Yahoo! Inc. (NASDAQ:YHOO)

The analysis of the financial leverage and debt ratios over the observed quarterly periods reveals consistent patterns in the company’s capital structure and use of debt financing.

Debt to Equity Ratio

This ratio remained at zero during the first three quarters, indicating absence of debt financing initially. From the fourth quarter of 2013 onwards, a modest increase is observed, fluctuating between 0.03 and 0.09. Notably, after reaching 0.09 in the mid-2013 and early 2014 periods, the ratio gradually declined and stabilized around 0.04 from 2015 through early 2017, suggesting controlled use of debt relative to shareholders’ equity.

Debt to Capital Ratio

Mirroring the debt to equity trend, this ratio was zero in early 2013 quarters, then increased slightly to 0.08 around the end of 2013 and the first half of 2014. Subsequently, it settled near 0.03 to 0.04 in later periods, indicating a relatively low proportion of debt in the overall capital employed by the company. The stability of this ratio in the latter years reflects a conservative capital structure with limited reliance on debt.

Debt to Assets Ratio

The debt to assets ratio followed a similar pattern, beginning at zero and reaching a peak of approximately 0.07 in late 2013 and early 2014. Thereafter, it decreased to a consistent range between 0.02 and 0.03, reflecting a low amount of liabilities relative to total assets. This suggests the company maintained a strong asset base funded largely through equity rather than debt.

Financial Leverage Ratio

This ratio demonstrated a gradual upward trend, starting from around 1.17 to 1.19 in early 2013 and increasing to approximately 1.29 by the end of that year. In 2014, the ratio rose more sharply to between 1.56 and 1.60, indicating an increased proportion of total assets to equity, possibly due to retained earnings or asset growth. From 2015 onwards, the financial leverage ratio oscillated in a narrow range between 1.46 and 1.57, maintaining relative stability. This level of financial leverage suggests a moderate use of equity to finance assets, consistent with the low debt ratios observed.

Overall, the company's financial structure during the period analyzed exhibited low leverage through debt, with ratios consistently indicating minimal debt usage relative to equity, capital, and assets. The financial leverage ratios, while showing some increase, remained moderate, suggesting prudent management of capital resources and limited financial risk related to debt obligations.

Total debt

Total debt exhibited an initial moderate level in early 2013, ranging from 36,000 to 49,000 thousand US dollars during the first three quarters. A significant increase was observed in the fourth quarter of 2013, where total debt surged dramatically to over 1,154,585 thousand US dollars. Following this spike, total debt continued a steady upward trend across subsequent periods, rising incrementally to reach 1,334,112 thousand US dollars by the first quarter of 2017.

Total stockholders’ equity

Stockholders’ equity showed a fluctuating pattern across the observed quarters. Starting from approximately 14,139,916 thousand US dollars in March 2013, it declined to around 12,494,111 thousand US dollars by September 2013 but then rebounded moderately by December 2013. A notable surge occurred in September 2014, when equity sharply increased to over 36,713,567 thousand US dollars, maintaining an elevated range thereafter despite some fluctuations. Generally, equity values showed periods of volatility but remained at a high level near or above 28 million thousand US dollars from late 2014 onwards, reaching 35,435,717 thousand US dollars by the first quarter of 2017.

Debt to equity ratio

The debt to equity ratio was essentially zero during the initial quarters in 2013, consistent with the low debt levels at that time. In the fourth quarter of 2013, coinciding with the sharp increase in total debt, the ratio moved to approximately 0.09 and remained around this level through mid-2014. From the third quarter of 2014 forward, despite ongoing increases in total debt, the ratio decreased to between 0.03 and 0.05, reflecting the concurrent rise in stockholders’ equity. Overall, the company maintained a relatively low leverage position, with the debt to equity ratio stabilizing within a narrow range below 0.1 throughout most of the reported periods.

Summary

The financial data indicate a pronounced increase in total debt beginning in late 2013, which then continued an upward trajectory through early 2017. Stockholders' equity displayed significant volatility but generally increased, especially after mid-2014, suggesting capital restructuring or large equity issuances. Despite the growth in absolute debt, the company managed to keep its debt-to-equity ratio low and stable, indicating a strong equity base relative to its debt load and a conservative leverage posture over the examined periods.

Total Debt

The total debt shows a significant increase early in the observed period, rising sharply from 36,000 thousand US dollars at the end of March 2013 to over 1.15 billion US dollars by the end of December 2013. From that high point, total debt continues to rise gradually over subsequent quarters, moving from approximately 1.16 billion US dollars in March 2014 to roughly 1.33 billion US dollars by the end of March 2017. This indicates a sustained increase in leverage over the years, although the growth rate of debt becomes more moderate after the initial spike.

