Gilead Sciences Inc. (NASDAQ:GILD)

Return on Assets (ROA)

The ROA demonstrates significant volatility throughout the observed periods. Starting with a low and unreported value in early 2020, the ratio increases steadily from 0.18% in March 2021 to a peak of 11.02% in December 2020, indicating improved asset efficiency during the latter half of 2020. Subsequently, ROA declines gradually across 2022, reaching its lowest points of 0.23% in September 2024 and 0.81% in December 2024, before rebounding sharply to 10.57% by March 2025. These fluctuations suggest periods of varying operational efficiency or asset utilization.

Financial Leverage

The financial leverage ratio exhibits a general declining trend from 2.71 in March 2020 to a low of 2.72 in June 2024, with minor fluctuations. Notably, leverage peaks to 3.76 in December 2020 and falls afterward, stabilizing near the range of 2.9 to 3.2 throughout late 2021 to early 2025. This pattern indicates a relative reduction in reliance on debt financing over time, contributing to potentially lower financial risk.

Return on Equity (ROE)

ROE shows pronounced volatility resembling that of ROA but with higher magnitude levels. From minimal values below 1% in early 2021, it sharply escalates to a peak of 34.44% in December 2020. Afterward, ROE declines progressively through 2022 and 2023, hitting lows near 0.69% in September 2024, before experiencing a strong recovery to 31.13% by March 2025. This trend underscores fluctuations in profitability attributable to equity, potentially reflecting operational performance changes and capital structure impacts.

The data reveals notable fluctuations in key financial ratios over multiple quarters, which reflect changes in profitability, efficiency, and financial structure.

Net Profit Margin

The net profit margin exhibits considerable variability. Starting from low values around 0.5% in early 2020, it rises sharply to peak values above 20% throughout 2021 and into early 2023. This indicates periods of strong profitability. However, there is a pronounced decline in the first half of 2024, with margins dropping below 4%, before rebounding to over 20% by early 2025. Such volatility may suggest variability in costs, revenues, or extraordinary items affecting net income.

Asset Turnover

Asset turnover remains relatively stable and shows a modest upward trend overall. It begins at approximately 0.36 in early 2020, gradually increases to around 0.44 through 2022 and early 2023, and then rises further to about 0.5 from mid-2024 onward. This improvement indicates enhanced efficiency in using assets to generate revenues over the period.

Financial Leverage

Financial leverage ratios demonstrate some fluctuations but mostly maintain a range between 2.7 and 3.8. Higher leverage in 2020 and early 2021 peaks near 3.7, followed by a decline below 3.0 in parts of 2022 and 2023, suggesting reduction in reliance on debt or increased equity. By 2024, leverage again varies around 3.0, pointing to a relatively stable capital structure in the medium term.

Return on Equity (ROE)

The ROE data broadly tracks net profit margin trends but with amplified changes due to leverage effects. From very low early values in 2020, ROE increases significantly to above 30% by late 2021, indicating strong returns to shareholders. It then declines gradually through 2022 and early 2023, before dropping sharply in early and mid-2024 to under 6%. A strong recovery to over 30% is noted again by early 2025. This pattern implies periods of high profitability and effective equity management interspersed with episodes of reduced returns.

Overall, the company experiences substantial cyclical fluctuations in profitability metrics while demonstrating steady improvement in asset utilization. Financial leverage remains moderately stable, suggesting consistent capital management practices. The marked swings in net profit margin and ROE warrant further investigation into operational factors or market conditions influencing earnings volatility during the observed timeline.

The analysis of the quarterly financial ratios over the illustrated periods reveals several notable trends regarding profitability, operational efficiency, and leverage.

Tax Burden

The tax burden ratio exhibited initially low or absent data before showing values beginning in early 2021. From that point, it remained relatively stable, fluctuating mostly between 0.7 and 0.8 through 2023, indicating a consistent effective tax rate during that time. However, in 2024, the ratio exhibited increased volatility, dropping to as low as 0.44 and 0.67 in some quarters before rising again to 0.87 by early 2025, suggesting variability in tax expense relative to earnings.

