Amgen Inc. (NASDAQ:AMGN)

The financial data reveals notable fluctuations in current assets and adjusted current assets over the five-year period. Both metrics exhibit a similar trend, reflecting consistency in the adjustments applied.

Current assets

Current assets decreased from US$21,144 million at the end of 2020 to US$19,385 million in 2021, representing a decline of approximately 8.4%. Subsequently, current assets increased significantly in 2022 to US$22,186 million, surpassing the 2020 level. This upward momentum intensified in 2023, with current assets reaching US$30,332 million, a substantial increase of about 36.7% over the prior year. However, in 2024, current assets slightly decreased to US$29,030 million, indicating a marginal reduction of approximately 4.3% from 2023 but still remaining well above previous years.

Adjusted current assets

The adjusted current assets follow a trend nearly identical to that of current assets. There was a decline from US$21,176 million in 2020 to US$19,411 million in 2021. In 2022, adjusted current assets rebounded to US$22,208 million, closely matching the unadjusted figure. The upward trend continued with a sharp increase in 2023 to US$30,360 million and a slight dip in 2024 to US$29,068 million. The minimal differences between current assets and adjusted current assets across all periods suggest limited adjustments affecting the current asset values.

Overall, the data indicates a period of contraction in 2021 followed by robust growth in current assets and adjusted current assets over the next two years, peaking in 2023. The slight decline in 2024 may warrant attention to determine whether it signals a stabilization or the beginning of a downward adjustment. The consistency between the reported and adjusted figures suggests reliability in the adjustments and minimal distortion in asset valuation across the reported periods.

Total Assets

The total assets exhibited a fluctuating trend over the five-year period. Starting from approximately $62,948 million at the end of 2020, there was a slight decrease in 2021 to about $61,165 million. This was followed by a modest recovery in 2022, reaching $65,121 million. A significant increase occurred in 2023, with assets peaking at $97,154 million. However, in 2024, there was a decline to $91,839 million, though the level remained substantially above earlier years except for the one-year peak.

Adjusted Total Assets

The adjusted total assets closely mirrored the pattern of the total assets throughout the period. Starting at $62,980 million in 2020, it decreased to $60,972 million in 2021 and rose moderately in 2022 to $64,189 million. A substantial jump occurred in 2023 reaching $94,382 million, followed by a decrease in 2024 to $88,623 million. The adjusted figures consistently corresponded with the reported total assets, indicating the adjustments applied did not significantly alter the overall asset valuation trend.

Trend Analysis

Overall, the asset base showed relative stability between 2020 and 2022 with moderate fluctuations, then experienced a notable expansion from 2022 to 2023, before retracting somewhat in 2024. This pattern suggests a possible major asset acquisition, revaluation, or other financial activities impacting asset size in 2023, followed by consolidation or divestiture processes in the subsequent year. The adjustments to assets, likely accounting changes or reclassifications, did not materially affect the trend.

Total Liabilities

The total liabilities exhibited a moderate increase from 53,539 million US dollars at the end of 2020 to 54,465 million in 2021. This upward trend continued more noticeably in 2022, reaching 61,460 million. A significant surge occurred in 2023, with liabilities rising sharply to 90,922 million. However, in 2024, the total liabilities decreased somewhat to 85,962 million, indicating a partial reversal after the previous year’s rapid increase.

Adjusted Total Liabilities

The adjusted total liabilities closely mirror the pattern observed in total liabilities. Starting at 53,338 million US dollars in 2020, the figure remains stable into 2021 at 54,465 million. A moderate rise is again seen in 2022, up to 61,449 million. In 2023, a sharp increase elevates adjusted liabilities to 88,568 million, followed by a decrease in 2024 to 84,346 million. Notably, the adjusted liabilities are consistently slightly lower than the total liabilities, but the gap remains relatively stable across the years.

Overall Trend and Insights

Both total and adjusted liabilities demonstrated a relatively steady increase from 2020 through 2022, followed by a pronounced jump in 2023. The subsequent decline in 2024, though moderate, suggests corrective measures or improved financial management after the substantial rise. The stability in the difference between total and adjusted liabilities implies consistent adjustments or accounting practices over the periods. The sharp liability increase in 2023 may warrant further investigation into its causes, such as acquisitions, increased borrowing, or other financing activities.

The analysis of the annual financial data reveals significant fluctuations in the stockholders’ equity and adjusted stockholders’ equity over the five-year period.

Stockholders’ Equity

The stockholders’ equity demonstrates a declining trend from 2020 through 2022, falling sharply from $9,409 million to $3,661 million. This represents a significant reduction over the first three years. However, in 2023, there is a notable rebound to $6,232 million, indicating recovery or improved financial performance during that year. By 2024, the equity slightly decreases to $5,877 million, suggesting some volatility but still above the low level recorded in 2022.

