Gilead Sciences Inc. (NASDAQ:GILD)

Debt to Equity Ratio Trends

The debt to equity ratio exhibited a downward trend from 1.73 in 2020 to 1.09 in 2023, indicating a gradual reduction in financial leverage relative to equity during this period. However, in 2024, this ratio increased to 1.38, signaling a reversal and suggesting a rise in debt relative to equity.

Debt to Equity Ratio Including Operating Lease Liability

This ratio followed a similar pattern to the standard debt to equity ratio, starting at 1.76 in 2020 and declining to 1.12 in 2023 before rising to 1.41 in 2024. The inclusion of operating lease liabilities slightly increases the ratio but does not materially alter the observed trend.

Debt to Capital Ratio Trends

The debt to capital ratio decreased steadily from 0.63 in 2020 to 0.52 in 2023, indicating improved capital structure with less reliance on debt. By 2024, the ratio increased to 0.58, again reflecting a moderate increase in debt relative to total capital.

Debt to Capital Including Operating Lease Liability

Including operating lease liabilities, the debt to capital ratio trends mirrored those without leases, moving from 0.64 in 2020 down to 0.53 in 2023, followed by an uptick to 0.59 in 2024. These figures confirm that lease obligations contribute marginally to the overall debt profile but conform to the same general trend.

Debt to Assets Ratio

The debt to assets ratio declined from 0.46 in 2020 to 0.40 in 2021 and remained stable through 2023. In 2024, it increased back to 0.45, aligning with other indicators of increased debt levels relative to assets.

Debt to Assets Including Operating Lease Liability

Including operating leases, this ratio also showed a decline from 0.47 in 2020 to 0.41 in 2023, with a subsequent rise to 0.46 in 2024. The inclusion of operating leases modestly elevates this ratio but maintains the same general pattern.

Financial Leverage

Financial leverage decreased consistently from 3.76 in 2020 to 2.72 in 2023, indicating a reduction in total assets funded by equity. Nonetheless, there was a rebound to 3.05 in 2024, suggesting an increase in leverage relative to equity again.

Interest Coverage Ratio

Interest coverage showed significant improvement from 2.7 in 2020 to a high of 9.27 in 2021, before gradually declining to 8.27 in 2023. In 2024, the ratio sharply dropped to 1.71, indicating a considerable reduction in the company's ability to cover interest expenses, which might reflect increased interest costs or reduced earnings.

Fixed Charge Coverage Ratio

The fixed charge coverage ratio follows the same trajectory as interest coverage, rising from 2.45 in 2020 to 8.15 in 2021, declining slightly to 7.18 in 2023, and then falling steeply to 1.61 in 2024. This signals a similar decline in the capacity to meet fixed financial obligations in the most recent year.

Summary of Financial Trends

Overall, the financial ratios depict a period of deleveraging from 2020 through 2023, characterized by a reduction in debt relative to equity, assets, and capital, as well as improving coverage ratios indicating stronger earnings relative to interest and fixed charges. The year 2024 marks a reversal of these trends, with increased leverage ratios and significantly weakened interest and fixed charge coverage ratios, implying greater financial risk and potentially reduced financial flexibility.

Total Debt

The total debt shows a general decreasing trend from 2020 through 2023, dropping from $31,402 million in 2020 to $24,987 million in 2023. However, in 2024, there is a noticeable increase to $26,711 million. This indicates a reduction in debt levels over the initial four years followed by a moderate rise in the fifth year.

Total Stockholders’ Equity

The total stockholders’ equity exhibits overall growth from 2020 to 2023, increasing from $18,202 million to a peak of $22,833 million. In 2024, equity declines significantly to $19,330 million. This pattern reflects expansion in the equity base over four years, followed by a contraction within the latest period.

Debt to Equity Ratio

The debt to equity ratio demonstrates a consistent downward trend from 1.73 in 2020 to 1.09 in 2023, indicating an improvement in capital structure with less reliance on debt relative to equity. However, in 2024, the ratio increases to 1.38, suggesting a relative rise in leverage compared to the previous year.

Overall, the data reflects a period of deleveraging and strengthening equity base from 2020 through 2023, enhancing financial stability. The reversal seen in 2024, with increased debt, decreased equity, and a higher debt to equity ratio, may imply a strategic shift towards more leverage or reflect operational or market pressures affecting the company’s capital structure in that year.

Total debt (including operating lease liability)

The total debt shows a decreasing trend from 32,117 million USD in 2020 to 25,658 million USD in 2023, reflecting a reduction in debt levels over these years. However, in 2024, the debt increased slightly to 27,322 million USD, indicating a moderate reversal in the previous declining trend.

Total stockholders’ equity

Stockholders’ equity generally increased from 18,202 million USD in 2020 to a peak of 22,833 million USD in 2023. This growth suggests an improvement in the company's net asset position over several years. Nonetheless, in 2024, equity declined to 19,330 million USD, representing a notable decrease compared to the prior year and a potential weakening of the equity base.

