Amgen Inc. (NASDAQ:AMGN)

The analysis of the quarterly financial data reveals several notable trends in key performance indicators over the observed periods.

Return on Assets (ROA)

An initial absence of data is observed until March 31, 2020, where ROA begins at 11.54%. Following this, a gradual decline occurs, with slight fluctuations, descending to a low of 3.44% at September 30, 2024. There is a modest recovery towards the end of the period, with ROA reaching 6.64% by March 31, 2025. This pattern indicates a weakening in asset profitability over the long term, with some recent improvement.

Financial Leverage

The financial leverage ratio shows considerable volatility over the examined periods. Starting from 6.5 and experiencing minor fluctuations early on, there is a sharp spike to 64.62 by March 31, 2022. Subsequently, the ratio declines significantly and continues to oscillate between roughly 11 and 19 through to the latest period. The extreme peak followed by normalization suggests a transient event or restructuring affecting leverage, with a tendency towards a moderate leverage level thereafter.

Return on Equity (ROE)

ROE data is missing initially but emerges at a high level of 77.2% on March 31, 2020. Thereafter, the ratio exhibits extreme volatility, peaking extraordinarily at 624.78% in June 30, 2022. Following this, there is a steep decline with multiple fluctuations, settling around the range of 50% to 110% in the latest quarters. The pronounced spikes and drops imply significant variability in equity profitability, potentially influenced by changes in leverage and asset returns.

Overall, the combination of decreasing ROA, volatile and occasionally excessive financial leverage, and highly fluctuating ROE suggests periods of financial instability or transformative financial strategies. The interplay between leverage and profitability metrics indicates that increased leverage has amplified equity returns, albeit with heightened risk and inconsistency in underlying asset performance.

Net Profit Margin

The net profit margin displays a fluctuating pattern over the periods analyzed. It remains relatively stable around the mid-20% range from March 2021 through December 2023, peaking at approximately 31.77% in March 2023. However, starting from March 2024, the margin experiences a noticeable decline, dropping sharply to about 10.6% by June 2024 before marginally recovering to 18.1% by March 2025. This downward trend in recent quarters suggests increased pressures on profitability or cost structures that impacted margins.

Asset Turnover

Asset turnover ratios are generally low but show slight variation throughout the observed periods. From March 2021, values oscillate around 0.37 to 0.41, indicating relatively consistent asset utilization. From December 2023 onwards, a subtle upward trend is observed, with the ratio increasing from 0.28 to 0.37 by March 2025. This gradual improvement suggests improving efficiency in using assets to generate revenue in the latter part of the period.

Financial Leverage

Financial leverage exhibits significant volatility. Initial ratios from March 2020 to December 2021 are moderate, ranging generally between 5.9 and 9.13. A dramatic spike is seen in March 2022, where leverage surges to an exceptionally high level of 64.62, followed by a sharp decline to around 24.51 in June 2022 and a continuing downward trend thereafter. Post-2022, financial leverage stabilizes within a range of approximately 11.83 to 18.51, with some fluctuations but remaining well below the peak. This anomalous spike and subsequent normalization may reflect one-off events or restructuring impacting the equity or debt components.

Return on Equity (ROE)

Return on equity shows a strong upward trend from early 2021, rising from approximately 68% toward very high levels, peaking at 624.78% in March 2022. This surge coincides with the peak in financial leverage, suggesting the leverage effect amplified returns significantly during this timeframe. Following this peak, ROE declines sharply but stays elevated, fluctuating between roughly 50% and 150% through 2023. Moving into 2024 and early 2025, ROE declines further but remains substantial compared to typical industry levels, ending near 95.59%. The pattern indicates a phase of excess financial leverage boosting returns, followed by gradual deleveraging and normalization with sustained high profitability.

Tax Burden

The tax burden ratio demonstrates a relatively stable pattern over the periods observed, maintaining values close to 0.87 to 0.89. There is a slight fluctuation, but overall the ratio stays within a narrow range, suggesting consistent tax efficiency without significant changes in tax impact on earnings.

Interest Burden

The interest burden ratio shows a declining trend over time, beginning near 0.87 and decreasing to as low as 0.52 before a mild recovery to around 0.69 in more recent periods. This downward movement indicates an increasing proportion of earnings absorbed by interest expenses, which could imply rising debt costs or higher leverage impact on profitability.

EBIT Margin

EBIT margin exhibits considerable volatility across the quarters. Early data points reflect a range from approximately 31% to 38%, followed by a notable increase peaking above 43% in the middle periods. More recent quarters experience a decline to below 27%, with a minor recovery toward the end near 30%. These fluctuations suggest changes in operational profitability that could be linked to varying cost controls, pricing strategies, or changes in revenue structure.

Asset Turnover

Asset turnover generally remains within a moderate band, fluctuating between approximately 0.28 and 0.41. The earlier figures display slightly higher turnover ratios, which taper off and stabilize at lower levels before a gradual uptick toward the latest periods. This pattern indicates some variation in the efficiency of asset utilization to generate revenue, with recent improvement suggesting better asset use or increased sales relative to assets.

Financial Leverage

Financial leverage shows significant volatility with some extreme values. Initial periods have moderate leverage ratios around 5.9 to 9.13, followed by a sharp spike to extraordinarily high levels exceeding 60. This spike decreases over subsequent periods but remains elevated compared to the start, fluctuating between around 11 and 25. More recent quarters maintain leverage ratios in the low to mid teens. Such volatility reflects substantial changes in the company's capital structure and reliance on debt financing, potentially reflecting periods of restructuring, asset revaluation, or financial strategy shifts.

