Illumina Inc. (NASDAQ:ILMN)

Total Asset Turnover

Both reported and adjusted total asset turnover demonstrate a declining trend over the five-year period. Reported total asset turnover decreased steadily from 0.56 in 2016 to 0.43 in 2020, indicating a gradual reduction in the company’s efficiency at using its assets to generate sales. The adjusted figures follow a similar pattern, dropping from 0.51 to 0.43 in the same period, reinforcing the observed decline in asset utilization.

Current Ratio

The reported and adjusted current ratios display notable volatility throughout the period. Both ratios increased from approximately 3.3 in 2016 to nearly 4 in 2017, suggesting improved short-term liquidity. However, in 2018 the ratio dropped sharply to around 2.49, before spiking significantly to about 6.7 in 2019, indicating a substantial change in current asset or liability management. By 2020, the ratios normalized to the mid-3 range. This volatility may reflect fluctuations in working capital management or changes in the composition of current assets and liabilities.

Debt to Equity Ratio

A downward trend is evident in both reported and adjusted debt to equity ratios, signifying decreased reliance on debt financing relative to equity. The reported ratio declines from 0.58 in 2016 to 0.25 by 2019 and remains stable in 2020. Similarly, the adjusted ratio falls from 0.81 to 0.40 over the same period. This reduction may indicate a strategic move toward strengthening the equity base or reducing debt liabilities, enhancing financial stability.

Debt to Capital Ratio

Consistent with the debt to equity trend, the reported debt to capital ratio decreases from 0.37 in 2016 to 0.20 in 2019 and stays unchanged in 2020. The adjusted ratio shows a decline from 0.45 to 0.29, suggesting a lower proportion of debt in the company’s overall capital structure. This trend reflects a shift toward lower leverage and possibly a more conservative capital structure.

Financial Leverage

Financial leverage, both reported and adjusted, trends downward from 2016 through 2019, moving from approximately 1.95 to around 1.59, indicating reduced use of borrowed funds relative to equity. In 2020, reported leverage slightly increases to 1.62, while adjusted leverage remains stable at 1.59. The decline over the period suggests cautious financial management with decreased dependency on debt.

Net Profit Margin

The reported net profit margin shows increases from 19.29% in 2016 to a peak of 28.28% in 2019, before declining sharply to 20.25% in 2020. Adjusted margins follow a similar pattern, rising to 28.11% in 2019 and declining to a higher 23.8% in 2020 than the reported figure. This pattern indicates the company increased profitability up to 2019 but faced margin compression in 2020, possibly due to increased costs or competitive pressures.

Return on Equity (ROE)

The reported ROE peaks in 2017 at 26.41% but then exhibits a downward trend to 13.98% in 2020. Adjusted ROE follows a comparable trajectory, declining from 24.65% in 2017 to 16.18% in 2020. The decrease in ROE over the latter years suggests reduced efficiency in generating profits from shareholders’ equity, potentially stemming from the decreased net profit margin or higher equity levels.

Return on Assets (ROA)

Reported ROA rises from 10.81% in 2016 to a high of 13.7% in 2019, then declines to 8.65% in 2020. The adjusted ROA trend is similar, increasing to 13.73% in 2019 and reducing to 10.19% in 2020. This indicates that asset profitability improved through 2019 but deteriorated in 2020, aligning with the observed trends in margins and asset turnover.

The financial data over the five-year period exhibits several notable trends in revenue, asset base, and turnover ratios.

Revenue

Revenue increased steadily from 2016 to 2019, rising from $2,398 million to a peak of $3,543 million. However, in 2020, revenue declined to $3,239 million, indicating a contraction after several years of growth.

Total Assets

Total assets exhibited consistent growth throughout the entire period, increasing from $4,281 million in 2016 to $7,585 million in 2020. This suggests ongoing asset accumulation or investment over time.

Reported Total Asset Turnover

The reported total asset turnover ratio declined over the period, starting at 0.56 in 2016 and falling to 0.43 by 2020. This decline indicates that despite asset growth, the efficiency in generating revenue from assets decreased.

Adjusted Total Assets

Adjusted total assets showed a similar growth pattern to reported total assets, rising from $4,685 million in 2016 to $7,569 million in 2020, with a slight dip in 2019 compared to 2018.

