Analysis of Solvency Ratios
Quarterly Data
Solvency ratios also known as long-term debt ratios measure a company ability to meet long-term obligations.
Solvency Ratios (Summary)
Celgene Corp., solvency ratios (quarterly data)
Based on: 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31).
The analysis of the financial leverage and debt-related ratios over the observed quarters reveals several notable trends. Initially, the debt to equity ratio began at a moderate level of 1.01, rising sharply and peaking at 6.20 by mid-2018. After this peak, there is a clear downward trend, with the ratio falling steadily to 1.64 by the third quarter of 2019. This indicates that the company initially increased its reliance on debt financing relative to equity but subsequently reduced this dependence significantly.
Similarly, the debt to capital ratio increased from 0.50 to a high of 0.86 by mid-2018, reflecting an elevated proportion of debt in the company’s capital structure. Post-peak, this ratio declines consistently to 0.62 by the last reported quarter, suggesting improved capital structure management with reduced leverage.
In line with these observations, the debt to assets ratio follows a comparable pattern, increasing from 0.39 to a maximum of 0.64 and then gradually decreasing to 0.48. This trend signifies that the proportion of assets financed through debt rose initially but was later moderated.
Financial leverage, calculated as the ratio of total assets to shareholders’ equity, exhibits the most pronounced variation. Beginning at 2.58, it escalates dramatically to 9.75, marking a period of significant leveraging. Following this peak, the ratio contracts steadily to 3.42 by the third quarter of 2019, consistent with the reduction in debt reliance.
Interest coverage ratio, reflecting the company’s capacity to meet interest obligations from its earnings, demonstrates a declining trend from 15.4 to a low of around 5.74 during late 2016. This decline suggests increasing pressure on earnings relative to interest expenses during the period of heightened leverage. However, subsequent quarters display a gradual improvement in interest coverage, rising to 9.73 by the end of the data series. This rebound indicates a restoration in earnings strength or a reduction in interest expense, contributing to better debt servicing capability.
Overall, the financial data show that the company experienced a phase of aggressive leverage increase from early 2015 through mid-2018, accompanied by a reduced ability to cover interest expenses. After reaching peak leverage, the company strategically deleveraged and improved financial stability, as reflected in the downward trends of debt ratios and an improving interest coverage ratio. These dynamics suggest a concerted effort to strengthen the balance sheet and reduce risks associated with high debt levels.
- Debt to Equity Ratio
- Started low, peaked sharply mid-2018, then declined steadily through 2019.
- Debt to Capital Ratio
- Increased to a peak of 0.86 and then declined, mirroring the debt to equity trend.
- Debt to Assets Ratio
- Rose from 0.39 to about 0.64 before trending downwards toward 0.48.
- Financial Leverage
- Exhibited strong growth culminating near 9.75, followed by significant reduction.
- Interest Coverage Ratio
- Declined from high levels to near 5.7, then recovered towards 9.7, indicating improved earnings relative to interest expense.
