YUM! Brands Inc. (NYSE:YUM)

The financial data reveals several notable trends regarding the leverage and equity position over the analyzed periods.

Total debt

Total debt exhibits a generally increasing trend from 2005 through 2015, rising from $1,860 million to $3,977 million. There are some fluctuations, such as a peak in 2008 at $3,589 million followed by a decrease in 2009 to $3,266 million, but the overall trajectory is upward. The incremental increases after 2012 are significant, moving from $2,942 million to nearly $4 billion by 2015, indicating a growing reliance on debt financing.

Shareholders’ equity

Shareholders’ equity shows more volatility compared to total debt. Starting at $1,449 million in 2005, equity decreases sharply, turning negative in 2008 to a deficit of $108 million. This indicates a critical point in the company’s financial health. After 2008, equity recovers strongly, peaking around 2013 at $2,166 million, before declining again to $911 million by the end of 2015. The recovery period suggests some successful efforts to rebuild equity, though the subsequent decline might indicate increased distributions, losses, or other equity-reducing activities.

Debt to equity ratio

The debt to equity ratio follows a volatile pattern reflective of the movements in both debt and equity. Starting at 1.28 in 2005, the ratio steadily climbs, peaking at 3.19 in 2009, corresponding to the period when equity was minimal or negative. Following this peak, the ratio improves, dropping to 1.37 by 2012 and 2013, reflecting the equity recovery in those years. However, towards 2015, the ratio spikes dramatically to 4.37, the highest in the period, indicating a high leverage level due to the combination of increased debt and reduced equity.

Overall, the data suggests growing leverage over time, with significant periods of financial strain as indicated by negative equity and high debt to equity ratios. The firm’s capital structure appears to have undergone considerable stress and adjustment, with an elevated risk profile especially in the latter years of the analysis period.