Celgene Corp. (NASDAQ:CELG)

The financial ratios over the analyzed periods reveal several notable trends in the capital structure and financial risk profile.

Debt to Equity Ratio

This ratio shows moderate fluctuations over time, beginning around 1.14 and increasing to a peak of 6.2 in June 2018. Following this peak, a gradual downward trend is observed, reducing to 1.64 by September 2019. The sharp rise prior to mid-2018 suggests a period of increased leverage, while the subsequent decline indicates deleveraging efforts.

Debt to Capital Ratio

The debt to capital ratio reflects a generally increasing trend from roughly 0.53 in early 2014 to a high of 0.86 in mid-2018, indicating a growing proportion of debt usage in the capital structure. After this peak, the ratio declines steadily to 0.62 by the third quarter of 2019, consistent with decreased reliance on debt financing.

Debt to Assets Ratio

Similar to debt to capital, the debt to assets ratio rises from approximately 0.40 to a maximum of 0.64 around mid-2018, illustrating increased overall debt relative to total assets. After mid-2018, the ratio diminishes to 0.48 by September 2019, suggesting improved asset coverage relative to debt.

Financial Leverage

This metric exhibits considerable volatility, rising sharply from 2.83 in March 2014 to a peak of 9.75 in June 2018, indicating higher utilization of financial leverage during this period. Thereafter, the ratio declines markedly to 3.42 by September 2019, signaling a reduction in leverage and potentially a strengthened equity base.

Interest Coverage Ratio

Data on interest coverage begins in September 2014 and generally portrays a decreasing trend from 14.22 to a low near 5.74 by December 2016, implying reduced ability to cover interest expenses during this time. Subsequently, interest coverage improves steadily, reaching 9.73 by September 2019, which suggests enhanced earnings relative to interest obligations and improved financial health.

In summary, the period through mid-2018 is marked by increasing leverage ratios, reflecting elevated debt levels and financial risk. The post-2018 timeframe demonstrates a concerted move towards deleveraging, improved coverage of interest expenses, and a strengthening balance sheet structure, leading to lower financial leverage and enhanced capacity to meet financial commitments.

The financial data reveals significant fluctuations in both total debt and stockholders' equity over the examined quarters, leading to notable variations in the debt to equity ratio.

Total Debt

Total debt demonstrates an overall upward trajectory, starting at 5,094 million USD in March 2014 and increasing to levels around 19,787 million USD by September 2019. The debt increased gradually through 2014 and early 2015 before experiencing a sharp rise between June and September 2015, almost doubling from 7,619 million USD to 15,498 million USD. After this spike, total debt stabilized around 14,000 to 16,000 million USD through 2016 and 2017, followed by another sharp increase in early 2018 reaching over 20,000 million USD. In the quarters following, total debt remained relatively stable but at higher levels compared to earlier years.

Stockholders’ Equity

Stockholders' equity showed a generally positive trend from March 2014 through September 2017, increasing from 4,485 million USD to a peak near 9,850 million USD in September 2017. However, there is a sharp decline after this peak, dropping to 3,430 million USD by June 2018. Despite some recovery in the subsequent quarters, equity remains considerably lower than its previous peak for the remainder of the period, finishing at 12,087 million USD in the final quarter. This indicates a period of significant volatility and possible equity restructuring or other financial adjustments during 2018 and 2019.

Debt to Equity Ratio

The debt to equity ratio mirrors the volatility seen in debt and equity figures. It started at a moderate level of 1.14 in March 2014 and dipped below 1.05 in December 2014 and March 2015, reflecting relatively balanced leverage. Following the sharp increase in debt mid-2015, the ratio surged to 2.88 in September 2015. Subsequently, the ratio oscillated but remained elevated above 1.4 until mid-2017. A pronounced spike occurs in early 2018, with the ratio reaching a peak of 6.2 in June 2018, indicating a period of significant financial leverage and potential risk. Afterward, the ratio gradually declines to about 1.64 by September 2019, signalling deleveraging or improvements in equity capitalization.

