Delta Air Lines Inc. (NYSE:DAL)

Debt to Equity Ratio

The debt to equity ratio exhibited stability from early 2018 through 2019, fluctuating modestly between 0.67 and 0.83. Beginning in the first quarter of 2020, this ratio saw a sharp increase, peaking dramatically at 60.26 in March 2021. Following this peak, the ratio declined steadily but remained elevated relative to pre-2020 levels, settling around 6.52 by mid-2022.

Debt to Equity Ratio (Including Operating Lease Liability)

This metric followed a similar pattern to the basic debt to equity ratio, with slightly higher values throughout. It showed a moderate increase through 2019, then surged in early 2020, peaking at 73.16 in March 2021. The ratio subsequently decreased but stayed higher than pre-pandemic figures, ending near 8.55 in mid-2022.

Debt to Capital Ratio

The debt to capital ratio remained relatively consistent from 2018 through 2019, staying around the 0.40 to 0.45 range. Starting in March 2020, there was a noticeable rise, reaching a maximum of 0.98 in March 2021. Afterwards, the ratio decreased moderately, ending near 0.87 by June 2022.

Debt to Capital Ratio (Including Operating Lease Liability)

This ratio paralleled the basic debt to capital ratio but at higher levels, indicating the impact of operating lease liabilities. It increased from approximately 0.40 to a peak of 0.99 in March 2021, then gradually declined, finishing at 0.90 in mid-2022.

Debt to Assets Ratio

The debt to assets ratio was relatively stable at around 0.16 to 0.18 throughout 2018 and 2019. There was a significant increase beginning in early 2020, peaking at 0.40 in March 2021. It decreased consistently thereafter, reaching 0.33 by mid-2022.

Debt to Assets Ratio (Including Operating Lease Liability)

Including operating lease liabilities, this ratio mirrored the trend of the basic debt to assets ratio but at higher levels. It rose from fluctuating around 0.16-0.18 pre-2020 to a high of 0.49 in March 2021 before declining slightly to 0.44 mid-2022.

Financial Leverage

Financial leverage showed minor fluctuations between 4.0 and 4.8 from early 2018 to late 2019. Starting in early 2020, the ratio spiked sharply, reaching an extraordinary peak of 151.62 in March 2021. Following this unprecedented increase, the ratio decreased significantly but remained elevated through mid-2022, measured at 19.63.

Interest Coverage Ratio

Interest coverage remained strong and positive from 2018 through 2019, ranging roughly between 14 and 22, indicating robust earnings relative to interest expenses. In the first half of 2020, the ratio turned negative, reflecting operating losses or insufficient earnings to cover interest expenses. Although the ratio remained negative through much of 2020 and early 2021, it showed gradual improvement from -12.62 in late 2020 to positive territory by the start of 2022. By mid-2022, the ratio improved to about 1.86, suggesting modest recovery in earnings relative to interest costs.

Overall Analysis

The data indicates that the company experienced heightened financial leverage and increased reliance on debt beginning in early 2020, likely linked to extraordinary circumstances during that period. Debt-related metrics peaked dramatically around the first quarter of 2021 before showing gradual improvement yet remaining elevated compared to pre-2020 levels. Interest coverage demonstrates a significant deterioration during 2020 with losses reflected in negative ratios, followed by a slow recovery into positive coverage in 2021 and 2022. These patterns suggest substantial financial stress during 2020-2021, with gradual stabilization occurring thereafter.

The financial data reveals notable shifts in the company’s capital structure from the first quarter of 2018 through the second quarter of 2022. Three main elements are observed: total debt, stockholders’ equity, and the debt-to-equity ratio. Each metric reflects evolving trends with implications for financial leverage and risk.

Total Debt

Total debt showed a generally increasing trend over the entire period, rising from approximately $8.6 billion in early 2018 to a peak near $34.9 billion in the third quarter of 2020. After this peak, total debt gradually declined to about $24.8 billion by mid-2022. The marked increase in debt starting in early 2020 suggests significant borrowing, possibly to manage liquidity or to support operations through adverse conditions.

Stockholders’ Equity

Stockholders’ equity fluctuated substantially over the period. Beginning at around $12.6 billion in early 2018, equity initially trended upward, reaching a high of about $15.4 billion at the end of 2019. However, by mid-2020, equity declined sharply to under $3.4 billion and continued to fall, bottoming out near $480 million by the end of 2020. Some recovery is observed starting in 2021, with equity reaching close to $3.8 billion by mid-2022, but it remains significantly below earlier levels. This volatility likely reflects asset write-downs, losses, or other equity impairments during the downturn period.

