Applied Materials Inc. (NASDAQ:AMAT)

Debt to Equity

The debt to equity ratio exhibited stability at approximately 0.65 from early 2019 until the end of 2019. In 2020, it experienced some fluctuations, peaking at 0.76 in the second quarter before declining steadily. From 2021 onward, a gradual downward trend is noted, reaching a low of 0.31 in the second quarter of 2024. The ratio slightly increased toward early 2025, settling at around 0.33. This decreasing trend indicates a reduction in reliance on debt relative to equity over the longer term.

Debt to Capital

The debt to capital ratio followed a broadly declining path from 0.39 in early 2019 to a low near 0.23 in the second quarter of 2024. Although there were minor fluctuations, this trend suggests a steady decrease in the proportion of debt within the company’s overall capital structure. The ratio stabilized slightly around 0.25 moving into early 2025.

Debt to Assets

This ratio showed modest decline from 0.28 at the beginning of 2019 to about 0.17 in the second quarter of 2024. There was relative stability in the latter periods with slight upticks toward the end of 2024 and early 2025, indicating a sustained reduction in debt financing relative to total assets across the observed period.

Financial Leverage

Financial leverage diminished moderately from approximately 2.31 in early 2019 to around 1.76 in the second quarter of 2024, reflecting a decline in the ratio of total assets to equity. This suggests the company has been gradually increasing equity or reducing asset exposure relative to equity. A slight increase in leverage is observed toward early 2025, ending near 1.79.

Interest Coverage

Data on interest coverage becomes available starting mid-2019 and reveals a clear upward trajectory. The ratio increased from approximately 14.79 to a peak exceeding 36 in mid-2024, indicating significant improvement in the company's ability to meet interest obligations through operating earnings. The interest coverage ratio slightly declined toward early 2025 but remained robust above 32.

Overall, the financial data reflect a consistent strengthening of the company's solvency and creditworthiness over the analyzed periods. The downward trends in various debt ratios combined with increasing interest coverage suggest an improved capital structure and enhanced capacity to service debt obligations. Financial leverage has declined, indicating more conservative use of debt relative to equity, while the company's earnings relative to interest expenses have substantially improved.

Total Debt

The total debt level exhibits relative stability from early 2019 through early 2020, fluctuating slightly around $5.3 billion. A noticeable increase occurs in the second quarter of 2020, rising sharply to approximately $6.8 billion, followed by a decline and stabilization near $5.4 billion for the remainder of 2020 and the first quarter of 2021. From 2021 onwards, total debt generally trends upward, reaching about $6.3 billion by early 2025. Mid-2024 displays a brief spike before correcting to values around $6.2 billion.

Stockholders’ Equity

Stockholders’ equity demonstrates a consistent upward trajectory over the entire period, beginning slightly above $8.2 billion in early 2019 and advancing steadily with minor fluctuations. The growth accelerates noticeably from late 2021 to early 2024, with equity reaching a peak around $19 billion. However, there is a slight decline observed in the final quarters towards early 2025, suggesting some contraction or adjustments in equity components. Overall, the trend reflects ongoing capital accumulation or retained earnings growth.

Debt to Equity Ratio

The debt to equity ratio decreases prominently throughout the timeframe, indicating an improving leverage position. It starts near 0.65 in early 2019 and remains at that level until early 2020. A spike to 0.76 is observed briefly in the second quarter of 2020, consistent with the noted debt increase. After this peak, the ratio declines steadily, reaching a low of approximately 0.31 in early 2024. Minor fluctuations occur subsequently, stabilizing around 0.33 by early 2025. This downward trend reflects stronger equity growth relative to debt increases, improving the company’s financial leverage and potentially reducing financial risk.

The quarterly financial data reveals several notable trends in the company's capital structure over the analyzed periods. Total debt figures have exhibited some fluctuations, with a generally stable range during early periods, followed by a significant increase around the April 2020 quarter. After this peak, debt levels mostly stabilized before showing another upward movement toward the later quarters.

Total capital has consistently grown throughout the timeframe, indicating expansion or increased financing activities. The capital amounts rose steadily from around 13.5 billion US dollars in early 2019 to over 25 billion US dollars by the most recent quarter, reflecting a significant scale-up in the overall financing base.

The debt-to-capital ratio demonstrates a clear downward trend after peaking in early 2020. Initially ranging around 0.38 to 0.40, the ratio dropped steadily, reaching approximately 0.23 to 0.25 in the most recent quarters. This decline suggests a relative reduction in leverage, as the growth in total capital outpaced debt accumulation, possibly reflecting efforts to strengthen the balance sheet or reduce financial risk.

Total Debt

Displayed relative stability around 5.3 billion US dollars during 2019, followed by a noticeable increase to approximately 6.8 billion US dollars in April 2020. Post this peak, debt levels mostly remained between 5.4 and 5.7 billion US dollars, before rising again above 6.2 billion US dollars in the final recorded quarters.

Total Capital

Presented a consistent upward trajectory over the entire period, growing from about 13.5 billion US dollars to more than 25 billion US dollars, indicating ongoing capital accumulation and potential investment or financing activities.

