Broadcom Inc. (NASDAQ:AVGO)

Debt to Equity Ratio

The debt to equity ratio initially shows an upward trend from 1.62 in early 2019 to a peak of 1.92 in May 2020. Subsequently, it declines with some fluctuations, reaching a low around 0.95 to 1.08 in early to mid-2024, indicating a reduction in leverage relative to equity over the period.

Debt to Capital Ratio

The debt to capital ratio mirrors the debt to equity pattern, rising from 0.62 in early 2019 to a high of 0.66 in mid-2020, before gradually decreasing to about 0.49 to 0.52 by mid-2024. This suggests a decrease in the proportion of debt within the company's capital structure in recent quarters.

Debt to Assets Ratio

The debt to assets ratio follows a similar pattern, increasing from 0.52 in early 2019 to 0.56 by mid-2020 and then declining steadily to around 0.40 to 0.43 in mid-2024. This reflects a reduction in the company's debt levels relative to its total assets over time.

Financial Leverage

Financial leverage shows a rising trend from 3.1 in early 2019 to a peak of 3.42 during 2022, followed by a clear downward trajectory reaching approximately 2.37 in mid-2024. This indicates a decreasing use of debt financing relative to equity over the analyzed period.

Interest Coverage Ratio

Interest coverage is measured beginning August 2019, starting at approximately 2.54 and consistently improving to a high of over 10.3 by early 2023, indicating stronger ability to cover interest expenses. However, after this peak, there is a notable decrease through 2023 into mid-2024, dropping back to roughly 3.5 to 6.9, suggesting a reduction in interest coverage capability more recently.

Overall, the data reveals a trend of initially increasing debt levels and leverage up to 2020, followed by a steady reduction in debt ratios and financial leverage through 2024. The company’s ability to cover interest expenses improved markedly from 2019 to early 2023 but experienced a decline in coverage ratios in the most recent quarters, which may warrant further analysis regarding interest expense management and earnings stability.

The financial data indicates notable fluctuations in the company's capital structure over the reported periods. Total debt exhibited a generally stable pattern up to early 2024, with values oscillating around the mid-30,000 to low-40,000 million US dollars range. However, from February 2024 onward, there is a marked increase, with the total debt nearly doubling compared to previous years, reaching peaks above 75,000 million US dollars before slightly moderating but remaining significantly elevated through May 2025.

Stockholders’ equity showed a declining trend from early 2019 to mid-2022, dropping from around 23,224 million US dollars to just below 21,000 million US dollars. Thereafter, it recovered somewhat, fluctuating between approximately 22,000 and 24,000 million US dollars until early 2024. Starting February 2024, equity also surged sharply, increasing to over 70,000 million US dollars, though with some volatility, ending near 69,500 million US dollars by May 2025.

The debt to equity ratio corroborates the shifts observed in debt and equity values. Initially, the ratio ranged between 1.32 and 1.92 from 2019 through 2023, reflecting a higher proportion of debt relative to equity. Beginning in early 2024, the ratio declines markedly, falling to nearly 1.00 and dropping below 1.00 by February 2025, indicating a more balanced or equity-favored capital structure. This shift suggests significant adjustments in financing strategy, likely involving both increased equity and debt levels but with equity growing proportionally more, resulting in a lower leverage ratio.

Overall, the data reveals a strategic transformation in the company’s capital composition starting in early 2024, characterized by substantial debt accumulation accompanied by a proportionally larger increase in equity, effectively reducing leverage ratios to levels not seen in previous years. Prior to this period, the company's leverage remained relatively high and stable, with moderate fluctuations in both debt and equity.

Total Debt

The total debt level initially fluctuated slightly from approximately $37.6 billion in early 2019 to a lower point near $32.8 billion by late 2019, followed by a significant increase peaking around $44.9 billion in early 2020. Subsequently, the debt has been gradually decreasing and stabilizing around the $39 billion mark through late 2022 and early 2023. However, starting in early 2024, there was a notable surge in total debt, almost doubling to approximately $75.9 billion, before slightly declining toward $67.3 billion by mid-2025.

Total Capital

Total capital showed a downward trend from $60.9 billion in early 2019 to a low around $57.7 billion in late 2019, then increased significantly to nearly $69.1 billion in early 2020. After this peak, total capital decreased steadily, fluctuating between approximately $60 billion and $63 billion from mid-2021 through early 2023. A marked increase occurred in early 2024, with total capital more than doubling to about $146.2 billion, followed by a moderate decline to roughly $136.9 billion by mid-2025.

Debt to Capital Ratio

The debt to capital ratio displayed moderate variability, beginning around 0.62 in early 2019 and reaching a low near 0.57 by late 2019. The ratio then rose to a peak of approximately 0.66 in mid-2020, before gradually receding to the low 0.6 range during 2021 and 2022. The ratio remained relatively stable near 0.64 into early 2023. Notably, from early 2024 onward, there is a clear downward trend in this ratio, falling from about 0.52 to 0.49 by mid-2025, reflecting a decline in leverage despite the surge in absolute debt and capital figures.

Total Debt

The total debt shows significant fluctuation over the reported periods. Initially, it remained relatively stable near the 37,500 million US$ mark from early 2019 through late 2019, followed by a notable increase beginning in early 2020. Debt reached a peak of approximately 45,863 million US$ in May 2020 before gradually declining and stabilizing around 39,000 to 40,000 million US$ through early 2023. A substantial surge occurred starting in early 2024, with total debt nearly doubling to reach over 75,900 million US$ by February 2024. Subsequently, it exhibits a downward trend, decreasing to about 66,500 to 67,000 million US$ by May 2025.

