Amgen Inc. (NASDAQ:AMGN)

The financial ratios presented demonstrate varying trends over the five-year period. Generally, adjusted ratios show similar patterns to reported ratios, though with some magnitude differences. A notable trend is the fluctuation in leverage ratios, alongside shifts in profitability and asset utilization.

Asset Turnover

Both reported and adjusted total asset turnover decreased from 0.40 in 2021 to 0.28 in 2023, indicating declining efficiency in asset utilization. A slight recovery is observed in 2024 and 2025, reaching 0.35 and 0.39 respectively, but levels remain below those of the initial year.

Liquidity

The reported and adjusted current ratios experienced a decline from 1.59 in 2021 to 1.14 in 2025. This suggests a weakening short-term liquidity position over the period. The most significant decrease occurred between 2022 and 2023, followed by a further reduction in 2024.

Leverage

Reported debt to equity increased substantially from 4.97 in 2021 to 10.64 in 2022, remaining elevated at 10.37 and 10.23 in 2023 and 2024 before decreasing to 6.31 in 2025. Adjusted debt to equity mirrors this trend, with higher values overall, peaking at 14.47 in 2022 and falling to 8.78 in 2025. Reported and adjusted debt to capital ratios show a similar pattern, remaining relatively stable around 0.90. Financial leverage followed a similar trajectory, increasing significantly from 9.13 in 2021 to 17.79 in 2022, peaking at 20.72 in 2024, and then decreasing to 10.46 in 2025.

Profitability

Reported net profit margin initially increased from 24.25% in 2021 to 26.42% in 2022, but then experienced a substantial decline to 12.77% in 2024 before recovering to 21.94% in 2025. The adjusted net profit margin shows a similar trend, though with lower values overall. Both reported and adjusted return on equity (ROE) exhibited a similar pattern, with a peak in 2022 followed by a decline in 2024 and a subsequent recovery in 2025. Reported ROE decreased from 87.96% in 2021 to 69.59% in 2024, while adjusted ROE decreased from 86.71% to 72.13% over the same period. Return on assets (ROA) also followed this pattern, decreasing from 9.63% in 2021 to 4.45% in 2024, before increasing to 8.51% in 2025. Adjusted ROA mirrored this trend, with lower values.

In summary, the period under review demonstrates a cycle of increasing leverage followed by a reduction, coupled with fluctuations in profitability metrics. Asset utilization decreased initially before showing signs of improvement in the later years. Liquidity also weakened over the period.

The period under review demonstrates fluctuating performance in asset utilization, as measured by total asset turnover. Product sales generally increased over the five-year period, while total assets experienced more volatility. Analysis of both reported and adjusted total asset turnover ratios reveals similar trends, suggesting that adjustments to total assets do not significantly alter the overall interpretation of asset efficiency.

Product Sales Trend

Product sales exhibited a consistent upward trajectory, increasing from US$24,297 million in 2021 to US$35,148 million in 2025. The largest year-over-year increase occurred between 2022 and 2023, followed by a substantial increase between 2023 and 2024.

Total Asset Trend

Total assets increased from US$61,165 million in 2021 to US$97,154 million in 2023, representing a significant expansion of the asset base. However, assets then decreased to US$90,586 million by 2025. This suggests potential strategic shifts in asset allocation or divestitures.

Reported Total Asset Turnover

The reported total asset turnover ratio decreased from 0.40 in 2021 to 0.28 in 2023, indicating a declining ability to generate sales from its asset base. A slight recovery to 0.35 was observed in 2024, followed by a further increase to 0.39 in 2025. This suggests some improvement in asset utilization in the later years of the period.

Adjusted Total Asset Turnover

The adjusted total asset turnover ratio mirrored the trend of the reported ratio. It decreased from 0.40 in 2021 to 0.29 in 2023, then increased to 0.36 in 2024 and 0.40 in 2025. The consistency between the reported and adjusted ratios indicates that the adjustments made to total assets did not materially impact the assessment of asset efficiency. The adjustments appear to be smoothing out some of the volatility in the asset base.

In conclusion, while product sales demonstrated consistent growth, the efficiency with which assets were used to generate those sales fluctuated. The period between 2021 and 2023 saw a decline in asset turnover, but a modest recovery was observed in the subsequent two years. The similarity between reported and adjusted ratios suggests that the underlying trend in asset utilization remains consistent regardless of the asset adjustments.

