Bristol-Myers Squibb Co. (NYSE:BMY)

The financial data reveals several notable trends in leverage and coverage ratios over the five-year period from 2020 to 2024.

Debt to Equity Ratios

The debt to equity ratio remained relatively stable from 2020 through 2023, fluctuating mildly between 1.24 and 1.35. However, there is a significant increase in 2024, where this ratio more than doubles to 3.04. When including operating lease liabilities, a similar pattern is observed, with the ratio rising sharply from 1.41 in 2023 to 3.13 in 2024.

Debt to Capital Ratios

Debt to capital maintained a steady level around 0.55 to 0.58 between 2020 and 2023, showing stability in capital structure during this period. In 2024, this metric rises considerably to 0.75, indicating increased reliance on debt within the capital employed. The inclusion of operating lease liabilities follows the same trend, with a slight increase from 0.58-0.56 in prior years to 0.76 in 2024.

Debt to Assets Ratios

Debt to assets ratios including and excluding operating lease liabilities also display consistent values near 0.41 to 0.44 from 2020 through 2023. In 2024, these ratios increase noticeably to 0.54 and 0.55 respectively, highlighting a growing proportion of assets financed by debt.

Financial Leverage

Financial leverage remains relatively stable around 3.0 to 3.2 from 2020 through 2023. A pronounced spike occurs in 2024, with the ratio surging to 5.67. This indicates a marked increase in the use of debt or other financial obligations relative to equity.

Interest and Fixed Charge Coverage

Interest coverage shows significant volatility across the years. In 2020 and 2024, the ratio is negative (-3.84 and -3.3 respectively), which suggests difficulties in covering interest expenses during those years. Conversely, coverage improves substantially from 2021 to 2023, with ratios ranging from approximately 7.0 to 8.2, indicating strong earnings relative to interest costs in those years. Fixed charge coverage mirrors this pattern, with negative values in 2020 and 2024 (-3.08 and -2.75) and steady positive values from 2021 through 2023 (roughly 6.0 to 6.7).

Overall, the data suggests that the company maintained a relatively stable and moderate debt position with strong coverage metrics between 2020 and 2023. However, in 2024 there is a marked increase in leverage ratios, accompanied by negative interest and fixed charge coverage ratios, which could imply increased financial risk or stress during the most recent period analyzed.

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

Total debt

The total debt demonstrates a general declining trend from 2020 through 2022, decreasing from approximately 50.7 billion US dollars to 39.3 billion US dollars. In 2023, this amount stabilized slightly around 39.8 billion US dollars before increasing significantly in 2024 to close to 49.6 billion US dollars. This indicates a reduction in borrowing initially, followed by a renewed reliance on debt financing in the latest year under review.

Total shareholders’ equity

Shareholders’ equity shows a consistent downward trajectory throughout the entire period. Beginning at around 37.8 billion US dollars in 2020, the equity base shrank steadily each year, reaching approximately 16.3 billion US dollars by 2024, which represents a reduction of more than half over five years. This significant decline suggests erosion in the net asset value attributable to shareholders.

Debt to equity ratio

The debt to equity ratio remains relatively stable from 2020 to 2023, fluctuating modestly between 1.24 and 1.35. However, there is a marked increase in 2024 to a ratio of 3.04, which more than doubles the prior year’s level. This sharp rise reflects the combined effect of increased debt and substantially decreased equity, indicating a considerable deterioration in financial leverage and potentially elevated risk exposure.

In summary, the company’s financial structure over the five years shows a contraction in equity alongside fluctuating debt levels, culminating in a heightened leverage position by 2024. The sharp increase in the debt to equity ratio in the final year underscores an increased dependency on debt relative to equity, which may warrant careful attention from financial management and investors.

Total Debt (including operating lease liability)

The total debt shows a fluctuating but generally declining trend from 2020 to 2023, decreasing from 51,673 million USD in 2020 to 41,464 million USD in 2023. However, there is a significant reversal in 2024, with the debt rising sharply to 51,200 million USD, approaching the initial 2020 level.

Total Shareholders’ Equity

Shareholders' equity demonstrates a steady decline throughout the entire period. It decreases from 37,822 million USD in 2020 to 16,335 million USD in 2024, indicating a substantial erosion of equity over these years. The reduction is consistent each year, with no observed recovery or stabilization.