Debt to Capital Ratio

Started close to 0.39, peaked at 0.43 in early 2020 corresponding with the increase in debt, then gradually declined to a range near 0.23 to 0.25 in recent quarters. This suggests improving leverage conditions and a stronger equity position relative to debt.

Total Debt

The total debt exhibited a generally stable trend around the range of 5,300 to 5,600 million USD from early 2019 until early 2023, with a notable spike to approximately 6,800 million USD in April 2020. This spike was followed by a return to previous levels in subsequent quarters. From early 2024 onwards, total debt increased again, reaching approximately 6,260 million USD towards the end of the period. This indicates episodic increases in leverage, particularly in early 2020 and starting again in early 2024.

Total Assets

Total assets showed a consistent upward trend throughout the observed periods. Starting at just below 19,000 million USD in early 2019, assets grew steadily to peak above 34,000 million USD by early 2024. Minor fluctuations occurred, but the overall trajectory reflects significant asset growth over the five-year period, indicating expansion in the company’s asset base.

Debt to Assets Ratio

The debt to assets ratio declined steadily over the period, moving from approximately 0.28 in early 2019 to about 0.18 by early 2024. This suggests an overall reduction in leverage relative to the asset base despite the episodic increases in total debt noted earlier. The ratio's decline signals improved capital structure and financial stability as assets grew faster than debt.

Summary Insights

The financial data reveal a company that has consistently enhanced its asset base while maintaining or improving its leverage position. Temporary increases in debt did not disrupt the downward trend in the debt to assets ratio, highlighting effective management of financial risk. The growth in total assets may reflect strategic investments or acquisitions conducted over the period. The relative stability in total debt, aside from noted exceptions, further supports a cautious and deliberate approach to leveraging resources in alignment with asset growth.

The financial data reveals evolving trends in the company's asset base, equity position, and leverage ratios over a period spanning from early 2019 through the first quarter of 2025.

Total Assets (US$ in millions)

Total assets demonstrate a generally upward trajectory, growing from approximately 18.9 billion in the first quarter of 2019 to a peak around 34.4 billion in early 2024. Notably, from January 2019 to October 2020, assets increased steadily, with some fluctuations around mid-2020. The growth trend accelerated from late 2021 through early 2024, indicating an expansion phase. However, slight declines are observed towards the latest reported quarters in 2024 and early 2025, which might suggest stabilization or minor retrenchment.

Stockholders' Equity (US$ in millions)

Equity exhibits a positive growth pattern over the same period but with more moderate fluctuations compared to total assets. Beginning near 8.2 billion in early 2019, equity rose progressively to a maximum of approximately 19 billion by early 2024. The trend reflects consistent increases in net assets attributable to shareholders, with occasional periods of slower growth or slight declines, such as during 2022 and the first quarter of 2025. Overall, equity growth aligns with the asset increase, supporting an expanded balance sheet.

Financial Leverage (ratio)

The financial leverage ratio decreased notably over the analyzed timeframe, starting above 2.3 in early 2019 and reducing to below 1.8 by the beginning of 2025. This decline indicates a gradual shift towards relatively higher equity financing or lower reliance on debt, enhancing the company's financial stability. The ratio shows a consistent downward trend with minor variations, suggesting improved capitalization and a more conservative financial structure.

In summary, the company has exhibited steady asset growth coupled with rising equity levels, resulting in a declining financial leverage ratio. This pattern suggests strengthening solvency and a balanced approach to financing, favoring equity over debt over time. The data indicates overall financial health improvement and potentially reduced risk exposure from leverage. Minor fluctuations in asset and equity values towards the end of the period may warrant further observation.

The earnings before interest and tax (EBIT) of the company demonstrated a general upward trend over the observed periods. Starting at 948 million US dollars in January 2019, EBIT exhibited some fluctuations but largely increased, reaching 2,390 million US dollars by April 2025. The growth trajectory shows several periods of moderate decline or stabilization, such as between January 2022 and October 2023, where values hovered around the 1,800 to 2,200 million US dollars range. Despite these variations, the long-term pattern reflects a substantial increase in EBIT, underscoring improved operational profitability.

Interest expense remained relatively stable throughout the timeframe, fluctuating mildly between 56 and 68 million US dollars. Such consistency suggests effective control over interest-related costs, despite the varying EBIT levels. The slight increases observed towards the later periods do not substantially impact the overall expense burden, indicating well-managed financing conditions.

The interest coverage ratio, a key indicator of the company's ability to service its debt, showed a notable improvement. Initially, coverage ratios are not available for the earliest quarters but from mid-2019 onwards, a clear scaling from approximately 15 up to over 36 is evident. This rising trend signifies increasing EBIT relative to interest expense, highlighting enhanced capacity to meet interest obligations comfortably. The peak coverage values occur around late 2023 to mid-2024, after which a mild decline appears but the ratio remains robust above 30.

Overall, the financial data reveal strengthening profitability and a stable interest expense profile, resulting in improved interest coverage. These trends indicate strengthened financial health and suggest the company is increasingly well-positioned to manage its debt service requirements over the observed periods.