Adjusted Total Asset Turnover

The adjusted total asset turnover ratio also declined over the period, from 0.51 in 2016 to 0.43 in 2020. There was a minor increase from 2018 to 2019, reflecting some improvement in asset efficiency for that year, but the overall trend remained downward.

In summary, while the asset base has expanded substantially, growth in revenue has slowed and even reversed in the latest year. The decreasing asset turnover ratios indicate a reduction in asset utilization efficiency, which may warrant further investigation into operational effectiveness or changes in asset composition.

The financial data indicates variability in both current assets and current liabilities over the five-year period, which subsequently impacts the liquidity ratios.

Current Assets

Current assets demonstrate a general upward trend from 2016 through 2018, increasing from $2,318 million to $4,490 million. There is a slight decline from 2018 to 2019, with a drop to $4,451 million, followed by a modest recovery to $4,483 million in 2020. Overall, current assets more than doubled across the five years.

Current Liabilities

Current liabilities exhibit considerable fluctuation. Starting at $705 million in 2016, liabilities increased slightly to $746 million in 2017. A sharp increase is observed in 2018 to $1,804 million, followed by a significant reduction in 2019 to $665 million. In 2020, liabilities rose again substantially to $1,244 million. This volatility suggests episodes of changing short-term obligations or capital structure adjustments.

Reported Current Ratio

The reported current ratio shows notable variability directly linked to changes in current liabilities and assets. It starts strong at 3.29 in 2016, rising to 3.99 in 2017, then falls drastically to 2.49 in 2018, correlating with the spike in current liabilities that year. The ratio peaks at 6.69 in 2019 due to a significant drop in liabilities, before decreasing to 3.6 in 2020 as liabilities increase again. These fluctuations indicate varying degrees of liquidity and short-term financial health.

Adjusted Current Assets and Adjusted Current Ratio

The adjusted current assets closely mirror the reported current assets, with minimal differences, suggesting consistency between reported and adjusted figures. The adjusted current ratio follows the same pattern as the reported current ratio, confirming the trends in liquidity status observed from the reported data.

In summary, the company's liquidity positions have experienced substantial fluctuations over the five-year period, largely influenced by changes in current liabilities. The ability to maintain a current ratio well above 1 throughout the period suggests that, despite volatility, the company generally maintained sufficient short-term assets to cover its short-term liabilities.

Total Debt

Total debt showed an overall fluctuating trend over the five-year period. It increased from 1,272 million USD in 2016 to a peak of 1,997 million USD in 2018, followed by a significant decline to 1,141 million USD in 2019. In 2020, total debt slightly increased again to 1,184 million USD.

Total Stockholders’ Equity

Stockholders’ equity steadily increased throughout the period. Starting at 2,197 million USD in 2016, equity rose each year, reaching 4,694 million USD in 2020. This indicates a consistent growth in the company’s net assets over the five years.

Reported Debt to Equity Ratio

The reported debt to equity ratio demonstrated a declining trend. From a ratio of 0.58 in 2016, it decreased to 0.49 in 2017, then increased slightly to 0.53 in 2018. A notable reduction occurred in 2019 and 2020, with the ratio stabilizing at 0.25, reflecting a lower leverage position relative to equity.

Adjusted Total Debt

Adjusted total debt followed a pattern similar to reported total debt but with higher absolute values. It rose from 1,795 million USD in 2016 to a peak of 2,599 million USD in 2018, before declining to 1,881 million USD in 2019 and 1,906 million USD in 2020, suggesting adjustments accounted for additional liabilities or considerations not captured in reported debt.

Adjusted Total Stockholders’ Equity

Adjusted equity increased consistently, paralleling the trend seen in reported equity but at slightly higher levels. Beginning at 2,209 million USD in 2016, it grew steadily to reach 4,764 million USD in 2020, signifying ongoing accumulation of value and possibly adjustments for items affecting equity valuation.

Adjusted Debt to Equity Ratio

Adjusted debt to equity reflected a steady decline across the period. Starting at 0.81 in 2016, the ratio decreased to 0.67 in both 2017 and 2018, then experienced a sharp reduction to 0.41 in 2019 and a slight further decrease to 0.40 in 2020. This indicates a marked improvement in the company’s leverage profile when considering adjusted figures.

