to equity.

Earnings Before Interest and Tax (EBIT)

Over the observed periods, EBIT exhibited significant volatility. Initially, the EBIT showed a strong upward trend from 653 million to a peak of 1,211 million by the end of 2021. However, a sharp decline followed in 2022, with EBIT turning negative in the third and fourth quarters (-38 million and -114 million, respectively). The first quarter of 2023 remained negative, but a gradual recovery ensued throughout the remainder of 2023 and into 2024, where EBIT fluctuated but generally maintained positive territory, reaching highs of 920 million by the fourth quarter of 2024. The last two periods showed a downturn, with EBIT falling to 852 million and then turning negative again (-28 million in June 2025).

Interest Expense

Interest expense demonstrated an overall increasing trend over the timeframe. Starting at 9 million in early 2021, the expense rose steadily, peaking at 31 million in the third quarter of 2022. After a brief decline to 19 million in the fourth quarter of 2022, interest expenses remained relatively stable in the mid-20 million range through 2023 and 2024, with a slight decrease towards the end of 2024 and early 2025. There was a notable increase again in the June 2025 period, with interest expense rising to 38 million.

Interest Coverage Ratio

The interest coverage ratio started at a high level, indicating strong ability to cover interest obligations, with a peak of 109.09 in December 2021. Following this peak, the ratio experienced a marked downward trend throughout 2022, falling below 15 by the end of the year, reflective of the deteriorating EBIT figures in relation to rising interest expenses. The ratio became negative in the first quarter of 2023, highlighting difficulties in covering interest costs at that time. Beginning in mid-2023, the ratio improved gradually, reaching a peak of 32.99 by the second quarter of 2025, although it slipped somewhat to 25.11 in the last period observed.

Summary Insight

The data indicates a period of financial stress in 2022 and early 2023, characterized by negative operational earnings and increasing interest expenses, resulting in a significant reduction in interest coverage. Subsequent quarters show gradual improvement in operating profitability and stable interest expenses, which enhanced the company's capacity to meet interest obligations. However, the EBIT volatility and the resurgence of higher interest expenses in the latest period suggest ongoing challenges in sustaining consistent earnings and managing debt costs.