Debt Ratios
Coverage Ratios
Debt to Equity
Celgene Corp., debt to equity calculation (quarterly data)
| Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||
| Short-term borrowings and current portion of long-term debt | 1,498) | —) | 500) | 501) | 502) | 1,497) | —) | —) | 1,400) | 500) | 500) | 501) | 501) | —) | —) | —) | 1,200) | 1,363) | 504) | ||||||
| Long-term debt, net of discount, excluding current portion | 18,289) | 19,790) | 19,781) | 19,769) | 19,742) | 19,754) | 20,271) | 15,838) | 12,874) | 13,783) | 13,784) | 13,789) | 13,803) | 14,312) | 14,268) | 14,250) | 14,298) | 6,256) | 6,303) | ||||||
| Total debt | 19,787) | 19,790) | 20,281) | 20,270) | 20,244) | 21,251) | 20,271) | 15,838) | 14,274) | 14,283) | 14,284) | 14,289) | 14,304) | 14,312) | 14,268) | 14,250) | 15,498) | 7,619) | 6,807) | ||||||
| Stockholders’ equity | 12,087) | 10,051) | 8,165) | 6,161) | 4,860) | 3,430) | 5,172) | 6,921) | 9,850) | 8,445) | 7,644) | 6,599) | 5,650) | 5,549) | 5,075) | 5,919) | 5,376) | 6,322) | 6,765) | ||||||
| Solvency Ratio | |||||||||||||||||||||||||
| Debt to equity1 | 1.64 | 1.97 | 2.48 | 3.29 | 4.17 | 6.20 | 3.92 | 2.29 | 1.45 | 1.69 | 1.87 | 2.17 | 2.53 | 2.58 | 2.81 | 2.41 | 2.88 | 1.21 | 1.01 | ||||||
| Benchmarks | |||||||||||||||||||||||||
| Debt to Equity, Competitors2 | |||||||||||||||||||||||||
| AbbVie Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Amgen Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Bristol-Myers Squibb Co. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Danaher Corp. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Eli Lilly & Co. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Gilead Sciences Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Johnson & Johnson | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Merck & Co. Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Pfizer Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Regeneron Pharmaceuticals Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Thermo Fisher Scientific Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Vertex Pharmaceuticals Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31).
1 Q3 2019 Calculation
Debt to equity = Total debt ÷ Stockholders’ equity
= 19,787 ÷ 12,087 = 1.64
2 Click competitor name to see calculations.
- Total Debt
- The total debt exhibits a sharp increase from March 2015 to September 2015, rising from approximately $6.8 billion to about $15.5 billion. Following this peak, the debt level stabilizes around the $14 billion mark through to December 2016. From early 2017 onwards, total debt remains relatively stable, fluctuating slightly near the $14-16 billion range until the end of 2017. Starting in early 2018, a notable increase occurs, with debt peaking at over $21 billion mid-2018, before declining to just below $20 billion by the third quarter of 2019.
- Stockholders’ Equity
- Stockholders’ equity begins at roughly $6.8 billion in March 2015 and generally trends downward through 2015 and early 2016, reaching a low of around $5 billion by March 2016. A gradual recovery is observed during 2016 and 2017, peaking near $9.9 billion by the third quarter of 2017. However, this is followed by a sharp decline through 2017 and 2018, dropping to a low near $3.4 billion by mid-2018. From late 2018 onward, equity recovers steadily, reaching approximately $12.1 billion by September 2019.
- Debt to Equity Ratio
- The debt to equity ratio follows a highly volatile pattern. It starts near parity at 1.01 in March 2015, jumps significantly to a peak of 2.88 by September 2015, reflecting a rapid increase in debt relative to equity. The ratio then declines steadily through 2016 and 2017, bottoming at around 1.45 by the third quarter of 2017, indicating improved equity relative to debt. Subsequently, a steep rise occurs through 2018, with the ratio peaking at 6.2 mid-year, signaling a period of comparatively high leverage and diminished equity levels. Finally, there is a pronounced reduction in leverage from late 2018 into 2019, with the ratio declining to 1.64 by September 2019, reflecting a more balanced capital structure.
