Amgen Inc. (NASDAQ:AMGN)

Debt to equity ratio

The debt to equity ratio remained relatively stable around 3.1 to 4.97 from March 2020 through December 2021, indicating moderately high leverage. There was a significant spike to 40.23 in March 2022, which quickly decreased over the following quarters, stabilizing back to a range between 7.9 and 12.75. This suggests a temporary but marked increase in leverage, followed by some deleveraging actions.

Debt to capital ratio

The debt to capital ratio ranged between 0.76 and 0.83 through the end of 2021, reflecting consistent capital structure with a moderate portion of debt. From March 2022 onwards, the ratio increased substantially to as high as 0.98 before decreasing slightly and fluctuating around 0.89 to 0.93. This pattern presents an elevated reliance on debt financing starting in early 2022, with slight adjustments in subsequent quarters.

Debt to assets ratio

The debt to assets ratio demonstrated a gradual increasing trend from around 0.52-0.58 prior to 2022, rising to a peak near 0.69 between March 2023 and June 2024. After this period, a slight decline to approximately 0.64 by March 2025 was observed. Overall, the company experienced an increased proportion of assets financed by debt during this timeframe.

Financial leverage

Financial leverage remained relatively consistent between 5.9 and 9.13 up to the end of 2021. Similar to the debt to equity ratio, a pronounced spike occurred in March 2022, jumping to 64.62, followed by a steady decline and volatility in subsequent quarters. The leverage ratio stabilized in the range of approximately 11 to 18 from 2022 through early 2025, indicating substantial leverage but lower than the peak.

Interest coverage ratio

The interest coverage ratio data is only available starting September 2020, with values initially between 6.22 and 7.64 through December 2021. From March 2022 onward, a declining trend is notable, dropping sharply from around 6.5 to as low as 2.1 in June 2024, before slightly rebounding to about 3.18 by March 2025. This decline signals decreasing ability to comfortably cover interest expenses, reflecting increased financial risk during this period.

The financial data reveals several notable trends and fluctuations over the quarters analyzed. The company's total debt exhibits significant variation, with a general upward trajectory from early 2020 through late 2021, peaking in the fourth quarter of 2023. After reaching a high of approximately 64.6 billion US dollars in December 2023, total debt slightly declines but remains elevated compared to earlier periods.

Stockholders’ equity presents a contrasting pattern. It initially remains relatively stable around 9 to 11 billion US dollars through 2020, followed by a sharp decline in early 2022 to under 1 billion US dollars, which marks a significant erosion of equity. This low level is sustained across 2022 but then gradually recovers throughout 2023, reaching about 7.7 billion US dollars by the third quarter of 2023 before experiencing another decline in late 2023 and early 2024. The equity figures stabilize thereafter but remain substantially below pre-2022 levels.

The debt to equity ratio reflects the interplay between total debt and equity. Starting around 3.2 to 3.5 in 2020 and 2021, this ratio escalates dramatically in early 2022 due to the collapse in equity, soaring to over 40 times in the first quarter of 2022. While the ratio decreases in subsequent quarters as equity recovers and debt fluctuates, it remains elevated above 7.9 through 2023 and 2024, indicating a high leverage situation compared to earlier periods.

Total Debt

Increased steadily from 31.8 billion US dollars in the first quarter of 2020 to a peak near 64.6 billion US dollars by the end of 2023, followed by a slight decline during 2024 and early 2025.

Stockholders’ Equity

Relatively stable around 9 to 11 billion US dollars through 2020, then dropped sharply to below 1 billion US dollars in early 2022, with a gradual partial recovery to around 7 to 7.7 billion US dollars across 2023 before declining slightly again.

Debt to Equity Ratio

Maintained modest levels near 3 to 4 through 2020 and 2021, surged dramatically to above 40 in early 2022 due to declining equity, and then fluctuated between approximately 7.9 and 12.75 during 2023 and 2024, indicating continued high leverage.

