Air Products & Chemicals Inc. (NYSE:APD)

The analysis of the annual financial data reveals significant trends in the current assets and adjusted current assets over the six-year period ending September 30, 2020.

Current Assets

The current assets have generally demonstrated a positive trajectory. Beginning at approximately 2,910,800 thousand US dollars in 2015, the value increased sharply in 2016 to around 4,317,300 thousand US dollars. This upward trend continued in 2017, reaching 5,876,700 thousand US dollars. A decline is observed in 2018 and 2019, with values dropping to 5,082,200 and 4,618,300 thousand US dollars respectively. Despite this temporary decrease, the current assets surged notably by 2020, reaching 8,684,900 thousand US dollars, marking the highest level during the period.

Adjusted Current Assets

The adjusted current assets exhibit a pattern closely mirroring that of the unadjusted current assets. Starting at 2,920,700 thousand US dollars in 2015, the figure climbed to 4,419,100 thousand in 2016, then to 5,945,800 thousand in 2017. Similar to current assets, adjusted current assets decreased in 2018 and 2019 to 5,106,200 and 4,667,100 thousand US dollars, respectively. A substantial increase was recorded in 2020, with adjusted current assets reaching 8,708,800 thousand US dollars. The consistency between both metrics indicates reliability in the adjustment process, with adjustments causing minimal deviation from the reported current assets.

Overall, the data shows that after a period of decline in 2018 and 2019, there was a strong recovery in 2020, with current assets and adjusted current assets reaching peak values within the span analyzed. This indicates enhanced liquidity potential in the most recent year, which might be attributed to operational improvements, asset management, or other financial strategies undertaken in 2020.

Total Assets

The total assets exhibited a consistent upward trend from 2015 to 2018, increasing from approximately $17.44 billion to $19.18 billion. However, in 2019, there was a slight decrease to $18.94 billion, followed by a significant increase in 2020, reaching around $25.17 billion. This indicates an overall growth trajectory with a notable acceleration in asset accumulation in the latest period.

Adjusted Total Assets

The adjusted total assets followed a similar pattern to total assets, steadily rising from approximately $17.71 billion in 2015 to $19.29 billion in 2018. There was a minor decline in 2019 to $19.14 billion, but the figure surged markedly in 2020 to $25.08 billion. The adjusted figures closely mirror the trends of total assets, confirming the significant expansion observed in the most recent year.

The analysis of the company's current liabilities over the six-year period reveals notable trends in the firm's short-term financial obligations. The values exhibit a general decline from 2015 to 2019, followed by an increase in 2020.

Trend in Current Liabilities

Starting at approximately $3.65 billion in 2015, current liabilities steadily decreased, reaching a low point of about $1.82 billion in 2019. This decline suggests a reduction in short-term obligations, potentially indicating improved working capital management or repayment of short-term debt.

However, in 2020, current liabilities rose significantly to around $2.42 billion. This increment could be indicative of changes in operational requirements, possible increases in borrowing, or delayed payments.

Adjusted Current Liabilities

The adjusted current liabilities closely mirror the trend of the unadjusted figures, confirming consistency in the adjustments made. The closeness of these two metrics throughout the years implies minimal adjustments affecting the reported current liabilities, which supports the reliability of the reported data.

The analysis of the provided financial data reveals notable trends in the liabilities of the company over the six-year period from 2015 to 2020.

Total Liabilities

The total liabilities exhibited an initial increase from approximately 10.06 billion USD in 2015 to about 10.84 billion USD in 2016. Subsequently, there was a significant decline over the next three years, with liabilities decreasing to approximately 8.28 billion USD in 2017, then to 8.00 billion USD in 2018, and further down to 7.55 billion USD in 2019. In 2020, there was a sharp reversal of this downward trend, with total liabilities markedly increasing to approximately 12.73 billion USD, which represents the highest value over the observed period.

Adjusted Total Liabilities

The adjusted total liabilities followed a similar trajectory to the total liabilities, beginning at about 9.44 billion USD in 2015 and rising to approximately 10.25 billion USD in 2016. This was followed by a notable reduction over the subsequent three years, falling to around 7.63 billion USD in 2017, decreasing slightly to 7.43 billion USD in 2018, and declining further to 7.01 billion USD in 2019. In 2020, there was a substantial increase in adjusted liabilities as well, reaching approximately 11.76 billion USD, which aligns with the trend observed in total liabilities.

Overall, the data suggests a pattern of liabilities reduction over the three-year period from 2016 through 2019, indicating possible efforts to deleverage or improve the company’s financial structure during those years. However, the sharp increase in liabilities in 2020 may reflect significant new borrowings, capital expenditures, or other financial activities impacting the company’s leverage. The parallel movements between total and adjusted liabilities imply consistency in reporting adjustments over time.

