Lockheed Martin Corp. (NYSE:LMT)

Debt to equity ratio

This ratio exhibits a noticeable fluctuation over the analyzed quarters. It initially declines sharply from 1.93 to a low of 0.96, indicating reduced reliance on debt compared to equity. However, starting from late 2022, there is a marked upward trend, reaching a peak of 4.06 before slightly declining to 3.59. This rising trend in the later periods suggests increased debt usage relative to equity financing.

Debt to capital ratio

The debt to capital ratio mirrors a similar pattern to the debt to equity ratio but with smaller magnitude changes. It decreases from 0.66 to 0.49 in early periods, indicating a reduction in debt as part of the company’s capital structure. Subsequently, it climbs steadily from 0.63 onwards, peaking at 0.80 before a mild decline to 0.78, reflecting an increasing proportion of capital being financed through debt.

Debt to assets ratio

This ratio remains relatively stable initially, around 0.23, and then rises gradually from late 2022 onwards, reaching 0.37 by the end of the period. The gradual increase highlights a growing share of assets being financed by debt, consistent with rising leverage observed in other debt ratios.

Financial leverage ratio

Financial leverage shows a significant decrease in the early quarters, dropping from 8.15 to 4.35. However, from the end of 2022, the ratio increases substantially, peaking at 11.04 before slightly decreasing to 9.75. This pattern indicates a shift from moderate to higher leverage, implying increased use of borrowed funds in the capital structure over time.

Interest coverage ratio

The interest coverage ratio generally trends downward throughout the periods analyzed. It starts at 15.44, indicating strong capability to cover interest expenses, then declines to 5.5 by the final quarter. This significant reduction suggests decreasing earnings relative to interest obligations, possibly signaling increased financial risk and reduced profitability margins to service debt costs.

Total Debt

The total debt shows a generally increasing trend over the periods analyzed. Starting from approximately 12,163 million US dollars, debt levels remained relatively stable through 2021 and early 2022, with minor fluctuations. From late 2022, there is a marked increase in debt, rising sharply from 15,547 million to about 22,189 million US dollars by late 2025. This indicates a significant accumulation of debt over the three-year span, particularly in the latter half of the period.

Stockholders’ Equity

Stockholders’ equity exhibits more volatility and a less consistent trend compared to total debt. Initially, equity increased from 6,312 million US dollars in early 2021 to a peak near 11,000 million by late 2021. However, from 2022 onwards, equity generally declined with some intermittent increases but overall showing a downward tendency. By the end of 2025, equity is roughly at 6,181 million US dollars, which is close to the initial level in 2021, reflecting a reduction after the earlier peak.

Debt to Equity Ratio

The debt to equity ratio presents a dynamic pattern consistent with the changes observed in total debt and equity. The ratio decreased from 1.93 in early 2021 to a low around 0.96 by late 2022, reflecting the period when debt was comparatively stable or declining and equity was higher. Subsequently, the ratio climbs sharply to exceed 4.0 by late 2025, highlighting the rapid increase in debt relative to equity during the latter stages. The rising ratio suggests growing leverage and potentially higher financial risk.

Overall Insights

The data indicates a strategic shift towards increased debt financing over the period, especially from late 2022 onward. While equity peaked at the end of 2021, it diminished thereafter, which alongside rising debt, contributed to a sharp increase in leverage. This heightened leverage ratio might imply elevated financial risk and interest obligations. Careful monitoring of equity trends and debt management will be critical going forward, considering the apparent growth in debt burden relative to the company’s equity base.

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

Total Debt

The total debt remained relatively stable from early 2021 through mid-2022, fluctuating slightly around the range of approximately $11.6 billion to $12.2 billion. However, starting in late 2022, there is a marked increase in total debt, rising sharply to exceed $22 billion by the third quarter of 2025. This indicates a significant increase in the company's borrowing or debt accumulation during the latter periods.

Total Capital

Total capital exhibited moderate growth from approximately $18.5 billion in the first quarter of 2021 to a peak near $26.8 billion by mid-2023. Afterward, there was a slight decline followed by renewed growth, culminating near $28.4 billion by late 2025. The fluctuations in capital appear less volatile compared to the increase in total debt, suggesting a relatively steady expansion of the company’s capital base over the observed timeline.

Debt to Capital Ratio

This ratio demonstrates significant variability corresponding to changes in total debt and capital. Initially, the ratio decreased from 0.66 in early 2021 to a low of around 0.49 by mid-2022, indicating a reduction in leverage and a relatively stronger capital position. Nevertheless, from late 2022 onwards, the debt to capital ratio increased substantially, reaching a high of approximately 0.80 by mid-2025. This rising ratio signals a growing reliance on debt financing compared to the company’s total capital, reflecting a shift towards a more leveraged capital structure in recent quarters.