Debt to Equity Ratio

The debt-to-equity ratio remained relatively stable and below 1.0 before 2020, oscillating between 0.67 and 0.83, indicating balanced leverage. Beginning in 2020, the ratio surged dramatically, reaching an extreme high of 60.26 at the end of 2020. This spike corresponds with the precipitous fall in equity and the peak in debt. Subsequent quarters show a gradual decline of the ratio, dropping to 6.52 by mid-2022. Despite this reduction, the leverage ratio remains substantially elevated compared to pre-2020 levels, indicating a persistently higher debt burden relative to equity.

In summary, the company experienced significant financial stress beginning in early 2020, as evidenced by a sharp increase in total debt and a drastic reduction in stockholders’ equity. This led to an unprecedented rise in the debt-to-equity ratio, reflecting a much higher reliance on debt financing. Partial recovery is seen in equity and a reduction of leverage since late 2020, yet the capital structure remains more leveraged and potentially riskier than the stable position observed pre-2020. These patterns suggest a period of financial adversity followed by gradual stabilization.

Total Debt (Including Operating Lease Liability)

The total debt exhibited an increasing trend from March 2018 through September 2020, rising from approximately 8.6 billion USD to a peak of over 41 billion USD. After this peak, debt levels decreased moderately but remained elevated, stabilizing around 32 to 34 billion USD by mid-2022. This suggests substantial leveraging, especially during 2020, which could be related to external financial pressures or strategic borrowing.

Stockholders’ Equity

Stockholders’ equity initially maintained growth from March 2018 to December 2019, increasing from about 12.6 billion USD to over 15 billion USD. However, a sharp decline occurred starting in the first quarter of 2020, falling drastically to below 2 billion USD by the end of 2020, and reaching a low point of approximately 482 million USD in the first quarter of 2021. Although a gradual recovery in equity followed through mid-2022, the levels remained significantly below the pre-2020 values. This denotes considerable erosion of equity, potentially due to operating losses or other financial impacts during this period.

Debt to Equity Ratio (Including Operating Lease Liability)

The debt to equity ratio was relatively stable and moderate before 2020, fluctuating between 0.68 and 1.36. Beginning in early 2020, the ratio increased sharply, peaking at 73.16 in March 2021, which indicates that debt vastly overwhelmed shareholder equity during this period. Subsequent quarters saw a reduction in this ratio but it still remained high, above 8 by mid-2022. This reflects increased financial risk and leverage, driven both by heightened debt and severely reduced equity levels.

Overall Financial Trends

The data reveal significant financial stress commencing in early 2020, characterized by a sharp increase in debt and a pronounced decline in equity. While some mitigation in debt and partial equity recovery occurred post-2021, the company sustained elevated leverage and weakened equity levels relative to prior years. These trends may be indicative of strategic responses to external challenges, exemplified by increased borrowing to offset operational impacts and diminished equity due to cumulative losses or asset adjustments.

The analysis of the quarterly financial data reveals several key trends in the company's leverage and capital structure over the examined periods.

Total Debt

Total debt exhibited a gradual upward trend from early 2018 through late 2019, increasing from approximately $8.6 billion to around $11.2 billion. Starting from the first quarter of 2020, debt levels rose sharply, peaking at nearly $35 billion in the third quarter of 2020. Subsequent quarters show a partial reduction in debt, declining steadily to just under $25 billion by mid-2022.

Total Capital

Total capital grew modestly from approximately $21.2 billion in the first quarter of 2018 to $26.5 billion by the end of 2019. Following this period, capital increased significantly to over $38 billion in the third quarter of 2020. After that peak, total capital decreased notably to about $30.6 billion by the end of 2020, then generally stabilized near the $28.5 billion to $30.8 billion range through mid-2022.

Debt to Capital Ratio

The debt to capital ratio remained relatively stable, fluctuating between 0.40 and 0.45 from early 2018 to late 2019. Beginning in the first quarter of 2020, the ratio escalated sharply, reaching a high of 0.98 at the end of 2020. This indicates a significant increase in the proportion of debt financing relative to total capital during this period. From 2021 onwards, the ratio gradually declined but remained elevated, fluctuating between 0.87 and 0.96 through mid-2022.

Overall, the data indicates a marked increase in leverage starting in early 2020, likely reflecting heightened borrowing activities or capital structure adjustments in response to external or operational challenges during that time. Despite some deleveraging afterward, the firm maintained a higher debt-to-capital ratio compared to the pre-2020 period, suggesting a more debt-heavy capital base in recent quarters.

The financial data reveals significant dynamics in debt and capital structure over the specified quarters. Notably, total debt, inclusive of operating lease liabilities, exhibits a general upward trend from early 2018 through mid-2020, followed by a gradual decline thereafter.

Total Debt

The total debt increased from approximately $8.6 billion at the end of Q1 2018 to a peak exceeding $41 billion in Q3 2020, reflecting substantial borrowing activity during this period. This surge may correspond to external factors necessitating increased leverage. Subsequent to this peak, total debt levels stabilized and then moderately decreased, settling slightly above $32 billion by Q2 2022.

