Analysis of Solvency Ratios
Solvency ratios also known as long-term debt ratios measure a company ability to meet long-term obligations.
Solvency Ratios (Summary)
Debt Ratios
Coverage Ratios
Cytokinetics Inc., solvency ratios
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
The solvency profile exhibits significant volatility over the five-year period, characterized by an initial trend of deleveraging followed by a sharp increase in debt reliance by the end of 2022.
- Leverage and Equity Ratios
- A general reduction in leverage was observed between 2018 and 2021. The debt to equity ratio declined from 1.64 in 2018 to 0.59 in 2021, while financial leverage decreased from 8.14 to 3.45 over the same period. When operating lease liabilities are included, the debt to equity ratio remained higher but followed a similar downward trajectory, moving from 1.64 in 2018 to 1.11 in 2021.
- Asset and Capital Composition
- Debt utilization relative to assets and capital showed a cyclical pattern with a pronounced spike in 2022. The debt to assets ratio, which had reached a low of 0.17 in 2021, rose sharply to 0.60 by December 31, 2022. Similarly, the debt to capital ratio experienced a significant increase, climbing from 0.37 in 2021 to 1.21 in 2022. This suggests a substantial increase in debt-funded financing toward the end of the observed period.
- Debt Service Coverage
- The capacity to service debt from operating earnings remained consistently deficient throughout the period. Interest coverage ratios were negative across all reported years, ranging from a peak of -6.97 in 2020 to -19.03 in 2022. Fixed charge coverage ratios mirrored this trend, remaining negative throughout the duration, with the most favorable position occurring in 2021 at -4.45 before deteriorating to -8.48 in 2022. The persistent negative values indicate that operating cash flows are insufficient to cover interest and fixed obligations.
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Debt to Equity
Cytokinetics Inc., debt to equity calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Current portion of term loan | —) | —) | —) | —) | 2,607) | |
| Short-term finance lease liabilities | 1,000) | 500) | —) | —) | —) | |
| Term loan, net, excluding current portion | 63,810) | 47,367) | 46,209) | 45,052) | 39,806) | |
| Convertible notes, net | 545,808) | 95,471) | 89,504) | 84,205) | —) | |
| Long-term finance lease liabilities | 1,001) | 805) | —) | —) | —) | |
| Total debt | 611,619) | 144,143) | 135,713) | 129,257) | 42,413) | |
| Stockholders’ equity (deficit) | (107,900) | 243,863) | 113,383) | (10,937) | 25,934) | |
| Solvency Ratio | ||||||
| Debt to equity1 | — | 0.59 | 1.20 | — | 1.64 | |
| Benchmarks | ||||||
| Debt to Equity, Competitors2 | ||||||
| AbbVie Inc. | 3.67 | 4.98 | — | — | — | |
| Amgen Inc. | 10.64 | 4.97 | — | — | — | |
| Bristol-Myers Squibb Co. | 1.27 | 1.24 | — | — | — | |
| Danaher Corp. | 0.39 | 0.49 | — | — | — | |
| Eli Lilly & Co. | 1.52 | 1.88 | — | — | — | |
| Gilead Sciences Inc. | 1.19 | 1.27 | — | — | — | |
| Johnson & Johnson | 0.52 | 0.46 | — | — | — | |
| Merck & Co. Inc. | 0.67 | 0.87 | — | — | — | |
| Pfizer Inc. | 0.37 | 0.50 | — | — | — | |
| Regeneron Pharmaceuticals Inc. | 0.12 | 0.14 | — | — | — | |
| Thermo Fisher Scientific Inc. | 0.78 | 0.85 | — | — | — | |
| Vertex Pharmaceuticals Inc. | 0.03 | 0.06 | — | — | — | |
| Debt to Equity, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | 0.80 | 0.93 | — | — | — | |
| Debt to Equity, Industry | ||||||
| Health Care | 0.72 | 0.80 | — | — | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Debt to equity = Total debt ÷ Stockholders’ equity (deficit)
= 611,619 ÷ -107,900 = —
2 Click competitor name to see calculations.
The solvency profile exhibits significant volatility and a marked deterioration in the long-term financial position by the end of the observed period. While there was a period of relative stabilization and leverage reduction between 2020 and 2021, the most recent fiscal year shows a substantial increase in liabilities coupled with a return to a negative equity position.
