AbbVie Inc. (NYSE:ABBV)

Debt to Equity Ratio

The debt to equity ratio exhibits a fluctuating pattern over the observed quarters. Initially, it rises from 5.94 in June 2020 to a peak of 6.58 in December 2020, followed by a general downward trend reaching a low of 3.67 in December 2022. Subsequently, the ratio increases again, notably accelerating from 5.73 in December 2023 to a sharp rise reaching 49.22 by March 2025. This indicates a significant increase in debt relative to equity in the most recent periods, suggesting heightened financial risk or increased leverage strategy.

Debt to Capital Ratio

The debt to capital ratio remains relatively stable, ranging mainly between 0.79 and 0.98 throughout the period. Starting from 0.86 in June 2020, the ratio shows minor fluctuations but trends upward toward the later quarters, peaking at 0.98 in March 2025. This steady rise indicates an increasing proportion of debt within the company's capital structure over time, aligning with the higher leverage observed in the debt to equity ratio.

Debt to Assets Ratio

This ratio shows a gradual decline from 0.74 in March 2020 to 0.44 by December 2023, implying a reduction in debt relative to total assets during this period. However, from March 2024 onward, the ratio rises again, reaching 0.51 by March 2025, which points to a renewed increase in leverage when considering total asset base. Overall, the debt to assets ratio reflects a moderate rise in debt levels in the later stages after an initial downward trend.

Financial Leverage Ratio

The financial leverage ratio demonstrates significant volatility. Starting at 10.17 in June 2020, it decreased slightly but then increased to 11.51 by December 2020, followed by a decline to 8.04 in December 2022. Subsequently, there is a pronounced upward trend, with the ratio rising sharply from 13.00 in December 2023 to an extreme value of 95.89 in March 2025. This pattern denotes a considerable escalation in the company's total assets relative to equity, indicating potentially aggressive leverage or diminished equity base in the final periods.

Total Debt

The total debt exhibited a generally fluctuating but downward trend from March 31, 2020, when it stood at $67,046 million, reaching a low of $59,385 million by December 31, 2023. Notably, there was a significant increase in total debt starting from March 31, 2024 ($74,001 million), which remained elevated through the subsequent quarters up to March 31, 2025, where it recorded $69,889 million. This indicates a resurgence in borrowing or liability accumulation after the previous period of decline.

Stockholders’ Equity (Deficit)

Stockholders’ equity showed considerable volatility over the period. Initially, it moved from a deficit of -$7,415 million on March 31, 2020 to positive territory, peaking at $17,254 million by December 31, 2022. Subsequent quarters, however, revealed a consistent decline in equity, falling to just $1,420 million by March 31, 2025. This decreasing equity trend over the last several quarters suggests weakening net asset values or possible share repurchases, divestitures, or losses.

Debt to Equity Ratio

The debt to equity ratio reflected significant volatility, starting from a high ratio of 5.94 in June 30, 2020, reaching a relatively lower point of 3.67 by December 31, 2022, coinciding with the rise in equity and contraction in debt. However, from March 31, 2023 onward, the ratio increased sharply to 49.22 by March 31, 2025. This dramatic rise in leverage indicates a substantially higher reliance on debt in proportion to equity, driven by both rising debt levels and declining equity, thus reflecting increased financial risk and potential solvency concerns.

Overall Insights

The financial trends indicate a period of deleveraging followed by renewed debt accumulation and deterioration in equity. The rising debt to equity ratio in recent periods points toward increased leverage and financial risk. The declining equity suggests challenges in maintaining net worth, potentially impacting the company's financial stability. Monitoring these trends is critical for assessing ongoing creditworthiness and investment risk.

The analysis of the quarterly financial data reveals notable trends regarding the company's debt, capital structure, and leverage ratios over the observed periods.

Total Debt

Total debt showed a significant increase from March 31, 2020, peaking around June 30, 2020. After that, a gradual decline was observed through December 31, 2023, indicating a consistent effort to reduce debt levels. However, starting March 31, 2024, the total debt rose again, reaching near previous elevated levels by March 31, 2025. This pattern suggests an initial period of increased borrowing followed by a long-term deleveraging trend, before a renewed rise in borrowing towards the end of the period analyzed.

