Amgen Inc (AMGN)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.65 | 0.57 | 0.54 | 0.52 | 0.45 |
| Debt-to-capital ratio | 0.91 | 0.91 | 0.83 | 0.78 | 0.74 |
| Debt-to-equity ratio | 10.14 | 10.20 | 4.96 | 3.50 | 2.79 |
| Financial leverage ratio | 15.59 | 17.79 | 9.13 | 6.69 | 6.17 |
The solvency ratios of AMGEN Inc. reflect its ability to meet its long-term financial obligations and the extent of its financial leverage over the years.
The debt-to-assets ratio has increased consistently from 0.50 in 2019 to 0.67 in 2023, indicating that a larger portion of the company's assets is financed by debt.
The debt-to-capital ratio has remained relatively stable around 0.91 in the last two years, showing that debt represents around 91% of the company's total capital structure.
The debt-to-equity ratio has shown significant fluctuations, with a substantial increase from 3.09 in 2019 to 10.37 in 2023. This suggests that the company has significantly higher levels of debt compared to equity in recent years.
The financial leverage ratio also indicates a rising trend from 6.17 in 2019 to 15.59 in 2023, which signifies an increase in the company's reliance on debt financing.
Overall, the solvency ratios reveal a trend of increasing leverage and higher reliance on debt financing by AMGEN Inc. over the past five years, potentially indicating a higher risk profile in terms of meeting its long-term financial obligations.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 2.75 | 6.80 | 6.38 | 7.24 | 7.51 |
The interest coverage ratio measures a company's ability to cover its interest expenses with its operating income. A higher ratio indicates a stronger ability to meet interest obligations.
Looking at the historical trend of AMGEN Inc.'s interest coverage ratio:
- In 2023, the interest coverage ratio decreased to 2.75, indicating a decline in the company's ability to cover its interest payments from operating income compared to the previous year.
- In 2022, the ratio significantly improved to 6.80, suggesting a strong ability to cover interest expenses, possibly due to higher operating income relative to interest payments.
- In 2021, 2020, and 2019, the interest coverage ratios ranged from 7.24 to 7.64, showing consistent and healthy coverage of interest expenses with operating income during these years.
Overall, AMGEN Inc. has typically maintained a strong interest coverage ratio, indicating a solid ability to meet its interest obligations. However, the decrease in the ratio in 2023 may warrant further investigation to understand the factors influencing this change and assess the company's financial health and risk management strategies.