Debt to Capital
Celgene Corp., debt to capital calculation (quarterly data)
| Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||
| Short-term borrowings and current portion of long-term debt | 1,498) | —) | 500) | 501) | 502) | 1,497) | —) | —) | 1,400) | 500) | 500) | 501) | 501) | —) | —) | —) | 1,200) | 1,363) | 504) | ||||||
| Long-term debt, net of discount, excluding current portion | 18,289) | 19,790) | 19,781) | 19,769) | 19,742) | 19,754) | 20,271) | 15,838) | 12,874) | 13,783) | 13,784) | 13,789) | 13,803) | 14,312) | 14,268) | 14,250) | 14,298) | 6,256) | 6,303) | ||||||
| Total debt | 19,787) | 19,790) | 20,281) | 20,270) | 20,244) | 21,251) | 20,271) | 15,838) | 14,274) | 14,283) | 14,284) | 14,289) | 14,304) | 14,312) | 14,268) | 14,250) | 15,498) | 7,619) | 6,807) | ||||||
| Stockholders’ equity | 12,087) | 10,051) | 8,165) | 6,161) | 4,860) | 3,430) | 5,172) | 6,921) | 9,850) | 8,445) | 7,644) | 6,599) | 5,650) | 5,549) | 5,075) | 5,919) | 5,376) | 6,322) | 6,765) | ||||||
| Total capital | 31,874) | 29,841) | 28,446) | 26,431) | 25,104) | 24,681) | 25,443) | 22,759) | 24,124) | 22,728) | 21,928) | 20,889) | 19,954) | 19,861) | 19,343) | 20,169) | 20,873) | 13,941) | 13,572) | ||||||
| Solvency Ratio | |||||||||||||||||||||||||
| Debt to capital1 | 0.62 | 0.66 | 0.71 | 0.77 | 0.81 | 0.86 | 0.80 | 0.70 | 0.59 | 0.63 | 0.65 | 0.68 | 0.72 | 0.72 | 0.74 | 0.71 | 0.74 | 0.55 | 0.50 | ||||||
| Benchmarks | |||||||||||||||||||||||||
| Debt to Capital, Competitors2 | |||||||||||||||||||||||||
| AbbVie Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Amgen Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Bristol-Myers Squibb Co. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Danaher Corp. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Eli Lilly & Co. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Gilead Sciences Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Johnson & Johnson | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Merck & Co. Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Pfizer Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Regeneron Pharmaceuticals Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Thermo Fisher Scientific Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Vertex Pharmaceuticals Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31).
1 Q3 2019 Calculation
Debt to capital = Total debt ÷ Total capital
= 19,787 ÷ 31,874 = 0.62
2 Click competitor name to see calculations.
The financial data reveals several notable trends in the company's capital structure over the examined periods.
- Total Debt
- The total debt exhibited a significant increase between March 31, 2015, and September 30, 2015, nearly doubling from approximately $6.8 billion to about $15.5 billion. After stabilizing around $14.2 billion through the end of 2016 and early 2017, total debt experienced a substantial rise again toward the end of 2017, peaking at over $21 billion by June 30, 2018. This peak was followed by a slight decrease and subsequent stabilization, with debt levels generally maintained around $20 billion to $19.7 billion in 2018 and 2019.
- Total Capital
- Total capital followed an upward trajectory overall. Starting at roughly $13.6 billion in early 2015, it increased significantly to over $20 billion by late 2015. From 2016 through early 2017, total capital continued to climb steadily, reaching approximately $24 billion by September 2017. Despite some fluctuations, including a dip around December 2017, total capital resumed growth, achieving about $31.9 billion by the last quarter observed in September 2019.
- Debt to Capital Ratio
- The debt to capital ratio exhibited considerable volatility across the periods. Initially, it rose sharply from 0.50 in March 2015 to a high of 0.74 by September 2015, reflecting the rapid expansion in debt relative to total capital. The ratio then declined gradually through 2016 and 2017, reaching a low of 0.59 in September 2017, indicating an improved balance between debt and capital. However, the ratio increased again towards the end of 2017 and through 2018, peaking at 0.86 in June 2018, which signals a higher leverage position. In 2019, the ratio demonstrated a steady decline, reducing to approximately 0.62 by September 2019, suggesting a deleveraging trend and a reduction in financial risk associated with debt levels relative to capital.
Overall, the company experienced periods of heightened borrowing that noticeably impacted its leverage metrics, particularly through mid-2015 and mid-2018. Despite fluctuations, the most recent trend indicates a move toward lower leverage, supported by increasing total capital and gradually decreasing debt to capital ratios in the latest quarters.
