Amgen Inc. (NASDAQ:AMGN)

The analysis of the quarterly financial ratios reveals notable fluctuations in the company's profitability and financial structure over the observed periods.

Return on Assets (ROA)

The ROA started at 11.33% in the first quarter of 2021 and generally trended downward with some variability. It experienced a decline from 9.61% in the second quarter of 2021 to a low of 6.91% by the end of 2023. Subsequently, ROA further decreased, reaching a minimum of 3.44% in mid-2024 before slightly recovering towards the end of the dataset, closing at 7.77% in the third quarter of 2025. This indicates a weakening efficiency in asset utilization over time, with some signs of stabilization in the latest quarters.

Financial Leverage

Financial leverage demonstrated considerable volatility. Initially, the leverage ratio was relatively stable, ranging from 6.7 to 9.13 through 2021. A significant spike occurred in the first quarter of 2022, peaking at an extremely high level of 64.62, which was followed by a marked decline through 2022. After stabilizing somewhat between 11.83 and 18.51 from late 2022 through 2024, leverage gradually declined again, reaching 9.37 by the third quarter of 2025. The pronounced peak in early 2022 suggests an abnormal capital structure change or a potentially sizeable increase in debt or equity fluctuations.

Return on Equity (ROE)

ROE showed a pattern similar to financial leverage with substantial peaks and troughs. It started at 75.91% in the first quarter of 2021, then declined but spiked dramatically to 624.78% in the first quarter of 2022. Following this, ROE decreased steadily over multiple quarters, settling near 98.82% by the third quarter of 2023. It further declined into 2024 before rebounding towards 95.59% by mid-2025. The extreme volatility and high ROE values suggest the impact of leverage fluctuations and possibly extraordinary items or changing equity bases during the periods analyzed.

Overall, the data indicate that the company faced significant shifts in its financial leverage which correspond to extreme variations in ROE. The ROA trend points to decreasing asset profitability, while the fluctuating financial leverage and ROE imply changes in capital structure and return distribution to equity holders. The sharp peaks in leverage and ROE during early 2022 could reflect an extraordinary event or financial restructuring, which warrants further investigation. The recent quarters show some normalization in these measures, possibly indicating stabilization of financial policies and operational efficiency.

The financial analysis reveals several notable trends and fluctuations across the key performance indicators over the observed periods.

Net Profit Margin (%)

The net profit margin exhibited variability, initially declining from 29.6% to around 23% during 2021, then recovering to peak near 31.77% by early 2023. However, from 2023 onwards, it showed a downward trajectory, hitting a low point of 10.6% by mid-2024. Subsequently, there was a modest recovery reaching approximately 20.31% by late 2025. This pattern indicates periods of both strong profitability and significant pressure on margins, particularly during 2024.

Asset Turnover (ratio)

The asset turnover ratio remained relatively stable through 2021 and early 2022, oscillating around 0.37 to 0.41. A sharp decline occurred in 2023, with the ratio dropping to 0.28 and maintaining this lower level throughout the year. Starting in early 2024, a gradual improvement is visible, with ratios climbing steadily back to 0.38 by late 2025. This suggests fluctuating efficiency in asset utilization, with a notable dip followed by recovery.

Financial Leverage (ratio)

Financial leverage displayed significant volatility. Initially ranged between 6.7 and 9.13 in 2021, followed by an extreme spike to 64.62 in early 2022. After this peak, leverage ratios swiftly declined in subsequent quarters, falling to 9.37 by late 2025. The spike and subsequent decrease imply substantial changes in capital structure, possibly due to a temporary increase in debt or asset base adjustments, followed by deleveraging efforts.

Return on Equity (ROE) (%)

ROE experienced dramatic fluctuations, increasing sharply to 624.78% in the first quarter of 2022 from around 75.91% in early 2021. This peak was not sustained, with a pronounced decrease through 2022 and 2023, bottoming close to 52.83% in mid-2024. A rebound trend ensued thereafter with ROE climbing again, reaching 72.82% by late 2025. These extraordinary variations suggest the influence of both leverage effects and changing profitability dynamics.

