Lockheed Martin Corp. (NYSE:LMT)

The financial analysis reveals several notable trends in the company's leverage and coverage ratios over the examined periods.

Debt to Equity Ratio

This ratio exhibited a significant downward trend from a high of 3.68 in March 2020 to a low of approximately 0.96 in September 2022, indicating a reduction in reliance on debt financing relative to shareholders' equity. However, starting from late 2022, the ratio began trending upward again, reaching values above 4.0 by September 2025. This recent increase suggests a resurgence in debt relative to equity, which may imply a shift towards greater financial risk or increased borrowing.

Debt to Capital Ratio

The ratio declined moderately from 0.79 in March 2020 to around 0.49 by September 2022, reflecting a decrease in the proportion of debt in the company’s capital structure. From that point, the ratio increased steadily, fluctuating between 0.62 and 0.80 until late 2025. This rise following the earlier decline indicates a gradual increase in the company's debt levels relative to total capital.

Debt to Assets Ratio

The metric remained relatively stable with slight declines from 0.26 in early 2020 to about 0.22 in late 2022, indicative of a consistent or slightly reduced debt load relative to total assets. Afterward, a noticeable upward shift was observed, climbing to approximately 0.37 by late 2025. The increase suggests growing leverage with respect to assets, which could impact asset risk profile.

Financial Leverage

The company's financial leverage ratio decreased significantly from 14.29 in March 2020 to about 4.35 in September 2022, suggesting a strong reduction in the multiplier effect of equity financing on assets. However, subsequent quarters showed an increase, reaching 11.04 by September 2025, a level indicative of heightened leverage and potentially increased risk exposure.

Interest Coverage Ratio

Interest coverage was not reported for early periods but showed strong figures ranging from 10.88 to nearly 16 between late 2020 and early 2022, reflecting robust earnings capacity relative to interest expenses. Beginning in 2022, the ratio declined steadily each quarter, reaching as low as 5.5 by September 2025. This downward trend indicates decreasing ability to cover interest expenses, which may highlight rising financial strain or reduced profitability.

Overall, the data indicates that the company initially strengthened its balance sheet by lowering leverage and improving coverage ratios through 2022. However, from that point onward, the observed trends point to increasing debt levels and reduced interest coverage, signaling a potential shift toward a more leveraged and risk-exposed financial position by late 2025.

The analysis of the quarterly financial data reveals several notable trends in the company's capital structure over the periods observed.

Total Debt

Total debt remained relatively stable from early 2020 through late 2021, fluctuating around the 11,600 to 12,700 million US$ range. However, beginning in late 2022, there is a clear upward trajectory, with total debt increasing significantly and reaching over 22,000 million US$ by the end of the latest quarter in 2025. This represents almost a doubling of debt levels compared to the initial period in 2020.

Stockholders’ Equity

Stockholders’ equity showed an initial growth trend from early 2020 through late 2021, increasing from about 3,400 million US$ to a peak near 11,000 million US$. This was followed by a period marked by volatility and a general decline, with equity falling to lows around 5,300 million US$ by late 2025. The equity levels in the final periods are notably lower than the peak values observed in 2021.

Debt to Equity Ratio

The debt to equity ratio exhibited a steady downward trend from early 2020 through late 2021, indicating an improving balance between debt and equity financing, with the ratio dropping from approximately 3.7 to near 1.1. Starting in early 2022, the ratio reversed course and increased sharply, peaking above 4.0 in late 2025, suggesting a heavier reliance on debt relative to equity. This ratio increase corresponds closely with the simultaneous rise in total debt and decline in equity during this period.

Overall, the trends indicate that the company managed to strengthen its equity position relative to debt through 2021 but thereafter has taken on substantially more debt while equity weakened, resulting in a significant increase in leverage by the end of the analyzed period. This shift may have implications for the company’s financial risk profile and warrants careful monitoring moving forward.

The company’s financial leverage exhibits notable fluctuations over the reported periods. Total debt, measured in millions of US dollars, remained relatively stable from early 2020 through late 2021, fluctuating slightly around the range of approximately 11,600 to 12,700 million. Starting from the end of 2021, there is a discernible upward trend in debt, accelerating significantly through 2022 and into 2023 and 2024, where it escalates from approximately 11,500 million to over 22,000 million by late 2025.

Total capital, also reported in millions of US dollars, displays a generally increasing trajectory over the time span. Initially, it rises steadily from about 16,000 million in early 2020 to a peak nearing 26,800 million around mid-2023. Thereafter, total capital fluctuates, with some periods showing minor declines but remains overall elevated compared to the earlier years. By late 2025, it approaches nearly 28,400 million, indicating growth in the company's capital base despite intermittent variability.

The debt-to-capital ratio, a key indicator of financial leverage and risk, reflects meaningful variability and provides insight into the company's capital structure dynamics. The ratio declines from a high of 0.79 in early 2020 to a low near 0.49 by late 2022, signaling a reduction in leverage and potentially a more conservative capital structure during this period. However, starting from late 2022, the ratio exhibits an upward trend, rising steadily back to levels between 0.75 and 0.80 by the end of the series in 2025. This suggests an increasing reliance on debt financing, reaching leverage levels comparable to or exceeding those in early 2020.