- Total Debt Trends
- A consistent upward trajectory in total debt is observed from 2018 to 2022. Debt levels rose from 42,413 thousand US dollars in 2018 to 144,143 thousand US dollars by 2021. A sharp escalation occurred in 2022, with total debt increasing to 611,619 thousand US dollars, representing a significant expansion of the company's leverage.
- Stockholders' Equity Volatility
- Equity levels have fluctuated substantially, alternating between surpluses and deficits. After a deficit of 10,937 thousand US dollars in 2019, equity recovered strongly, peaking at 243,863 thousand US dollars in 2021. However, this trend reversed abruptly in 2022, resulting in a stockholders' deficit of 107,900 thousand US dollars.
- Debt to Equity Ratio Analysis
- The debt to equity ratio improved from 1.64 in 2018 to 0.59 in 2021, indicating a period where equity growth outpaced debt accumulation. However, the ratio cannot be meaningfully calculated for 2019 and 2022 due to the presence of stockholders' deficits. The transition from a low ratio in 2021 to a deficit in 2022 suggests a severe decline in solvency and an increased reliance on borrowed funds to finance operations.
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Debt to Equity (including Operating Lease Liability)
Cytokinetics Inc., debt to equity (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Current portion of term loan | —) | —) | —) | —) | 2,607) | |
| Short-term finance lease liabilities | 1,000) | 500) | —) | —) | —) | |
| Term loan, net, excluding current portion | 63,810) | 47,367) | 46,209) | 45,052) | 39,806) | |
| Convertible notes, net | 545,808) | 95,471) | 89,504) | 84,205) | —) | |
| Long-term finance lease liabilities | 1,001) | 805) | —) | —) | —) | |
| Total debt | 611,619) | 144,143) | 135,713) | 129,257) | 42,413) | |
| Short-term operating lease liabilities | 12,829) | 14,863) | 2,785) | 4,616) | —) | |
| Long-term operating lease liabilities | 126,895) | 112,229) | 440) | 2,195) | —) | |
| Total debt (including operating lease liability) | 751,343) | 271,235) | 138,938) | 136,068) | 42,413) | |
| Stockholders’ equity (deficit) | (107,900) | 243,863) | 113,383) | (10,937) | 25,934) | |
| Solvency Ratio | ||||||
| Debt to equity (including operating lease liability)1 | — | 1.11 | 1.23 | — | 1.64 | |
| Benchmarks | ||||||
| Debt to Equity (including Operating Lease Liability), Competitors2 | ||||||
| AbbVie Inc. | 3.72 | 5.03 | — | — | — | |
| Amgen Inc. | 10.83 | 5.07 | — | — | — | |
| Bristol-Myers Squibb Co. | 1.31 | 1.27 | — | — | — | |
| Danaher Corp. | 0.41 | 0.52 | — | — | — | |
| Eli Lilly & Co. | 1.59 | 1.96 | — | — | — | |
| Gilead Sciences Inc. | 1.22 | 1.30 | — | — | — | |
| Johnson & Johnson | 0.53 | 0.47 | — | — | — | |
| Merck & Co. Inc. | 0.70 | 0.91 | — | — | — | |
| Pfizer Inc. | 0.41 | 0.54 | — | — | — | |
| Regeneron Pharmaceuticals Inc. | 0.12 | 0.15 | — | — | — | |
| Thermo Fisher Scientific Inc. | 0.82 | 0.89 | — | — | — | |
| Vertex Pharmaceuticals Inc. | 0.06 | 0.10 | — | — | — | |
| Debt to Equity (including Operating Lease Liability), Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | 0.83 | 0.96 | — | — | — | |
| Debt to Equity (including Operating Lease Liability), Industry | ||||||
| Health Care | 0.76 | 0.83 | — | — | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Debt to equity (including operating lease liability) = Total debt (including operating lease liability) ÷ Stockholders’ equity (deficit)
= 751,343 ÷ -107,900 = —
2 Click competitor name to see calculations.
The financial trajectory from 2018 to 2022 is characterized by a substantial increase in total leverage and significant volatility in stockholders' equity, culminating in a weakened solvency position.
- Total Debt Trends
- A consistent and accelerating upward trend in total debt, including operating lease liabilities, is observed. Liabilities rose from US$ 42,413 thousand in 2018 to US$ 751,343 thousand by the end of 2022. The most pronounced increase occurred between 2021 and 2022, where debt levels nearly tripled within a single fiscal year.