Debt to Assets
Celgene Corp., debt to assets calculation (quarterly data)
| Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||
| Short-term borrowings and current portion of long-term debt | 1,498) | —) | 500) | 501) | 502) | 1,497) | —) | —) | 1,400) | 500) | 500) | 501) | 501) | —) | —) | —) | 1,200) | 1,363) | 504) | ||||||
| Long-term debt, net of discount, excluding current portion | 18,289) | 19,790) | 19,781) | 19,769) | 19,742) | 19,754) | 20,271) | 15,838) | 12,874) | 13,783) | 13,784) | 13,789) | 13,803) | 14,312) | 14,268) | 14,250) | 14,298) | 6,256) | 6,303) | ||||||
| Total debt | 19,787) | 19,790) | 20,281) | 20,270) | 20,244) | 21,251) | 20,271) | 15,838) | 14,274) | 14,283) | 14,284) | 14,289) | 14,304) | 14,312) | 14,268) | 14,250) | 15,498) | 7,619) | 6,807) | ||||||
| Total assets | 41,363) | 39,183) | 37,639) | 35,480) | 34,215) | 33,444) | 34,556) | 30,141) | 31,736) | 30,306) | 28,820) | 28,086) | 26,754) | 26,562) | 25,964) | 27,053) | 27,369) | 17,746) | 17,481) | ||||||
| Solvency Ratio | |||||||||||||||||||||||||
| Debt to assets1 | 0.48 | 0.51 | 0.54 | 0.57 | 0.59 | 0.64 | 0.59 | 0.53 | 0.45 | 0.47 | 0.50 | 0.51 | 0.53 | 0.54 | 0.55 | 0.53 | 0.57 | 0.43 | 0.39 | ||||||
| Benchmarks | |||||||||||||||||||||||||
| Debt to Assets, Competitors2 | |||||||||||||||||||||||||
| AbbVie Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Amgen Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Bristol-Myers Squibb Co. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Danaher Corp. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Eli Lilly & Co. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Gilead Sciences Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Johnson & Johnson | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Merck & Co. Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Pfizer Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Regeneron Pharmaceuticals Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Thermo Fisher Scientific Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Vertex Pharmaceuticals Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31).
1 Q3 2019 Calculation
Debt to assets = Total debt ÷ Total assets
= 19,787 ÷ 41,363 = 0.48
2 Click competitor name to see calculations.
The analysis of the financial data reveals several key trends in the company's debt and asset management over the examined periods.
- Total Debt
- The total debt exhibited an overall upward trend from March 2015 through December 2017, peaking notably at $15,838 million by the end of 2017. Following this peak, debt levels increased significantly reaching a maximum of $21,251 million in June 2018 before demonstrating some fluctuation and a slight decrease towards the latter periods. By September 2019, the total debt stood at approximately $19,787 million, indicating some efforts to moderate debt accumulation after a period of considerable growth.
- Total Assets
- Total assets showed consistent growth throughout the timeframe, increasing from $17,481 million in March 2015 to $41,363 million by September 2019. This steady increase suggests a positive expansion in the company's asset base, with particularly notable jumps in asset values around the transition from 2017 to 2018 and continuing through 2019. The continuous asset growth may reflect investments, acquisitions, or organic growth contributing to the company’s scale.
- Debt to Assets Ratio
- The debt to assets ratio illustrates variability reflective of movements in both debt and assets. Initially, the ratio rose significantly from 0.39 in March 2015 to a peak of 0.59 by March 2018, indicating that debt levels were increasing at a faster rate relative to assets during this period. After this peak, the ratio demonstrated a gradual decline to 0.48 by September 2019, suggesting improved balance sheet leverage and a relative reduction in debt burden compared to asset growth.
Overall, the data points to a phase of increased leveraging up to early 2018, followed by strategic balancing of debt relative to assets. The company has succeeded in expanding its asset base notably while managing to reduce its leverage ratio in the later periods, potentially lowering financial risk and improving financial stability.
