Applied Materials Inc. (NASDAQ:AMAT)

Debt to Equity

The debt to equity ratio demonstrates an overall declining trend from 0.61 in January 2020 to approximately 0.32 by mid-2025. Initial fluctuations are noted, with a peak around 0.76 in April 2020, followed by a consistent downward movement. This trend indicates a gradual reduction in reliance on debt financing relative to equity over the observed period.

Debt to Capital

This ratio follows a similar downward trajectory, starting at 0.38 in January 2020 and diminishing to about 0.24 by July 2025. The ratio shows minor fluctuations but maintains a decline, suggesting the company is progressively lowering its debt proportion within its capital structure.

Debt to Assets

The debt to assets ratio decreases from 0.27 in early 2020 to near 0.18 by mid-2025, signaling a reduced share of debt in total asset financing. Although slight variations occur, the general trend points towards improved asset funding stability with less leverage.

Financial Leverage

The financial leverage ratio declines moderately over the period, moving from 2.28 in January 2020 down to approximately 1.75 by mid-2025. This reduction reflects a modest increase in the equity base relative to total assets, aligning with the decreases observed in debt-related ratios.

Interest Coverage

Interest coverage ratio shows a strong increasing trend, rising from 15.35 in January 2020 to peaks above 36 in early 2024, before stabilizing in the low to mid-30s subsequently. This improvement highlights enhanced ability to meet interest obligations from operating earnings, indicating stronger financial health and reduced risk related to debt servicing.

Total Debt

The total debt exhibited fluctuations but generally remained within a range of approximately 5,300 to 6,300 million US dollars over the reviewed periods. Beginning at 5,314 million in early 2020, it increased sharply to 6,815 million by April 2020, then decreased and stabilized around 5,400 to 5,600 million until early 2023. From 2023 onwards, the debt level showed a gradual increase, reaching about 6,262 million by mid-2025. This suggests a moderately rising indebtedness position towards the later periods.

Stockholders’ Equity

Stockholders’ equity has demonstrated a consistent upward trend throughout the periods. Starting at 8,660 million in early 2020, equity steadily increased each quarter, reaching 19,504 million by mid-2025. This indicates substantial growth in the company’s net asset base and potential retained earnings or capital injections, reflecting improved financial strength and shareholder value over time.

Debt to Equity Ratio

The debt to equity ratio showed an overall downward trend, moving from 0.61 in early 2020 to values fluctuating around 0.32 by mid-2025. After an initial increase peaking at 0.76 in April 2020, the ratio steadily declined, reflecting that equity growth outpaced debt accumulation. The lower ratio in the later periods suggests a strengthened balance sheet with improved leverage and financial stability.

The financial data presents trends in debt management and capital structure over a series of quarterly periods. Total debt exhibits fluctuations initially, rising from early 2020 through mid-2020, followed by a period of relative stability around 5,450 million US dollars. From late 2022 onward, a generally increasing trend in total debt is observed, peaking near 6,260 million US dollars by the latest periods.

Total capital shows an overall upward trajectory, increasing steadily from approximately 13,974 million US dollars in early 2020 to over 25,700 million US dollars by mid to late 2025. This reflects a significant growth in the company's capital base over the analyzed periods.

The ratio of debt to capital provides insight into leverage dynamics during these intervals. Starting at 0.38 in early 2020, the ratio trends downward consistently, indicating a gradual reduction in leverage relative to total capital. This ratio decreases to a low around 0.23 by early 2024, suggesting a shift toward a more equity-weighted capital structure. Although slight upticks occur around late 2024, the ratio remains relatively low compared to earlier periods.

Overall, the data indicates a strategic trend of incremental capital expansion combined with cautious management of debt levels. The decline in the debt-to-capital ratio despite the increases in absolute debt levels underscores the importance of growing capital resources faster than debt, which may reflect efforts to strengthen the financial position and reduce overall risk exposure.

Total Debt

Exhibits initial volatility with increases in 2020, stabilization through 2021 and 2022, followed by a moderate rise starting in late 2022 into 2025.

Total Capital

Shows consistent growth throughout all periods, nearly doubling from early 2020 to 2025, indicative of expanding resources available to the company.

Debt to Capital Ratio

Demonstrates a clear downward trend overall, highlighting decreasing financial leverage and an emphasis on capital accumulation over debt financing.

The financial data reveals several notable trends over the observed periods. Total debt exhibited initial fluctuations, rising from $5.314 billion to a peak near $6.262 billion by mid-2025. After reaching highs around early 2024, debt levels remained relatively stable with minor increases toward the later periods. This pattern indicates cautious debt management with an overall increasing but controlled debt load.

