Bristol-Myers Squibb Co. (NYSE:BMY)

Debt to Equity Ratio

The debt to equity ratio exhibited a moderate degree of fluctuation over the observed periods from March 2020 to March 2025. Initially, the ratio hovered around 0.9 to 1.34, indicating a balanced leverage position. Through 2021 and 2022, the ratio remained relatively stable, generally between 1.18 and 1.42. However, starting in early 2024, a marked increase is evident with the ratio rising significantly to levels above 2.8, peaking at 3.38 in March 2024. This suggests a considerable increase in leverage, reflecting a higher reliance on debt relative to equity in the recent periods.

Debt to Capital Ratio

The debt to capital ratio reflected a steady upward trend over the five-year period. Early readings oscillated between 0.47 and 0.57, indicating a moderate proportion of debt in the capital structure. From 2023 onward, the ratio steadily increased, reaching as high as 0.77 in March 2024 before slightly stabilizing around 0.74-0.75 in subsequent quarters. This consistent increase implies a growing proportion of debt financing compared to total capital.

Debt to Assets Ratio

The debt to assets ratio followed a similar trajectory to the debt to capital ratio, indicating a gradual increase in leverage relative to total assets. Starting near 0.36 in early 2020, the metric rose modestly to approximately 0.42 by late 2021. From 2023 forward, there was a notable increase reaching 0.56 in March 2024, with minor fluctuations afterwards but staying above 0.53. This trend signals an elevated use of debt financing as a percentage of total asset base, suggesting increased financial risk.

Financial Leverage Ratio

The financial leverage ratio exhibited moderate variability initially, maintaining around 2.5 to 3.3 through 2020 to 2023, which translates to a leverage level of roughly 2.5 to 3 times equity. From early 2024, a significant surge is observable, with the ratio nearly doubling to peak at 6.01 in March 2024, followed by a slight reduction but sustaining a high level above 5 for the remaining quarters. This sharp rise points to considerably higher leverage, implying that the company is increasingly financing its assets through debt, thus potentially increasing financial risk and the burden of debt obligations.

The financial data reveal several distinct trends concerning total debt, shareholders' equity, and the debt-to-equity ratio over the observed periods.

Total Debt

Total debt has shown some fluctuation but generally follows a gradual decline from the beginning of the period until late 2023. Specifically, total debt decreased from approximately $46.7 billion in March 2020 to around $37.6 billion by September 2023. However, starting from late 2023, debt levels increased notably, peaking at about $55.7 billion in March 2024, before slightly retracing but remaining elevated above $49 billion through March 2025. This pattern indicates a significant rise in debt obligations beginning in early 2024.

Total Shareholders’ Equity

Shareholders’ equity exhibited a declining trend overall. Initially, equity was near $49.9 billion in early 2020 but dropped sharply to less than $38 billion by the end of 2020. After this sharp fall, equity remained relatively stable around the $31 billion mark through 2022 and into early 2023, followed by a further decline to approximately $29 billion in late 2023. From early 2024 onward, shareholders' equity decreased drastically, reaching a low of about $16.3 billion in December 2024, with a slight recovery to $17.4 billion by March 2025. This pronounced decrease in equity coincides with the period of increased debt.

Debt to Equity Ratio

The debt-to-equity ratio reflects the interplay between total debt and shareholders’ equity. Initially, the ratio was below 1.0, indicating a relatively balanced capital structure, but it spiked sharply in December 2020 to 1.34 due to reduced equity and persistent debt levels. After this peak, the ratio fluctuated moderately around the 1.2 to 1.3 range until late 2023. Beginning in 2024, the ratio experienced a dramatic increase, jumping from 1.35 in December 2023 to over 3.3 in March 2024, indicating that debt levels have become more than three times the equity. The ratio remained elevated, fluctuating slightly but staying close to this high level through March 2025. This surge indicates a substantial increase in financial leverage during 2024.

Overall, the data suggest that the company has taken on significantly more debt relative to its equity starting in early 2024, resulting in a marked increase in financial leverage. This shift could imply changes in financing strategy, possible acquisitions, or other capital-intensive activities. Concurrently, the reduction in shareholders' equity weakens the equity base, amplifying the impact of rising debt on the company’s capital structure. Such a pronounced change in leverage ratios warrants close attention, as it may affect financial risk and cost of capital going forward.

Total Debt

Total debt showed a general decline from March 2020 through December 2023, decreasing from approximately $46.7 billion to about $39.8 billion. This indicates a steady deleveraging trend over nearly four years. However, starting in March 2024, total debt increased significantly, rising sharply to $55.7 billion by the end of that quarter. After this peak, total debt decreased gradually but remained elevated relative to prior years, ending at around $49.7 billion by March 2025.