In summary, the data indicates a period marked by significant volatility in leverage and profitability measures. The spike in financial leverage correlates with extraordinary ROE increases early in 2022, followed by a stabilization phase with gradual improvements in asset turnover and profit margins. These trends suggest episodic shifts in financial strategy or operating conditions, with signs of recovery in efficiency and profitability metrics towards the end of the timeline.

Tax Burden

The tax burden ratio remained relatively stable over the observed periods, fluctuating narrowly between 0.85 and 0.90. This consistency indicates a steady proportion of earnings retained after tax expenses across quarters.

Interest Burden

The interest burden ratio exhibited a declining trend starting around early 2023, reaching a low of 0.52 in mid-2024 before partially recovering to 0.74 by late 2025. This pattern suggests an increasing impact of interest expenses on earnings during 2023-2024, which somewhat lessened in the following periods.

EBIT Margin

The EBIT margin fluctuated considerably, initially hovering around low-to-mid 30% values until the end of 2022. It then spiked sharply to over 43% in early 2023, before declining to the mid-20% range in 2024. The margin showed signs of improvement again towards the end of 2025, stabilizing around the low 30% range. This volatility reflects variable earnings efficiency relative to sales during the period.

Asset Turnover

Asset turnover ratios displayed relative stability around 0.37-0.41 through late 2022 but declined noticeably to approximately 0.28 in early 2023. A gradual recovery followed, reaching pre-2023 levels by late 2025. This pattern suggests a temporary reduction in the efficiency of asset utilization, with a return to previous efficiency levels by the end of the timeframe.

Financial Leverage

Financial leverage exhibited significant fluctuation. It peaked dramatically at over 64 times in early 2022, indicating an extreme increase in leverage. Subsequently, the ratio trended downwards, decreasing steadily to 9.37 by late 2025. Although leverage remained above early 2021 levels, the downward trend highlights efforts or occurrences leading to reduced reliance on debt over time.

Return on Equity (ROE)

ROE showed pronounced volatility, featuring an exceptionally high peak of over 624% in early 2022, followed by a steady decline over the next quarters. Despite this, ROE remained elevated relative to the pre-2022 period, stabilizing between 70% and 95% from mid-2024 onward. The fluctuations correspond closely to changes in financial leverage and EBIT margin, underlining leverage's significant influence on profitability returns.

Net Profit Margin

The net profit margin exhibited fluctuations over the observed periods. Initially, the margin showed a moderate decline from 29.6% to 23.03% in 2021, followed by recovery to 27.88% by the third quarter of 2022. A notable peak occurred in the first quarter of 2023, reaching 31.77%, but this was followed by a significant downward trend through 2024, hitting a low of 10.6% in mid-2024. Toward the end of the dataset, there was a modest rebound, with margin increasing to 20.31% by the third quarter of 2025. Overall, the data reveals periods of volatility with a sharp decline in profitability during 2024 and gradual improvement thereafter.

Asset Turnover

Asset turnover remained relatively stable between 0.37 and 0.41 during 2021 and 2022, suggesting consistent asset utilization efficiency. However, a pronounced decrease occurred starting in early 2023, with the ratio dropping to 0.28 and maintaining this lower level through to the end of 2023. From 2024 onwards, there was a gradual recovery in asset turnover, climbing back to 0.38 by the third quarter of 2025. This indicates that asset efficiency was adversely affected in 2023 but showed signs of improvement afterwards.

Return on Assets (ROA)

The ROA trend closely parallels the patterns observed in net profit margin and asset turnover. It declined from a peak of 11.33% in early 2021 to a low of approximately 8.36% by late 2023. A sharper drop is evident in 2024, where ROA fell below 5%, reaching a minimum of 3.44%. Subsequently, moderate recovery is observed in 2025, with ROA rising to nearly 7.8% by the third quarter. This trajectory suggests a period of reduced overall asset profitability during 2024 with incremental gains in the following periods.