The adjusted current ratio remained relatively stable between 2021 and 2023, then exhibited a declining trend over the subsequent two years. While the reported and adjusted current ratios are identical across all periods, a closer examination of the underlying components reveals insights into the company’s short-term liquidity position.

Adjusted Current Ratio Trend

The adjusted current ratio held steady at 1.59 in 2021 and 1.42 in 2022, before increasing to 1.65 in 2023. A subsequent decline is observed, falling to 1.26 in 2024 and further to 1.14 in 2025. This indicates a weakening ability to cover short-term liabilities with short-term assets over the latter part of the analyzed period.

Current Assets and Liabilities

Current assets increased from US$19,385 million in 2021 to US$30,332 million in 2023, representing substantial growth. However, these assets decreased slightly to US$29,030 million in 2024 and remained relatively flat at US$29,057 million in 2025.

Current liabilities demonstrated a consistent upward trend throughout the period, rising from US$12,184 million in 2021 to US$25,489 million in 2025. This increase in liabilities, coupled with the stabilization of current assets in the final two years, contributed to the observed decline in the adjusted current ratio.

Adjusted Asset Impact

The adjusted current assets are nearly identical to the reported current assets across all periods, suggesting minimal adjustments were made to the initially reported figures. This implies that the adjustments did not materially alter the assessment of short-term liquidity.

The observed trend suggests that while the company maintained a reasonable short-term liquidity position initially, its ability to meet short-term obligations with current assets has diminished as liabilities have increased and asset growth has plateaued.

The period between 2021 and 2025 demonstrates significant fluctuations in both reported and adjusted debt to equity ratios. Total debt increased substantially from 2021 to 2023, before exhibiting a decline in the subsequent two years. Stockholders’ equity experienced a more volatile pattern, decreasing sharply between 2021 and 2022, followed by periods of increase and decrease.

Adjusted Debt to Equity Ratio - Overall Trend

The adjusted debt to equity ratio began at 5.22 in 2021 and rose dramatically to 14.47 in 2022. While decreasing to 11.25 in 2023, it increased again to 14.23 in 2024 before falling to 8.78 in 2025. This indicates a period of increasing financial leverage followed by a partial correction.

Debt and Equity Movements

Adjusted total debt mirrored the trend of reported total debt, increasing from US$33,979 million in 2021 to US$65,423 million in 2023, and then decreasing to US$55,435 million in 2025. Adjusted stockholders’ equity showed a substantial decrease from US$6,507 million in 2021 to US$2,740 million in 2022, followed by a recovery to US$6,315 million in 2025. The larger changes in debt compared to equity contribute to the observed ratio fluctuations.

Comparison to Reported Debt to Equity

The adjusted debt to equity ratio consistently exceeded the reported debt to equity ratio across all observed years. The difference between the two ratios suggests that adjustments to total debt and stockholders’ equity significantly impact the assessment of the company’s leverage. The adjustments appear to amplify the observed trends in financial risk.

The most substantial increase in the adjusted debt to equity ratio occurred between 2021 and 2022, coinciding with a significant rise in adjusted total debt and a substantial decrease in adjusted stockholders’ equity. The subsequent decline in the ratio in 2025 is attributable to a decrease in adjusted total debt and an increase in adjusted stockholders’ equity. These movements suggest potential shifts in financing strategies or equity management practices.

The information presents a five-year trend of debt and capital figures, culminating in calculated ratios. Total debt and total capital both exhibited growth from 2021 to 2023, followed by declines in 2024 and 2025. The reported debt to capital ratio remained relatively stable between 2021 and 2024, before decreasing slightly in 2025. A similar pattern is observed in the adjusted debt to capital ratio, though with slightly higher values overall.

Total Debt

Total debt increased from US$33,309 million in 2021 to US$64,613 million in 2023, representing a substantial increase over two years. Subsequently, debt decreased to US$60,099 million in 2024 and further to US$54,604 million in 2025. This suggests a period of increased borrowing followed by debt reduction.

Total Capital

Total capital mirrored the trend of total debt, increasing from US$40,009 million in 2021 to US$70,845 million in 2023. Similar to debt, capital decreased to US$65,976 million in 2024 and US$63,262 million in 2025. The parallel movement of debt and capital suggests that increases in debt were, at least partially, funded by increases in capital.