Total Capital

Total capital displayed a fluctuating but generally downward trend from the peak around June 30, 2020, moving from approximately 102 billion USD to about 70 billion USD by the end of the period. There was a gradual and steady decrease in total capital from early 2022 through to early 2025, which may reflect changes in equity financing or retained earnings along with debt dynamics.

Debt to Capital Ratio

The debt to capital ratio began above 1.0 in early 2020, indicating debt exceeding capital during that time. This ratio declined steadily through 2021 and into 2022, reaching a low point below 0.80, indicating a stronger capital base relative to debt. From 2023 onwards, the ratio began to increase again, rising to nearly 1.0 by March 31, 2025. This reversal suggests increasing leverage, aligning with the increasing trend of total debt and the declining trend of total capital in the most recent quarters.

Overall, the financial data points to an initial phase of elevated borrowing followed by years of deleveraging and capital consolidation. The leverage ratio improvements between 2021 and 2023 were driven primarily by reductions in debt relative to capital. However, recent quarters indicate a renewed increase in leverage, possibly linked to increased debt or changes in capital structure. Continuous monitoring of this trend will be critical to assess the company's financial risk and capital management strategies going forward.

Total Debt

Total debt exhibited a notable increase from March 31, 2020, reaching a peak around June 30, 2020, followed by a general downward trend through December 31, 2023. Specifically, debt increased from approximately $67 billion in early 2020 to above $87 billion mid-2020, then steadily declined to near $59 billion by the end of 2023. However, beginning in the first quarter of 2024, total debt showed a resurgence, rising again to about $70 billion by March 31, 2025.

Total Assets

Total assets increased sharply from March 31, 2020, peaking in the second half of 2020 at approximately $150 billion. Thereafter, a gradual decline occurred, with values falling to around $134 billion by the end of 2023. In 2024, asset levels fluctuated somewhat, rising above $148 billion mid-year before retracting somewhat to about $136 billion by March 31, 2025. Overall, total assets demonstrated volatility with a peak stabilization followed by a modest recovery toward early 2025.

Debt to Assets Ratio

The debt to assets ratio displayed a consistent downward trajectory from March 2020 through December 2023, declining from a high of 0.74 to approximately 0.44. This suggests an improvement in the company’s leverage position during this period. Starting in early 2024, the ratio increased moderately, stabilizing around 0.5 through March 31, 2025, indicating a modest increase in leverage relative to assets.

Summary of Trends and Insights

The financial data reveals an initial period of increased indebtedness and asset accumulation in 2020, followed by a multi-year effort to reduce leverage through debt reduction and asset optimization up to the end of 2023. The improvement in the debt to assets ratio signifies better asset coverage of liabilities over that period. However, from 2024 onward, both total debt and the debt to assets ratio rebounded, pointing to a possible strategic shift toward increased borrowing or capital restructuring. Asset values demonstrated volatility but remained within a relatively stable range in recent quarters. These patterns suggest dynamic financial management adjusting to evolving operational or market conditions.

Total assets

The total assets exhibited a notable increase early in the period, rising sharply from approximately $91.2 billion in March 2020 to about $150.6 billion by December 2020. Following this peak, total assets generally declined over subsequent quarters, reaching approximately $134.5 billion by December 2023. An uptick is observed again in the first quarter of 2024, peaking at roughly $148.9 billion in March 2024, before gradually declining to about $136.2 billion by March 2025. Overall, total assets showed volatility with an initial expansion, a mid-period contraction, a temporary increase, and a subsequent downward trend.

Stockholders’ equity (deficit)

Stockholders’ equity transitioned from a significant deficit of approximately -$7.4 billion in March 2020 to a positive balance exceeding $15 billion by the end of 2020. This positive equity level was relatively stable throughout 2021 and 2022, fluctuating between about $12.5 billion and $17.3 billion. However, beginning in early 2023, equity levels declined steadily, dropping to around $10.4 billion by December 2023 and further to $1.4 billion by March 2025. This downward trajectory indicates a reduction in net equity over the latter part of the period despite earlier positive results.

Financial leverage

Financial leverage demonstrated considerable variation across the timeline. It began with a high level of 10.17 in June 2020 and fluctuated moderately between roughly 8 and 13 through the end of 2023. Starting in 2024, the financial leverage ratio escalated dramatically, reaching values of 18.59 in March 2024 and climbing steeply to 95.89 by March 2025. This substantial increase reflects a sharp rise in the proportion of debt relative to equity, signifying heightened financial risk and potential strain on the company’s capital structure.