Applied Materials Inc. (NASDAQ:AMAT)

Debt to Equity

The debt to equity ratio exhibits a generally declining trend over the observed periods, starting at 0.65 in early 2019 and gradually decreasing to approximately 0.32 by mid-2025. There are minor fluctuations around 2020 where the ratio temporarily increased, peaking near 0.76 before resuming a downward path. This decline suggests a reduction in reliance on debt relative to equity financing.

Debt to Capital

The debt to capital ratio follows a pattern similar to debt to equity, with initial stability near 0.39–0.40, a peak around April 2020 at 0.43, and then a consistent decrease through to around 0.24 by mid-2025. This steady decrease indicates improved capital structure stability and a reduced proportion of debt in total capital.

Debt to Assets

This ratio remains relatively stable in the early periods around 0.28 but displays a gradual decline beginning mid-2020, reaching a low near 0.18 by mid-2025. Minor fluctuations appear in later periods, but the overall trend points to a gradual reduction in the share of assets funded by debt.

Financial Leverage

Financial leverage decreases over time from about 2.31 in early 2019 to approximately 1.75 by mid-2025. The trend includes some short-term variability, but the overall decline indicates diminishing use of debt relative to shareholders' equity, reflecting a more conservative capital structure.

Interest Coverage

The interest coverage ratio shows a strong upward trend starting with values around 14.79 in mid-2019 and increasing steadily to a peak of approximately 36.27 by late 2024. Slight declines occur in early 2025, but the ratio remains high, demonstrating improved ability to cover interest expenses from operating earnings, which suggests stronger operational profitability and lower financial risk over the period.

The analysis of the financial ratios and figures over the reported periods reveals several notable trends in the company's capital structure and financial leverage.

Total Debt

The total debt initially remained stable around $5.3 billion from the beginning of 2019 until early 2020. There was a significant increase to approximately $6.8 billion in April 2020, likely reflecting additional borrowing during that period. After this spike, the debt level decreased back to around $5.4 billion by the end of 2020 and remained relatively stable with slight fluctuations. Beginning in late 2023 and into 2024, total debt showed a rising trend again, reaching about $6.3 billion by mid-2025.

Stockholders’ Equity

Stockholders’ equity demonstrated consistent growth throughout the entire period. Starting at about $8.2 billion in early 2019, equity rose steadily with minor variations, reaching approximately $19.5 billion by mid-2025. This growth reflects accumulation of retained earnings or additional equity issuances contributing to the strengthening of the company's financial position.

Debt to Equity Ratio

The debt to equity ratio showed a declining trend for most of the period, indicating a reduction in financial leverage relative to the company's equity base. Starting from 0.65 at the beginning of 2019, the ratio fluctuated but mostly decreased, dropping to a low of approximately 0.31 by early 2024. Toward the end of the timeline, the ratio shows a slight uptick but remains below 0.35, which signifies a conservative capital structure overall. The temporary rise in this ratio around April 2020 corresponds to the peak in total debt during that time.

Overall, the data suggests a strong and improving equity base complemented by careful management of debt levels. The company’s financial leverage is moderate and has generally decreased over the observed period, except for isolated instances of increased borrowing. The steady expansion of equity combined with controlled debt indicates an emphasis on maintaining a robust capital structure, potentially enhancing financial stability and creditworthiness.

Total debt

The total debt remained relatively stable around the 5,300 million US$ mark from early 2019 through early 2020, before experiencing a noticeable increase to approximately 6,800 million US$ in April 2020. This spike was followed by a decline and stabilization near the 5,450 million US$ level throughout late 2020 and much of 2021. Starting from early 2023, a gradual upward trend is observed, with total debt creeping upwards to around 6,260 million US$ by mid-2025.

Total capital

Total capital showed a general upward trajectory over the period analyzed. Beginning near 13,500 million US$ in early 2019, it steadily increased through subsequent quarters, with minor fluctuations, reaching approximately 17,700 million US$ by late 2021. The upward trend continued more prominently after early 2022, culminating in an estimated 25,700 million US$ by mid-2025. This represents nearly a doubling of total capital over the six-year period.

Debt to capital ratio

The debt to capital ratio started at about 0.39 in early 2019, slightly fluctuating near this level until early 2020. Following the debt spike in April 2020, the ratio showed a marked decrease over the subsequent years, reflecting the increase in total capital outpacing growth in debt. By early 2023, the ratio had declined to around 0.30 and continued trending downward to approximately 0.24 by mid-2025. Despite a modest rise in total debt during 2023–2025, the ratio's relative stability around the mid-0.20 range indicates a balance between incremental debt and capital growth.