Total Capital

Total capital exhibited a downward trend from about $96.6 billion in March 2020 to roughly $66.6 billion in March 2025. This represents a substantial contraction over this five-year horizon. The decline was relatively steady, with a few periods of moderate stabilization, such as around 2022 and early 2023. No major rebounds are evident during this timeframe, suggesting a reduction in the company's overall capital base.

Debt to Capital Ratio

The debt to capital ratio initially fluctuated around the 0.47 to 0.57 range between 2020 and early 2023, indicating a moderate level of leverage with some variability. Beginning in the first quarter of 2024, the ratio increased sharply to approximately 0.77, reflecting a marked rise in leverage consistent with the spike observed in total debt. This elevated leverage ratio persisted through 2024 and into early 2025, with values consistently near 0.74-0.75, significantly higher than any point in the previous four years.

Overall Analysis

The data reveal an initial deleveraging strategy from 2020 through 2023, characterized by reductions in both total debt and total capital, leading to relatively stable leverage ratios. This was followed by a sudden increase in debt levels starting in early 2024, resulting in a sharply higher debt to capital ratio and suggesting a shift toward greater financial leverage. Despite a reduction in total capital over the entire period, the spike in debt has increased the company's relative indebtedness significantly during the last observed year. This change in capital structure could indicate new financing activities, acquisitions, or changes in financial policy, impacting the company’s risk profile.

The analysis of the quarterly financial data reveals notable trends in the company's debt and asset levels over the period under review.

Total Debt

The total debt exhibited some volatility throughout the quarters. Initially, it remained relatively stable around the mid-46,000 million USD mark from early 2020 to early 2021, followed by a gradual decline reaching approximately 37,600 million USD by late 2021. There was a slight increase towards the end of 2021 into early 2022, with debt fluctuating between 39,000 and 42,000 million USD. From 2023 onward, the debt level stabilized around the 37,600 to 39,700 million USD range for several quarters. However, a pronounced increase occurred beginning in early 2024, with total debt surging to over 55,600 million USD by March 2024. This elevated debt level was somewhat mitigated but remained high, ending near 49,700 million USD by the first quarter of 2025.

Total Assets

The company's total assets demonstrated a consistent decreasing trend from early 2020 through much of 2023. Assets declined steadily from about 129,285 million USD in March 2020 to approximately 91,263 million USD at the end of 2022. In 2023, the total assets remained relatively stable at just under 94,000 million USD through most of the year, with a slight recovery to around 99,031 million USD in the second quarter of 2024. However, this was followed by a modest decline in the latter part of 2024 and early 2025, with assets settling close to 92,400 million USD by March 2025.

Debt to Assets Ratio

The debt to assets ratio reflects the balance between the company's liabilities and resources. Initially, the ratio was stable at around 0.36 during 2020. There was a notable increase to approximately 0.41-0.43 in the following year, indicating a higher leverage position. During 2022 and 2023, the debt to assets ratio fluctuated around the 0.40 to 0.42 range, suggesting relative stability in the leverage. However, a sharp rise in this ratio occurred in early 2024, peaking at 0.56. Despite a slight decline thereafter, the ratio remained elevated above 0.50 into 2025, indicating an increased reliance on debt financing relative to asset base compared to previous years.

Overall, the data show a trend of declining asset base over the years with a contrasting pattern in total debt that initially decreased but then sharply increased in early 2024. Consequently, leverage as measured by the debt to assets ratio rose significantly in 2024 and has stayed elevated. These changes suggest a strategic shift or external financial pressures leading to greater debt accumulation, which may imply increased financial risk or investment activity during the latter part of the observed period.

Total Assets

Total assets exhibit a general declining trend over the observed periods, decreasing from approximately 129.3 billion US dollars at the end of Q1 2020 to about 92.4 billion US dollars by the end of Q1 2025. This contraction is relatively steady, with some periods showing a sharper decline, such as between the end of 2020 and mid-2022. A slight recovery is noted around Q4 2023, reaching approximately 95.2 billion US dollars, before declining again in subsequent quarters.

Total BMS Shareholders’ Equity

Shareholders’ equity follows a downward trajectory, falling from about 49.9 billion US dollars in early 2020 to roughly 17.4 billion US dollars by Q1 2025. The series reveals significant fluctuation, particularly in late 2020 when equity dropped sharply from near 50.2 billion to 37.8 billion US dollars, indicating an extraordinary event or write-down. Subsequent fluctuations show minor recoveries and declines, with a notable decrease in equity in late 2023 and early 2024, culminating in the lowest points in mid-2024 before a slight recovery at the start of 2025.

Financial Leverage

The financial leverage ratio trends upward overall, starting near 2.59 in March 2020 and rising notably to over 5 by the end of the period examined. The ratio indicates an increasing reliance on debt relative to equity. The increase is particularly sharp between late 2023 and mid-2024, when leverage more than doubles, rising from approximately 3.23 to over 6. This coincides with the significant drop in shareholders’ equity and only a moderate decrease in total assets, suggesting a substantial increase in debt or liabilities.