- Stockholders' Equity Volatility
- Equity levels exhibited extreme fluctuations throughout the period. After starting at US$ 25,934 thousand in 2018, a deficit was recorded in 2019. A recovery followed, with equity peaking at US$ 243,863 thousand in 2021, before returning to a deficit of US$ 107,900 thousand in 2022.
- Debt to Equity Ratio Analysis
- The debt to equity ratio demonstrated a downward trend between 2018 and 2021, decreasing from 1.64 to 1.11. This improvement was driven by the growth in stockholders' equity during those specific years. However, the recurrence of a stockholders' deficit in 2022 indicates that total liabilities now exceed total equity, signifying a deterioration in the capital structure.
The combination of exponentially growing debt and a return to a negative equity position by 2022 suggests an increasing reliance on external financing and a heightened risk profile regarding long-term solvency.
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Debt to Capital
Cytokinetics Inc., debt to capital calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Current portion of term loan | —) | —) | —) | —) | 2,607) | |
| Short-term finance lease liabilities | 1,000) | 500) | —) | —) | —) | |
| Term loan, net, excluding current portion | 63,810) | 47,367) | 46,209) | 45,052) | 39,806) | |
| Convertible notes, net | 545,808) | 95,471) | 89,504) | 84,205) | —) | |
| Long-term finance lease liabilities | 1,001) | 805) | —) | —) | —) | |
| Total debt | 611,619) | 144,143) | 135,713) | 129,257) | 42,413) | |
| Stockholders’ equity (deficit) | (107,900) | 243,863) | 113,383) | (10,937) | 25,934) | |
| Total capital | 503,719) | 388,006) | 249,096) | 118,320) | 68,347) | |
| Solvency Ratio | ||||||
| Debt to capital1 | 1.21 | 0.37 | 0.54 | 1.09 | 0.62 | |
| Benchmarks | ||||||
| Debt to Capital, Competitors2 | ||||||
| AbbVie Inc. | 0.79 | 0.83 | — | — | — | |
| Amgen Inc. | 0.91 | 0.83 | — | — | — | |
| Bristol-Myers Squibb Co. | 0.56 | 0.55 | — | — | — | |
| Danaher Corp. | 0.28 | 0.33 | — | — | — | |
| Eli Lilly & Co. | 0.60 | 0.65 | — | — | — | |
| Gilead Sciences Inc. | 0.54 | 0.56 | — | — | — | |
| Johnson & Johnson | 0.34 | 0.31 | — | — | — | |
| Merck & Co. Inc. | 0.40 | 0.46 | — | — | — | |
| Pfizer Inc. | 0.27 | 0.33 | — | — | — | |
| Regeneron Pharmaceuticals Inc. | 0.11 | 0.13 | — | — | — | |
| Thermo Fisher Scientific Inc. | 0.44 | 0.46 | — | — | — | |
| Vertex Pharmaceuticals Inc. | 0.03 | 0.05 | — | — | — | |
| Debt to Capital, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | 0.44 | 0.48 | — | — | — | |
| Debt to Capital, Industry | ||||||
| Health Care | 0.42 | 0.44 | — | — | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Debt to capital = Total debt ÷ Total capital
= 611,619 ÷ 503,719 = 1.21
2 Click competitor name to see calculations.
The solvency profile exhibits significant volatility between 2018 and 2022, characterized by a period of deleveraging followed by a substantial and abrupt increase in debt obligations.
- Total Debt Trends
- A consistent upward trajectory in total debt is observed over the five-year period. Following an initial increase from 42,413 thousand USD in 2018 to 129,257 thousand USD in 2019, debt levels remained relatively stable through 2021. However, a sharp escalation occurred in 2022, with total debt rising to 611,619 thousand USD, representing a more than fourfold increase from the previous year.
- Total Capital Growth
- Total capital grew steadily from 68,347 thousand USD in 2018 to 503,719 thousand USD in 2022. This indicates a continuous expansion of the organization's funding base, although the rate of capital accumulation was significantly outpaced by debt acquisition in the final observed year.
- Debt to Capital Ratio Analysis
- The debt to capital ratio demonstrated high variability. A peak of 1.09 in 2019 indicated a period where debt obligations exceeded total capital. A corrective trend followed in 2020 and 2021, with the ratio declining to 0.54 and 0.37, respectively, suggesting an improvement in solvency and a reduction in relative leverage. This trend reversed sharply in 2022, as the ratio climbed to 1.21, signaling a heavily leveraged capital structure where debt once again exceeds total capital.