Total assets demonstrated a consistent upward trajectory throughout all periods. Starting at approximately $19.767 billion, assets grew steadily to over $34.2 billion by the final quarter in 2025. This persistent asset growth suggests ongoing investment, expansion, or value accumulation within the company’s asset base.

The debt to assets ratio shows a declining trend from 0.27 initially to as low as 0.17 by mid-2024, indicating an improvement in asset coverage relative to debt. Although a slight increase in this ratio appears toward late 2024 and early 2025, the ratio remains below the early 2020 levels, reflecting a generally strengthened balance sheet in terms of solvency and financial stability.

Total Debt

Started at $5.314 billion in early 2020, increased to just over $6.26 billion by mid-2025.

Debt levels peaked around early 2024, then stabilized with minor fluctuations.

Indicates managed but increasing indebtedness over time.

Total Assets

Displayed steady growth from roughly $19.8 billion to over $34.2 billion.

Consistent increases suggest ongoing asset accumulation or expansion activities.

Debt to Assets Ratio

Decreased from 0.27 in early 2020 to a low of 0.17 in mid-2024, implying reduced leverage.

A slight uptick toward late 2024 and 2025 remains below initial values, indicating stronger financial leverage control.

Overall, the company appears to be effectively growing its asset base while managing debt levels to improve financial stability and solvency. The declining debt to asset ratio over the majority of the timeline suggests enhanced creditworthiness and a potentially lower financial risk profile. Nonetheless, the increased leverage observed in recent quarters warrants monitoring to maintain this favorable position.

Total Assets

The total assets demonstrated an overall upward trend from January 2020 through July 2025. Starting at 19,767 million USD in early 2020, the assets increased steadily with occasional fluctuations, reaching a peak of 34,409 million USD by April 2025 before a slight decline to 33,338 million USD in July 2025. This growth suggests a consistent expansion in the company's asset base over the analyzed period.

Stockholders’ Equity

Stockholders’ equity displayed a steady increase throughout the period. Beginning at 8,660 million USD in January 2020, equity rose to 19,504 million USD by July 2025. The rise was relatively smooth, with incremental growth in each quarter except for minor fluctuations around early 2022 and mid-2025. This consistent growth in equity implies strengthening in the company’s net worth and retained earnings.

Financial Leverage

Financial leverage, defined as the ratio of total assets to stockholders’ equity, decreased notably over the reported timeframe. Initially, the ratio stood at 2.28 in January 2020, peaked slightly at 2.42 in April 2020, then progressively declined to 1.75 by July 2025. This decline indicates a reduction in reliance on debt relative to equity, reflecting improved financial stability and potentially lower financial risk for the company.

Overall Insights

The combined trends of increasing total assets and equity, alongside a decreasing financial leverage ratio, suggest a strengthening financial position. The company appears to have expanded its asset base while concurrently bolstering its equity financing, leading to a more conservative capital structure with reduced leverage. This trend may reflect strategic growth efforts supported by retained earnings or equity issuance rather than increased debt, which could enhance financial flexibility and reduce risk exposure over time.

The analysis of the quarterly financial data reveals several clear patterns and trends concerning earnings before interest and tax (EBIT), interest expense, and interest coverage over the reported periods.

Earnings Before Interest and Tax (EBIT)

EBIT exhibits a generally upward trajectory over the period analyzed, indicating growth in the company’s operational profitability. Starting at 1,064 million US dollars in January 2020, EBIT experienced fluctuations but maintained an overall increase, culminating at 2,629 million US dollars by July 2025. The data shows positive momentum despite some intermittent declines, particularly visible in mid-2022 and early 2023 when EBIT values slightly receded before resuming growth. This pattern suggests resilience and an overall strengthening of earnings capability.

Interest Expense

Interest expense remains relatively stable throughout the periods, with only slight increases observed over time. Beginning at 59 million US dollars in January 2020, the value fluctuates marginally within a narrow range, reaching 66 million US dollars by July 2025. This stability indicates that the company’s cost of borrowing or interest obligations have not significantly increased in proportion to its earnings.

Interest Coverage Ratio

The interest coverage ratio demonstrates a strong and improving capacity to meet interest obligations from earnings. Starting from 15.35 in January 2020, the ratio steadily increased, surpassing 30 by late 2021 and maintaining levels mostly above 30 thereafter. The peak ratio observed is 36.27 in July 2024. The slight declines seen towards the later periods do not undermine the overall high coverage, which implies robust financial health and an ample buffer for covering interest expenses. This improving trend is consistent with the growth in EBIT relative to stable interest expenses.

In summary, the company has shown significant growth in operational profitability as evidenced by the rising EBIT. Interest costs have remained controlled, and the ability to cover these costs from earnings has strengthened considerably, as reflected in the increasing interest coverage ratio. These trends suggest effective financial management and an improving financial position over the examined quarters.