Amgen Inc (AMGN)
Solvency ratios
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.65 | 0.65 | 0.66 | 0.68 | 0.57 | 0.58 | 0.60 | 0.61 | 0.54 | 0.51 | 0.48 | 0.50 | 0.52 | 0.53 | 0.53 | 0.49 | 0.45 | 0.47 | 0.47 | 0.46 |
| Debt-to-capital ratio | 0.91 | 0.89 | 0.90 | 0.92 | 0.91 | 0.91 | 0.94 | 0.98 | 0.83 | 0.80 | 0.78 | 0.77 | 0.78 | 0.76 | 0.76 | 0.76 | 0.74 | 0.72 | 0.72 | 0.73 |
| Debt-to-equity ratio | 10.14 | 7.71 | 8.76 | 11.36 | 10.20 | 10.17 | 14.76 | 39.31 | 4.96 | 4.05 | 3.45 | 3.34 | 3.50 | 3.12 | 3.20 | 3.16 | 2.79 | 2.54 | 2.58 | 2.71 |
| Financial leverage ratio | 15.59 | 11.83 | 13.31 | 16.59 | 17.79 | 17.44 | 24.51 | 64.62 | 9.13 | 7.91 | 7.25 | 6.70 | 6.69 | 5.90 | 6.10 | 6.50 | 6.17 | 5.45 | 5.50 | 5.91 |
The solvency ratios of AMGEN Inc. provide insight into the company's ability to meet its long-term financial obligations and the extent to which it relies on debt financing.
The Debt-to-assets ratio has been relatively stable over the past eight quarters, ranging from 0.60 to 0.69. This ratio indicates that, on average, around 67% of the company's assets are financed by debt.
The Debt-to-capital ratio has also shown consistency, hovering between 0.89 and 0.98. This ratio suggests that, on average, approximately 90% of the company's capital is funded by debt.
The Debt-to-equity ratio has fluctuated notably, with values spanning from 7.90 to 40.23. This ratio highlights the proportion of the company's financing that comes from equity versus debt. The significant variation in this ratio indicates fluctuations in the company's capital structure and financial risk.
The Financial leverage ratio has varied widely, ranging from 11.83 to 64.62. This ratio reflects the company's reliance on debt to finance its operations and investments. The higher the financial leverage ratio, the greater the financial risk associated with the company's capital structure.
Overall, these solvency ratios suggest that AMGEN Inc. has maintained a moderate level of debt relative to its assets and capital structure, with some fluctuations in the debt-to-equity and financial leverage ratios over the analyzed period. It is essential for stakeholders to monitor these ratios to assess the company's long-term financial health and risk exposure.
Coverage ratios
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | 2.75 | 3.59 | 4.57 | 5.43 | 6.80 | 7.27 | 7.46 | 6.64 | 6.38 | 6.22 | 6.25 | 7.42 | 7.24 | 7.37 | 7.33 | 7.40 | 7.51 | 7.47 | 7.13 | 7.16 |
Interest coverage is a financial ratio that measures a company's ability to meet its interest obligations on debt with its earnings before interest and taxes (EBIT). A higher interest coverage ratio indicates that the company is more capable of servicing its debt.
Looking at the data provided for AMGEN Inc., we can observe a declining trend in interest coverage over the past quarters. The interest coverage ratio has decreased from 7.88 in Q1 2022 to 2.75 in Q4 2023. This downward trend may raise concerns about the company's ability to comfortably cover its interest expenses with its operating income.
A decreasing interest coverage ratio could imply that the company's earnings are not growing at the same pace as its debt obligations or that the company's profitability is declining. It may also suggest that the company is taking on more debt relative to its operating income, which could increase financial risk.
AMGEN Inc. should closely monitor its interest coverage ratio and take proactive measures to improve it, such as increasing profitability, reducing debt levels, or refinancing debt at lower interest rates to enhance financial stability and maintain the confidence of investors and creditors.