Interest Burden

The interest burden ratio demonstrates improvement over time with increased values indicating lower interest expenses relative to earnings before interest and taxes. From early 2021 to late 2023, it generally ranged from 0.83 to 0.9, showing strong ability to manage interest costs. In 2024, a sharp decline was observed in some quarters (notably 0.16 in Q3), indicating periods of higher interest impact, although by early 2025 it rebounded significantly to 0.87.

EBIT Margin

The EBIT margin showed an overall upward trend from 2020 through 2021, peaking around 38.22% in Q4 2020 and stabilizing between approximately 20% to 30% through 2023. This reflects a strong operational profitability during these years. The margin, however, fell significantly in 2024, dropping below 10% and reaching a low near 4.16% in Q3 2024, indicating considerable pressure on operating profit margins before recovering to 27.32% by Q1 2025.

Asset Turnover

This ratio showed a steady gradual increase across all quarters, rising from about 0.36 in early 2020 to about 0.52 in mid-2024, suggesting improved efficiency in utilizing assets to generate revenue. There is a minor softness towards the end of 2024 but overall this metric indicates enhanced operational efficiency over the period.

Financial Leverage

Financial leverage increased notably from 2.71 in early 2020, peaking near 3.76 in late 2020, but then progressively trended downwards to about 2.8 by mid-2023. From mid-2023 into 2025, it fluctuated moderately between approximately 2.7 and 3.2, reflecting relatively stable use of borrowed funds to finance equity with some volatility but no extreme changes.

Return on Equity (ROE)

ROE experienced considerable volatility during the period. Starting from low or absent values in early 2020, it sharply improved through 2020 and peaked at 34.44% in Q4 2020. Subsequently, it moderated but remained generally strong through 2023 with values mostly above 20%. Like EBIT margin, ROE fell sharply in 2024 to single digits and as low as 0.69%, likely reflecting pressure on profitability and/or increased costs during that period. By early 2025, ROE rebounded robustly to 31.13%, signaling recovery in shareholder returns.

In summary, the data shows that the company experienced strong profitability and efficient asset use during 2020 to 2023, accompanied by moderate financial leverage and manageable interest burden. However, 2024 was a challenging year with noticeable declines in profitability ratios and increased volatility in tax and interest burdens. Despite these challenges, the early 2025 figures suggest a recovery trajectory in both operational performance and shareholder returns.

Net Profit Margin

The net profit margin displayed a notable increase starting in the first quarter of 2021, rising from 0.51% to a peak of 27.21% by the end of 2021. Following this peak, the margin gradually declined throughout 2022, reaching a low of 12.44% in the fourth quarter. However, profitability improved again in 2023, with the net profit margin rising to above 20%, maintaining relative stability through the first quarter of 2024. There is a sharp decline observed in the second and third quarters of 2024, dropping below 4%, but the margin recovers back to about 20.87% by the first quarter of 2025. This pattern suggests periods of volatility but also resilience in profitability over the observed timeframe.

Asset Turnover

The asset turnover ratio shows a consistent upward trend from early 2021 onward. Beginning at approximately 0.36 in the first quarter of 2021, it increased steadily to reach 0.44 by the end of 2022. This metric continued to rise in 2023 and into 2024, peaking at 0.52 mid-2024. Toward the end of the period in early 2025, the ratio slightly decreased to 0.51. Overall, this indicates a gradual improvement in the efficiency with which the company utilized its assets to generate revenue over the analyzed quarters.

Return on Assets (ROA)

ROA experienced a significant improvement from the first quarter of 2021, moving from 0.18% to a high point of 11.02% in the last quarter of that year. The subsequent quarters through 2022 saw a declining trend, with ROA falling to approximately 5.33% by year-end. Throughout 2023, however, the ratio recovered, stabilizing around the 8-9% range. A sharp reduction occurred in the early quarters of 2024, with ROA dropping below 2%, before rebounding sharply to 10.57% by the first quarter of 2025. This indicates a general pattern of initial growth, mid-term contraction, and recent recovery in asset profitability.

The analysis of the quarterly financial ratios over the observed periods indicates several notable trends in the company's profitability, operational efficiency, and financial burden management.

