Advanced Micro Devices Inc. (NASDAQ:AMD)

Debt to Equity and Related Ratios

The debt to equity ratio shows a general decline from 0.16 in March 2020 to a low of 0.03 in multiple quarters through 2023 and early 2024, indicating a reduction in leverage relative to shareholder equity. A slight uptick to 0.07 is observed by March 2025. When including operating lease liabilities, the ratio follows a similar trend but remains marginally higher, peaking at 0.27 in June 2020 before declining to 0.04 by late 2024, then rising slightly to 0.08 by March 2025. This suggests consistent management of total debt obligations with minimal growth in leverage in recent periods.

Debt to Capital Ratios

Both the standard and operating lease inclusive debt to capital ratios exhibit a decreasing trend from early 2020 through 2024. The ratio drops from 0.14 to approximately 0.03 for the standard measure and from 0.19 to 0.04 for the inclusive measure. An increase to 0.07–0.08 levels in early 2025 mirrors the pattern seen in debt to equity ratios, indicating slightly increasing reliance on debt capital in that period.

Debt to Assets Ratios

The proportion of debt relative to total assets declines steadily from 0.08 in March 2020 to about 0.02 in early 2025, showing reduced leverage on the asset base. Including operating lease liabilities, similar trends emerge with slightly higher ratios reflecting lease obligations. A modest increase toward 0.06–0.07 is seen in early 2025, consistent with other leverage measures.

Financial Leverage Ratio

Financial leverage ratios decreased substantially from 1.93 in Q1 2020 to approximately 1.20 by late 2024, demonstrating a strengthening equity base relative to total assets. Minor fluctuations forward to early 2025 show slight increases but remain in a low range, reflecting a conservative capital structure.

Interest Coverage Ratio

Interest coverage improved significantly from the available data starting at 28.23 in December 2020, peaking at 109.09 in March 2022, indicating a strong ability to meet interest obligations. However, a sharp decline is evident thereafter, dropping to negative values in late 2023, which implies periods where earnings before interest and taxes fell below interest expense, signaling temporary financial stress. Recovery trends occur subsequently, with the ratio improving back above 30 by March 2025, suggesting a return to favorable earnings relative to interest costs.

Total Debt

The total debt shows significant fluctuations over the analyzed periods. Starting at $488 million in March 2020, debt increased substantially to $690 million in June 2020, before markedly declining to $313 million by the end of 2020. Debt levels then remained stable at $313 million through the first three quarters of 2021. A sharp increase occurred in March 2022, with debt rising to $1,787 million, followed by further growth peaking at $2,777 million in June 2022. Subsequently, debt stabilized around the $2,466 to $2,750 million range through the end of 2022 and early 2023. Mid-2024 saw a decrease to approximately $1,719 million, before a dramatic spike to $4,164 million occurred by March 2025.

Stockholders’ Equity

Stockholders' equity displayed a consistent upward trajectory throughout the period. Beginning at approximately $3,037 million in March 2020, equity rose steadily to reach $7,497 million by December 2021. A notable and extraordinary increase occurred by March 2022, with equity surging to over $55,000 million, maintaining this elevated level through subsequent quarters. The equity balance continued minor incremental increases, ending at $57,881 million in March 2025. This dramatic rise in equity corresponds with the period of increased total debt noted above.

Debt to Equity Ratio

The debt to equity ratio remained low and generally declined from 0.16 in March 2020 to lows around 0.03-0.04 during 2021 and 2022, indicating a relatively low leverage position compared to equity. Despite the large increases in both debt and equity in early 2022, the ratio stayed low, suggesting that equity growth outpaced debt growth. Toward the end of the period, specifically by March 2025, the ratio increased to 0.07, reflecting the recent surge in total debt relative to equity.

Overall Trends and Insights

The financial data reveals a period of moderate debt reduction and equity growth during 2020 and 2021, followed by a significant capital restructuring or equity injection starting in early 2022. The extraordinary increase in stockholders’ equity, coupled with rising debt levels, may indicate strategic financing activities, such as equity offerings or debt issuances, to fund expansion or other corporate initiatives. Despite increased debt in recent periods, the company’s leverage ratio remains low, implying a strong equity base. However, the sharp rise in debt by early 2025 warrants attention regarding potential impacts on future financial risk and capital structure.