In summary, the data outlines a clear pattern of increasing leverage over the period, marked by two principal instances of rapid debt accumulation accompanied by fluctuations in equity levels. The ratio's peak in mid-2018 suggests a period of heightened financial risk or significant structural change in capital composition. The subsequent reduction in the ratio hints at efforts to manage leverage through equity growth or debt reduction towards the end of the observed timeline.

Total debt

The total debt exhibited a general upward trend over the observed periods. Starting at approximately 5,094 million USD in the first quarter of 2014, the debt level increased significantly, peaking at 20,281 million USD by the first quarter of 2019. Notable surges occurred around late 2015, and again between early 2017 and mid-2018 when debt moved from about 14,274 million USD to more than 21,000 million USD. Slight reductions are visible towards the last two recorded quarters, ending near 19,787 million USD.

Total capital

Total capital also demonstrated consistent growth throughout the timeline, rising from 9,579 million USD in early 2014 to 31,874 million USD by the third quarter of 2019. There is an overall upward trajectory with some periods of slower growth or modest declines, notably late 2015 and early 2018. Despite these fluctuations, the capital base expanded by more than threefold, reflecting increasing resource capacity over the reported intervals.

Debt to capital ratio

The debt to capital ratio fluctuated considerably, indicating varying leverage levels. Initially around 0.53 in the first quarter of 2014, the ratio increased temporarily to 0.74 by the third quarter of 2015, suggesting a higher proportion of debt financing during that time. Following some decline and stabilization through 2016 and 2017, the ratio surged again to a peak of 0.86 by mid-2018, showing increasing reliance on debt relative to total capital. After this peak, the leverage ratio decreased steadily towards 0.62 by the third quarter of 2019, indicating a reduction in relative debt burden within the capital structure.

Overall, the data reflect a pattern of rising absolute debt levels accompanied by periods of increasing leverage, followed by attempts to moderate debt relative to total capital. The growth in total capital suggests concurrent efforts to strengthen the financial base, although the fluctuating debt to capital ratio indicates variability in funding strategy and risk exposure over time.

The analysis of the financial trends over the reported periods reveals several notable patterns related to leverage and asset growth.

Total Debt

Total debt shows an overall increasing trend during the timeline. Starting from approximately $5.1 billion at the end of Q1 2014, debt increased steadily with a significant spike around Q3 2015, reaching roughly $15.5 billion before slightly stabilizing near $14 billion toward the end of 2015 and early 2016. Post-2016, total debt remained relatively stable but experienced a rise again from 2017 through early 2018, peaking above $20 billion in several quarters in 2018 and 2019, before a marginal decrease toward late 2019.

Total Assets

The total assets present a consistent upward trajectory throughout the entire period. Starting at $12.7 billion in Q1 2014, assets grew steadily without major declines, reaching approximately $27.4 billion by Q3 2015 and continuing to increase thereafter, crossing $31 billion by late 2017 and eventually surpassing $41 billion by Q3 2019. This continuous growth suggests expansion or acquisition activity supporting asset base enlargement.

Debt to Assets Ratio

The debt to assets ratio fluctuates between 0.39 and 0.64 over the period, reflecting changes in leverage relative to asset growth. Initially, the ratio hovers around 0.40 to 0.44, then sharply increases to a peak of approximately 0.57 in Q3 2015, coinciding with a large rise in debt. After peaking, the ratio declines gradually to around 0.45 in late 2017, indicating a moderation of leverage relative to asset expansion. However, there is another increase starting in early 2018, reaching a high of 0.64 in mid-2018, before steadily decreasing toward 0.48 by late 2019. This variation suggests periods of increased borrowing relative to assets, followed by phases of deleveraging or asset growth outpacing debt.

In summary, total debt experienced significant growth, with notable fluctuations and peaks aligned with major changes in funding or financing strategies. Meanwhile, total assets steadily increased, indicating company growth or acquisition activity. The debt to assets ratio reveals dynamic leverage management, with alternating periods of higher and lower leverage, reflecting the evolving balance between debt and asset base expansion.

The analysis of the quarterly financial data reveals several key trends and fluctuations in the company’s financial position over the examined periods.