Tax Burden

The tax burden ratio begins at a low level of 0.07 in March 2021, rising sharply to approximately 0.75-0.79 in late 2021 and early 2022, indicating a higher proportion of earnings taxed during this period. Subsequently, this ratio remains relatively stable around 0.74 to 0.82 through 2023, before dropping to a low of 0.44 in mid-2024. Toward the end of the period, there is a recovery to 0.87 by March 2025. This fluctuation suggests variability in tax expense impact on net income across quarters.

Interest Burden

The interest burden ratio is around 0.63 in early 2021 and improves to approximately 0.85-0.90 for much of 2021 and early 2023, reflecting controlled interest expenses relative to earnings before interest and taxes. A noticeable decline appears around mid-2024, where the ratio drops to 0.16, indicating increased interest expenses or reduced operating income. Recovery is seen by late 2024 into early 2025 with a ratio near 0.87, suggesting restored earnings capacity after interest costs.

EBIT Margin

The EBIT margin demonstrates a marked improvement beginning at 11.03% in March 2021, surging to a peak of 38.22% by the end of 2020 and maintaining elevated levels above 20% through much of 2023. However, a sharp decline occurs during 2024 with single-digit margins as low as 4.16%, before rebounding to 27.32% by March 2025. This pattern suggests periods of both strong operational profitability and significant contraction within the most recent year.

Asset Turnover

The asset turnover ratio exhibits a consistent upward trend from approximately 0.36 in early 2021 to over 0.50 by mid-to-late 2024. This steadily increasing ratio reflects improved efficiency in utilizing assets to generate revenue throughout the observed period.

Return on Assets (ROA)

The ROA starts at a minimal 0.18% in early 2021 and escalates to a peak around 11% by the end of 2020 and early 2021, linked to the high EBIT margins previously noted. Following this, ROA maintains moderate levels close to 5-9% through 2023, before experiencing a substantial drop below 2% during 2024. The figure recovers sharply to above 10% by the first quarter of 2025. These fluctuations indicate variability in overall asset profitability corresponding to operational performance and expense impacts.

Tax Burden Ratio

The tax burden ratio shows a notable increase from 0.07 in March 2021 to a peak of around 0.79 towards the end of 2021. For most of 2022 and early 2023, it remains relatively stable between 0.73 and 0.82. However, a marked decline is observable in mid-2024, dropping to a low of 0.44, followed by some recovery but exhibiting volatility by the end of 2024 and the first quarter of 2025, reaching 0.87.

Interest Burden Ratio

The interest burden ratio starts from 0.63 in the first observable quarter and increases steadily, reaching values close to 0.9 throughout 2021 and into early 2023. Mid-2023 to mid-2024 sees a significant drop to as low as 0.16, indicative of increased interest expense or reduced EBIT. This is followed by a partial recovery towards the end of 2024 and early 2025, again approaching 0.87.

EBIT Margin

The EBIT margin exhibits a strong upward trend from March 2021, increasing from 11.03% to a peak above 38% by the end of 2020, then settling in the range of about 20% to 30% for 2022 into early 2023. However, a sharp decline occurs starting mid-2023, dropping below 10% in 2024, with a low point of approximately 4.16%. A recovery to around 27.32% is visible by Q1 2025.

Net Profit Margin

Net profit margin trends generally align with EBIT margin patterns but are consistently lower, reflecting the impact of taxes and interest. The margin rises from a low 0.51% in early 2021 to a peak near 27.21% by the end of 2020. Subsequently, it remains between about 12% and 21% through early 2023. Following a steep decline mid-2023 to mid-2024, hitting lows near 0.45%, it rebounds sharply to 20.87% by Q1 2025.

Overall Observations

The financial ratios reflect periods of high profitability and operating efficiency through 2020 and early 2023, followed by a pronounced downturn in mid-2023 and 2024. This downtrend affects all key profitability metrics and burdens, suggesting challenges such as increased costs or lower earnings before interest and taxes. The subsequent recovery by Q1 2025 indicates potential operational improvements or cost control measures taking effect. The volatility in tax and interest burdens further suggests changing financial or tax strategies impacting net income outcomes.