Overall, the data shows a marked increase in leverage, driven primarily by a significant reduction in equity rather than disproportionate growth in debt alone. The elevated debt to equity ratio throughout 2023 and into 2024 suggests increased financial risk and potential vulnerability related to the company’s capital structure during this period. The recovery in equity after early 2022 partially alleviates this risk, though leverage remains considerably higher than pre-2022 levels.

The analysis of the debt and capital data over the given periods reveals notable trends and fluctuations in the company's financial leverage.

Total Debt

The total debt demonstrates a general upward trajectory from March 31, 2020, to December 31, 2024, starting at approximately $31.8 billion and reaching peaks over $64.6 billion near the end of 2024. Despite this overall increase, certain quarters show reductions or stabilization, such as the decrease from December 31, 2023 ($64.6 billion) to December 31, 2024 ($60.1 billion). This pattern suggests active debt management with periods of both accumulation and repayment.

Total Capital

Total capital figures fluctuate more moderately compared to debt. Initially, total capital rises from around $41.3 billion at the start of 2020, experiencing a dip towards 2021 and early 2022 where it drops below $38 billion. Subsequently, it recovers substantially, hitting a high near $70.8 billion at the end of 2023 before a gradual decline back to approximately $63.6 billion by the end of the observed period. These movements indicate shifts in capital structure, possibly due to changes in equity financing or retained earnings influencing overall capital.

Debt to Capital Ratio

The debt to capital ratio remains consistently high throughout the period, generally ranging between 0.76 and 0.93. Notably, the ratio spikes sharply to around 0.98 in early 2022, reflecting an increased reliance on debt within the capital structure at that point. Following this peak, the ratio shows some variability but largely stabilizes around the 0.9 level, suggesting that debt consistently represents about 90% of total capital in recent periods. This indicates a high leverage profile, which may imply increased financial risk or strategic use of debt financing.

In summary, the data indicates a trend toward elevated leverage, with total debt growing substantially over the period analyzed. Total capital fluctuates but the company's capital structure is consistently debt-heavy, with the debt to capital ratio frequently exceeding 0.9 in recent years. These trends highlight a strong emphasis on debt financing, which may reflect strategic financial decisions or market conditions influencing borrowing capacity and capital management.

Total Debt

The total debt exhibited fluctuations over the analyzed periods. Beginning at approximately $31.8 billion in the first quarter of 2020, debt rose moderately through mid-2021, peaking notably at about $37.6 billion in the third quarter of 2021, before declining slightly. From early 2022 onwards, a significant increase occurred, reaching a high of roughly $64.6 billion by the end of 2023. This elevated level of debt then showed a gradual decrease to approximately $57.4 billion by the first quarter of 2025.

Total Assets

Total assets remained relatively stable between $59 billion and $65 billion from 2020 until late 2022. From early 2023, assets rose considerably, peaking at about $97.2 billion in the last quarter of 2023. A modest decline followed in subsequent quarters but assets stayed elevated compared to earlier periods, ending at around $89.4 billion in the first quarter of 2025.

Debt to Assets Ratio

The debt to assets ratio ranged between 0.52 and 0.58 during 2020 and into 2021, indicating a relatively stable leverage position. Starting in late 2021, the ratio began to climb, reaching approximately 0.69 by early 2023. This heightened leverage level persisted through 2024, with a slight tapering to about 0.64 by the first quarter of 2025. The rising ratio corresponds with the significant increase in total debt outpacing asset growth during this period.

Overall Trends and Insights

The company experienced a substantial increase in both debt and assets starting in early 2023, with debt rising at a faster pace resulting in higher leverage as indicated by the debt to assets ratio approaching 0.7. Prior to this period, debt and assets were more balanced, maintaining a debt to assets ratio around 0.5 to 0.6. The elevated leverage level in recent years suggests increased borrowing which could reflect strategic investment, capital expenditures, or other financial maneuvers. The gradual reduction in debt and slight decrease in the leverage ratio towards early 2025 may indicate beginning deleveraging or improved asset management. Overall, the financial data suggests a shift towards a more aggressive capital structure starting in 2023, with careful monitoring needed for sustainability and risk management due to higher indebtedness levels.

