Gilead Sciences Inc. (NASDAQ:GILD)

The analysis of the financial ratios over the reported periods reveals several notable trends and fluctuations in the company's leverage and coverage metrics.

Debt to Equity Ratio

This ratio demonstrated a marked increase from 1.09 in March 2020, peaking at 1.73 in December 2020. Subsequently, it generally declined, reaching a low of 1.09 again by December 2023. However, a moderate upward trend is apparent thereafter, rising again to about 1.38 in December 2024 before slightly decreasing towards mid-2025. This pattern suggests an initial increase in debt financing relative to equity, followed by deleveraging and then some renewed leverage in later periods.

Debt to Capital Ratio

The debt to capital ratio followed a similar pattern to the debt to equity ratio, starting around 0.52 in early 2020 and increasing steadily to 0.63 by September and December 2020. It then declined gradually to about 0.52 by December 2023, indicating reduced reliance on debt within total capital. From 2024 onwards, there is a slight increase followed by stabilization around the mid-0.50s, reflecting a moderate and relatively stable use of debt in capital structure during these periods.

Debt to Assets Ratio

The debt to assets ratio rose from 0.40 in Q1 2020 to a high around 0.48 in September 2020, then declined to approximately 0.39 by the end of 2021. Afterward, it remained fairly stable around 0.40 through 2023. A mild increase is seen in 2024, fluctuating near 0.44 to 0.45, suggesting that debt represented a significant and consistent share of total assets, with slight variation in recent quarters.

Financial Leverage Ratio

The financial leverage ratio increased from 2.71 in Q1 2020 to a peak of 3.76 at year-end 2020, indicating higher reliance on debt to finance assets. A decreasing trend followed, with the ratio falling to about 2.72 by December 2023. The ratio then increased again to around 3.21 in early 2024 before stabilizing close to 2.8–3.0 in subsequent quarters, indicating fluctuating use of leverage but generally a moderate level of financial leverage over the full period.

Interest Coverage Ratio

Interest coverage data begins from September 2020 at 2.7 times, increasing significantly to a peak of 10.06 times by June 2021 before gradually declining to roughly 8.27 by the end of 2023. A sharp decrease to as low as 1.18 times was noted in late 2024, signaling weakening capacity to cover interest expenses during that period, followed by a recovery towards 8.2 times by mid-2025. This suggests periods of strong earnings relative to interest expense interrupted by temporary strain before improvement.

Overall, the data indicate a peak in leverage metrics around late 2020, followed by a general deleveraging phase through 2023. The company maintained stable but moderately high debt levels relative to equity, capital, and assets. Financial leverage exhibited a similar cyclical pattern. Interest coverage improved notably in 2021 but later experienced volatility with a significant dip in 2024, though it rebounded by mid-2025. These trends reflect dynamic shifts in the company's capital structure management and interest expense coverage capabilities over the analyzed periods.

The analysis of the financial data reveals several notable trends in the company's capital structure over the referenced periods.

Total Debt

The total debt exhibits fluctuations over time. Initially, from March 31, 2020, to December 31, 2020, there is a rising trend, increasing from approximately $24.1 billion to $31.4 billion. Following this peak, total debt declines gradually through 2021 and 2022, reaching around $25.2 billion by December 31, 2022. In subsequent periods, the debt level remains relatively stable with minor fluctuations, maintaining levels between approximately $24.9 billion and $26.7 billion up to June 30, 2025.

Total Stockholders’ Equity

Stockholders' equity shows notable variability. From $22.1 billion in March 2020, equity decreases sharply to about $17.4 billion by September 30, 2020. It then rebounds and generally trends upwards through 2021, peaking around $22.8 billion in June 2023. Subsequently, there is a decline in equity throughout 2023 into early 2024, reaching a low near $17.5 billion in March 2024. From this low, equity recovers gradually towards the last date observed with levels rising back to about $19.7 billion by mid-2025.

Debt to Equity Ratio

The debt to equity ratio mirrors the movements in debt and equity, reflecting changes in leverage. The ratio rises markedly from 1.09 in early 2020 to a peak of 1.73 by the end of 2020, indicating increased leverage driven by a rise in debt and a decline in equity. After this peak, the ratio declines steadily through 2021 and 2022, reducing leverage to approximately 1.19 by the end of 2022. In 2023 and early 2024, the ratio fluctuates moderately, with another uptick observed in early 2024 reaching as high as 1.44 before slightly decreasing again by mid-2025 to near 1.27. This pattern suggests a cyclical leverage adjustment, possibly in response to changes in financing or asset valuation strategies.