Debt to equity ratio (including operating lease liability)

The debt to equity ratio decreased steadily from 1.76 in 2020 to 1.12 in 2023, which indicates an improving capital structure with less reliance on debt relative to equity. In 2024, however, the ratio increased to 1.41, signaling a shift towards higher leverage relative to equity. This change corresponds with the simultaneous rise in debt and decline in equity observed for that year.

The financial data over the analyzed periods reveal trends related to the company's debt management and capital structure.

Total Debt

The total debt exhibits a decreasing trend from 31,402 million US dollars at the end of 2020 to 24,987 million at the end of 2023, indicating a concerted effort in reducing debt levels over these years. However, in 2024, there is an uptick to 26,711 million, suggesting a partial reversal or new borrowing activity.

Total Capital

Total capital shows a general decline from 49,604 million US dollars in 2020 to 46,041 million in 2024, with some fluctuations. After a drop to 46,470 million in 2022, it slightly recovered to 47,820 million in 2023 but declined again in 2024. This indicates some variability but overall downward pressure on the capital base.

Debt to Capital Ratio

The debt to capital ratio declines steadily from 0.63 in 2020 to 0.52 in 2023, reflecting improved leverage and a stronger capital position relative to debt. This declining trend shows an enhancement in the balance between debt and equity financing. However, this trend reverses in 2024, where the ratio rises to 0.58, consistent with the observed increase in total debt and decrease in total capital.

In summary, the company demonstrated a consistent reduction in debt and leverage from 2020 through 2023, contributing to improved financial stability. Nevertheless, the data for 2024 indicate a shift, with increasing debt levels and leverage, potentially reflecting strategic changes in financing or operational needs.

Total Debt (Including Operating Lease Liability)

The total debt decreased consistently from 32,117 million US dollars at the end of 2020 to 25,658 million US dollars by the end of 2023, reflecting a reduction in the company’s leverage over this period. However, in 2024, there was a noticeable uptick in total debt to 27,322 million US dollars, indicating a reversal of the prior downward trend.

Total Capital (Including Operating Lease Liability)

Total capital exhibited a decline from 50,319 million US dollars in 2020 to 46,652 million US dollars in 2024. The downward trajectory was evident with minor fluctuations, including a slight increase in 2023. Overall, the trend suggests a reduction in the capital base over the five-year period.

Debt to Capital Ratio (Including Operating Lease Liability)

The debt to capital ratio demonstrated a significant downward movement from 0.64 in 2020 to a low of 0.53 in 2023, indicating that the proportion of debt relative to total capital was decreasing and the company was deleveraging. However, in 2024, this ratio increased to 0.59, signaling a modest rise in financial leverage and a shift towards higher reliance on debt financing compared to the prior year.

Summary of Financial Leverage Trends

Overall, the data points to a period of deleveraging from 2020 through 2023, with both total debt and the debt to capital ratio declining, accompanied by a modest contraction in total capital. The increase in total debt and the debt to capital ratio in 2024 suggests a partial reversal in this trend, where the company increased its debt levels and consequently its financial leverage relative to capital. The movements in total capital also reflect a nuanced financial strategy possibly aimed at balancing debt and capital structure amidst changing business conditions.

Total Debt

The total debt of the company has shown a general downward trend from 2020 to 2023, decreasing from 31,402 million USD in 2020 to 24,987 million USD in 2023. However, in 2024, the total debt increased again to 26,711 million USD, indicating a reversal of the previous reducing trend.

Total Assets

Total assets have steadily declined throughout the period under review, dropping from 68,407 million USD in 2020 to 58,995 million USD in 2024. This consistent decrease suggests a contraction in the asset base over the five-year span.

Debt to Assets Ratio

The debt to assets ratio decreased from 0.46 in 2020 to 0.39 in 2021, reflecting a reduction in leverage. From 2021 to 2023, the ratio remained stable at around 0.40, despite the decreasing asset base. In 2024, the ratio increased back to 0.45, indicating a higher proportion of debt relative to assets, consistent with the increase in total debt and continued decline in total assets.

Total Debt (including operating lease liability)

The total debt shows a declining trend from 32,117 million USD in 2020 to 25,658 million USD in 2023, indicating a reduction in leverage during this period. However, in 2024, total debt increased again to 27,322 million USD, which suggests a partial reversal of the previous deleveraging trend.

Total Assets

Total assets consistently decreased over the five-year period, from 68,407 million USD in 2020 to 58,995 million USD in 2024. This steady decline reflects a reduction in the company's asset base year over year.

Debt to Assets Ratio (including operating lease liability)

The debt to assets ratio improved notably from 0.47 in 2020 to 0.40 in 2021, indicating a stronger asset coverage relative to debt. From 2021 through 2023, the ratio remained relatively stable at around 0.41, demonstrating a consistent leverage position during these years. In 2024, the ratio increased to 0.46, reflecting the increase in debt combined with decreasing assets, thus indicating a higher relative leverage compared to the previous two years.

Total Assets

The total assets exhibit a declining trend over the five-year period, decreasing from US$68,407 million at the end of 2020 to US$58,995 million by the end of 2024. This represents a reduction of approximately 13.8%, indicating a contraction in asset base. The decline appears steady year-over-year, with no significant fluctuations or reversals in the downward trajectory.

