YUM! Brands Inc. (NYSE:YUM)

Debt to Equity Ratio

The debt to equity ratio shows a general declining trend from March 2011 through September 2014, moving from 2.01 to a low around 1.33-1.40, indicating a reduction in reliance on debt compared to equity over this period. However, starting in December 2014, the ratio experiences a notable increase, reaching a peak of 30.97 by March 2016. This sharp rise suggests a significant increase in debt relative to equity, indicating increased financial risk or a change in capital structure in recent periods.

Debt to Capital Ratio

This ratio follows a gradual downward trend from 0.67 in March 2011 to a low of about 0.56-0.58 between March 2013 and September 2014, reflecting a modest decrease in the proportion of debt within the total capital employed. From December 2014 onward, the ratio sharply increases, reaching 1.26 by September 2016. This uptrend aligns with the debt to equity pattern, confirming an increasing debt burden in the company’s capital structure.

Debt to Assets Ratio

The ratio declines from 0.43 in March 2011 to a stable range of approximately 0.33 to 0.37 through late 2014, indicating a steady or slightly reduced reliance on debt financing relative to total assets. After this period, a pronounced increase occurs, with the ratio rising to 0.88 by September 2016. This escalation highlights greater debt usage backed by fewer assets or an increase in debt relative to asset base in recent periods.

Financial Leverage Ratio

Financial leverage maintains a steady level between 3.66 and 4.85 for the majority of the periods spanning from March 2011 to September 2014, implying a consistent use of debt to amplify returns. A spike is observed starting late 2014, culminating in an extreme value of 52.7 during June 2016, before data becomes unavailable. This surge signifies an extraordinary leverage position, reflecting significantly higher risks due to amplified debt levels or a sharp decline in equity or assets.

Overall Analysis

Between 2011 and late 2014, all leverage and debt-related ratios reveal a period of relative stability or gradual deleveraging. This suggests prudent financial management with controlled debt use. After 2014, there is a notable and rapid increase across all debt metrics, pointing to aggressive borrowing or changes in capital structure. The magnitude of increase, especially in debt to equity and financial leverage ratios, signals heightened financial risk, which may warrant close monitoring for potential solvency or liquidity challenges. Missing values in the latest periods somewhat limit a complete assessment but the available trends indicate a significant shift towards higher leverage.

The analysis of the quarterly financial data reveals several notable trends and changes over the periods observed.

Total debt

The total debt values show a general upward trend over time. Starting from 3,588 million USD in March 2011, the debt decreased slightly during 2011 and 2012, reaching a low around 2,942 million USD in December 2012. Subsequently, there is a steady increase in debt from 2013 onward, with a significant spike to 9,167 million USD by September 2016, indicating a marked increase in the company’s borrowing or long-term liabilities toward the later periods.

Shareholders’ equity

The shareholders’ equity exhibits fluctuations but maintains a relatively stable range between 1,500 and 2,300 million USD from 2011 through early 2015. Starting in late 2014, there is a noticeable decline in equity, with a sharp decrease in 2015 and 2016, even turning negative by mid-2016 (reaching -1,896 million USD). This decline suggests increasing financial difficulties or possible write-downs, impacts on retained earnings, or other factors adversely affecting net asset value.

Debt to equity ratio

The debt to equity ratio reflects the inverse relationship between debt and equity. Initially, this ratio declines from 2.01 in March 2011 to approximately 1.28 by March 2013, indicating improving leverage conditions. Thereafter, the ratio stabilizes around 1.3 to 1.4 until late 2014. Beginning in 2015, the ratio rises sharply to 4.37 by March 2016 and dramatically surges to nearly 31 by June 2016, consistent with the equity turning negative and the substantial increase in total debt. This extreme leverage suggests significantly increased financial risk and potential solvency concerns during the last periods.

Overall, the company’s financial condition demonstrates escalating debt levels alongside a deterioration in equity, culminating in a precarious capital structure by mid-2016. The sharp increase in financial leverage, as reflected in the debt to equity ratio, underscores a heightened risk profile and may warrant further examination of the underlying causes and potential implications for future financial stability.

The analysis reveals notable trends in the capital structure and debt levels over the observed periods. Total debt exhibits a general upward trajectory from early 2011 through the third quarter of 2016, increasing from approximately $3.6 billion to over $9.1 billion. Despite some fluctuations and marginal declines in certain quarters, the overall movement indicates a considerable rise in debt obligations.

Total capital, composed of debt and equity, remains relatively stable in the earlier periods but shows some variability toward the later quarters. It begins slightly above $5.3 billion in March 2011 and fluctuates within the range of approximately $4.9 billion to $5.9 billion through 2014, after which there is a decline around 2014 to 2015, followed by a jump in the last reported period to over $7.2 billion.