In summary, the company exhibited a trend of increasing equity accompanied by fluctuations in debt levels. Both reported and adjusted debt-to-equity ratios declined over time, suggesting improved financial stability and reduced dependence on debt financing relative to equity. The adjusted figures generally presented higher absolute values and leverage ratios but mirrored the overall decreasing leverage trend.

Total Debt

Total debt displayed a fluctuating trend over the analyzed period. It increased from 1,272 million USD at the end of 2016 to 1,997 million USD by the end of 2018. Subsequently, it decreased sharply to 1,141 million USD in 2019 before slightly increasing again to 1,184 million USD in 2020.

Total Capital

Total capital consistently increased during the period from 3,469 million USD in 2016 to 5,878 million USD in 2020. The growth was particularly noticeable between 2017 and 2018, and afterwards it stabilized around the 5,750 to 5,880 million USD range.

Reported Debt to Capital Ratio

The reported debt to capital ratio decreased overall, starting at 0.37 in 2016 and reducing to 0.20 by 2020. This signals a relative decline in debt levels compared to total capital, with the biggest decline occurring in 2019 and sustaining at the lower level into 2020.

Adjusted Total Debt

Adjusted total debt followed a trend similar to total debt but at higher absolute values. It rose from 1,795 million USD in 2016 to a peak of 2,599 million USD in 2018, then declined to 1,881 million USD in 2019 and slightly increased to 1,906 million USD in 2020.

Adjusted Total Capital

Adjusted total capital showed a steady increase, growing from 4,004 million USD in 2016 to 6,670 million USD in 2020. The increase was marked and consistent, especially significant between 2017 and 2018.

Adjusted Debt to Capital Ratio

The adjusted debt to capital ratio decreased from 0.45 in 2016 to 0.29 in 2019 and remained at that level in 2020. This indicates an improvement in the company’s leverage ratio on an adjusted basis, reflecting better balance between debt and capital over time.

The analysis of the financial data reveals several notable trends over the five-year period ending in 2020. Total assets consistently increased each year, growing from US$4,281 million in 2016 to US$7,585 million in 2020, indicating expanding operational scale or investment. Stockholders’ equity followed a similar upward trajectory, rising from US$2,197 million to US$4,694 million, reflecting an increase in the company's net worth over the period.

Financial leverage, both reported and adjusted, showed a declining trend from 2016 to 2019, with reported leverage decreasing from 1.95 to 1.59 and adjusted leverage from 2.12 to 1.59. This suggests a reduction in the relative use of debt financing over equity, implying a move towards a more conservative capital structure or improved equity base. However, in 2020 the reported financial leverage showed a slight increase to 1.62, while adjusted leverage remained stable at 1.59, indicating a modest shift but generally maintaining a lower leverage level compared to earlier years.

The adjusted assets and adjusted equity figures, which may account for valuation differences or other adjustments, follow trends similar to their reported counterparts. Adjusted total assets rose from US$4,685 million to US$7,569 million, and adjusted equity increased from US$2,209 million to US$4,764 million over the period. The close alignment between reported and adjusted leverage ratios in later years suggests consistency in leverage assessment methodologies.

Asset Growth

Total assets increased steadily, demonstrating company expansion.

Equity Growth

Equity rose substantially, indicating strengthening shareholder value.

Financial Leverage

Leverage ratios declined significantly until 2019, implying lower reliance on debt, then slightly increased or stabilized in 2020.

Adjusted vs Reported Figures

Adjusted assets and equity track closely with reported figures, confirming reliability of the reported data and consistent leverage trends.

Net Income Attributable to Illumina Stockholders

The net income increased steadily from 463 million USD in 2016 to a peak of 1,002 million USD in 2019, indicating strong profit growth over this period. However, in 2020, net income declined significantly to 656 million USD, reflecting a downturn after several years of growth.

Revenue

Revenue exhibited consistent growth from 2,398 million USD in 2016 to 3,543 million USD in 2019. In 2020, revenue declined to 3,239 million USD, marking a reversal in the previously upward trend.

Reported Net Profit Margin

The reported net profit margin experienced an overall upward trend from 19.29% in 2016 to a high of 28.28% in 2019, demonstrating improved profitability efficiency. This margin dropped substantially to 20.25% in 2020, consistent with the decline in net income and revenue.

Adjusted Consolidated Net Income

Adjusted net income followed a similar pattern to reported net income, increasing from 426 million USD in 2016 to 996 million USD in 2019 before decreasing to 771 million USD in 2020. The adjustment reflects a consistent underlying profitability trend despite some variability.