Total Gilead Stockholders’ Equity

Stockholders’ equity demonstrates an overall upward trend from 2020 through 2023, increasing from US$18,202 million to US$22,833 million. This rise suggests growth in net assets attributable to shareholders during these years. However, in 2024, equity decreases to US$19,330 million, indicating a reversal from prior gains and a decline of approximately 15.3% from the previous year. The late-year drop could denote distribution events, losses, or other equity adjustments.

Financial Leverage

Financial leverage shows a decreasing pattern from 3.76 in 2020 to a low of 2.72 in 2023, reflecting a reduction in the ratio of total assets to equity and suggesting an improvement in the capital structure with potentially less reliance on debt. However, the metric rises again to 3.05 in 2024, indicating an increase in leverage, which may point to higher financial risk or changes in debt or equity levels during this period.

Summary of Trends

The data reveal a consistent contraction in total assets coupled with a general increase in stockholders’ equity through 2023, followed by a decline in equity in 2024. Financial leverage improves until 2023 but worsens slightly in the final year. Taken together, the patterns suggest a period of asset reduction alongside strengthening equity and capital structure for most of the period, with a potential shift towards increased leverage and reduced equity capitalization in the latest year.

Earnings before interest and tax (EBIT)

The EBIT shows significant fluctuations over the five-year period. It increased markedly from 2,653 million US dollars in 2020 to a peak of 9,279 million US dollars in 2021. Following this peak, EBIT declined to 6,749 million in 2022, then experienced a moderate recovery to 7,803 million in 2023. However, the most recent data point in 2024 reveals a sharp decrease to 1,667 million, which is the lowest level in the entire timeframe except for the initial year.

Interest expense

Interest expense remained relatively stable throughout the period, with minor fluctuations. It started at 984 million US dollars in 2020, rose slightly to 1,001 million in 2021, then decreased modestly to 935 million in 2022. In 2023, interest expense increased marginally again to 944 million, followed by a slight rise to 977 million in 2024. Overall, interest expense has maintained a consistent range around approximately 935 to 1,001 million.

Interest coverage

The interest coverage ratio exhibited notable changes in alignment with EBIT trends. It was 2.7 in 2020, indicating moderate ability to cover interest expenses. The ratio surged to 9.27 in 2021, reflecting greatly improved coverage capacity, likely due to the peak in EBIT. Subsequently, it declined to 7.22 in 2022 and edged up to 8.27 in 2023, still indicating strong coverage. In 2024, however, the ratio dropped sharply to 1.71, underscoring a significant weakening in the ability to meet interest obligations from operational earnings.

Summary and Insights

The EBIT and interest coverage ratios reveal a volatile earnings performance across the analyzed years. The peak in 2021 likely enhanced the company’s financial flexibility, but the marked downturn in 2024 signals increased risk. Despite relatively stable interest expenses, the drastic decrease in EBIT in the latest year has diminished the buffer available to service debt, as indicated by the sharp fall in interest coverage. This trend suggests heightened financial stress or operational challenges impacting profitability and raises the need for careful monitoring of debt servicing capacity moving forward.

Earnings before fixed charges and tax

The earnings before fixed charges and tax exhibited significant volatility over the analyzed period. Initially, there was a notable peak in 2021, reaching 9435 million US dollars, which represents a substantial increase from 2824 million US dollars at the end of 2020. However, this high was followed by a decline in 2022 and 2023, with values dropping to 6911 million and 7968 million US dollars respectively. By 2024, earnings sharply decreased again to 1830 million US dollars, indicating a downward trend after multiple fluctuations.

Fixed charges

Fixed charges remained relatively stable throughout the period. The values hovered around the range of 1097 to 1157 million US dollars, with minimal variation. Starting at 1155 million US dollars in 2020, fixed charges slightly fluctuated but showed no significant upward or downward trend through to 2024.

Fixed charge coverage ratio

The fixed charge coverage ratio demonstrated pronounced changes over the years, reflecting variations in earnings and fixed charges. The ratio reached its highest point in 2021 at 8.15, indicating strong ability to cover fixed charges by earnings before fixed charges and tax. Following this peak, the ratio declined over the next two years to 6.3 in 2022 and 7.18 in 2023, suggesting some decrease in coverage capacity but still relatively strong. By 2024, the ratio dramatically dropped to 1.61, which points to a substantially reduced ability to cover fixed charges, coinciding with the steep decline in earnings before fixed charges and tax.

Overall trends and insights

The financial data indicates a period of high earnings capacity early in the timeline, particularly in 2021, followed by a consistent reduction in earnings and coverage ratio toward 2024. Despite stable fixed charges, the fluctuating earnings have directly impacted the fixed charge coverage ratio, suggesting potential risks in financial leverage and fixed cost management in the later years. The sharp decline in earnings in 2024 and the corresponding fall in the coverage ratio may warrant closer scrutiny regarding operational performance and cost structure sustainability.