Total Capital

Total capital fluctuates widely throughout the period. It begins near 14.2 billion US dollars in March 2013 and decreases somewhat by September 2013 to about 12.5 billion US dollars. Thereafter, it experiences a notable increase by the end of 2013 and through 2014, reaching nearly 40 billion US dollars in December 2014. Total capital then declines sharply over the next several quarters to about 29.5 billion by the end of September 2015. Following this, it recovers and rises again to end the period at approximately 36.8 billion US dollars in March 2017. These variations suggest significant changes in the company's financing structure or asset base during this time, possibly due to equity issuances, asset revaluations, or other capital adjustments.

Debt to Capital Ratio

The debt to capital ratio is initially zero for the first three quarters, reflecting a negligible level of debt relative to total capital in that timeframe. As debt increases sharply at the end of 2013, the ratio rises to approximately 0.08 and remains stable around this level through mid-2014. Subsequently, the ratio decreases to about 0.03 by December 2014 and remains fairly steady around 0.04 through to the end of the observation period in March 2017. This indicates that although total debt increased, capital also expanded sufficiently to keep debt at a relatively low proportion of total capital, suggesting a conservative leverage position overall after the initial debt spike.

Overall Trends and Insights

The data reveals an initial phase of rapid debt accumulation in late 2013, accompanied by fluctuations in total capital including a peak near the end of 2014. In subsequent years, both debt and capital adjust gradually, with total capital showing a volatile but upward trend and debt increasing steadily at a much more moderate pace. The consistent debt to capital ratio near 0.04 after 2014 suggests a stable capital structure with limited reliance on debt financing relative to the total capital base. This pattern may reflect strategic financial management focused on maintaining balanced leverage despite growth or restructuring activities reflected in the capital changes.

Total Debt

Over the analyzed periods, total debt exhibited a substantial increase initially, rising sharply from 36,000 thousand US dollars at the end of March 2013 to over 1.15 billion by the end of December 2013. Following this sharp rise, total debt showed a steady, incremental upward trend across subsequent quarters, reaching approximately 1.33 billion US dollars by the end of March 2017. The consistent incremental increases suggest a continuous reliance on debt financing over time but at a more controlled pace after the initial surge.

Total Assets

Total assets displayed noticeable fluctuations across the quarters. Initially, the assets decreased from approximately 16.5 billion US dollars at the end of March 2013 to about 14.9 billion by September 2013. However, there was a rebound with assets increasing to around 16.8 billion by the end of December 2013. Subsequently, a significant jump is observed during 2014, peaking at roughly 61.9 billion US dollars at the end of December 2014. After this peak, the asset base generally declined, with several quarters showing dips to levels around 41 billion to 55 billion US dollars, fluctuating thereafter. This pattern suggests possible acquisitions, asset revaluations, or disposals influencing the total asset figures over time.

Debt to Assets Ratio

The debt to assets ratio started at zero for the first three quarters of 2013, indicating negligible or no debt relative to assets during that period. With the sharp increase in debt at the end of 2013, the ratio rose to approximately 7%, reflecting increased leverage. In 2014, this ratio dropped significantly and stabilized around 2% during the latter part of the year and throughout 2015, suggesting that asset growth outpaced debt accumulation during this period. From 2016 onwards, the ratio modestly increased and fluctuated around 2% to 3%, indicating a relatively stable leverage position with moderate increases in debt proportional to asset values.

Total Assets

Over the analyzed periods, total assets demonstrated a fluctuating trend with overall growth. Initially, the assets ranged around 16 billion US dollars but experienced a notable increase starting in mid-2014, peaking above 61 billion by the end of 2014. Subsequently, a decline occurred through 2015, falling to approximately 41 billion by the third quarter. The total assets then showed recovery and variability, rising again towards the end of 2016 and reaching above 55 billion by the first quarter of 2017. This pattern indicates periods of significant expansion followed by retrenchment and renewed growth.

Total Stockholders’ Equity

Stockholders’ equity generally mirrored the asset trends but with less pronounced volatility. Beginning near 14 billion US dollars, equity grew substantially in mid-2014 to peak around 38 billion towards the end of 2014. Through 2015, equity decreased to about 28 billion and fluctuated around that level into early 2016. A recovery phase occurred in late 2016, with equity increasing to approximately 35 billion by early 2017. The equity movement indicates a strengthening capital base during periods of asset expansion, though it also experienced significant contractions aligned with asset declines.

Financial Leverage Ratio

The financial leverage ratio exhibited a gradual upward trend over the quarters, starting from approximately 1.17 in the first quarter of 2013 and increasing to about 1.6 by late 2014. This level was maintained with slight fluctuations, generally hovering between 1.5 and 1.6 through the subsequent quarters up to early 2017. The increase in leverage suggests progressively higher use of debt relative to equity, peaking during the large asset expansion period in 2014, and then stabilizing at a higher leverage level than at the beginning of the timeline.