The analysis of the financial data reveals several notable trends in the company’s debt and asset management over the observed periods.

Total Debt

Total debt levels are relatively stable during the early periods, fluctuating slightly around approximately $5.3 billion. A notable increase occurs in April 2020, with total debt rising to about $6.8 billion, which then decreases again in subsequent quarters to a mid-$5 billion range. From early 2023 onward, a gradual increase in total debt is observable, culminating in a rise to around $6.26 billion by late 2025. This indicates periods of increased leverage possibly related to strategic financing or operational needs.

Total Assets

Total assets show a consistent upward trend across the entire timeline. Beginning at approximately $18.9 billion in early 2019, total assets increase steadily to over $33 billion by the end of the dataset in late 2025, with some minor fluctuations. This growth reflects ongoing asset accumulation, which may result from expansion activities, acquisitions, or appreciation of asset values.

Debt to Assets Ratio

The debt to assets ratio fluctuates mildly throughout the period but exhibits a general downward trend, moving from 0.28 in early 2019 to around 0.18 by the end of 2025. This decline suggests an improvement in the company’s leverage position relative to the size of its asset base. A temporary spike to 0.31 in April 2020 aligns with the noted increase in absolute debt but is followed by a consistent reduction, indicating effective management of the debt burden in relation to asset growth.

In summary, the financial data depicts a company that has increased its total asset base substantially while maintaining or slightly reducing its relative leverage over time. The temporary rise in debt in early 2020 may reflect a response to external circumstances requiring increased liquidity or capital access, but the subsequent management of this debt and growth in assets demonstrates a strategic approach to maintaining financial stability.

The analysis of the quarterly financial data reveals the following trends and insights:

Total Assets

Total assets show an overall upward trend over the observed period, increasing from approximately 18,922 million USD in early 2019 to a peak near 34,632 million USD in mid-2025. Despite some minor fluctuations, the general trajectory indicates growth in asset base, with occasional periods of stabilization or slight decreases towards the end of the timeline, such as the decline seen between early 2025 and mid-2025.

Stockholders’ Equity

Stockholders’ equity also demonstrates growth over time, rising from around 8,209 million USD at the beginning of 2019 to over 19,500 million USD by mid-2025. While the growth is generally consistent, there are periods where equity levels plateau or slightly retract, notably around early 2022 and early 2025. This suggests some variability in retained earnings or capital changes during these periods.

Financial Leverage

The financial leverage ratio exhibits a gradual decline throughout the timeline, moving from a high of about 2.32 in early 2019 to lower levels near 1.75 by mid-2025. This downward trend indicates a reduction in the company’s reliance on debt relative to equity, reflecting a strengthening balance sheet with proportionally increased equity financing or reduced total liabilities relative to equity.

In summary, the data indicates consistent growth in the company’s asset base and equity, coupled with a steady reduction in financial leverage. This pattern illustrates an improving financial position characterized by expanding resources supported increasingly by equity rather than debt. Such trends typically point towards enhanced financial stability and potentially lower financial risk over the examined period.

The earnings before interest and tax (EBIT) has shown a generally upward trend over the observed periods, increasing from 948 million US dollars in January 2019 to 2629 million US dollars in July 2025. After some fluctuations in the early quarters, there was a significant rise starting around April 2021, peaking intermittently but maintaining a strong upward trajectory overall. This indicates improving operational profitability over time.

Interest expense has remained relatively stable across the periods, fluctuating slightly around an average of approximately 60 million US dollars. While minor variations are present, there is no substantial upward or downward trend in interest expenses, suggesting consistent financing costs during the analyzed timeframe.

The interest coverage ratio, calculated as EBIT divided by interest expense, shows a sustained improvement throughout the period. Starting from approximately 14.79 in July 2019, it steadily increased to peak values above 36 in the years following 2023. This rising ratio reflects a stronger ability to cover interest obligations, driven primarily by the growing EBIT coupled with stable interest expenses, which indicates enhanced financial health and lower risk of distress related to interest payments.

Earnings before interest and tax (EBIT)

Consistent growth with some minor fluctuations; improved from 948 million to 2629 million US dollars over the period.

Interest Expense

Stable around 60 million US dollars; no significant trends upward or downward.

Interest Coverage Ratio

Marked improvement from about 14.79 to over 36, indicating enhanced capacity to meet interest payments due to rising EBIT and stable interest expenses.