Total assets

Total assets demonstrated a general upward trend from March 31, 2014, through September 30, 2019, increasing from approximately US$12.7 billion to US$41.4 billion. Notably, the growth pace accelerated significantly between June 30, 2015, and September 30, 2015, where total assets jumped from around US$17.7 billion to US$27.4 billion, indicating a major asset acquisition or revaluation event. Despite minor decreases in some quarters, particularly in late 2017 and mid-2018, the overall trajectory points to considerable expansion in asset base over the five-and-a-half-year span.

Stockholders’ equity

Stockholders’ equity initially increased steadily from US$4.5 billion in March 2014 to nearly US$6.8 billion by March 2015. However, subsequent quarters show volatility with equity declining to approximately US$5.4 billion by September 2015 and fluctuating thereafter. There is a marked rebound from early 2016 to late 2017 where equity rose substantially, peaking near US$9.9 billion in September 2017 before sharply dropping again by early 2018. Following this trough, equity rose consistently from mid-2018 onward, reaching about US$12.1 billion by September 2019. These fluctuations suggest periods of earnings volatility, possible share repurchases, dividends, or other equity-affecting transactions.

Financial leverage

Financial leverage, calculated as the ratio of total assets to stockholders' equity, exhibited considerable variability throughout the periods. Starting at a ratio of approximately 2.83 in early 2014, it increased and decreased cyclically, with distinct peaks observed around September 2015 (5.09), March 2018 (6.68), and June 2018 (9.75). A higher leverage ratio implies increased reliance on debt or liabilities relative to equity. The peaks in leverage coincide with low points in equity and elevated asset bases, perhaps reflecting increased borrowing or obligations financing the asset growth. Toward the end of the period, leverage declined to about 3.42 by September 2019, indicating a strengthening equity position relative to assets and potentially a more conservative capital structure.

Overall, the data indicate significant growth in total assets, intermittent volatility in stockholders' equity, and corresponding fluctuations in financial leverage. The company appears to have undergone phases of expansion financed increasingly through leverage, followed by periods of equity strengthening and deleveraging. This pattern could reflect strategic financial management responding to investment opportunities and capital market conditions during the timeframe.

The earnings before interest and tax (EBIT) demonstrate a fluctuating yet overall upward trend over the observed periods. Starting at 362 million US dollars in the first quarter of 2014, EBIT rises sharply to 748 million by mid-2014, then experiences volatility with a significant dip to 69 million in the third quarter of 2015. From this low point, EBIT recovers robustly, reaching peaks above 2 billion US dollars in the first three quarters of 2019, indicating considerable improvement and growth in operating profitability.

Interest expense maintains a gradual upward trajectory throughout the timeline. Initially, the expense is relatively low at 29 million US dollars in early 2014, followed by progressive increases to values hovering around 190 to 192 million by the final quarters of 2019. The steady rise in interest expense suggests growth in debt levels or higher borrowing costs over the years.

The interest coverage ratio, reflecting the ability to cover interest expenses with EBIT, shows improvement after an initial calculation absence. From a high of approximately 15.4 in mid-2014, there is a general decline reaching a trough of 5.74 by the end of 2015, indicating increased pressure on earnings to cover interest obligations during this period. However, subsequent quarters show a recovery with the ratio climbing to near 9.73 in late 2019, reflecting strengthened earnings relative to interest expenses and an improved financial risk position.

EBIT Trends

High volatility with significant dips around late 2014 to 2015 but marked overall growth culminating in strong profits above 2 billion US dollars in 2019.

Interest Expense Trends

Consistent increase from modest levels in 2014 to sustained high levels near 190 million by 2019.

Interest Coverage Ratio Trends

Initial high coverage decreasing significantly through 2015, followed by steady recovery reaching near 10 times coverage by 2019, indicating improved capacity to meet interest obligations.

Overall, the financial data points to a period characterized by rising operating income and increased interest costs, with eventual enhancement of the company's ability to service its debt. The improvements in EBIT alongside rising interest expenses and recovering interest coverage ratio suggest stronger operational performance supported by manageable financing costs in the latter years.