Amgen Inc. (NASDAQ:AMGN)

Debt to Equity

The debt to equity ratio increased significantly from 3.51 in 2020 to a peak of 10.64 in 2022, indicating a considerable rise in leverage. After 2022, it showed a slight reduction but remained high at 10.23 by 2024. Including operating lease liability, the values follow a similar pattern with marginally higher ratios.

Debt to Capital

The debt to capital ratio rose consistently from 0.78 in 2020 to 0.91 in 2022 and then stabilized around 0.91 through 2024. This indicates an increasing proportion of debt within the company's capital structure, reaching a high and then maintaining that level. The inclusion of operating lease liability presented a nearly identical trend.

Debt to Assets

The ratio of debt to assets showed a marked increase from 0.52 in 2020 to 0.67 in 2023, reflecting greater leverage relative to total assets. A slight decline to 0.65 in 2024 suggests a minor improvement in asset coverage. With operating lease liability included, the ratios remain slightly higher but display the same trend.

Financial Leverage

Financial leverage rose dramatically from 6.69 in 2020 to 17.79 in 2022, consistent with the sharp increase in debt ratios. This metric then declined to around 15.6 in 2023 and 2024, indicating some reduction in leverage but still maintaining a substantially elevated level compared to 2020.

Interest Coverage

Interest coverage ratio decreased steadily from 7.44 in 2020 to 2.46 in 2024. This decline highlights a reduction in the company’s ability to meet interest expenses from operating earnings, representing increased financial risk. The steepest declines occurred after 2022, signaling worsening coverage.

Fixed Charge Coverage

Fixed charge coverage followed a similar negative trajectory, falling from 6.48 in 2020 to 2.37 in 2024. This trend reflects a diminishing capacity to cover fixed financial obligations, further underscoring rising financial strain over the period analyzed.

The financial data reveals notable shifts in the company's capital structure over the analyzed five-year period.

Total Debt

The total debt increased steadily from 32,986 million US dollars at the end of 2020 to 38,945 million in 2022, followed by a sharp surge to 64,613 million in 2023. However, in 2024, total debt decreased slightly to 60,099 million. This indicates a significant accumulation of liabilities, particularly between 2022 and 2023.

Stockholders’ Equity

Stockholders' equity exhibited a downward trend from 9,409 million US dollars in 2020 to 3,661 million in 2022. There was a partial recovery in 2023, with equity rising to 6,232 million but declining again to 5,877 million in 2024. Overall, equity levels remain substantially lower than at the start of the period.

Debt to Equity Ratio

The debt to equity ratio increased markedly across the timeframe, starting at 3.51 in 2020 and peaking at 10.64 in 2022. While it slightly decreased to 10.37 in 2023 and 10.23 in 2024, the ratio maintained a level indicating a high reliance on debt financing relative to equity. This trend reflects growing financial leverage and potentially higher financial risk.

In summary, the company has experienced a consistent increase in debt accompanied by a reduction in equity, resulting in a significantly elevated debt to equity ratio by the end of the period. The data suggests a strategic move toward borrowing, with potential implications for financial stability and risk profile that warrant close monitoring.

Total Debt (including operating lease liability)

The total debt exhibited a rising trend from 2020 through 2023, increasing significantly from 33,445 million US dollars in 2020 to a peak of 65,423 million US dollars in 2023. In 2024, there was a slight decline to 60,879 million US dollars, suggesting some deleveraging after a period of marked debt accumulation.

Stockholders’ Equity

Stockholders' equity demonstrated a declining trajectory overall. Starting at 9,409 million US dollars in 2020, it fell sharply to 3,661 million US dollars by 2022. Afterwards, equity partially recovered to 6,232 million US dollars in 2023 but then decreased again to 5,877 million US dollars in 2024. This fluctuation indicates variability in the company’s net asset position over the period assessed.

Debt to Equity Ratio (including operating lease liability)

The debt to equity ratio rose markedly from 3.55 in 2020 to 10.83 in 2022, reflecting substantial leveraging relative to equity during this time. Although there was a slight decrease in this ratio to 10.50 in 2023 and further to 10.36 in 2024, the level remains significantly elevated compared to 2020, indicating a consistently higher reliance on debt financing relative to equity.

Summary of Financial Leverage Trends

The data reveals a clear trend of increased financial leverage over the analyzed period, driven by rapidly growing debt and declining equity through the early years, followed by some stabilization in debt levels and moderate recovery of equity in the later years. Despite these shifts, the firm's capital structure remained highly leveraged at the end of the period, which could imply increased financial risk and potential impacts on creditworthiness and cost of capital.

