Medtronic PLC (NYSE:MDT)

Debt to Equity Ratio

The debt to equity ratio exhibits some fluctuations over the presented periods, beginning at 0.52 in July 2019 and generally hovering between 0.49 and 0.6 across most quarters. Notably, the ratio increased slightly around mid-2020 and early 2021, reaching 0.6, before declining to the mid-0.4 range in mid-2022. It then rose again towards the end of 2024, peaking at 0.59. This pattern suggests moderate variability in the company's leverage relative to shareholders' equity with periodic increases in reliance on debt financing.

Debt to Capital Ratio

The debt to capital ratio remains relatively stable throughout the time span, fluctuating between approximately 0.31 and 0.37. The ratio shows slight increases around mid-2020 and again near the end of 2024, peaking at 0.37. These movements align with similar trends seen in the debt to equity ratio, indicating steady but modest adjustments in the mix of debt relative to overall capital employed.

Debt to Assets Ratio

This ratio is fairly consistent, ranging from about 0.26 to 0.31. The ratio decreased slightly in mid-2022 to around 0.26 and 0.27, then rebounded in the latter part of 2024 back to roughly 0.31. The stable trend suggests that the proportion of total assets financed by debt has experienced minimal volatility, indicating a balanced approach to asset financing.

Financial Leverage

The financial leverage ratio shows a moderate degree of fluctuation, starting at 1.81 in mid-2019 and peaking at 1.92 in early 2021. It then declined steadily to about 1.71 by mid-2022, followed by a gradual increase towards 1.91 by late 2024. The trend reveals that the company’s use of debt relative to equity has varied within a narrow band, reflecting ongoing management of leverage levels.

Interest Coverage Ratio

Interest coverage ratios are available starting from April 2020, initially reported at a moderate 4.71. There is a noticeable improvement reaching a peak above 11 around early 2022. Subsequently, the ratio stabilizes around 7.5 to 10 from 2022 through 2024, with minor fluctuations. This improvement suggests enhanced ability to cover interest expenses over time, indicating stronger earnings relative to interest obligations in the later periods.

The financial data reveals several notable trends in the company’s capital structure over the analyzed periods.

Total Debt

Total debt fluctuates over the quarters, beginning at approximately $26.3 billion in July 2019. It decreases slightly through early 2020, reaching near $24.1 billion by April 2022. Subsequently, debt shows increments, peaking around $28.3 billion in October 2024. Overall, total debt exhibits moderate volatility with a general upward trend toward the later periods.

Shareholders’ Equity

Shareholders’ equity remains relatively stable throughout the timeframe, starting at about $50.4 billion in July 2019. It marginally increases, peaking near $52.7 billion in July 2022, before trending downward to roughly $48.0 billion by April 2025. This suggests a mild decline in equity base in recent quarters following a period of modest growth.

Debt to Equity Ratio

The debt to equity ratio varies in tandem with changes in debt and equity. The ratio is initially near 0.52 in mid-2019 and declines to approximately 0.44 by mid-2022, indicating reduced leverage. However, from late 2022 onward, the ratio rises again, reaching about 0.59 by April 2025. This upward shift reflects increasing debt levels relative to shareholders’ equity, suggesting a return to higher leverage in the most recent periods.

Summary Insights

The period from 2019 to mid-2022 generally indicates a cautious approach with decreasing leverage, driven by reductions in total debt and stable-to-increasing equity. Starting in late 2022, the company appears to have increased its debt burden while equity slightly decreased, leading to a higher debt to equity ratio. This may imply a strategic decision to leverage more heavily, potentially to finance growth initiatives or manage cash flows under prevailing economic conditions.

The analysis of the financial data reveals several notable trends relating to the company's leverage and capital structure over the observed periods.

Total Debt

The total debt fluctuated over the quarters, starting at US$26,262 million in July 2019 and experiencing both increases and decreases throughout the timeframe. Initial decreases were observed until April 2020, followed by an increase reaching a peak of over US$30,000 million in January 2021. Subsequently, total debt generally trended downward through mid-2023, with occasional rises in certain quarters, such as the increase to US$28,128 million in January 2023. The most recent periods show a renewed increase, reaching US$28,516 million by April 2025, indicating variability but an overall rising tendency towards the end of the period.

Total Capital

Total capital exhibited smaller fluctuations compared to debt, beginning at US$76,625 million in July 2019. The figure showed a pattern of modest declines and recoveries across quarters, with the lowest levels observed around April 2024 at approximately US$75,238 million. The capital values remained relatively stable within a range of roughly US$75,000 million to US$81,000 million, showing resilience with no drastic changes across the entire period.

Debt to Capital Ratio

The debt to capital ratio remained relatively stable, oscillating between 0.31 and 0.37. Initially, it hovered around 0.33 to 0.34, increasing slightly to 0.37 in late 2020 and early 2021, coinciding with the peak in total debt. Following this, the ratio decreased to near 0.31 by mid-2022, reflecting a reduction in leverage relative to total capital. However, from mid-2023 onwards, the ratio again edged upward, reaching approximately 0.37 by the last recorded quarter in April 2025. This pattern indicates cyclical changes in leverage, with periods of increased indebtedness relative to capital, followed by partial deleveraging.