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Debt to Capital (including Operating Lease Liability)
Cytokinetics Inc., debt to capital (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Current portion of term loan | —) | —) | —) | —) | 2,607) | |
| Short-term finance lease liabilities | 1,000) | 500) | —) | —) | —) | |
| Term loan, net, excluding current portion | 63,810) | 47,367) | 46,209) | 45,052) | 39,806) | |
| Convertible notes, net | 545,808) | 95,471) | 89,504) | 84,205) | —) | |
| Long-term finance lease liabilities | 1,001) | 805) | —) | —) | —) | |
| Total debt | 611,619) | 144,143) | 135,713) | 129,257) | 42,413) | |
| Short-term operating lease liabilities | 12,829) | 14,863) | 2,785) | 4,616) | —) | |
| Long-term operating lease liabilities | 126,895) | 112,229) | 440) | 2,195) | —) | |
| Total debt (including operating lease liability) | 751,343) | 271,235) | 138,938) | 136,068) | 42,413) | |
| Stockholders’ equity (deficit) | (107,900) | 243,863) | 113,383) | (10,937) | 25,934) | |
| Total capital (including operating lease liability) | 643,443) | 515,098) | 252,321) | 125,131) | 68,347) | |
| Solvency Ratio | ||||||
| Debt to capital (including operating lease liability)1 | 1.17 | 0.53 | 0.55 | 1.09 | 0.62 | |
| Benchmarks | ||||||
| Debt to Capital (including Operating Lease Liability), Competitors2 | ||||||
| AbbVie Inc. | 0.79 | 0.83 | — | — | — | |
| Amgen Inc. | 0.92 | 0.84 | — | — | — | |
| Bristol-Myers Squibb Co. | 0.57 | 0.56 | — | — | — | |
| Danaher Corp. | 0.29 | 0.34 | — | — | — | |
| Eli Lilly & Co. | 0.61 | 0.66 | — | — | — | |
| Gilead Sciences Inc. | 0.55 | 0.56 | — | — | — | |
| Johnson & Johnson | 0.35 | 0.32 | — | — | — | |
| Merck & Co. Inc. | 0.41 | 0.48 | — | — | — | |
| Pfizer Inc. | 0.29 | 0.35 | — | — | — | |
| Regeneron Pharmaceuticals Inc. | 0.11 | 0.13 | — | — | — | |
| Thermo Fisher Scientific Inc. | 0.45 | 0.47 | — | — | — | |
| Vertex Pharmaceuticals Inc. | 0.06 | 0.09 | — | — | — | |
| Debt to Capital (including Operating Lease Liability), Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | 0.45 | 0.49 | — | — | — | |
| Debt to Capital (including Operating Lease Liability), Industry | ||||||
| Health Care | 0.43 | 0.45 | — | — | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Debt to capital (including operating lease liability) = Total debt (including operating lease liability) ÷ Total capital (including operating lease liability)
= 751,343 ÷ 643,443 = 1.17
2 Click competitor name to see calculations.
The financial trajectory between 2018 and 2022 indicates a substantial increase in leverage and a volatile solvency profile. Total debt, including operating lease liabilities, experienced aggressive growth, rising from 42,413 thousand US dollars in 2018 to 751,343 thousand US dollars by the end of 2022. This growth was particularly pronounced in the final year of the observed period, where debt levels nearly tripled.
- Total Debt and Capital Trends
- A consistent upward trend in total debt is evident throughout the five-year period. While total capital also expanded—increasing from 68,347 thousand US dollars in 2018 to 643,443 thousand US dollars in 2022—the pace of debt accumulation outstripped the growth of the total capital base in the latter stages of the analysis.
- Debt to Capital Ratio Volatility
- The debt to capital ratio exhibits significant fluctuations. Following a spike to 1.09 in 2019, the ratio declined and stabilized between 0.53 and 0.55 during 2020 and 2021, suggesting a temporary improvement in the balance sheet structure. However, this trend reversed sharply in 2022, with the ratio reaching a period high of 1.17.
- Solvency Implications
- The occurrence of a debt to capital ratio exceeding 1.0 in both 2019 and 2022 suggests periods where total debt exceeded total capital. Such a condition typically indicates a negative equity position, signaling an increased reliance on external financing and a heightened solvency risk profile by the conclusion of 2022.