Total Capital

Total capital, which incorporates operating lease liabilities, rose from around $21.2 billion in early 2018 to nearly $45 billion by Q3 2020. However, a notable decline occurred in Q4 2020, where capital dropped to roughly $37 billion. The capital base then remained relatively stable with slight fluctuations, ending near $36 billion in Q2 2022.

Debt to Capital Ratio

The debt to capital ratio fluctuated moderately within 2018 but demonstrated a sharp increase starting in 2019. It escalated from roughly 0.41 at the beginning of 2018 to a high of 0.99 by Q1 2021, indicative of a growing reliance on debt relative to capital. This near equaling of debt to total capital suggests heightened financial leverage. Post Q1 2021, the ratio trended slightly downward but remained elevated around 0.90 through mid-2022.

Overall, the data suggests a period of aggressive debt accumulation culminating in late 2020, likely driven by specific financial pressures or strategic decisions. Despite reductions in total debt and capital thereafter, leverage remains substantially higher than in early 2018, highlighting ongoing elevated financial risk and dependence on debt financing.

The company's financial position over the observed periods reveals notable trends in debt management relative to its asset base. Total debt exhibited a general upward trajectory from early 2018 to mid-2020, increasing substantially from approximately $8.6 billion in March 2018 to a peak exceeding $34.8 billion by September 2020. This sharp rise indicates a significant increase in the company's leverage during this interval, possibly reflecting responses to external conditions requiring greater capital.

After reaching this peak, the total debt gradually decreased across subsequent periods, declining to about $24.8 billion by June 2022. This reduction suggests efforts to deleverage and improve the capital structure following the earlier accumulation of debt.

Regarding total assets, the company showed a gradual increase from around $54.1 billion in March 2018 to nearly $79.1 billion by September 2020. This growth in assets coincided with the rise in total debt, implying asset expansion funded, in part, by increased borrowing. However, post-September 2020, total assets declined somewhat and fluctuated moderately between approximately $72.0 billion and $75.3 billion through mid-2022.

The debt-to-assets ratio further elucidates the relationship between borrowing and asset levels. This ratio remained relatively stable and low from 2018 through 2019, fluctuating between 0.16 and 0.18, indicating moderate leverage. However, starting in early 2020, the ratio increased sharply, peaking at 0.44 in the third quarter of 2020, which corresponds to the highest recorded total debt relative to assets. This spike reflects a significant increase in financial risk and leverage during that time.

Following the peak, the ratio steadily declined, reaching approximately 0.33 by June 2022. This reduction aligns with the observed decrease in total debt and stabilizing asset base, indicating an improvement in the leverage position and potentially a strategic focus on strengthening the balance sheet.

In summary, the data reveal a period of rapid debt accumulation and asset growth culminating in significantly increased leverage around mid-2020, followed by a gradual deleveraging phase up to mid-2022. The company's leverage metrics suggest a response to fiscal pressures or investment needs that were later addressed through debt reduction and asset stabilization efforts.

Total Debt

Increased markedly from $8.6 billion in early 2018 to a peak above $34.8 billion in late 2020, then decreased to $24.8 billion by mid-2022.

Total Assets

Grew steadily from $54.1 billion to $79.1 billion by late 2020, followed by minor fluctuations and a slight decline to around $74.8 billion by mid-2022.

Debt to Assets Ratio

Remained stable around 0.16-0.18 until early 2020, surged to 0.44 by third quarter 2020, then declined steadily to approximately 0.33 by mid-2022.

The financial data reveals notable trends in the company's leverage and asset base over the analyzed quarterly periods.

Total Debt (Including Operating Lease Liability)

Total debt exhibited a general upward trajectory from early 2018 through mid-2020, beginning around $8.6 billion and reaching a peak exceeding $41 billion by September 2020. Following this peak, debt levels show a gradual decline, stabilizing in the range of approximately $33 billion to $35 billion through mid-2022.

Total Assets

Total assets displayed a steady increase over the observed periods, rising from about $54 billion in early 2018 to nearly $79 billion by late 2020. After that, asset levels slightly decreased and stabilized around the $72 billion to $75 billion range through mid-2022, indicating a largely stable asset base post-peak.

Debt to Assets Ratio (Including Operating Lease Liability)

The debt to assets ratio saw a marked increase from approximately 0.16 in early 2018 to a concerning high point of 0.52 in September 2020. This sharp rise correlates with the significant increase in debt during this period. Thereafter, the ratio declines somewhat to the mid-0.40s range, suggesting an improvement in leverage but remaining above pre-2019 levels.