Adjusted Net Profit Margin

The adjusted net profit margin rose from 17.77% in 2016 to 28.11% in 2019, indicating enhanced operational profitability over time. In 2020, there was a decline to 23.8%, which, while lower than the peak year, remains above the levels seen in 2016 to 2018.

Overall Analysis

The period from 2016 to 2019 showed a robust growth phase characterized by increasing revenue, net income, and profit margins, both reported and adjusted. The subsequent decline in 2020 across these key financial metrics suggests an interruption in this growth trajectory, possibly due to market or operational challenges. Despite this downturn, the adjusted profit margin in 2020 remained relatively strong, indicating resilience in the company's profitability management.

The analysis of the annual financial data reveals several notable trends and changes over the five-year period.

Net Income Attributable to Stockholders

The net income showed a consistent upward trend from 2016 to 2019, increasing from $463 million to a peak of $1,002 million. However, there was a significant decline in 2020, falling to $656 million. This suggests that the company experienced strong profitability growth initially, but faced challenges in the most recent year.

Total Stockholders’ Equity

Stockholders’ equity increased steadily throughout the period, rising from $2,197 million in 2016 to $4,694 million in 2020. This growth reflects accumulated retained earnings and potentially additional capital contributions, indicating strengthening financial stability and resources over time.

Reported Return on Equity (ROE)

The reported ROE improved from 21.06% in 2016 to a high of 26.41% in 2017, followed by a gradual decline to 21.72% in 2019. In 2020, ROE fell more sharply to 13.98%. This pattern aligns with the decline in net income during the final year, signaling reduced profitability relative to equity.

Adjusted Consolidated Net Income

The adjusted net income mirrors the trend of net income, increasing from $426 million in 2016 to $996 million in 2019, then decreasing to $771 million in 2020. The adjusted figures also indicate some level of non-recurring or extraordinary items, but the underlying profitability trend remains consistent with the reported figures.

Adjusted Total Stockholders’ Equity

The adjusted equity shows a steady increase similar to the reported equity, rising from $2,209 million to $4,764 million across the five years. This continued growth supports the company’s enhanced financial position when considering adjustments.

Adjusted Return on Equity (ROE)

The adjusted ROE follows a pattern close to the reported ROE, peaking in 2017 at 24.65%, then experiencing a moderate decline before dropping to 16.18% in 2020. The decrease in adjusted ROE indicates a reduction in returns generated on the equity base after adjustments, reflecting weakened operational performance in the latest period.

Overall, the data demonstrates strong growth in profitability and equity from 2016 through 2019, followed by a notable decline in net income and ROE in 2020. Despite the downturn in profitability metrics, the company maintained steady equity growth, suggesting resilience in its capital structure amid the profitability challenges faced in 2020.

Net income attributable to stockholders

The net income showed an overall upward trend from 2016 to 2019, increasing from 463 million US dollars to a peak of 1002 million US dollars. However, a significant decline occurred in 2020, with net income falling to 656 million US dollars.

Total assets

Total assets rose steadily from 4281 million US dollars in 2016 to 7585 million US dollars in 2020. The growth was consistent, with a notable increase between 2017 and 2018.

Reported Return on Assets (ROA)

Reported ROA improved from 10.81% in 2016 to a high of 13.81% in 2017. It then fluctuated moderately, reaching 13.7% in 2019, before declining sharply to 8.65% in 2020, indicating reduced profitability relative to asset size in the last year.

Adjusted consolidated net income

Adjusted net income followed a similar trajectory to reported net income, increasing from 426 million US dollars in 2016 to a high of 996 million US dollars in 2019, then decreasing to 771 million US dollars in 2020. This suggests that the adjustments did not significantly alter the overall trend.

Adjusted total assets

Adjusted total assets increased from 4685 million US dollars in 2016 to a maximum of 7569 million US dollars in 2020, echoing the general upward trend seen in reported total assets but with slight variations in magnitude year-over-year.

Adjusted Return on Assets (ROA)

The adjusted ROA showed variation throughout the period, starting at 9.1% in 2016 and reaching its peak at 13.73% in 2019. It decreased to 10.19% in 2020, signaling a reduction in profitability after adjustment, but less severe than the decline observed in the reported ROA.