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Debt to Assets
Cytokinetics Inc., debt to assets calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Current portion of term loan | —) | —) | —) | —) | 2,607) | |
| Short-term finance lease liabilities | 1,000) | 500) | —) | —) | —) | |
| Term loan, net, excluding current portion | 63,810) | 47,367) | 46,209) | 45,052) | 39,806) | |
| Convertible notes, net | 545,808) | 95,471) | 89,504) | 84,205) | —) | |
| Long-term finance lease liabilities | 1,001) | 805) | —) | —) | —) | |
| Total debt | 611,619) | 144,143) | 135,713) | 129,257) | 42,413) | |
| Total assets | 1,014,775) | 841,319) | 533,803) | 289,814) | 211,178) | |
| Solvency Ratio | ||||||
| Debt to assets1 | 0.60 | 0.17 | 0.25 | 0.45 | 0.20 | |
| Benchmarks | ||||||
| Debt to Assets, Competitors2 | ||||||
| AbbVie Inc. | 0.46 | 0.52 | — | — | — | |
| Amgen Inc. | 0.60 | 0.54 | — | — | — | |
| Bristol-Myers Squibb Co. | 0.41 | 0.41 | — | — | — | |
| Danaher Corp. | 0.23 | 0.27 | — | — | — | |
| Eli Lilly & Co. | 0.33 | 0.35 | — | — | — | |
| Gilead Sciences Inc. | 0.40 | 0.39 | — | — | — | |
| Johnson & Johnson | 0.21 | 0.19 | — | — | — | |
| Merck & Co. Inc. | 0.28 | 0.31 | — | — | — | |
| Pfizer Inc. | 0.18 | 0.21 | — | — | — | |
| Regeneron Pharmaceuticals Inc. | 0.09 | 0.11 | — | — | — | |
| Thermo Fisher Scientific Inc. | 0.35 | 0.37 | — | — | — | |
| Vertex Pharmaceuticals Inc. | 0.03 | 0.04 | — | — | — | |
| Debt to Assets, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | 0.31 | 0.32 | — | — | — | |
| Debt to Assets, Industry | ||||||
| Health Care | 0.28 | 0.30 | — | — | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Debt to assets = Total debt ÷ Total assets
= 611,619 ÷ 1,014,775 = 0.60
2 Click competitor name to see calculations.
The solvency profile exhibits significant volatility over the five-year period ending December 31, 2022. While the total asset base grew consistently, the debt-to-assets ratio fluctuated, reflecting varying periods of leverage and asset accumulation.
- Total Debt Trends
- Debt levels remained relatively stable between 2019 and 2021, ranging from US$ 129.3 million to US$ 144.1 million. However, a substantial increase occurred in 2022, where total debt rose to US$ 611.6 million, representing a more than fourfold increase from the previous year.
- Asset Expansion
- Total assets demonstrated a steady upward trajectory, growing from US$ 211.2 million in 2018 to US$ 1.01 billion by 2022. This continuous expansion acted as a counterweight to debt growth during the middle of the period, effectively reducing the overall solvency risk between 2020 and 2021.
- Debt to Assets Ratio Volatility
- The ratio experienced an initial spike to 0.45 in 2019, followed by a period of deleveraging that saw the ratio decline to a period low of 0.17 by 2021. This trend was reversed sharply in 2022, with the ratio climbing to 0.60, indicating that a significantly larger proportion of assets is now financed through debt compared to the preceding years.