Overall Analysis

The data suggests that the company substantially increased leverage beginning in 2018, peaking in 2020, which is likely connected to strategic responses to external circumstances affecting liquidity and financing requirements. The subsequent reduction in debt and improvement in the debt to assets ratio after 2020 indicates efforts to manage and reduce financial risk. The total assets growth followed a steadier path, with a notable plateau and slight decline after 2020, possibly reflecting asset revaluation or divestitures. The debt to assets ratio's movement highlights increased financial risk during 2019-2020, followed by a gradual deleveraging phase.

The analysis of the quarterly financial data reveals several notable trends in the company’s asset base, equity position, and financial leverage over the observed periods.

Total Assets

Total assets exhibited a generally upward trend from the first quarter of 2018 through mid-2020, rising from approximately 54.1 billion US dollars to a peak near 79.1 billion US dollars. This was followed by some volatility, with assets declining to around 72.0 billion US dollars by the end of 2020. Subsequently, the asset base showed a modest recovery and stabilization, fluctuating around the 73.0 to 74.8 billion US dollars range through mid-2022.

Stockholders’ Equity

Stockholders' equity experienced a different trajectory compared to total assets. It showed moderate growth from early 2018, increasing from around 12.6 billion to approximately 15.4 billion US dollars by late 2019. However, a dramatic decline occurred starting in early 2020, coinciding with the onset of the global crisis period, dropping sharply to roughly 1.5 billion US dollars by the end of 2020. Post this low point, equity levels remained very low relative to prior years, with only slight gains, reaching a peak of about 3.9 billion US dollars in late 2021 before decreasing again and stabilizing near 3.0 to 3.8 billion US dollars by mid-2022.

Financial Leverage

The financial leverage ratio, defined as total assets divided by stockholders’ equity, exhibited significant fluctuations, reflecting the changes in equity relative to assets. The ratio was relatively stable and moderate during 2018 and 2019, ranging roughly between 4.0 and 4.8. Beginning in early 2020, there was a sharp increase in leverage, reaching unprecedented highs with peaks at 23.56 and escalating dramatically to 46.93 and later exceeding 150 in early 2021. This extraordinary leverage indicates a substantial increase in assets relative to eroded equity, consistent with the sharp decline observed in shareholder equity. After peaking, leverage decreased but remained elevated well above pre-2020 levels, fluctuating between approximately 18.6 and 58.8 through mid-2022.

Overall, the data portrays a period of growth in asset size through 2019, interrupted by a severe erosion of equity in 2020, likely driven by significant losses or capital reductions. This led to a dramatic rise in financial leverage, signaling increased financial risk and a weakened equity buffer against liabilities. Although there are signs of partial recovery or stabilization in the equity base and leverage ratios post-2020, the capital structure remains considerably more leveraged compared to the pre-crisis period.

The earnings before interest and tax (EBIT) exhibited considerable fluctuations over the analyzed periods. Initially, from the first quarter of 2018 through the end of 2019, EBIT demonstrated a generally positive and somewhat stable trend, with values consistently exceeding US$800 million, peaking at approximately US$2 billion in the third quarter of 2019. However, starting in the first quarter of 2020, EBIT turned negative, signaling challenges; the lowest points were observed in the second and third quarters of 2020 with values falling below negative US$6 billion. Although there was some recovery into 2021, the figures remained volatile, with EBIT oscillating between negative and positive territory and without reestablishing the strong positive levels seen prior to 2020. By mid-2022, EBIT showed modest improvement, returning to positive figures just above US$1 billion.

Regarding the net interest expense, the data reveals a gradual increase over time with notable spikes during the pandemic year. The net interest expense remained relatively stable and moderate before 2020, generally fluctuating between US$67 million to US$92 million per quarter. From the first quarter of 2020 onwards, the interest expense rose sharply, peaking at US$365 million in the fourth quarter of 2020. Subsequent quarters through 2022 saw interest expenses remain elevated compared to pre-2020 levels but demonstrated a slight declining trend after the peak.

The interest coverage ratio, reflecting EBIT relative to interest expense, showed strong coverage capacity prior to 2020. Values were consistently above 14, peaking above 21 at times, indicating healthy earnings relative to interest costs. However, starting in the first quarter of 2020, the ratio plunged into negative territory, reaching approximately -19.5 in the third quarter of 2020, highlighting significant difficulties in covering interest expenses from operating earnings. Recovery efforts appear evident as the ratio improved from negative extremes in 2021 to positive values near 1.86 by mid-2022, suggesting gradual restoration of operational earnings adequate to cover interest obligations, though still substantially weaker compared to pre-2020 periods.

In summary, the financial indicators suggest that the company experienced a severe operational and financial stress period beginning in early 2020, with sharp declines in EBIT and deterioration in interest coverage, alongside increasing interest expenses. There are gradual signs of recovery into 2021 and 2022, yet the financial health has not yet reached pre-crisis levels. Monitoring of EBIT trends and interest expense management remains critical going forward to ensure sustained profitability and financial stability.