Total Debt

Total debt displayed a steady upward trend from 2020 through 2023, increasing from 32,986 million USD to 64,613 million USD. This represents a near doubling of the debt level over this period. However, in 2024, total debt slightly decreased to 60,099 million USD, indicating a minor reduction but overall maintenance of a high debt load compared to earlier years.

Total Capital

Total capital fluctuated over the examined timeframe. It initially decreased from 42,395 million USD in 2020 to 40,009 million USD in 2021, then increased to 42,606 million USD in 2022. A sharp rise occurred in 2023, reaching 70,845 million USD, followed by a decrease to 65,976 million USD in 2024. Despite the fluctuations, the overall trend suggests growth in total capital, particularly pronounced in the years 2023 and 2024.

Debt to Capital Ratio

The debt to capital ratio shows a clear upward trend from 0.78 in 2020 to approximately 0.91 in 2022, where it stabilized through 2024. This indicates an increasing reliance on debt financing relative to total capital, reaching and maintaining a high leverage level close to 91%. The stability of the ratio at this elevated level in the last three years suggests a strategic acceptance of this capital structure.

Total debt (including operating lease liability)

The total debt showed a relatively stable level from 2020 to 2021, increasing marginally from 33,445 million USD to 33,979 million USD. In 2022, there was a noticeable rise to 39,640 million USD. This upward trend accelerated significantly in 2023, with the debt reaching 65,423 million USD, an increase of over 65% from the previous year. In 2024, the total debt slightly decreased to 60,879 million USD but remained substantially higher than the levels observed before 2023.

Total capital (including operating lease liability)

Total capital experienced some fluctuations over the observed period. It started at 42,854 million USD in 2020 and declined to 40,679 million USD in 2021. The capital base then increased to 43,301 million USD in 2022. A pronounced jump was noted in 2023, climbing sharply to 71,655 million USD, mirroring the debt increase patterns. By 2024, the total capital decreased to 66,756 million USD but maintained a higher level compared to 2020-2022.

Debt to capital (including operating lease liability)

The debt-to-capital ratio exhibited an increasing trend throughout the period. Beginning at 0.78 in 2020, the ratio increased to 0.84 in 2021, then further escalated to 0.92 in 2022. The ratio slightly declined to 0.91 in 2023 and remained steady at 0.91 in 2024. This indicates a consistently high proportion of debt in the company’s capital structure from 2022 onwards, reaching and maintaining levels near 90% debt to total capital.

Summary of Trends and Insights

The data reflects a strategic shift towards increased leverage starting in 2022, with a notable surge in total debt and capital in 2023. The slight reduction of debt and capital in 2024 does not offset the substantial increase seen since 2021. The persistence of the debt-to-capital ratio near 0.91 suggests a deliberate maintenance of a highly leveraged capital structure in recent years. This pattern may indicate increased borrowing to finance expansion or other significant investments, with a sustained focus on debt utilization as a core component of capital strategy.

Total Debt

The total debt exhibited a marked upward trend from 2020 to 2023, increasing from US$32,986 million to US$64,613 million. This represents a doubling of debt levels within three years. However, in 2024 there was a reduction in total debt to US$60,099 million, indicating some deleveraging after the peak in 2023.

Total Assets

Total assets showed moderate fluctuation with a decline from US$62,948 million in 2020 to US$61,165 million in 2021, followed by growth to US$65,121 million in 2022. Subsequently, there was a significant increase to US$97,154 million in 2023, before a decline to US$91,839 million in 2024. Overall, total assets rose substantially, particularly in 2023.

Debt to Assets Ratio

The debt to assets ratio increased steadily from 0.52 in 2020 to 0.67 in 2023, before decreasing slightly to 0.65 in 2024. This trend reflects a rising leverage position up to 2023, consistent with the increase in total debt outpacing asset growth, followed by a modest reduction in leverage in 2024.

Summary

The financial data indicate an overall increase in leverage over the five-year period, driven by a sharp rise in total debt, which outpaced the growth in total assets until 2023. The peak leverage ratio in 2023 suggests increased financial risk or expansion financing during this period. The partial decline in total debt and leverage ratio in 2024 may signify efforts to reduce risk or adjust the capital structure following heightened indebtedness. The fluctuations in total assets, particularly the substantial increase in 2023, could be indicative of significant asset acquisitions or revaluations that influenced the balance sheet composition.

Total Debt (Including Operating Lease Liability)

The total debt exhibited an overall upward trend from 2020 to 2023, increasing from $33,445 million to $65,423 million. However, in 2024, there was a noticeable reduction to $60,879 million, indicating some deleveraging or debt repayment during that year.