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Debt to Assets (including Operating Lease Liability)
Cytokinetics Inc., debt to assets (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Current portion of term loan | —) | —) | —) | —) | 2,607) | |
| Short-term finance lease liabilities | 1,000) | 500) | —) | —) | —) | |
| Term loan, net, excluding current portion | 63,810) | 47,367) | 46,209) | 45,052) | 39,806) | |
| Convertible notes, net | 545,808) | 95,471) | 89,504) | 84,205) | —) | |
| Long-term finance lease liabilities | 1,001) | 805) | —) | —) | —) | |
| Total debt | 611,619) | 144,143) | 135,713) | 129,257) | 42,413) | |
| Short-term operating lease liabilities | 12,829) | 14,863) | 2,785) | 4,616) | —) | |
| Long-term operating lease liabilities | 126,895) | 112,229) | 440) | 2,195) | —) | |
| Total debt (including operating lease liability) | 751,343) | 271,235) | 138,938) | 136,068) | 42,413) | |
| Total assets | 1,014,775) | 841,319) | 533,803) | 289,814) | 211,178) | |
| Solvency Ratio | ||||||
| Debt to assets (including operating lease liability)1 | 0.74 | 0.32 | 0.26 | 0.47 | 0.20 | |
| Benchmarks | ||||||
| Debt to Assets (including Operating Lease Liability), Competitors2 | ||||||
| AbbVie Inc. | 0.46 | 0.53 | — | — | — | |
| Amgen Inc. | 0.61 | 0.56 | — | — | — | |
| Bristol-Myers Squibb Co. | 0.42 | 0.42 | — | — | — | |
| Danaher Corp. | 0.25 | 0.28 | — | — | — | |
| Eli Lilly & Co. | 0.34 | 0.36 | — | — | — | |
| Gilead Sciences Inc. | 0.41 | 0.40 | — | — | — | |
| Johnson & Johnson | 0.22 | 0.19 | — | — | — | |
| Merck & Co. Inc. | 0.29 | 0.33 | — | — | — | |
| Pfizer Inc. | 0.20 | 0.23 | — | — | — | |
| Regeneron Pharmaceuticals Inc. | 0.09 | 0.11 | — | — | — | |
| Thermo Fisher Scientific Inc. | 0.37 | 0.38 | — | — | — | |
| Vertex Pharmaceuticals Inc. | 0.05 | 0.07 | — | — | — | |
| Debt to Assets (including Operating Lease Liability), Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | 0.32 | 0.34 | — | — | — | |
| Debt to Assets (including Operating Lease Liability), Industry | ||||||
| Health Care | 0.29 | 0.31 | — | — | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Debt to assets (including operating lease liability) = Total debt (including operating lease liability) ÷ Total assets
= 751,343 ÷ 1,014,775 = 0.74
2 Click competitor name to see calculations.
The financial trajectory from 2018 to 2022 is characterized by a substantial expansion in both the asset base and total debt obligations, culminating in a significantly higher leverage position by the end of the period.
- Debt Accumulation Trends
- Total debt, including operating lease liabilities, experienced an exponential increase, rising from 42,413 thousand US dollars in 2018 to 751,343 thousand US dollars in 2022. The most aggressive growth occurred between 2021 and 2022, where debt nearly tripled in a single fiscal year.
- Asset Growth Patterns
- Total assets grew consistently throughout the five-year window, increasing from 211,178 thousand US dollars in 2018 to 1,014,775 thousand US dollars in 2022. This represents a steady expansion of the balance sheet, with significant growth observed between 2019 and 2021.
- Solvency Ratio Volatility
- The debt to assets ratio fluctuated between 2018 and 2021, starting at 0.20, peaking at 0.47 in 2019, and then receding to 0.26 in 2020 as asset growth temporarily outpaced debt acquisition. However, a sharp upward trend emerged in the final two years, with the ratio climbing to 0.32 in 2021 and reaching 0.74 by 2022.
- Leverage Implications
- The shift in the debt to assets ratio from 0.20 to 0.74 indicates a fundamental change in the capital structure. By 2022, a significantly larger proportion of the company's assets were financed through debt rather than equity, marking a transition toward a more leveraged financial position.
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Financial Leverage
Cytokinetics Inc., financial leverage calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Total assets | 1,014,775) | 841,319) | 533,803) | 289,814) | 211,178) | |
| Stockholders’ equity (deficit) | (107,900) | 243,863) | 113,383) | (10,937) | 25,934) | |
| Solvency Ratio | ||||||
| Financial leverage1 | — | 3.45 | 4.71 | — | 8.14 | |
| Benchmarks | ||||||
| Financial Leverage, Competitors2 | ||||||
| AbbVie Inc. | 8.04 | 9.51 | — | — | — | |
| Amgen Inc. | 17.79 | 9.13 | — | — | — | |
| Bristol-Myers Squibb Co. | 3.12 | 3.04 | — | — | — | |
| Danaher Corp. | 1.68 | 1.84 | — | — | — | |
| Eli Lilly & Co. | 4.65 | 5.44 | — | — | — | |
| Gilead Sciences Inc. | 2.97 | 3.23 | — | — | — | |
| Johnson & Johnson | 2.44 | 2.46 | — | — | — | |
| Merck & Co. Inc. | 2.37 | 2.77 | — | — | — | |
| Pfizer Inc. | 2.06 | 2.35 | — | — | — | |
| Regeneron Pharmaceuticals Inc. | 1.29 | 1.36 | — | — | — | |
| Thermo Fisher Scientific Inc. | 2.21 | 2.33 | — | — | — | |
| Vertex Pharmaceuticals Inc. | 1.30 | 1.33 | — | — | — | |
| Financial Leverage, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | 2.62 | 2.86 | — | — | — | |
| Financial Leverage, Industry | ||||||
| Health Care | 2.57 | 2.69 | — | — | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Financial leverage = Total assets ÷ Stockholders’ equity (deficit)
= 1,014,775 ÷ -107,900 = —
2 Click competitor name to see calculations.
A consistent expansion of the asset base is observed from 2018 through 2022, with total assets increasing from 211,178 thousand US$ to 1,014,775 thousand US$. This represents a substantial growth in the scale of the organization's resources over the five-year period. In contrast, stockholders' equity exhibited significant volatility, alternating between positive values and deficits.