Total Air Products shareholders’ equity

The total shareholders’ equity demonstrates an overall upward trend from 2015 to 2020, beginning at approximately $7.25 billion and rising to about $12.08 billion. A slight decline is observable between 2015 and 2016, where the equity decreased from $7.25 billion to $7.08 billion. However, from 2016 to 2017, a significant increase occurred, bringing equity to around $10.09 billion. The equity continued to grow steadily through 2018, 2019, and 2020, albeit at a more moderate pace compared to the earlier surge.

Adjusted total equity

The adjusted total equity follows a pattern similar to that of the total shareholders’ equity but starts from a higher base and consistently stays above the unadjusted figures. It increased from approximately $8.27 billion in 2015 to roughly $13.32 billion in 2020. There was a decrease from 2015 to 2016, mirroring the trend in total equity, followed by marked growth from 2016 onwards. The rise from 2016 to 2017 is also substantial, followed by steady increases each subsequent year. The adjustment appears to scale with the original equity figures, suggesting systematic factors or revaluations driving the adjusted values higher throughout the period.

General observations

Both measures of equity reveal a strong positive growth trajectory over the six-year period. The notable increase from 2016 to 2017 indicates a possible significant event or operational improvement contributing to improved financial strength. The difference between total shareholders’ equity and adjusted total equity remains relatively consistent, implying that adjustments applied may be based on stable parameters relative to the underlying equity. There are no indications of major fluctuations or reversals after 2017, signaling stable and sustained equity growth for the company through 2020.

Total reported debt

The total reported debt experienced a decline from 2015 to 2019, dropping from approximately $5.88 billion to $3.33 billion. However, in 2020 there was a sharp increase to about $7.91 billion, indicating a significant rise in debt levels in the latest year.

Total Air Products shareholders’ equity

Shareholders' equity showed a generally increasing trend throughout the period. From $7.25 billion in 2015, it declined slightly in 2016 but then rose steadily each year, reaching $12.08 billion by 2020. This growth reflects a strengthening equity base over the long term.

Total reported capital

Total reported capital, representing the sum of debt and equity, generally increased over the years. It grew from $13.13 billion in 2015 to $14.67 billion in 2018, with a slight dip in 2019, before jumping significantly to nearly $19.99 billion in 2020. This increase in 2020 aligns with the rise in reported debt.

Adjusted total debt

The adjusted total debt mirrored the trend of total reported debt with a slight decline from $6.21 billion in 2015 to $3.59 billion in 2019, before increasing sharply to $8.31 billion in 2020. This adjustment confirms the substantial leverage increase in the final year.

Adjusted total equity

Adjusted total equity followed an upward trajectory similar to reported shareholders' equity. Starting at $8.27 billion in 2015, it decreased marginally in 2016, then consistently increased each year, reaching $13.32 billion by 2020. The steady rise suggests improving or stable equity quality.

Adjusted total capital

Adjusted total capital, combining adjusted equity and debt, showed a generally stable growth path with a minor dip in 2019. From $14.48 billion in 2015, it climbed to $15.89 billion in 2018, slightly fell to $15.72 billion in 2019, then surged to $21.63 billion in 2020. The sharp increase in 2020 reflects the increased adjusted debt position.

Overall, the data indicates that while equity components have steadily increased over the six-year period, the debt levels, both reported and adjusted, decreased notably until 2019 before experiencing a significant rise in 2020. This development resulted in a marked increase in total capital in the final year observed. The patterns suggest a recent strategic decision or circumstance leading to higher leverage after a period of deleveraging.

The financial data over the six-year period reveals fluctuating yet generally positive trends in both net income attributable to Air Products and adjusted net income.

Net Income Attributable to Air Products

The net income showed significant volatility. Starting at 1,277,900 thousand US dollars in 2015, it experienced a sharp decline in 2016 to 631,100 thousand US dollars. In 2017, net income surged sharply to 3,000,400 thousand US dollars, the highest point in the observed period. Subsequently, it decreased considerably to 1,497,800 thousand US dollars in 2018 but improved steadily in the following years, reaching 1,760,000 thousand US dollars in 2019 and 1,886,700 thousand US dollars in 2020. Despite the erratic fluctuations, the net income in 2020 is higher than the value in 2015, indicating growth over the long term.

Adjusted Net Income

The adjusted net income presents a different but related pattern. It started relatively low at 440,900 thousand US dollars in 2015, then increased sharply in 2016 to 1,305,100 thousand US dollars. After a further rise in 2017 to 1,715,400 thousand US dollars, adjusted net income decreased gradually in the next two years to 1,426,100 thousand US dollars in 2018 and 1,236,100 thousand US dollars in 2019. However, there was a notable recovery and substantial increase in 2020, reaching 2,327,900 thousand US dollars, the highest level in the period observed. This suggests improvement in underlying profitability after adjustments, and a strong rebound after a decline.

In summary, the company experienced considerable variability in its net income over the period, with a peak in 2017 and recovery toward 2020. Adjusted net income, which may exclude certain irregular items, shows a general upward trend with a dip from 2017 to 2019 followed by a significant increase in 2020. The data imply that despite short-term fluctuations, there is an overall positive momentum in profitability by the end of the period analyzed.