Summary

The financial ratios collectively suggest that the company faced challenges affecting profitability and asset efficiency, particularly in 2024. The net profit margin, asset turnover, and ROA all declined significantly during that year, indicating reduced operational effectiveness and lower returns on asset investments. Following this dip, a gradual recovery trend emerges across all three metrics into 2025, although prior peak levels have not yet been fully restored. The data reflects a period of financial stress with initial stabilization and improvement as the latest quarter approaches.

Tax Burden

The tax burden ratio has remained relatively stable over the observed quarterly periods, fluctuating narrowly between 0.85 and 0.90. This stability suggests consistent tax expense management relative to pre-tax earnings without significant volatility.

Interest Burden

The interest burden ratio demonstrated a declining trend from early 2021 through late 2023, reaching its lowest point around late 2023 at 0.73. Beginning in 2024, the ratio shows a recovery trend, increasing gradually to 0.74 by the third quarter of 2025. This indicates that the company's interest expense relative to EBIT worsened initially but improved in recent quarters, implying better control or reduction of interest costs or increased EBIT in the latest periods.

EBIT Margin

The EBIT margin displayed moderate variability across the quarters. Margins were notably stronger during 2021 and 2022, peaking above 44% in mid-2023, before experiencing a pronounced decline throughout 2024 with values dropping to around 22.81% at mid-year. A partial recovery is seen thereafter, with margins increasing towards 32.16% by late 2025. This pattern indicates fluctuating operational profitability, with a significant profit compression in 2024 and some stabilization in subsequent periods.

Asset Turnover

Asset turnover remained fairly consistent in early periods, generally hovering around 0.38 to 0.41. However, a noticeable dip occurred in 2023 where the ratio dropped to 0.28, maintaining this lower level through early 2024. From mid-2024 onward, asset turnover gradually improves, rising back toward previous levels at approximately 0.38 by late 2025. This suggests a temporary decline in the efficiency of asset utilization that has been gradually rectified.

Return on Assets (ROA)

Return on assets exhibited a downward trend from 11.33% in early 2021 to lows near 3.44% in mid-2024. Following this low point, ROA shows a rebound trend, improving to 7.77% by late 2025. The decline aligns with the previously observed drops in EBIT margin and asset turnover, reflecting lower profitability and asset efficiency, while the subsequent recovery indicates improved capacity to generate returns on employed assets.

The analysis of the financial ratios over the observed periods reveals distinct trends in the company's profitability and cost management metrics.

Tax Burden

The tax burden ratio remains relatively stable throughout the periods, fluctuating narrowly between 0.85 and 0.90. This consistency suggests a steady effective tax rate and consistent tax expense relative to profit before tax, indicating no significant changes in tax policy impact or tax planning effectiveness.

Interest Burden

This ratio exhibits a clear declining trend from 0.87 in early 2021 to a low of 0.52 mid-2024, followed by a recovery trending upwards towards approximately 0.74 by late 2025. The initial decline suggests an increasing interest expense relative to earnings before interest and taxes, possibly indicating rising debt costs or leverage. The subsequent improvement points to better interest coverage or reduced interest expenses in later periods.

EBIT Margin

The EBIT margin shows considerable volatility. It starts around 38% in early 2021, decreases to roughly 31% in late 2021, recovers to over 44% in early 2023, and then experiences a significant drop to around 22%-26% between mid-2023 and late 2024. Thereafter, it gradually improves to above 32% by late 2025. These fluctuations reflect changes in the company’s operating efficiency or cost structure impacting earnings before interest and taxes.

Net Profit Margin

Net profit margin follows a broadly similar pattern to EBIT margin but generally at a lower level, ranging from nearly 30% in early 2021, dipping below 11% in mid-2024, and recovering to above 20% by late 2025. The pronounced dip aligns with the period of increased interest burden and declining EBIT margin, underscoring the combined effect of higher financing costs and operating performance on bottom-line profitability.

In summary, the financial performance indicators depict a period of increased financial stress or cost challenges around 2023-2024, affecting both operating and net profitability. Improvements seen in interest burden and margins towards 2025 suggest successful measures in cost control, operational efficiency, or capital structure optimization, contributing to enhanced profitability.