Total Debt (including operating lease liability)

The total debt exhibited notable fluctuations over the observed periods. Initially, debt decreased from 699 million USD in March 2020 to 531 million USD by December 2020, indicating a reduction in leverage. It remained relatively stable through mid-2021, ranging between 550 and 660 million USD. However, beginning in March 2022, a substantial increase occurred, with debt peaking at 3,199 million USD in June 2022. Following this peak, total debt declined gradually, settling around 2,200 million USD by the end of 2024. A sharp increase is observed again in March 2025, with debt rising to 4,731 million USD.

Stockholders' Equity

Stockholders’ equity showed a consistent upward trend throughout the periods. Starting at 3,037 million USD in March 2020, equity increased steadily each quarter, reaching a significant jump between December 2021 (7,497 million USD) and March 2022 (55,333 million USD). From this point onward, equity levels stabilized in the mid-50,000 million USD range, with incremental growth observed through March 2025, ending at 57,881 million USD.

Debt to Equity Ratio (including operating lease liability)

The debt-to-equity ratio declined from 0.23 in March 2020 to a low range between 0.04 and 0.06 from March 2022 through most of 2024, reflecting a lower relative debt burden compared to equity. This decrease corresponds with the surge in equity and the moderate levels of debt during that interval. The ratio remained quite stable in this lower range until a slight increase to 0.08 was recorded in March 2025, coinciding with the recent rise in total debt.

Overall Insights

The data indicates a strategic strengthening of the equity base over the analyzed timeframe, particularly evident in the sizeable increase starting in early 2022. Despite fluctuations in the absolute debt figures, the relative debt burden has generally declined when compared to equity, suggesting improved financial stability. The spikes in total debt observed in mid-2022 and early 2025 may warrant further investigation to understand the underlying causes and their implications. The consistent equity growth coupled with a generally low and stable debt-to-equity ratio signals a robust capital structure maintenance approach in recent periods.

The analysis of the financial trends reveals several key points regarding the company's capital structure and leverage over the examined periods.

Total Debt

The total debt experienced fluctuations with notable changes over the reported quarters. Initially, there was an increase from 488 million USD in March 2020 to a peak of 690 million USD in June 2020, followed by a decline to 313 million USD by March 2021 where it maintained a relatively stable level through December 2021. A significant rise occurred in March 2022, reaching 1,787 million USD, peaking further in June 2022 at 2,777 million USD. Subsequently, the debt level stabilized around 2,467 to 2,468 million USD until December 2023. In early 2024, a reduction was observed with values around 1,719 to 1,721 million USD, before climbing sharply again to 4,164 million USD by March 2025.

Total Capital

Total capital increased steadily from 3,525 million USD in March 2020 to 7,810 million USD by December 2021, showing strong growth in the company's capital base. An extraordinary surge is observed starting March 2022 with total capital jumping dramatically to over 57,000 million USD and maintaining a high range around 57,000 to 58,700 million USD over the next quarters. This substantial increase suggests considerable capital infusion or revaluation events during this period. By March 2025, total capital further increased marginally to 62,045 million USD.

Debt to Capital Ratio

The debt to capital ratio exhibited a clear downward trend from 0.14 in March 2020 to a low of approximately 0.03 between March 2022 and December 2024, indicating a reduction in leverage relative to capital. This aligns with the marked increase in total capital during this period, which outpaced the growth in debt, effectively lowering the company's leverage ratio. However, at the final data point in March 2025, the ratio increased to 0.07, reflecting the recent surge in debt that outpaced the capital growth.

Overall, the company demonstrated a decreasing leverage trend up until late 2024, supported by robust growth in total capital. The sharp increase in both total capital and total debt around early 2022 suggests significant changes in the company's financing or asset base. The recent spike in debt toward early 2025 indicates a shift toward higher leverage, which may warrant further investigation to understand the underlying causes and potential implications for financial risk and capital management.

The analysis of the quarterly financial data reveals distinct trends regarding the company's debt levels, capital structure, and leverage ratio over the examined periods.

Total debt (including operating lease liability)

The total debt exhibited significant fluctuations throughout the timeline. Initially, debt levels were relatively moderate, ranging between approximately $500 million and $900 million from early 2020 through late 2021. However, starting in early 2022, there is a noticeable and abrupt increase, with debt surging beyond $2 billion and reaching a peak near $3.2 billion in mid-2022. This elevated level of debt was somewhat maintained through the subsequent quarters, with minor decreases followed by stability around the $2.8 to $3.0 billion range. Towards the end of the timeline, specifically in the final quarter of 2024, there is a marked increase, with debt rising sharply to approximately $4.7 billion.