Return on Equity (ROE)

ROE experiences dramatic variations, with early values around 68% to 77%, spiking to extremely high values surpassing 600%, before tapering down to more moderate levels between approximately 50% and 100%. The peaks correspond with periods of very high financial leverage, indicating that leverage considerably amplifies returns. However, the sharp fluctuations also imply heightened risk and variability in shareholder returns over the analyzed timeframe.

Net Profit Margin

The net profit margin exhibits notable fluctuations across the observed periods. Starting from the first available data at 29.97% on March 31, 2020, the margin slightly declined to 23.03% by December 31, 2020. Subsequently, there was a moderate recovery, reaching a peak of 31.77% on March 31, 2023. However, this improvement was followed by a sharp decline, hitting a low of 10.6% by June 30, 2024. Toward the end of the period, the margin showed signs of recovery, returning to 18.1% by March 31, 2025. Overall, the net profit margin fluctuated considerably, with periods of both strong profitability and significant contraction.

Asset Turnover

The asset turnover ratio remained relatively stable within the initial years, ranging between 0.37 and 0.41 from March 31, 2020, through December 31, 2022. From March 31, 2023 onwards, a decline is observed with the ratio settling at 0.28 consistently through December 31, 2023. Gradual improvement followed in 2024, with the ratio increasing from 0.3 in June 30, 2024 to 0.37 by March 31, 2025. This suggests a temporary reduction in how efficiently assets were utilized to generate revenue, with a recovery trend visible in the most recent quarters.

Return on Assets (ROA)

Return on assets closely mirrors the trend seen in net profit margin, indicating a correlation between profitability and asset efficiency. Initially, ROA was 11.54% on March 31, 2020, followed by a decline to 8.63% by December 31, 2020. It then hovered around mid to high single digits until reaching a low of 6.91% on December 31, 2023. This decline continued further in early 2024, with the lowest point at 3.44% on September 30, 2024. A recovery phase ensued, with ROA climbing to 6.64% by March 31, 2025. The pattern highlights challenges in asset profitability during 2024, with improvements emerging toward the latest period.

Tax Burden

The tax burden ratio remained relatively stable over the analyzed periods, fluctuating narrowly between 0.86 and 0.9. This indicates a consistent proportion of earnings retained after tax expenses, with a slight positive trend toward 0.89 in the most recent quarters.

Interest Burden

The interest burden ratio shows a declining trend over time, starting from 0.87 in early 2021 and decreasing sharply to as low as 0.52 by mid-2024. This suggests an increasing impact of interest expenses on earnings, although a moderate recovery is seen toward the end of 2024, with the ratio climbing back to around 0.69.

EBIT Margin

The EBIT margin experienced notable volatility. It initially decreased from approximately 38% in early 2021 to around 31% by the end of that year. Thereafter, a significant improvement occurred in 2022 and early 2023, reaching highs above 44%. However, this was followed by a considerable decline through 2024, with margins dropping below 25%, indicating reduced operational profitability towards the end of the period.

Asset Turnover

Asset turnover ratios remained fairly constant at around 0.38–0.41 through 2021 and early 2022 but declined sharply to approximately 0.28 by mid-2023, persisting at this lower level for several quarters. The ratio showed gradual improvement in late 2024, suggesting a modest recovery in asset utilization efficiency.

Return on Assets (ROA)

The ROA followed a downward trajectory from values above 11% in early 2021 to a low point around 3.44% by late 2024. This declining trend reflects reduced overall profitability relative to the asset base. A slight rebound is noticeable towards the end of 2024, with ROA rising modestly to 6.64%, suggesting some recuperation in asset earnings performance.

Tax Burden

The tax burden ratio remained relatively stable throughout the periods analyzed, fluctuating slightly between 0.86 and 0.90. This indicates a consistent effective tax rate impacting net income over time with no significant upward or downward trend.

Interest Burden

The interest burden ratio shows a noticeable declining trend beginning from 0.87 in early 2021 and decreasing progressively to as low as 0.52 by mid-2024. A moderate recovery is observed toward the end of the period, rising to around 0.69 in the first quarter of 2025. This pattern suggests increasing interest expenses relative to EBIT, which put downward pressure on profitability during most of the period, particularly from 2023 onwards.

EBIT Margin

The EBIT margin displayed volatility with an initial dip from the high 30s percentage range down to around 31%, followed by a recovery to above 43% in late 2022 and early 2023. This peak was not sustained, as a sharp decline ensued starting in 2023, reaching a low near 22.8% in mid-2024 before a modest improvement to approximately 29.6% by early 2025. This variation indicates fluctuations in operating profitability, likely influenced by operational and cost factors during the analyzed timeframe.

Net Profit Margin

The net profit margin mirrors the trends seen in the EBIT margin but with more pronounced fluctuations due to the compounded effects of tax and interest burdens. Margins rose to nearly 32% in early 2023 before declining sharply to about 10.6% in mid-2024. A slight recovery is evident towards the end of the period, reaching 18.1% in early 2025. This trend implies significant pressures on bottom-line profitability, particularly from increased interest costs and reduced operating margins during 2023 and 2024.