Financial Leverage
Celgene Corp., financial leverage calculation (quarterly data)
| Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||
| Total assets | 41,363) | 39,183) | 37,639) | 35,480) | 34,215) | 33,444) | 34,556) | 30,141) | 31,736) | 30,306) | 28,820) | 28,086) | 26,754) | 26,562) | 25,964) | 27,053) | 27,369) | 17,746) | 17,481) | ||||||
| Stockholders’ equity | 12,087) | 10,051) | 8,165) | 6,161) | 4,860) | 3,430) | 5,172) | 6,921) | 9,850) | 8,445) | 7,644) | 6,599) | 5,650) | 5,549) | 5,075) | 5,919) | 5,376) | 6,322) | 6,765) | ||||||
| Solvency Ratio | |||||||||||||||||||||||||
| Financial leverage1 | 3.42 | 3.90 | 4.61 | 5.76 | 7.04 | 9.75 | 6.68 | 4.36 | 3.22 | 3.59 | 3.77 | 4.26 | 4.73 | 4.79 | 5.12 | 4.57 | 5.09 | 2.81 | 2.58 | ||||||
| Benchmarks | |||||||||||||||||||||||||
| Financial Leverage, Competitors2 | |||||||||||||||||||||||||
| AbbVie Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Amgen Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Bristol-Myers Squibb Co. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Danaher Corp. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Eli Lilly & Co. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Gilead Sciences Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Johnson & Johnson | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Merck & Co. Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Pfizer Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Regeneron Pharmaceuticals Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Thermo Fisher Scientific Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Vertex Pharmaceuticals Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31).
1 Q3 2019 Calculation
Financial leverage = Total assets ÷ Stockholders’ equity
= 41,363 ÷ 12,087 = 3.42
2 Click competitor name to see calculations.
- Total Assets
- Total assets showed an overall upward trend across the periods, increasing from $17,481 million in March 2015 to $41,363 million by September 2019. There was a notable jump between June 2015 and September 2015, where total assets rose sharply from $17,746 million to $27,369 million. After this increase, total assets exhibited steady growth with minor fluctuations, rising gradually through subsequent periods.
- Stockholders’ Equity
- Stockholders' equity experienced considerable volatility over the observed periods. It started at $6,765 million in March 2015, followed by a decline to $5,376 million by September 2015. After some fluctuations, equity dropped significantly during 2017 and the first half of 2018, reaching a low of $3,430 million in June 2018. Subsequently, it rebounded strongly, climbing to $12,087 million by September 2019, indicating renewed shareholder value growth in the latter part of the timeline.
- Financial Leverage
- The financial leverage ratio demonstrated significant variability over the timeline, reflecting changing reliance on debt relative to equity. Starting at 2.58 in March 2015, the ratio peaked sharply at 5.12 in March 2016 and even higher to 9.75 by June 2018, coinciding with periods when equity values were low relative to assets. After mid-2018, the leverage ratio decreased steadily, reaching 3.42 by September 2019, indicating a reduction in leverage and potentially a more balanced capital structure toward the end of the period.
- General Observations
- The data reveals a pattern where rapid asset growth was initially accompanied by declining equity and increased leverage, suggesting significant capital structure changes, potentially through increased debt or other liabilities. The equity decline through 2017 into mid-2018 and the corresponding peak in leverage highlight periods of elevated financial risk. The subsequent recovery in equity and corresponding reduction in leverage suggest a strategic deleveraging. Overall, the company’s asset base nearly doubled, while equity fluctuations point to variable shareholder value and capital management strategies throughout the periods analyzed.