In summary, the financial data indicates a period of stable debt and moderate capital growth in the early years, followed by a pronounced increase in total debt starting in late 2022. This shift has resulted in a higher debt to capital ratio, reflecting increased leverage. The overall trends suggest a strategic or financial decision to increase debt levels relative to capital during the latest periods under review.

Total Debt

The total debt remained relatively stable from March 2021 through September 2022, fluctuating slightly between approximately 11,600 and 12,200 million US dollars. However, starting in December 2022, there was a notable increase in total debt, rising sharply from about 15,500 million US dollars to over 22,100 million US dollars by September 2025. This upward trajectory indicates a significant accumulation of debt over the recent periods.

Total Assets

Total assets showed a moderate increasing trend over the observed timeframe. Beginning at around 51,400 million US dollars in March 2021, assets experienced small fluctuations but generally rose, reaching approximately 60,300 million US dollars by September 2025. Despite some volatility, this steady increase suggests gradual asset growth.

Debt to Assets Ratio

The debt to assets ratio was relatively stable, remaining around 0.23 from early 2021 through mid-2022. Starting from December 2022, coinciding with the rise in total debt, the ratio increased more sharply, moving from roughly 0.29 to 0.37 by September 2025. This indicates that the company's leverage intensified, with debt growing at a faster pace than assets during the later periods.

Overall Analysis

The financial data exhibits a period of balance and stability in debt levels and leverage until late 2022, after which there is a marked increase in indebtedness. Despite asset growth, the faster pace of debt accumulation led to a rising debt-to-assets ratio, reflecting higher financial leverage and potentially increased financial risk. The trends highlight an evolving capital structure with greater reliance on debt financing in the most recent quarters.

Total Assets

The total assets show a general upward trend over the entire period analyzed. Starting at approximately $51.4 billion, the asset base exhibits moderate growth with some fluctuations, reaching around $60.3 billion by the most recent quarter. Notably, there is a slight dip observed around December 2023, but the overall trajectory continues upward afterward, indicating expansion or asset accumulation over time.

Stockholders’ Equity

Stockholders’ equity demonstrates significant variability. Early in the period, equity increases substantially, reaching a peak near $11.0 billion before experiencing a decline. This decline is pronounced toward the latter part of the timeline, dropping from a higher point to levels closer to $6.1 billion. The fluctuations suggest a period of equity reduction possibly through returns to shareholders, losses, or other equity-affecting activities, with some recovery observed but generally trending lower compared to the mid-period peak.

Financial Leverage

The financial leverage ratio shows considerable variation across the periods. Initially, leverage starts high near 8.15, then decreases steadily to a low around 4.35 to 4.53, indicating reduced reliance on debt relative to equity. However, from late 2022 onward, leverage increases again, peaking above 11.0 at one point before moderating slightly but remaining elevated relative to the earlier low points. The observed pattern suggests shifts in capital structure, with periods of deleveraging followed by increasing leverage, potentially reflecting changes in financing strategy or market conditions.

Overall Insights

The company’s total asset growth accompanied by fluctuating equity levels and varying leverage ratios points to dynamic financial management. The rising financial leverage in the latter quarters, coupled with declining equity, could indicate increased borrowing or restructuring of capital. The combination of stable asset growth and changing leverage may warrant closer monitoring of debt levels and their impact on financial stability going forward.

The earnings before interest and tax (EBIT) exhibit considerable fluctuations over the observed periods. Initially, EBIT values remain relatively stable, ranging mostly between approximately $2,300 million and $2,600 million through late 2021. However, there is a pronounced dip observed in the third quarter of 2021 and again in the first quarter of 2025 where EBIT falls significantly below $1,000 million. The pattern indicates intermittent quarters with reduced operational profitability interspersed with quarters where EBIT rebounds to levels above $2,000 million, suggesting potential variability in operational performance or one-time impacts affecting earnings.

Interest expense shows a generally increasing trend throughout the time frame. Starting around $140 million in early 2021, interest expense rises steadily to approximately $280 million by late 2025. This gradual increase may reflect rising debt levels, higher cost of borrowing, or changes in capital structure.

The interest coverage ratio, which measures the company's ability to meet interest payments through EBIT, demonstrates a declining trend. Early periods show a comfortable coverage ratio above 14, indicating strong ability to cover interest obligations. However, this ratio steadily declines, reaching values near 5.5 by late 2025. This decrease signifies reduced margin of safety in meeting interest expenses, largely driven by the combined effect of fluctuating and occasionally diminished EBIT alongside increasing interest costs. The progressive reduction in interest coverage raises considerations about financial risk and the sustainability of debt levels under the current operating performance.

Summary of Key Trends

EBIT shows volatility with periodic downturns substantially below the average, pointing to inconsistent operational earnings across quarters.

Interest expenses steadily increase, implying growing financing costs over time.

The interest coverage ratio declines consistently, signaling decreasing financial flexibility and increased risk in meeting interest obligations.