Total capital (including operating lease liability)

Total capital demonstrated a generally upward trajectory, suggesting expansion or increased financing capacity during the periods analyzed. From just under $4 billion in early 2020, total capital increased gradually to exceed $8 billion by the end of 2021. Starting in 2022, total capital jumped dramatically, reaching near $57 billion early that year, and maintained a range close to $57 billion to $59 billion through most of 2023 and 2024. By the final period in early 2025, total capital further increased to approximately $62.6 billion. This sizable increase in capital reflects significant growth in the company’s financing base or asset expansion over these years.

Debt to capital (including operating lease liability)

The debt-to-capital ratio reveals important insights into the company’s leverage and capital structure changes. It started at a moderate level around 0.19 to 0.21 in early 2020, indicating that debt constituted roughly 19% to 21% of total capital at that time. The ratio then declined steadily to a low of about 0.04 to 0.05 from early 2022 through most of 2024, reflecting a relatively low level of debt compared to the capital base. This decrease in leverage suggests that the company's capital expansion outpaced the growth of its debt. Nevertheless, in the final quarter analyzed, the ratio spikes back to 0.08, indicating an increase in leverage relative to prior quarters, coinciding with the notable rise in total debt during that period.

Overall, the data points to significant capital growth paired with initially moderate then low leverage levels for most of the period. The spike in debt in early 2022 and again near the end of 2024, along with the associated increases in debt-to-capital ratio, may warrant further review to understand the context and potential impact on financial risk and strategic financing decisions.

Total Debt

The total debt levels exhibited significant fluctuations over the observed periods. Initially, there was an increase from 488 million US dollars in March 2020 to a peak of 690 million in June 2020, followed by a notable reduction to around 313 million US dollars sustained across multiple quarters in 2021. However, starting in March 2022, total debt rose sharply to 1.787 billion US dollars and continued increasing to 2.777 billion by June 2022. After some relative stabilization around 2.466 to 2.468 billion throughout late 2022 and early 2023, debt levels decreased again to approximately 1.719 billion in mid-2024, before sharply rising to 4.164 billion by March 2025. This pattern suggests episodic financing activities or restructuring events causing significant changes in leverage.

Total Assets

Total assets grew consistently over the timeframe, indicating asset base expansion. From 5.864 billion US dollars in March 2020, assets increased steadily, surpassing the 10 billion mark by March 2021, and then displaying a dramatic jump to over 67 billion US dollars in March 2022. Slight fluctuations followed but overall, assets remained in the range between 67 and 70 billion US dollars throughout 2023 and early 2024. The growing asset base reflects either acquisitions, capital expenditures, or revaluation impacts.

Debt to Assets Ratio

The debt to assets ratio declined markedly from 0.08 in March 2020 to a low of 0.02 around mid-2024, demonstrating a substantial reduction in leverage relative to asset size during much of the period. Despite the sharp increase in total debt near the end of the observed timeline, the ratio remains relatively low due to the corresponding large asset base. The ratio's increase to 0.06 at the end of the period reflects the substantial rise in debt but still indicates a conservative leverage level when compared to the total assets figure.

The analysis of the quarterly financial data reveals several key trends regarding the company's debt levels and asset base over the observed periods.

Total debt (including operating lease liability)

The total debt showed fluctuations with notable increases and decreases. Initially, debt ranged between approximately $500 million and $900 million from early 2020 through late 2021. A significant surge occurred starting in early 2022, with debt jumping to above $2 billion and peaking at nearly $3.2 billion in mid-2022. Subsequently, debt levels stabilized somewhat, fluctuating around the $2.2 billion to $3.0 billion range through late 2023 and early 2024. Near the end of the period in March 2025, debt spiked markedly to approximately $4.7 billion, indicating a substantial increase in leverage or financing activity.

Total assets

The total assets exhibited an overall upward trend, demonstrating growth in the company’s asset base. Starting from about $5.9 billion in early 2020, assets increased steadily and substantially, reaching over $12 billion by the end of 2021. There was an exceptional jump in total assets in early 2022, with amounts rising steeply to approximately $67 billion and maintaining this high level through 2023 and early 2024. Slight fluctuations occurred thereafter, with assets mostly ranging between $67 billion and $70 billion, concluding with an increase to about $71.5 billion in March 2025.