In summary, the data reflects a period of increased leverage during 2020 followed by deleveraging and stabilization in subsequent years. Stockholders' equity experienced volatility with periods of significant decline and recovery. The debt to equity ratio changes align with these trends, signaling dynamic management of capital structure throughout the periods analyzed.

The financial data reveals several noteworthy trends in the capital structure over the observed periods.

Total Debt (US$ in millions)

Total debt started at 24,097 million USD as of March 31, 2020, and demonstrated a general increase reaching a peak of approximately 31,402 million USD by December 31, 2020. Subsequently, debt levels gradually declined through 2021 and most of 2022, stabilizing around the 25,000 million USD range towards late 2022 and early 2023. From mid-2023, debt figures remained relatively stable with slight fluctuations, before dipping to 23,249 million USD by June 30, 2024, and again increasing towards the end of the time series, reaching nearly 26,711 million USD in December 2024, and around 24,946 million USD by June 30, 2025.

Total Capital (US$ in millions)

Total capital exhibited some variability throughout the periods, beginning at 46,164 million USD at the start of 2020, falling to a low point near 41,631 million USD in mid-2024. There was an initial rise observed through late 2020 up to nearly 49,878 million USD by mid-2021. However, from mid-2021 onward, total capital showed a declining trend overall, with some recovery in late 2023 and early 2024, reaching around 46,114 million USD by June 30, 2025.

Debt to Capital Ratio

The ratio of debt to total capital started at 0.52 and increased to its highest point of 0.63 during the third and fourth quarters of 2020, indicating a greater proportion of debt financing in that period. Afterward, the ratio steadily declined and stabilized between 0.53 and 0.56 across 2021 and early 2023. A notable rise occurred in early 2024, with the ratio climbing back to approximately 0.59, before fluctuating slightly but remaining near the 0.56 to 0.58 range by mid-2025.

In summary, the company experienced increased leverage during 2020, with the debt-to-capital ratio peaking around late 2020. This was followed by a gradual deleveraging phase through 2021 and 2022, as total debt decreased and the capital base showed some weakening. The debt-to-capital ratio remained relatively stable in the mid-0.5 range for much of 2023, before rising again modestly in 2024. The fluctuations in both total debt and total capital during 2024 and early 2025 suggest changes in financing strategy or capital structure adjustments, leading to a slight rebound in leverage ratios near historical highs seen during the early pandemic period.

The analysis of the financial data over the reported periods reveals several key trends in the company's debt and asset management. Total debt exhibits fluctuations with a notable rise from March 2020 to December 2020, peaking at 31,402 million US dollars, followed by a gradual decline through 2023. However, there is an observable increase again starting mid-2024, reaching above 26,700 million US dollars by June 2025.

Total assets similarly demonstrate volatility. The asset value increased significantly from March 2020 to December 2020, reaching over 68,000 million US dollars, before declining steadily through 2024. The lowest reported asset value appears around mid-2024 at approximately 53,579 million US dollars, with some recovery by mid-2025, though still below earlier peak levels.

The debt-to-assets ratio indicates the proportion of debt relative to total assets, fluctuating between 0.39 and 0.48 throughout the periods. Initially, the ratio rose from 0.40 in March 2020 to a high of 0.48 by September 2020, indicating an increase in leverage. This ratio then trended downward, stabilizing around 0.40 during much of 2021 and 2022, suggesting improved balance sheet strength. However, the ratio increases again in 2024, reaching highs around 0.45, which implies a higher leverage stance in recent periods.

Total Debt

Following an increase in 2020, total debt saw a decline between 2021 and early 2024. A notable upward movement occurred again from mid-2024 onwards.

Total Assets

Total assets peaked by the end of 2020, then decreased through 2024 with a slight recovery into 2025. This suggests potential asset disposals, depreciation effects, or other balance sheet adjustments affecting asset size.

Debt to Assets Ratio

The leverage ratio increased sharply in 2020, moderately decreased, and stabilized around 0.40 during 2021–2023, then rose once more in 2024. This pattern reflects shifts in financial leverage concurrent with changes in debt and asset valuations, indicating a varying risk profile over time.