Overall, the data reveal a period of deleveraging through 2021 and early 2022, characterized by stable or modestly increasing capital and controlled debt levels. This trend reverses from late 2022 onward, as debt rises more sharply relative to capital, increasing the company's financial leverage. The post-2022 increase in the debt-to-capital ratio toward 0.8 indicates a strategic shift or response to market or operational factors resulting in higher debt utilization within the capital structure.

The analysis of the financial data reveals the following trends and observations regarding the company's debt and asset structure over the reported periods.

Total Debt

The total debt remained relatively stable from March 2020 to December 2021, fluctuating slightly around the range of approximately $11.6 billion to $12.7 billion. Beginning in December 2022, a notable increase in total debt occurred, rising significantly from about $11.5 billion to exceed $22 billion by September 2025. This increase indicates an accelerated accumulation of debt in recent periods.

Total Assets

Total assets showed a general upward trend, rising from approximately $49.2 billion in March 2020 to around $57 billion by September 2023. Thereafter, there was a temporary decrease to about $52.5 billion by December 2023. Subsequently, asset levels resumed growth, reaching over $60 billion by September 2025, reflecting an overall expansion of the company's asset base over the full time frame.

Debt to Assets Ratio

The debt to assets ratio initially decreased from 0.26 in March 2020 to a low of 0.22 by September 2022, indicating improved leverage and a stronger asset base relative to debt. However, starting from December 2022, this ratio increased steadily, reaching 0.37 by September 2025. This upward movement signifies that debt grew at a faster pace than assets in the later periods, implying increased financial leverage and potentially higher risk exposure.

In summary, the company managed relatively stable debt levels in the early periods with a gradual asset increase, leading to improved leverage ratios. However, from late 2022 onwards, debt surged considerably while assets grew more moderately. Consequently, the debt to assets ratio increased substantially, suggesting a shift towards higher leverage that may warrant careful monitoring from a financial risk perspective.

The analysis of the quarterly financial data reveals several notable trends related to total assets, stockholders’ equity, and financial leverage over the examined periods.

Total Assets

Total assets have generally exhibited a gradual upward trend with some fluctuations. Starting at approximately 49.2 billion US dollars in the first quarter of 2020, the total assets increased steadily with minor declines, reaching around 60.3 billion US dollars by the last quarter of 2025. Notably, there was a slight dip observed in late 2023, but the overall trajectory remained positive, indicating asset growth over the five-year span.

Stockholders' Equity

Stockholders’ equity showed more volatility in comparison to total assets. Initial growth was observed from about 3.4 billion US dollars in the first quarter of 2020 to a peak of approximately 11 billion US dollars in late 2021. Following this peak, equity values demonstrated a declining trend, falling below 7 billion US dollars towards the end of 2023 and fluctuating thereafter with values generally ranging between 5.3 to 6.7 billion US dollars through 2024 and 2025. This pattern may reflect changes in retained earnings, dividends, share repurchases, or other equity movements.

Financial Leverage

The financial leverage ratio, defined as the ratio of total assets to stockholders’ equity, decreased significantly from an initial value of about 14.3 in early 2020 to a low near 4.3 in late 2022, indicating a stronger equity base relative to assets during this period. However, post-2022, financial leverage increased again, reaching a peak of above 11 by mid-2025 before slightly declining to around 9.7 at the end of 2025. This rising leverage in later periods suggests increased reliance on debt or other liabilities relative to equity, which might imply greater financial risk or shifts in capital structure strategy.

In summary, the data portrays a company growing its asset base steadily, while equity experienced significant fluctuations with a notable peak followed by decline. Financial leverage mirrored these changes inversely, indicating a period of deleveraging until 2022, followed by increased leverage, suggesting evolving financial policies or market conditions impacting the company's capital structure decisions.

The earnings before interest and tax (EBIT) of the company exhibited significant fluctuations over the reported quarters. Initially, EBIT values were stable around the 2100-2300 million US$ range, with a notable dip to 820 million US$ in the quarter ending September 26, 2021. Subsequently, EBIT recovered and fluctuated again between approximately 2190 and 2399 million US$ until the quarter ending September 29, 2024, when it again sharply dropped to 783 million US$. Following this decline, EBIT showed some recovery but remained volatile, creating an inconsistent trend toward the final reported period.

Interest expense showed a general upward trend across the quarters. Starting from around 148 million US$ at the beginning of the period, interest expense gradually increased with minor variability, reaching 286 million US$ by the last reported quarter. This steady increase in interest costs may indicate rising debt levels or increased borrowing costs.

Interest coverage ratio, which measures the company's ability to cover interest expenses with EBIT, showed a consistent declining trend. Early data points indicate a strong coverage ratio above 14 times, but this ratio steadily decreased, falling below 6 times in the latest quarters. The combination of decreasing EBIT and increasing interest expense contributed to the lower interest coverage, signaling potentially greater financial risk related to interest obligations.

Overall, the data reveals volatility in operating profitability and a clear upward trend in financing costs. The declining interest coverage ratio over time suggests increasing pressure on the company's operating earnings to meet interest payments, which may warrant further analysis of debt management and operational efficiency going forward.