Debt to Equity Ratio (including operating lease liability)

The debt to equity ratio presents moderate fluctuations between 2020 and 2023, ranging from 1.27 to 1.41. However, in 2024, this ratio experiences a dramatic increase to 3.13, reflecting a much higher level of debt relative to equity. This sharp rise corresponds with the decrease in equity and the increase in total debt during the same period, suggesting increased financial leverage and potential risk.

Total Debt

The total debt decreased progressively from 50,676 million USD at the end of 2020 to 39,320 million USD by the end of 2022, indicating a consistent effort to reduce debt over these years. However, a slight increase occurred in 2023, with total debt rising to 39,772 million USD. In 2024, total debt rose significantly to 49,649 million USD, reversing the earlier downward trend and approaching the 2020 level.

Total Capital

Total capital followed a downward trajectory throughout the observed period. It started at 88,498 million USD in 2020 and steadily declined each year to reach 65,984 million USD by the end of 2024. This persistent decline suggests either a reduction in equity, debt, or both contributing components, with a more marked decrease in recent years.

Debt to Capital Ratio

The debt to capital ratio remained relatively stable from 2020 to 2023, fluctuating slightly between 0.55 and 0.57, indicating a balanced proportion of debt relative to the company's total capital. However, in 2024, this ratio jumped sharply to 0.75, reflecting a significant increase in reliance on debt financing relative to total capital, consistent with the notable rise in total debt and continued decline in total capital.

The data reveals several noteworthy trends in the financial structure over the five-year period.

Total Debt (including operating lease liability)

Total debt decreased consistently from 51,673 million USD at the end of 2020 to 40,717 million USD by the end of 2022. In 2023, a slight increase was observed, with total debt rising to 41,464 million USD, followed by a more pronounced rise to 51,200 million USD in 2024. This suggests a period of deleveraging followed by renewed borrowing or lease obligations toward the end of the timeline.

Total Capital (including operating lease liability)

Total capital exhibited a steady downward trend from 89,495 million USD at the end of 2020 to 67,535 million USD by the end of 2024. The year-on-year decline indicates a contraction in the company's overall capital base, with the most significant reductions occurring between 2021 and 2024.

Debt to Capital Ratio (including operating lease liability)

The debt to capital ratio remained relatively stable, fluctuating between 0.56 and 0.58 from 2020 through 2023. This stability indicates consistent leverage relative to capital during this period. However, a sharp increase to 0.76 in 2024 highlights a significant shift toward greater reliance on debt financing or lease liabilities compared to the total capital base. This change reflects the simultaneous rise in total debt and the decrease in total capital observed in 2024.

Overall, the data indicates a strategy focused initially on reducing debt and capital base through 2022, followed by increased leverage and borrowing in 2024. The substantial increase in debt relative to capital in 2024 merits attention as it may impact the company’s financial risk profile going forward.

Total Debt

The total debt shows a declining trend from 2020 to 2022, decreasing from 50,676 million US dollars to 39,320 million US dollars. In 2023, there is a slight increase to 39,772 million US dollars, followed by a significant rise in 2024 to 49,649 million US dollars, approaching the levels seen in 2020.

Total Assets

Total assets display a continuous downward trend over the entire period, starting from 118,481 million US dollars in 2020 and decreasing each year to reach 92,603 million US dollars by 2024. This consistent decline suggests a reduction in the company's asset base over these years.

Debt to Assets Ratio

The debt to assets ratio initially decreases from 0.43 in 2020 to a low of 0.41 in 2021 and 2022, indicating an improvement in the company’s leverage position relative to its assets. However, in 2023, the ratio slightly increases to 0.42 and then experiences a sharp rise to 0.54 in 2024, reflecting a marked increase in leverage. This change is largely due to the combined effect of rising debt and decreasing assets in 2024.

The financial data reveals notable trends in the company's debt levels, asset base, and leverage ratios over the five-year period analyzed.

Total Debt (Including Operating Lease Liability)

The total debt exhibited a generally decreasing trend from 2020 to 2022, declining from $51,673 million to $40,717 million. In 2023, this value slightly increased to $41,464 million. However, there is a marked increase in 2024, with total debt rising sharply to $51,200 million, nearly reaching the 2020 level.

Total Assets

Total assets showed a consistent downward trend over the entire period, declining from $118,481 million in 2020 to $92,603 million in 2024. This steady decrease indicates a shrinking asset base year over year, with the most significant decreases occurring between 2021 and 2024.