Total Assets

Total assets showed fluctuations over the period from March 31, 2020, to March 31, 2025. Initially, there was a moderate increase from approximately 61.7 billion USD to around 65.0 billion USD by mid-2020, followed by a general decline through December 2021, reaching about 61.2 billion USD. A notable decline was observed in early 2022, bottoming near 59.2 billion USD, before rebounding significantly to a peak of approximately 97.2 billion USD at the end of 2023. Thereafter, total assets displayed a gradual downward trend, stabilizing just below 90 billion USD by the first quarter of 2025.

Stockholders’ Equity

Stockholders’ equity experienced considerable volatility and a general decline during the timeframe. Starting at roughly 9.5 billion USD in early 2020, equity increased slightly through the third quarter of 2020 before trending downward to a low of approximately 6.7 billion USD by the end of 2021. A dramatic drop occurred in the first quarter of 2022, plunging to under 1 billion USD, after which equity gradually recovered, reaching about 7.7 billion USD by the third quarter of 2023. Subsequently, equity fluctuated, ending near 6.2 billion USD in the first quarter of 2025.

Financial Leverage

Financial leverage exhibited significant variability and notable spikes throughout the periods observed. It began at a ratio of 6.5 in early 2020, declined slightly to below 6 by the third quarter of 2020, but then surged progressively through 2021, peaking at over 9 by year-end. Early 2022 saw an extreme increase, with leverage soaring to an unusually high of approximately 64.6, indicating a drastic rise in the ratio of total assets to stockholders' equity—mainly driven by the simultaneous steep drop in equity. Subsequent quarters showed a steady reduction in leverage, descending to around 11.8 by late 2023. However, the ratio again oscillated in 2024 and early 2025, fluctuating between approximately 12 and 18, suggesting ongoing instability in the equity base relative to assets.

Analysis Summary

The data reflects a period marked by significant financial fluctuations. Total assets remained relatively stable with some volatility but ultimately grew substantially by late 2023 before easing off. In contrast, stockholders' equity showed a problematic downward trajectory with a critical drop in early 2022, which detrimentally impacted financial leverage ratios, causing extreme leverage spikes indicating higher financial risk or distress during that period. Although some recovery in equity and stabilization of leverage occurred afterward, the elevated and volatile leverage levels suggest ongoing concerns regarding capital structure and balance sheet strength. This pattern underscores potential challenges in maintaining financial stability and may warrant a deeper investigation into equity valuation changes, asset management, and related financing activities over the timeframe.

Earnings before interest and tax (EBIT)

The EBIT figures demonstrate considerable volatility over the observed periods. Initially, EBIT remained relatively stable between approximately 2,300 and 2,500 million USD from the first quarter of 2020 through the fourth quarter of 2021. However, a notable dip occurred in the first half of 2022, with values dropping to around 1,970 and 1,859 million USD. Subsequently, EBIT recovered sharply in the last quarter of 2022 and the first quarter of 2023, reaching a peak near 3,985 million USD. Following this peak, EBIT again fluctuated, displaying a downward trend into 2024, before partially recovering towards the end of the observation period. Overall, the pattern reveals cycles of decline and recovery, with substantial peak values offset by significant lows in between.

Interest expense, net

Interest expense showed a gradual increasing trend over time. Starting from 346 million USD in the first quarter of 2020, the expense generally increased, reaching a high of 824 million USD by the middle quarters of 2024. This consistent rise in interest expense may suggest increased borrowing costs or higher debt levels. Despite some small fluctuations, the overall trajectory was upward, reflecting escalating financial costs through the reporting periods.

Interest coverage ratio

The interest coverage ratio exhibited a declining trend throughout the reported quarters. Early data is incomplete, but from the available measurements beginning around 2020, the ratio decreased from 7.44 to values as low as approximately 2.1 in mid-2024. This decline indicates a reduced ability to cover interest expenses through EBIT, suggesting increasing financial risk or pressure. Toward the end of the period, there was a slight improvement noted, with the ratio rising to about 3.18, but it remained significantly below the levels seen earlier in the dataset, signifying sustained decreased coverage capacity.