Interest Coverage
Celgene Corp., interest coverage calculation (quarterly data)
| Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||
| Net income (loss) | 1,691) | 1,571) | 1,545) | 1,073) | 1,082) | 1,045) | 846) | (81) | 988) | 1,101) | 932) | 429) | 171) | 598) | 801) | 561) | (34) | 356) | 719) | ||||||
| Add: Income tax expense | 226) | 250) | 269) | 44) | 296) | 262) | 184) | 1,212) | 3) | 77) | 82) | 70) | 85) | 97) | 121) | 185) | 14) | 115) | 108) | ||||||
| Add: Interest expense | 190) | 192) | 192) | 190) | 193) | 192) | 166) | 142) | 127) | 126) | 127) | 127) | 128) | 123) | 122) | 125) | 89) | 48) | 49) | ||||||
| Earnings before interest and tax (EBIT) | 2,107) | 2,013) | 2,006) | 1,307) | 1,571) | 1,499) | 1,196) | 1,273) | 1,118) | 1,304) | 1,141) | 626) | 385) | 818) | 1,044) | 870) | 69) | 519) | 876) | ||||||
| Solvency Ratio | |||||||||||||||||||||||||
| Interest coverage1 | 9.73 | 8.99 | 8.32 | 7.52 | 7.99 | 8.11 | 8.72 | 9.26 | 8.26 | 6.80 | 5.88 | 5.74 | 6.26 | 6.11 | 6.53 | 7.51 | 9.37 | 13.76 | 15.40 | ||||||
| Benchmarks | |||||||||||||||||||||||||
| Interest Coverage, Competitors2 | |||||||||||||||||||||||||
| Amgen Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Danaher Corp. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Gilead Sciences Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Johnson & Johnson | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Regeneron Pharmaceuticals Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Thermo Fisher Scientific Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Vertex Pharmaceuticals Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31).
1 Q3 2019 Calculation
Interest coverage
= (EBITQ3 2019
+ EBITQ2 2019
+ EBITQ1 2019
+ EBITQ4 2018)
÷ (Interest expenseQ3 2019
+ Interest expenseQ2 2019
+ Interest expenseQ1 2019
+ Interest expenseQ4 2018)
= (2,107 + 2,013 + 2,006 + 1,307)
÷ (190 + 192 + 192 + 190)
= 9.73
2 Click competitor name to see calculations.
The earnings before interest and tax (EBIT) demonstrates a volatile yet generally increasing trend over the examined periods. Initial fluctuations are observed with a significant drop to a low point in the third quarter of 2015, followed by a recovery and subsequent growth. From early 2016 onward, EBIT shows a pattern of cyclical rises and falls but with an overall upward trajectory, reaching a peak in the third quarter of 2019. This indicates progressive operational profitability improvement over time despite intermittent short-term declines.
Interest expense exhibits a gradual increase during the same timeframe. Beginning with relatively lower values in 2015, expenses steadily rise through to 2018, after which they maintain a relatively stable level around 190 to 192 million US dollars. This pattern suggests the company faced progressively higher borrowing costs or increased debt levels initially, which then stabilized in the later periods.
The interest coverage ratio, which gauges the company's ability to meet interest obligations from EBIT, reflects these dynamics. It starts at a high 15.4 in the first quarter of 2015 but experiences a significant decline early on, reaching a trough near 5.74 by the last quarter of 2016. This decrease corresponds with the lowered EBIT and rising interest expenses observed in earlier periods. Subsequently, the ratio improves steadily, indicating enhanced financial health and better coverage capability. By the third quarter of 2019, the interest coverage ratio attains a relatively strong level nearing 9.73, confirming an improved capacity to service interest payments supported by increased operational earnings.
- EBIT Trend
- Volatile initially with a low in Q3 2015; overall growth through to Q3 2019 with cyclical fluctuations.
- Interest Expense
- Gradual rise from 2015 through 2018, stabilizing thereafter, indicating increasing but controlled financing costs.
- Interest Coverage Ratio
- Declined sharply early on due to lower EBIT and higher interest expense, then improved steadily to strong levels by 2019.