- Asset Expansion and Resource Accumulation
- Total assets grew steadily each year, nearly quintupling between 2018 and 2022. The most significant leaps occurred between 2019 and 2021, indicating a period of rapid capital accumulation or investment in the entity's operational capacity.
- Stockholders' Equity Volatility
- The equity position shifted from a positive 25,934 thousand US$ in 2018 to a deficit of 10,937 thousand US$ in 2019. While a strong recovery was noted by 2021, reaching 243,863 thousand US$, the position deteriorated sharply by 2022, resulting in a deficit of 107,900 thousand US$. This pattern suggests instability in the net worth of the company over the analyzed timeframe.
- Financial Leverage Trends
- During periods of positive equity, a downward trend in financial leverage was observed, decreasing from 8.14 in 2018 to 3.45 in 2021. This indicates a reduction in the reliance on debt relative to equity to fund assets during those specific years. However, the leverage ratio is absent for 2019 and 2022, correlating directly with the periods where stockholders' equity entered a deficit, rendering the standard leverage calculation non-applicable.
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Interest Coverage
Cytokinetics Inc., interest coverage calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net loss | (388,955) | (215,314) | (127,290) | (121,692) | (106,289) | |
| Add: Income tax expense | —) | —) | —) | —) | —) | |
| Add: Interest expense | 19,414) | 16,440) | 15,963) | 6,623) | 3,797) | |
| Earnings before interest and tax (EBIT) | (369,541) | (198,874) | (111,327) | (115,069) | (102,492) | |
| Solvency Ratio | ||||||
| Interest coverage1 | -19.03 | -12.10 | -6.97 | -17.37 | -26.99 | |
| Benchmarks | ||||||
| Interest Coverage, Competitors2 | ||||||
| AbbVie Inc. | 7.04 | 6.36 | — | — | — | |
| Amgen Inc. | 6.22 | 6.60 | — | — | — | |
| Bristol-Myers Squibb Co. | 7.26 | 7.07 | — | — | — | |
| Danaher Corp. | 40.30 | 32.92 | — | — | — | |
| Eli Lilly & Co. | 21.53 | 19.12 | — | — | — | |
| Gilead Sciences Inc. | 7.22 | 9.27 | — | — | — | |
| Johnson & Johnson | 79.71 | 125.46 | — | — | — | |
| Merck & Co. Inc. | 18.09 | 18.22 | — | — | — | |
| Pfizer Inc. | 29.05 | 19.83 | — | — | — | |
| Regeneron Pharmaceuticals Inc. | 82.80 | 163.75 | — | — | — | |
| Thermo Fisher Scientific Inc. | 11.56 | 17.49 | — | — | — | |
| Vertex Pharmaceuticals Inc. | 78.23 | 45.40 | — | — | — | |
| Interest Coverage, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | 15.40 | 14.91 | — | — | — | |
| Interest Coverage, Industry | ||||||
| Health Care | 14.75 | 14.14 | — | — | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Interest coverage = EBIT ÷ Interest expense
= -369,541 ÷ 19,414 = -19.03
2 Click competitor name to see calculations.
The solvency profile of the organization is characterized by a persistent inability to service interest obligations through operating earnings. A sustained negative trajectory in earnings before interest and taxes (EBIT) combined with rising interest expenses has resulted in negative interest coverage ratios across the entire reporting period, indicating a reliance on external financing or cash reserves to meet debt obligations.
- Earnings Before Interest and Tax (EBIT)
- A significant and accelerating downward trend is observed in EBIT. From December 31, 2018, to December 31, 2022, operating losses expanded from US$ 102.5 million to US$ 369.5 million. The most pronounced increase in losses occurred between 2021 and 2022, where EBIT declined by approximately 86%.
- Interest Expense
- Interest costs have exhibited a consistent upward trend over the five-year period. Expenses grew from US$ 3.8 million in 2018 to US$ 19.4 million in 2022. This steady increase suggests an expansion of the debt burden or an increase in the cost of borrowing.