Reported Debt to Capital Ratio

The reported debt to capital ratio increased from 0.83 in 2021 to 0.91 in 2022 and remained at 0.91 in both 2023 and 2024. A slight decrease to 0.86 was observed in 2025. This indicates a relatively stable, and somewhat high, level of debt financing relative to capital over the period, with a minor reduction in leverage at the end of the observed timeframe.

Adjusted Debt to Capital Ratio

The adjusted debt to capital ratio followed a similar trajectory to the reported ratio, increasing from 0.84 in 2021 to 0.94 in 2022. It then decreased to 0.92 in 2023, remained at 0.93 in 2024, and concluded at 0.90 in 2025. The adjusted ratio consistently exceeded the reported ratio across all periods, suggesting that the adjustments made to the debt and capital calculations resulted in a higher leverage position. The decrease in 2025 mirrors the trend observed in the reported ratio.

The convergence of the reported and adjusted ratios in later years suggests the impact of the adjustments may be diminishing. Overall, the period demonstrates a cycle of increasing leverage followed by a moderate reduction in debt relative to capital.

An examination of the financial information reveals trends in adjusted financial leverage over a five-year period. Total assets experienced growth from 2021 to 2023, peaking at US$97,154 million, before declining in 2024 and 2025 to US$91,839 million and US$90,586 million, respectively. Stockholders’ equity demonstrated a more volatile pattern, decreasing significantly from 2021 to 2022, followed by increases in 2023, 2024, and 2025, ultimately reaching US$8,658 million.

Reported Financial Leverage

Reported financial leverage increased substantially from 9.13 in 2021 to 17.79 in 2022. It then decreased to 15.59 in 2023 and remained relatively stable at 15.63 in 2024. A notable decrease to 10.46 was observed in 2025.

Adjusted Total Assets & Equity

Adjusted total assets mirrored the trend of total assets, increasing to US$94,382 million in 2023 and then decreasing to US$88,623 million in 2024 and US$86,877 million in 2025. Adjusted stockholders’ equity followed a similar pattern to stockholders’ equity, with a low of US$2,740 million in 2022 and a high of US$6,315 million in 2025.

Adjusted Financial Leverage

Adjusted financial leverage exhibited a significant increase from 9.37 in 2021 to 23.43 in 2022, representing the largest single-year increase across the observed period. It decreased to 16.23 in 2023, then increased again to 20.72 in 2024 before declining to 13.76 in 2025. The adjusted leverage ratio generally tracked the reported leverage ratio, but consistently reported higher values.

The fluctuations in both reported and adjusted financial leverage suggest a dynamic capital structure. The increase in leverage in 2022, followed by subsequent adjustments, warrants further investigation to understand the underlying drivers, such as debt financing, equity changes, and asset management strategies. The decrease in adjusted financial leverage in 2025, coinciding with increases in adjusted stockholders’ equity, may indicate a strengthening financial position.

The adjusted net profit margin exhibited fluctuations over the five-year period. Initial values demonstrated relative stability, followed by a significant decline and subsequent recovery.

Overall Trend

The adjusted net profit margin began at 23.22% in 2021, increased modestly to 23.54% in 2022, then decreased to 20.25% in 2023. A substantial drop occurred in 2024, reaching a low of 9.63%, before recovering to 19.42% in 2025. This indicates a period of profitability challenges in 2024, followed by improvement in the most recent year.

Comparison to Reported Net Profit Margin

The adjusted net profit margin consistently remained below the reported net profit margin throughout the observed period. The difference between the two margins suggests the presence of items impacting net income that are being adjusted for, potentially related to non-recurring events or specific accounting treatments. The largest divergence occurred in 2024, where the reported margin (12.77%) was notably higher than the adjusted margin (9.63%).

Relationship to Product Sales

Product sales generally increased over the period, moving from US$24,297 million in 2021 to US$35,148 million in 2025. However, the adjusted net profit margin did not consistently increase alongside product sales. The decline in margin in 2024, despite increasing product sales to US$32,026 million, suggests that cost of goods sold or operating expenses may have increased at a faster rate than revenue.

Year-over-Year Changes

From 2021 to 2022, the adjusted net profit margin experienced a slight increase of 0.32 percentage points. A decrease of 3.29 percentage points was observed from 2022 to 2023. The most significant year-over-year change was a decline of 10.62 percentage points from 2023 to 2024. Finally, a substantial increase of 9.79 percentage points occurred from 2024 to 2025, indicating a strong recovery in profitability.