The debt-to-capital ratio, which measures the proportion of debt financing relative to total capital, reflects these changes with a notable initial decrease from 0.67 in early 2011 to about 0.56 by early 2013. This downward trend suggests a reduction in leverage during this timeframe. From 2013 onward, the ratio displays increased volatility and a clear upward trend, rising from around 0.57 to 1.26 by the third quarter of 2016, indicating a significant increase in leverage. A debt-to-capital ratio exceeding 1.0 suggests that debt exceeds total capital at the end of the period, highlighting a substantial reliance on debt financing.

These patterns imply that the company significantly increased its debt relative to its overall capital base in the latter part of the period under review. The increase in leverage could impact financial risk profiles and may reflect strategic financing decisions or responses to market conditions.

Total Debt

Rising trend from approximately $3.6 billion to $9.1 billion between 2011 and 2016, with minor fluctuations.

Total Capital

Generally stable between $5 billion and $5.9 billion during early years, followed by a dip in 2014-2015 and a sharp increase to $7.2 billion in late 2016.

Debt to Capital Ratio

Declined from 0.67 in early 2011 to 0.56 in early 2013, then increased sharply to 1.26 by Q3 2016, indicating a shift toward higher leverage.

The analysis of the quarterly financial data over multiple periods reveals notable trends in the company's debt structure and asset base.

Total Debt

Total debt levels show an overall upward trend with fluctuations across the quarters. Initial values around the earlier years start near 3,500 million USD, gradually decreasing to just under 3,000 million USD in several quarters during 2012 and 2013. From 2014 onwards, the total debt begins to rise steadily, with a pronounced increase from 2015 to 2016, culminating in a sharp surge to over 9,100 million USD by the last reported quarter.

Total Assets

Total assets exhibit moderate variability with a general tendency to remain within the 8,000 to 9,300 million USD range for most of the reported quarters. After reaching approximately 9,300 million USD in early 2012, assets decline gradually and hover near 8,200 million USD through 2015 and early 2016. A significant rebound occurs in the last quarter reported, with total assets increasing to over 10,400 million USD.

Debt to Assets Ratio

The debt to assets ratio follows a declining trend initially, decreasing from 0.43 to a low of about 0.33 between 2011 and 2012. This suggests a reduction in leverage or improved asset coverage relative to debt during these years. However, from 2013 onwards, the ratio gradually increases, accelerating sharply in the last few quarters to reach 0.88, indicating a substantial rise in financial leverage and potentially higher risk exposure due to the increased reliance on debt financing relative to asset levels.

In summary, the data reveals a period of deleveraging and cautious debt management through the early years, followed by a phase of rapid debt accumulation and rising leverage towards the end of the series. The notable increase in both total debt and the debt-to-assets ratio in the most recent quarters highlights a shift in the company’s capital structure that may impact its financial risk profile going forward. The concurrent rise in total assets in the latest quarter could be indicative of asset acquisition, refinancing, or revaluation events contributing to the changes in these financial metrics.

The analysis of the quarterly financial data reveals distinct patterns and notable changes in the key financial metrics over the observed periods.

Total Assets

Total assets fluctuated moderately from March 2011 through June 2016, ranging roughly between 8,000 and 9,300 million US dollars. The assets remained relatively stable with minor increases and decreases in each quarter, except for a significant increase to 10,432 million US dollars by September 2016. This spike indicates a substantial growth in asset base in the last quarter observed, contrasting with the prior trend of stability.

Shareholders' Equity

Shareholders’ equity generally showed an increasing trend through the initial periods, rising from 1,783 million US dollars in early 2011 to a peak near 2,505 million by the last quarter of 2014. However, post-2014, the equity exhibited substantial volatility and a sharp decline. By March 2015, there was a steep drop to 1,547 million, followed by further declines leading to negative equity values (deficit) in the last two quarters observed: -389 million and -1,896 million respectively. This shift represents a notable deterioration in net worth, indicating financial distress or significant losses in the latter periods.

Financial Leverage

Financial leverage ratios started at elevated levels (~4.7) in early 2011, slightly declining to around 3.6 by late 2014, suggesting a gradual reduction in leverage over these years. However, a sharp reversal is observed in 2015 and 2016 when leverage ratios surged dramatically, peaking at 52.7 in June 2016 (with no data subsequently). This increase in leverage correlates with the decline in shareholders' equity, indicating increased reliance on debt financing or reduced equity base, thereby elevating financial risk substantially toward the end of the period.

In summary, the company maintained stable total assets with moderate growth until mid-2016 but experienced significant erosion in shareholders’ equity and a surge in financial leverage starting around late 2014. This combination suggests increasing financial vulnerability and potential solvency concerns that warrant further detailed explanation or investigation into the underlying causes, such as impairments, restructuring, or external economic impacts during the last observed quarters.