Total Assets

Total assets showed a fluctuating pattern over the five-year period. Initially, assets declined slightly from $62,948 million in 2020 to $61,165 million in 2021, before increasing steadily to a peak of $97,154 million in 2023. In 2024, total assets decreased to $91,839 million, although remaining significantly higher than initial levels.

Debt to Assets Ratio (Including Operating Lease Liability)

The debt to assets ratio increased consistently from 0.53 in 2020 to 0.67 in 2023, reflecting growing leverage relative to the asset base. In 2024, the ratio showed a marginal decline to 0.66, aligning with the decrease in total debt and total assets. Despite this slight reduction, leverage remained elevated compared to earlier years.

Total Assets

The total assets of the company showed a fluctuating trend over the five-year period. There was a slight decrease from 62,948 million US dollars in 2020 to 61,165 million in 2021. This was followed by an increase to 65,121 million in 2022. A significant jump occurred in 2023, reaching 97,154 million, before slightly receding to 91,839 million in 2024. This pattern indicates notable asset growth particularly during 2022-2023, with some reduction in the last year.

Stockholders’ Equity

Stockholders' equity exhibited a consistent decline from 9,409 million US dollars in 2020 to 3,661 million in 2022, reflecting a substantial reduction over these three years. In 2023, equity rebounded to 6,232 million but declined again to 5,877 million in 2024. The overall trend highlights significant erosion in equity through 2022, with partial recovery thereafter, but remaining below levels seen at the start of the period.

Financial Leverage

Financial leverage demonstrated a strong upward trajectory from a ratio of 6.69 in 2020 to a peak of 17.79 in 2022, suggesting increased reliance on debt relative to equity. Although leverage decreased slightly to 15.59 in 2023, it remained elevated and stable at 15.63 in 2024. This indicates that the company has sustained a higher leverage position compared to the initial year, which may imply greater financial risk or strategic use of debt financing during the period under review.

Earnings Before Interest and Tax (EBIT)

The EBIT displayed a fluctuating trend over the analyzed periods. Starting at US$9,395 million in 2020, it declined to US$7,898 million in 2021, then experienced a moderate recovery to US$8,752 million in 2022. In 2023, a notable increase to US$10,730 million occurred, followed by a significant decline to US$7,764 million in 2024. This pattern suggests variability in operating profitability with a peak in 2023 before a sharp reduction in the latest period.

Interest Expense, Net

The net interest expense showed a consistently increasing tendency throughout the years. Beginning at US$1,262 million in 2020, it modestly decreased to US$1,197 million in 2021 but then increased to US$1,406 million in 2022. This upward trend accelerated in 2023 and 2024 with amounts of US$2,875 million and US$3,155 million respectively, indicating rising borrowing costs or increased debt levels.

Interest Coverage Ratio

The interest coverage ratio progressively deteriorated across the periods. It started at a relatively strong level of 7.44 in 2020, then declined to 6.6 in 2021 and further to 6.22 in 2022. A sharper decline occurred in 2023, falling to 3.73, and the ratio dropped further to 2.46 in 2024. This declining trend reflects a reduced ability to cover interest expenses from operating earnings, posing potential concerns about financial risk and leverage.

Earnings Before Fixed Charges and Tax

The earnings before fixed charges and tax showed a fluctuating pattern across the periods analyzed. There was a decline from 9,618 million USD in 2020 to 8,135 million USD in 2021, followed by a recovery to 8,970 million USD in 2022 and a further increase to 10,938 million USD in 2023. However, this was succeeded by a notable drop to 7,983 million USD in 2024, indicating volatility in operational profitability before accounting for fixed charges and tax.

Fixed Charges

Fixed charges increased steadily over the years, starting from 1,485 million USD in 2020 and marginally decreasing to 1,434 million USD in 2021. Thereafter, a continuous rise was observed, reaching 1,624 million USD in 2022, then nearly doubling to 3,083 million USD in 2023, and further increasing to 3,374 million USD in 2024. This trend reflects a growing financial obligation related to fixed costs.

Fixed Charge Coverage Ratio

The fixed charge coverage ratio experienced a consistent decrease throughout the periods. It declined from a high of 6.48 in 2020 to 5.67 in 2021 and further to 5.52 in 2022. A more pronounced drop occurred in 2023, with the ratio falling to 3.55, and reaching its lowest point at 2.37 in 2024. This decreasing ratio suggests a weakening ability to cover fixed charges from earnings before fixed charges and tax, signaling increased financial risk or reduced cushion in meeting fixed obligations.