Debt to Assets Ratio (Including Operating Lease Liability)

The debt to assets ratio generally decreased slightly from 0.44 in 2020 to 0.42 in 2021 and remained stable at 0.42 in 2022. This suggests a modest reduction in leverage during these years. However, the ratio rose back to 0.44 in 2023 and increased sharply to 0.55 in 2024. The 2024 figure indicates a considerable increase in financial leverage, reflecting both the rise in total debt and the continuing decline in total assets.

Overall, the data suggests a strategy or environment where the company reduced its debt relative to assets through 2022, followed by an increase in leverage by 2024, driven primarily by rising debt levels combined with a shrinking asset base. This may imply increased financial risk or a shift in capital structure approach in the most recent year analyzed.

Total Assets

The total assets exhibit a declining trend over the five-year period. Starting from US$118,481 million at the end of 2020, there is a consistent decrease reaching US$92,603 million by the end of 2024. This indicates a reduction in the company’s asset base by approximately 22% over these years.

Total Shareholders’ Equity

The total shareholders’ equity also shows a downward trajectory from US$37,822 million in 2020 to US$16,335 million in 2024. The decline appears more pronounced between 2023 and 2024, where equity drops sharply, suggesting significant changes in retained earnings or capital structure in the most recent period.

Financial Leverage

Financial leverage remains relatively stable around the 3.0 to 3.2 range from 2020 to 2023, indicating a consistent relationship between total assets and shareholders' equity. However, there is a marked increase to 5.67 in 2024. This sharp rise in leverage suggests a substantial increase in debt or liabilities relative to equity, implying greater financial risk or a shift in capital funding strategy.

Earnings before interest and tax (EBIT)

The EBIT values exhibit significant volatility throughout the observed periods. In 2020, the EBIT was strongly negative at -5,451 million US dollars, indicating substantial operational losses. This situation reversed dramatically in 2021 with a notable positive EBIT of 9,432 million US dollars, maintaining a high level in 2022 at 8,945 million and slightly increasing to 9,606 million in 2023. However, by 2024, there was a sharp decline to a negative EBIT of -6,432 million US dollars, signaling a considerable deterioration in operational profitability.

Interest expense

The interest expenses show a generally decreasing trend from 2020 through 2023, starting at 1,420 million US dollars and progressively declining to 1,166 million US dollars in 2023. In 2024, there is a marked increase in interest expenses to 1,947 million US dollars, which is the highest value observed across the five-year period.

Interest coverage ratio

The interest coverage ratio mirrors the EBIT trend, reflecting the company's ability to cover interest expenses through operating earnings. In 2020, the ratio was negative at -3.84, consistent with the negative EBIT and indicating insufficient earnings to cover interest. It improved dramatically to 7.07 in 2021, continuing to increase slightly in 2022 (7.26) and 2023 (8.24), suggesting robust earnings relative to interest costs during these years. In 2024, this ratio fell sharply to -3.3, once again indicating a failure to cover interest expenses with earnings.

Earnings before fixed charges and tax

The earnings before fixed charges and tax displayed notable volatility over the five-year period. In 2020, the value was significantly negative at -5188 million USD, indicating considerable operational challenges or high expenses relative to earnings. A substantial recovery occurred in 2021, with earnings turning strongly positive to 9713 million USD. This positive trend continued with slight fluctuations, reaching 9169 million USD in 2022 and increasing marginally to 9923 million USD in 2023. However, in 2024, the earnings sharply reverted to a negative value of -6142 million USD, signifying a significant downturn or exceptional costs impacting profitability.

Fixed charges

Fixed charges exhibited a decreasing trend from 1683 million USD in 2020 to 1456 million USD in 2022, suggesting a reduction in fixed financial obligations during this period. This was followed by a slight increase to 1483 million USD in 2023, indicative of relatively stable fixed charges for that year. In 2024, there was a marked rise to 2237 million USD, representing a significant increase in fixed charges which could correspond to increased debt servicing costs or other fixed financial obligations.

Fixed charge coverage ratio

The fixed charge coverage ratio, which measures the ability to cover fixed charges with earnings, showed considerable variability consistent with earnings before fixed charges and tax. The ratio was deeply negative at -3.08 in 2020, reflecting the negative earnings and inadequate capacity to cover fixed costs. A strong improvement was observed in 2021 and the subsequent years, reaching above 6.0 in 2021, 6.3 in 2022, and 6.69 in 2023, indicating ample coverage of fixed charges and improved financial stability. However, in 2024, this ratio dropped sharply to -2.75, corresponding to the negative earnings and increased fixed charges, signaling a weakened ability to meet fixed financial obligations.