Overall, the company maintained a level of moderate leverage with adjustments correlating to asset and liability changes. The increase in debt relative to assets in 2024 suggests a strategic shift or response to external conditions affecting capital structure. Careful monitoring of leverage and asset trends is advisable to assess ongoing financial stability and risk exposure.

The analysis of the quarterly financial data over the indicated periods reveals several notable trends related to the total assets, total stockholders’ equity, and financial leverage ratios.

Total Assets

The total assets exhibit some volatility throughout the timeline. Starting from a high point at approximately US$59.7 billion in March 2020, assets declined to around US$55.9 billion by June 2020, then increased to peak near US$68.4 billion by December 2020. Following this peak, total assets experienced a gradual decline into early 2024, reaching a low around US$53.6 billion in June 2024. The latter part of the series shows a modest recovery, with assets rising again to roughly US$58.7 billion by December 2024, yet slightly declining after to about US$55.7 billion by June 2025.

Total Gilead Stockholders’ Equity

The stockholders’ equity began at approximately US$22.1 billion in March 2020 and then decreased sharply to approximately US$18 billion by June 2020. This was followed by a modest decline continuing to roughly US$17.4 billion in September 2020. From late 2020 through the end of 2021, equity grew steadily, peaking near US$22.8 billion by December 2021. Thereafter, equity generally fluctuated with a downward trend through the first half of 2024, dropping to approximately US$17.5 billion by March 2024. In the final periods, equity stabilized and increased slightly, reaching around US$19.7 billion by June 2025.

Financial Leverage Ratio

The financial leverage ratio indicated a rising trend from 2.71 in March 2020 to a high of 3.76 by December 2020, reflecting an increased reliance on debt relative to equity during this period. Afterward, leverage generally declined to approximately 2.8 by December 2023, suggesting a reduction in financial risk or increased equity financing. However, leverage showed variability thereafter, peaking again at 3.21 in March 2024 before moderating towards 2.83 by mid-2025. This fluctuation points to periods of both increased and decreased debt usage relative to equity.

In summary, total assets and stockholders’ equity demonstrated significant fluctuations throughout the period, with the most considerable growth occurring toward the end of 2020 and again toward the end of 2024. Financial leverage followed a pattern of increasing risk exposure in 2020, followed by a gradual deleveraging through 2023, though persisting volatility in leverage ratios indicates ongoing adjustments in the company's capital structure over time.

The analysis of the quarterly financial data reveals notable fluctuations in earnings before interest and tax (EBIT), interest expense, and the resulting interest coverage ratios over the observed periods.

Earnings before interest and tax (EBIT)

The EBIT figures demonstrate significant volatility throughout the quarters. Initially, EBIT was positive at 2,244 million USD in March 2020 but plummeted sharply to a negative 2,733 million USD in June 2020. Subsequently, it recovered to positive values in the following quarters, with peaks such as 3,688 million USD in September 2021. However, inconsistencies persisted, including a notable decline to negative 4,232 million USD in March 2024. Overall, while the EBIT shows a general capacity for recovery after intensive drops, it remains highly variable reflecting possible operational or external challenges impacting profitability intermittently.

Interest Expense

Interest expense remained relatively stable over the entire period, fluctuating narrowly between 226 million USD and 267 million USD. This consistency indicates controlled and predictable financing costs, with no significant spikes or reductions, suggesting stable debt levels or fixed interest terms during the reported intervals.

Interest Coverage Ratio

The interest coverage ratio, which indicates the ability to meet interest obligations from EBIT, reflects the volatility in EBIT. Starting from missing data in early periods, the ratio climbed from 2.7 to as high as 10.06 by December 2021, corresponding to improved EBIT figures. Afterward, a notable decrease occurred, reaching a low point of 1.18 in September 2024, when EBIT turned negative or marginal. This ratio generally remained above 1, indicating an ability to cover interest expenses most quarters, but the significant variations suggest periods of financial stress or reduced earnings capacity affecting debt servicing.

In summary, the company exhibits considerable swings in operational profitability (EBIT), while maintaining relatively constant interest expenses. The fluctuation in the interest coverage ratio underscores the sensitivity of debt service capacity to earnings volatility. Attention to stabilizing EBIT and managing operational risks may be prudent to ensure consistent financial health and adequate coverage of interest obligations.