Adjusted Stockholders’ Equity

The adjusted stockholders’ equity shows a similarly declining trajectory, starting at $9,642 million in 2020 and dropping to $2,740 million by 2022. This reflects a more pronounced decrease compared to the unadjusted figure. In 2023, adjusted equity improves substantially to $5,814 million, indicating a partial recovery or adjustment in financial reporting. However, the figure drops again in 2024 to $4,277 million, which is lower than the corresponding stockholders’ equity value and suggests continued challenges or conservative adjustments in the equity valuation.

Overall, both equity measures experienced a sharp decline in the initial years, followed by a partial recovery in 2023. The subsequent year shows some decline again, indicating potential instability or ongoing adjustments. The variance between stockholders’ equity and adjusted stockholders’ equity in the later years may reflect changes in accounting practices or adjustments for specific financial considerations.

Over the analyzed period, the financial data reveals several notable trends in the company’s capital structure and financial positioning.

Total Reported Debt

This metric shows a steady increase from 32,986 million USD in 2020 to a peak of 64,613 million USD in 2023, followed by a slight reduction to 60,099 million USD in 2024. This indicates a significant rise in leverage, particularly between 2022 and 2023, where debt nearly doubled, before modestly decreasing in the following year.

Stockholders’ Equity

Equity exhibits a declining trend overall, decreasing from 9,409 million USD in 2020 to a low of 3,661 million USD in 2022. A partial recovery occurs in 2023 to 6,232 million USD; however, it decreases again slightly in 2024 to 5,877 million USD. This pattern reflects fluctuations in retained earnings or changes in capital that resulted in diminished shareholder equity, particularly marked in the initial three years.

Total Reported Capital

Total capital remained relatively stable from 2020 (42,395 million USD) to 2022 (42,606 million USD), followed by a sharp increase in 2023 to 70,845 million USD and a moderate decrease to 65,976 million USD in 2024. This growth mirrors the rise in total debt, confirming that the increase in leverage drove the expansion in reported capital rather than equity growth.

Adjusted Totals (Debt, Equity, Capital)

The adjusted debt figures closely parallel the reported debt trends, rising steadily from 33,445 million USD in 2020 to 65,423 million USD in 2023 before falling slightly to 60,879 million USD in 2024. Adjusted stockholders’ equity, however, declines more sharply from 9,642 million USD in 2020 to 2,740 million USD in 2022, followed by a rebound to 5,814 million USD in 2023 and a further decline to 4,277 million USD in 2024. Adjusted total capital exhibits a similar pattern to reported total capital, increasing substantially in 2023 before a reduction in 2024.

Insights on Capital Structure

The data suggest a strategic shift toward higher leverage with debt levels doubling within a few years, indicating possible capital raising through borrowing. This has been partially cushioned by fluctuations in equity, but the equity base has generally contracted relative to the rising debt. The notable increase in total capital in 2023 is attributable primarily to increased debt, implying reliance on external financing sources. The adjusted figures reinforce this observation, showing the debt growth and equity reduction after considering adjustments.

Overall Financial Position

The increased leverage may enhance financing capacity but also indicates heightened financial risk. The fluctuating equity, especially its decline through the middle of the period, could reflect retained earnings erosion or shareholder distributions. The slight reduction in debt and capital in 2024 might suggest early efforts to deleverage or balance the capital structure after rapid expansion.

Net Income

The net income shows a fluctuating trend over the five-year period. It initially declines from 7,264 million USD in 2020 to 5,893 million USD in 2021. Following this drop, there is a recovery phase with net income increasing to 6,552 million USD in 2022 and further to 6,717 million USD in 2023. However, in 2024, a significant decrease occurs, with net income falling sharply to 4,090 million USD, indicating a substantial reduction in profitability in the latest year.

Adjusted Net Income

Adjusted net income exhibits a generally decreasing trend from 2020 through 2024. Starting at 6,450 million USD in 2020, it declines moderately to 5,642 million USD in 2021 and slightly recovers to 5,838 million USD in 2022. The figure then continues to decline to 5,450 million USD in 2023, followed by a pronounced drop to 3,085 million USD in 2024. The pattern suggests consistent pressure on earnings quality or operational performance resulting in reduced adjusted profitability, with the most pronounced impact occurring in 2024.

Comparative Analysis

Both net income and adjusted net income demonstrate volatility, but adjusted net income shows a more consistent downward movement over the years. The divergence between net income and adjusted net income widens in 2024 compared to prior years, highlighting potentially increased one-time charges, adjustments, or non-recurring items in that year. The sharp reductions in both metrics in 2024 suggest challenges that impacted the company's overall and core earnings, which may warrant further investigation to identify underlying causes.