Debt to assets ratio (including operating lease liability)

The debt to assets ratio started relatively low, between 0.12 and 0.14 in the first two quarters of 2020, before declining progressively through 2021, settling around 0.04 to 0.05. This decline reflected the company’s rapid asset growth outpacing debt increases during this time. From early 2022 onward, the ratio remained relatively low, around 0.03 to 0.04, consistent with a strong asset base relative to debt. However, by the last quarter of the data set in March 2025, the ratio increased up to 0.07, corresponding with the sharp rise in total debt. Despite this increase, the ratio remains relatively moderate in absolute terms, suggesting the company is maintaining a stable debt level relative to its total assets.

Overall, the company demonstrated aggressive asset growth beginning in 2022, coinciding with an increase in leverage, especially towards the end of the observed period. The relatively low and stable debt to asset ratios over most of the timeline imply maintained financial prudence in leveraging such asset expansions. The sharp rise in debt in the final quarter warrants further investigation to assess the drivers and intended use of this increased borrowing.

The analysis of the quarterly financial data reveals several notable trends with respect to total assets, stockholders’ equity, and financial leverage over the observed periods.

Total Assets

Total assets demonstrated a general upward trajectory from March 2020 through December 2021, increasing steadily from approximately $5.9 billion to $12.4 billion. However, a substantial and abrupt increase occurred between December 2021 and March 2022, when total assets surged to approximately $66.9 billion. Following this significant jump, total assets stabilized with minor fluctuations, remaining in the range of approximately $67 billion to $71.6 billion through March 2025.

Stockholders’ Equity

Stockholders’ equity mirrored the trend observed in total assets initially, rising from about $3 billion in March 2020 to roughly $7.5 billion by December 2021. Similarly, a marked increase occurred between December 2021 and March 2022, with equity expanding drastically to above $55 billion. Post this increase, equity levels remained relatively stable, fluctuating slightly around the $54.5 billion to $57.9 billion range up to March 2025, indicating a period of consolidation following the substantial growth.

Financial Leverage

Financial leverage, measured as a ratio, displayed a declining pattern from 1.93 in March 2020 to approximately 1.21 by December 2021, indicating a reduction in the company's reliance on debt relative to equity. The ratio then stabilized, fluctuating narrowly between 1.20 and 1.24 through March 2025. This stability following the significant asset and equity increases suggests a maintained balance between debt and equity components despite the financial scale change.

In summary, the data indicates a period of moderate growth up to the end of 2021, followed by an extraordinary expansion of the company's financial base in early 2022, with total assets and equity increasing nearly tenfold. Subsequently, the financial structure stabilized, reflected in consistent financial leverage ratios, indicating that the company managed its capital structure prudently following the expansion period.

The earnings before interest and tax (EBIT) value displayed notable fluctuations over the reported quarters. Initially, EBIT rose steadily from US$181 million in March 2020 to a peak of US$1,211 million in December 2021, indicating substantial operational growth during this period. However, starting in March 2022, EBIT declined sharply to US$912 million, continuing its downward trend into a negative territory with a low of -US$114 million in December 2022. Subsequently, EBIT recovered gradually, reaching US$920 million in December 2024 before slightly decreasing to US$852 million by March 2025.

Interest expense showed variability but remained relatively moderate compared to EBIT levels. Beginning at US$13 million in March 2020, interest expense increased notably to a peak of US$31 million in September 2022, before stabilizing around the mid-20 million range in later quarters.

The interest coverage ratio, which measures the company's ability to meet its interest obligations from operating earnings, demonstrated significant variation corresponding to EBIT trends. During periods of rising EBIT (mid-2020 to late 2021), the ratio increased sharply, reaching 109.09 in December 2021, indicating strong coverage capabilities. As EBIT declined and turned negative by late 2022, the interest coverage ratio dropped substantially, even becoming negative (-2.15 in December 2022), reflecting difficulties in covering interest expenses at that time. Following this low, the ratio improved steadily, rising back to 32.99 by March 2025, suggesting a recovery in the company's ability to service its debt from operating income.

Overall, the data reveal a cycle of strong operational performance with increasing EBIT and robust interest coverage from early 2020 through 2021, a period of financial strain and negative operating profits through late 2022, followed by a phase of steady recovery through early 2025. Interest expenses fluctuated moderately but did not display a consistent trend that directly correlated with EBIT movements, implying that operational performance rather than changes in debt cost primarily influenced coverage ratios.