Total Assets

Total assets demonstrated a declining trend from early 2019 through late 2019, falling from roughly 72,000 million US$ to about 67,500 million US$. Thereafter, a recovery is observed beginning in early 2020, with assets peaking around 81,500 million US$ mid-2020. From late 2020 through 2023, total assets remained relatively stable, fluctuating slightly between 71,500 and 73,000 million US$. In early 2024, total assets increased sharply, nearly doubling in value to around 177,870 million US$. A mild decline is noticeable afterward, with assets settling near 164,600 to 165,300 million US$ by mid-2025.

Debt to Assets Ratio

The debt to assets ratio remains relatively consistent throughout most of the reporting periods, oscillating narrowly around the range of 0.49 to 0.56 from early 2019 to early 2023. This indicates that despite fluctuations in absolute debt and asset values, the proportion of debt relative to assets was fairly stable in this timeframe. However, a marked decrease in this ratio is evident from early 2024 onwards, dropping from approximately 0.54 in early 2023 to around 0.40 by mid-2025. This decline suggests that the growth of assets outpaced the increase in debt during this recent period, improving the overall leverage position.

The analysis of the quarterly financial data reveals several notable trends in the company's asset base, equity position, and financial leverage over the observed periods.

Total Assets

Total assets experienced a general decline from early 2019 through late 2019, decreasing from approximately $72.1 billion to $67.5 billion. This trend reversed starting in early 2020, with assets rising sharply to a peak around February 2021 near $77 billion. Following this peak, total assets fluctuated moderately but remained around the mid-70 billion range until early 2023. From the beginning of 2023 through mid-2024, there was an abrupt and significant increase in reported total assets, nearly doubling to a peak of approximately $178 billion in February 2024. After this spike, a gradual decline ensued, bringing assets to about $164.6 billion by May 2025. The substantial asset growth in 2024 suggests a major acquisition, asset revaluation, or consolidation event impacting the balance sheet.

Stockholders’ Equity

Stockholders’ equity mirrored some of the asset trends but with less volatility. Initial quarters showed a slight decline from $23.2 billion in early 2019 to approximately $21.5 billion by mid-2019, followed by a rebound peaking near $24.9 billion in late 2019. The equity declined steadily through mid-2022, reaching a low near $20.9 billion, then partially recovered to around $24 billion by the end of 2022. From the start of 2023, equity values saw a pronounced increase aligned with the asset surge, rising sharply to over $70 billion in early 2024. Subsequently, the equity position stabilized somewhat, fluctuating slightly but remaining above $69 billion through mid-2025. This pattern implies that the equity base expanded in conjunction with asset growth, possibly due to additional capital raising, retained earnings growth, or recognition of fair value adjustments.

Financial Leverage Ratio

The financial leverage ratio showed notable variability but generally trended downward over the entire period. Initially, leverage ratios hovered around 3.1 to 3.4 in 2019 and 2020, indicating a leveraged capital structure with assets roughly three times equity. There was a decline to approximately 3.0 by late 2021. During 2022 and early 2023, leverage rose slightly to over 3.4, before decreasing steadily from early 2023 onward, reaching around 2.37 by mid-2025. The downward trend in leverage suggests a relative increase in equity compared to debt financing, indicating a possible strengthening of the capital structure or deleveraging efforts in recent quarters.

In summary, the data reveals a period of asset contraction through 2019, followed by growth and a dramatic expansion in 2024, likely reflecting significant corporate actions. Equity trends show more stability, with a marked increase corresponding to the asset jump in 2024. The leverage ratio's gradual decline in recent periods points to an improved equity base relative to liabilities. Collectively, these patterns suggest strategic financial management aimed at strengthening the balance sheet while accommodating substantial asset growth.

Earnings before interest and tax (EBIT)

The EBIT displays a general upward trend over the observed periods, beginning at 623 million USD in early 2019 and reaching a peak of 6,363 million USD by early 2025. There are fluctuations in the data, with some notable increases such as between late 2019 (1,108 million USD) and early 2021 (1,954 million USD), as well as more substantial growth from late 2021 (2,603 million USD) to early 2025 (6,363 million USD). A temporary decline is perceptible towards early 2024, where EBIT drops from 4,372 million USD in early 2024 to 2,268 million USD by mid-2024 before rebounding sharply towards the end of 2024 and early 2025.

Interest expense

Interest expense shows a fluctuating but broadly increasing pattern during the periods under review. Starting from 345 million USD in early 2019, it rises gradually to a plateau around the 400–500 million USD range from 2019 through early 2023. From early 2023 onward, there is a marked increase in interest expense, reaching values over 900 million USD in early to mid-2024 before declining slightly to 769 million USD by mid-2025.

Interest coverage ratio

The interest coverage ratio improves substantially over time, reflecting greater ability to cover interest expenses from operating earnings. Initially, specific ratio values are absent; however, starting from mid-2019, the ratio begins near 2.5 and steadily rises to reach above 10 by the beginning of 2024. This period correlates with increasing EBIT and relatively stable or moderately rising interest expenses. Notably, the coverage ratio dips from nearly 10 in early 2024 to approximately 3.5 by late 2024, corresponding to the mentioned drop in EBIT and spike in interest expense, before recovering to 5.73 by mid-2025.

Summary

In summary, EBIT shows strong growth across the periods with some variability, suggesting expanding operational profitability. Interest expenses grow moderately for most of the periods but surge during 2023 and 2024, which temporarily compresses the interest coverage ratio despite persistently high EBIT. The interest coverage ratio demonstrates improving financial health and debt service capability for most of the timeline, though it experiences a notable decline in 2024 linked to the fluctuation in EBIT and increased interest expense. By mid-2025, the figures indicate recovery and strengthening position relative to interest obligations.