- Interest Coverage Ratio
- The interest coverage ratio remained negative throughout the period, confirming that operating profits are insufficient to cover interest payments. The ratio showed temporary improvement, becoming less negative and reaching a peak of -6.97 in 2020. However, this trend reversed in 2021 and 2022, with the ratio deteriorating to -19.03 by the end of 2022, reflecting the disproportionate increase in operating losses relative to interest expenses.
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Fixed Charge Coverage
Cytokinetics Inc., fixed charge coverage calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net loss | (388,955) | (215,314) | (127,290) | (121,692) | (106,289) | |
| Add: Income tax expense | —) | —) | —) | —) | —) | |
| Add: Interest expense | 19,414) | 16,440) | 15,963) | 6,623) | 3,797) | |
| Earnings before interest and tax (EBIT) | (369,541) | (198,874) | (111,327) | (115,069) | (102,492) | |
| Add: Rent expense for operating and finance leases | 21,600) | 23,100) | 5,700) | 5,100) | 5,000) | |
| Earnings before fixed charges and tax | (347,941) | (175,774) | (105,627) | (109,969) | (97,492) | |
| Interest expense | 19,414) | 16,440) | 15,963) | 6,623) | 3,797) | |
| Rent expense for operating and finance leases | 21,600) | 23,100) | 5,700) | 5,100) | 5,000) | |
| Fixed charges | 41,014) | 39,540) | 21,663) | 11,723) | 8,797) | |
| Solvency Ratio | ||||||
| Fixed charge coverage1 | -8.48 | -4.45 | -4.88 | -9.38 | -11.08 | |
| Benchmarks | ||||||
| Fixed Charge Coverage, Competitors2 | ||||||
| AbbVie Inc. | 6.54 | 5.90 | — | — | — | |
| Amgen Inc. | 5.52 | 5.67 | — | — | — | |
| Bristol-Myers Squibb Co. | 6.30 | 6.01 | — | — | — | |
| Danaher Corp. | 13.41 | 10.85 | — | — | — | |
| Eli Lilly & Co. | 15.17 | 13.33 | — | — | — | |
| Gilead Sciences Inc. | 6.30 | 8.15 | — | — | — | |
| Johnson & Johnson | 38.72 | 48.16 | — | — | — | |
| Merck & Co. Inc. | 13.69 | 13.08 | — | — | — | |
| Pfizer Inc. | 18.79 | 14.22 | — | — | — | |
| Regeneron Pharmaceuticals Inc. | 68.67 | 138.96 | — | — | — | |
| Thermo Fisher Scientific Inc. | 8.12 | 12.19 | — | — | — | |
| Vertex Pharmaceuticals Inc. | 47.97 | 29.62 | — | — | — | |
| Fixed Charge Coverage, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | 11.85 | 11.49 | — | — | — | |
| Fixed Charge Coverage, Industry | ||||||
| Health Care | 10.95 | 10.48 | — | — | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Fixed charge coverage = Earnings before fixed charges and tax ÷ Fixed charges
= -347,941 ÷ 41,014 = -8.48
2 Click competitor name to see calculations.
An analysis of the solvency metrics from 2018 through 2022 reveals a consistent inability to generate earnings sufficient to meet fixed obligations. The financial trajectory is characterized by expanding operating losses and a steady increase in fixed costs, resulting in negative coverage ratios throughout the entire period.
- Earnings Before Fixed Charges and Tax
- A significant downward trend in earnings is observed, with losses increasing from -97,492 thousand US dollars in 2018 to -347,941 thousand US dollars in 2022. The deterioration accelerated sharply between 2021 and 2022, during which the deficit nearly doubled, indicating a substantial increase in operating expenditures.
- Fixed Charges
- Fixed charges exhibited a consistent upward progression, rising from 8,797 thousand US dollars in 2018 to 41,014 thousand US dollars in 2022. This represents a nearly five-fold increase in the company's mandatory financial obligations over the five-year window.
- Fixed Charge Coverage Ratio
- The fixed charge coverage ratio remained negative for the duration of the analyzed period, confirming that operating earnings were inadequate to cover fixed charges. Although the ratio moved closer to a break-even point between 2018 (-11.08) and 2021 (-4.45), this marginal improvement was reversed in 2022, when the ratio declined to -8.48. This shift reflects the combined impact of widening operating losses and higher fixed costs.
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