Overall, the data suggest that the company managed its capital structure with moderate variability in debt levels and a relatively stable capital base. The periods of increased debt and higher leverage ratios may reflect strategic financing decisions or reactions to market conditions, while the subsequent reductions suggest efforts to manage risk and maintain a balanced capital structure. The recent uptick in both debt and leverage may warrant further monitoring to assess potential impacts on financial flexibility and risk exposure.

Total Debt

The total debt figures exhibit a fluctuating pattern over the examination period. Starting at 26,262 million USD in July 2019, there was a slight decline towards April 2020 followed by a rise peaking near the end of 2020 and early 2021. Subsequently, debt decreased significantly around the second quarter of 2021 and remained relatively stable but dispersed until early 2024. Another observable increase occurred in the last four quarters through April 2025, culminating at 28,516 million USD. The variability suggests active debt management and periodic adjustments possibly linked to strategic financing or market conditions.

Total Assets

Total assets displayed modest volatility, starting from 91,268 million USD in July 2019, peaking marginally around early 2021 and early 2023 periods, reaching slightly above 94,000 million USD. However, between these peaks, there are multiple minor dips, with the lowest values observed around the first and second quarters of 2024. Despite these fluctuations, the asset base has remained relatively stable within a narrow range, reflecting consistent asset management or valuation effects over time.

Debt to Assets Ratio

The debt to assets ratio moved within a tight range predominantly between 0.26 and 0.31 throughout the reported quarters. Initial values hovering near 0.29 declined somewhat to approximately 0.27 by early 2020. Periods of increase and decrease correspond closely with movements in total debt and assets, illustrating the inverse relationship between the two metrics. The ratio increased again towards late 2024 and early 2025, reaching values around 0.31, indicating increased leverage relative to assets. These fluctuations reflect periodic shifts in capital structure and financial risk exposure but do not suggest extreme leverage changes over the period.

Total assets

The total assets exhibited a generally stable pattern throughout the observed periods, fluctuating within a relatively narrow range between approximately 89,973 million US dollars and 97,270 million US dollars. Initially, the assets showed moderate growth from late 2019 into early 2021, reaching a peak at the start of 2021. Subsequently, there was a gradual decline and stabilization around the low 90,000 million US dollars mark for the remainder of the timeline. This trend suggests a phase of consolidation with limited asset expansion after early 2021.

Shareholders’ equity

The shareholders’ equity displayed minor fluctuations but maintained an overall modest downward drift over the period. Initial figures near 50,363 million US dollars rose slightly to a peak near 52,672 million US dollars by mid-2022. After this peak, equity values experienced a gradual decline, trending downward towards approximately 48,024 million US dollars by early 2025. This decreasing equity trend in the latter periods may reflect distributions, asset revaluations, or other factors impacting retained earnings or capital structure.

Financial leverage

The financial leverage ratio fluctuated modestly between 1.71 and 1.92. It started near 1.81 in mid-2019, experienced a peak just shy of 1.92 in early 2021, indicating increased use of debt or liabilities relative to equity during that period. Following this peak, leverage decreased gradually to a low around 1.71 by mid-2022 and then rose again, nearing 1.91 by early 2025. These movements suggest varying strategies in capital structure management, with leverage increasing at the start and end of the timeline, possibly reflecting changes in borrowing or equity adjustments.

Earnings before Interest and Tax (EBIT)

The EBIT figures display considerable fluctuations across the observed quarterly periods. Early periods show moderate values around 1,500 to 1,700 million US dollars, followed by a sharp decline in April 2020 to 367 million. Afterwards, there is a recovery phase where EBIT gradually increases, peaking again above 1,700 million between October 2020 and April 2022. The middle of this sequence shows some volatility with decreases and rebounds, notably a decline to 970 million in July 2021 followed by recovery. From mid-2022 onwards, EBIT remains generally around 1,300 to 1,700 million but exhibits some periodic dips, especially noticeable in April 2024 when EBIT falls to 1,059 million. The most recent quarters up to early 2025 show an uptick, reaching back into the 1,700 million range. Overall, EBIT demonstrates a pattern of sensitivity to external or internal factors with periods of decline followed by recovery.

Interest Expense, Net

Interest expenses show variability but less dramatic changes compared to EBIT. Initial interest expense is considerably high at 609 million in July 2019, quickly dropping to a range between 130 and 180 million through most subsequent quarters. There is a notable spike in October 2020 at 470 million, after which interest expenses return to a fluctuating but narrower band between approximately 130 and 210 million. The last few quarters indicate a slight upward trend in interest expenses, with values generally between 170 and 209 million, signaling a moderately increasing cost of debt servicing.

Interest Coverage Ratio

The interest coverage ratio, which measures the ability to service interest expenses from EBIT, exhibits a pattern of initial absence or missing values, followed by an improvement starting April 2020. Early ratios range between approximately 3.7 and 6.6, reflecting relatively lower coverage ability. From July 2020 onwards, there is a steady increase and stabilization in interest coverage, frequently exceeding 7 and reaching above 10 in several quarters during 2021 and 2022. This elevated coverage level indicates strong EBIT relative to interest expenses in those periods. However, towards the end of the dataset, the ratio trends slightly downward but remains comfortably above 7, suggesting sustained but somewhat moderated interest servicing capacity.