The fluctuations in the adjusted net profit margin warrant further investigation to understand the underlying drivers, particularly the factors contributing to the significant decline in 2024 and the subsequent recovery in 2025. Analysis of the adjustments made to net income is crucial for a complete understanding of the company’s financial performance.

The period between 2021 and 2025 demonstrates considerable fluctuation in both net income and stockholders’ equity, impacting reported and adjusted return on equity (ROE). While reported ROE exhibits volatility, the adjusted ROE provides a potentially more consistent view of underlying performance after accounting for certain adjustments.

Adjusted Return on Equity (ROE) - Overall Trend

Adjusted ROE began at 86.71% in 2021, increased significantly to 213.07% in 2022, then decreased to 93.74% in 2023. A further decline to 72.13% was observed in 2024, followed by a substantial increase to 108.06% in 2025. This indicates a period of high variability, with 2022 and 2025 representing peak performance and 2024 the lowest.

Adjusted Net Income

Adjusted net income decreased from US$5,642 million in 2021 to US$5,450 million in 2023. A significant drop to US$3,085 million occurred in 2024, before recovering strongly to US$6,824 million in 2025. This pattern largely mirrors the fluctuations observed in adjusted ROE.

Adjusted Stockholders’ Equity

Adjusted stockholders’ equity experienced a substantial decrease from US$6,507 million in 2021 to US$2,740 million in 2022. It then increased to US$5,814 million in 2023 and US$6,315 million in 2025, with a moderate decrease to US$4,277 million in 2024. The volatility in equity likely contributes to the fluctuations in adjusted ROE.

Comparison with Reported ROE

Reported ROE values are considerably higher than adjusted ROE in 2021, 2022, and 2023. The difference between reported and adjusted ROE suggests that the adjustments made to net income and/or stockholders’ equity have a material impact on the calculated return. The gap narrows in 2024 and 2025, but remains present. The higher volatility in reported ROE compared to adjusted ROE suggests the adjustments are smoothing out some of the underlying fluctuations.

The significant changes in adjusted ROE are closely tied to the concurrent movements in adjusted net income and adjusted stockholders’ equity. The substantial increase in adjusted ROE in 2025 is driven by both a recovery in adjusted net income and an increase in adjusted stockholders’ equity. Further investigation into the nature of the adjustments made to net income and stockholders’ equity would be necessary to fully understand the drivers of these fluctuations.

The adjusted return on assets (ROA) exhibited fluctuations over the five-year period. Initial values were relatively strong, followed by a decline, and then a recovery towards the end of the period. A consistent pattern of adjusted net income and adjusted total assets influencing the adjusted ROA is observed.

Adjusted ROA Trend

The adjusted ROA began at 9.25% in 2021 and decreased to 3.48% in 2024, representing a significant downward trend. However, a substantial increase to 7.85% was recorded in 2025, indicating a potential reversal of the prior decline. The 2024 value represents the lowest point in the observed period.

Relationship to Adjusted Net Income

Adjusted net income generally moved in tandem with the adjusted ROA. A decrease in adjusted net income from 2021 to 2023 corresponded with a decline in adjusted ROA. The substantial increase in adjusted net income in 2025 directly contributed to the recovery in adjusted ROA observed in that year. The sharp drop in adjusted net income in 2024 was a primary driver of the low adjusted ROA for that year.

Relationship to Adjusted Total Assets

Adjusted total assets increased consistently from 2021 to 2023, but then decreased in both 2024 and 2025. The increase in adjusted total assets from 2021 to 2023, without a proportional increase in adjusted net income, contributed to the initial decline in adjusted ROA. The subsequent decrease in adjusted total assets in 2024 and 2025, coupled with the increase in adjusted net income in 2025, supported the recovery in adjusted ROA.

Comparison to Reported ROA

The adjusted ROA consistently remained below the reported ROA throughout the period. The difference between the two ratios varied annually, but the adjusted ROA generally provided a more conservative assessment of profitability relative to asset utilization. The trends observed in both the reported and adjusted ROA were similar, though the magnitude of the fluctuations differed.

In summary, the adjusted ROA experienced a period of decline followed by a recovery, largely influenced by changes in both adjusted net income and adjusted total assets. The 2025 results suggest a potential improvement in asset utilization efficiency, but continued monitoring is warranted to confirm this trend.