Analysis of Solvency Ratios
Solvency ratios also known as long-term debt ratios measure a company ability to meet long-term obligations.
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- Income Statement
- Cash Flow Statement
- Common-Size Income Statement
- Common-Size Balance Sheet: Assets
- Analysis of Short-term (Operating) Activity Ratios
- Enterprise Value to FCFF (EV/FCFF)
- Present Value of Free Cash Flow to Equity (FCFE)
- Current Ratio since 2005
- Price to Earnings (P/E) since 2005
- Analysis of Debt
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Solvency Ratios (Summary)
Cytokinetics Inc., solvency ratios
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
- Debt to Equity and Related Measures
- The debt to equity ratio decreased from 1.64 at the end of 2018 to 1.2 in 2020, further declining to 0.59 in 2021. Data for 2019 and 2022 are missing. When including operating lease liabilities, the ratio was slightly higher in 2020 at 1.23 and 1.11 in 2021, indicating additional leverage from lease obligations. Overall, there is a trend of decreasing reliance on debt relative to equity up to 2021.
- Debt to Capital Ratios
- The debt to capital ratio shows fluctuations with an initial increase from 0.62 in 2018 to 1.09 in 2019, followed by a decline to 0.54 in 2020 and a further drop to 0.37 in 2021. However, there is a notable increase to 1.21 in 2022. Including operating lease liabilities, the trend is similar but slightly more elevated, ending at 1.17 in 2022. This pattern suggests variable capital structure management, with a significant increase in leverage in 2022.
- Debt to Assets Ratios
- The debt to assets ratio rose from 0.20 in 2018 to 0.45 in 2019, then decreased to 0.25 in 2020 and 0.17 in 2021, before increasing again to 0.60 in 2022. Including operating lease liabilities, the ratio presents slightly higher values and ends even higher at 0.74 in 2022. The data indicate fluctuations in asset financing, with increased debt levels relative to assets in the most recent year.
- Financial Leverage
- Financial leverage declined markedly from 8.14 in 2018 to 4.71 in 2020 and then further down to 3.45 in 2021. The absence of data for 2019 and 2022 limits full trend analysis, but available data suggest a reduction in leverage over the observed periods.
- Interest and Fixed Charge Coverage
- Interest coverage ratios are consistently negative over the five-year period. Values improved from -26.99 in 2018 to -6.97 in 2020 but then worsened again to -12.10 in 2021 and further to -19.03 in 2022, indicating consistent operating losses or insufficient earnings to cover interest expenses. Similarly, fixed charge coverage ratios, while also negative, improved from -11.08 in 2018 to -4.45 in 2021 but declined to -8.48 in 2022. These persistent negative coverage ratios demonstrate ongoing challenges in meeting fixed financial obligations from earnings.
- General Observations
- The financial metrics reflect a company with fluctuating leverage and financing structure, showing periods of deleveraging followed by increased borrowing, particularly noticeable in 2022. Despite reductions in debt ratios through some years, the persistent negative coverage ratios imply continued operating or profitability challenges that may affect the company’s ability to service its debt and fixed charges sustainably.
Debt Ratios
Coverage Ratios
Debt to Equity
Cytokinetics Inc., debt to equity calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Current portion of term loan | ||||||
| Short-term finance lease liabilities | ||||||
| Term loan, net, excluding current portion | ||||||
| Convertible notes, net | ||||||
| Long-term finance lease liabilities | ||||||
| Total debt | ||||||
| Stockholders’ equity (deficit) | ||||||
| Solvency Ratio | ||||||
| Debt to equity1 | ||||||
| Benchmarks | ||||||
| Debt to Equity, Competitors2 | ||||||
| AbbVie Inc. | ||||||
| Amgen Inc. | ||||||
| Bristol-Myers Squibb Co. | ||||||
| Danaher Corp. | ||||||
| Eli Lilly & Co. | ||||||
| Gilead Sciences Inc. | ||||||
| Johnson & Johnson | ||||||
| Merck & Co. Inc. | ||||||
| Pfizer Inc. | ||||||
| Regeneron Pharmaceuticals Inc. | ||||||
| Thermo Fisher Scientific Inc. | ||||||
| Vertex Pharmaceuticals Inc. | ||||||
| Debt to Equity, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | ||||||
| Debt to Equity, Industry | ||||||
| Health Care | ||||||
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Debt to equity = Total debt ÷ Stockholders’ equity (deficit)
= ÷ =
2 Click competitor name to see calculations.
- Total debt
- The total debt demonstrates a significant upward trend over the five-year period. Starting from $42,413 thousand at the end of 2018, it rose sharply to $129,257 thousand in 2019. The growth continued at a slower pace in 2020 and 2021, reaching $135,713 thousand and $144,143 thousand respectively. In 2022, total debt surged dramatically to $611,619 thousand, indicating a substantial increase in the company's borrowings or liabilities during that year.
- Stockholders’ equity (deficit)
- The stockholders’ equity exhibits considerable fluctuation throughout the period. Initially, equity was positive at $25,934 thousand in 2018, but shifted to a deficit of $10,937 thousand in 2019, suggesting losses or increased liabilities exceeding assets. In 2020, the position recovered significantly to a positive $113,383 thousand and further increased to $243,863 thousand in 2021, indicating strong equity growth. However, this trend reversed sharply in 2022, with equity declining to a deficit of $107,900 thousand, reflecting potentially large losses or financial adjustments adversely impacting shareholder value.
- Debt to equity ratio
- The debt to equity ratio shows a mixed pattern with some missing data points. In 2018, the ratio was 1.64, indicating that debt exceeded equity by 64%. The ratio was not reported for 2019. In 2020, it decreased to 1.2, implying a relative improvement in the capital structure. A further decline to 0.59 in 2021 suggests a stronger equity base relative to debt during that year. However, the ratio for 2022 is not provided, which leaves the latest relationship between debt and equity unclear. Given the sharp increase in debt and the return to equity deficit in 2022, the ratio for that year might have worsened significantly.
Debt to Equity (including Operating Lease Liability)
Cytokinetics Inc., debt to equity (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Current portion of term loan | ||||||
| Short-term finance lease liabilities | ||||||
| Term loan, net, excluding current portion | ||||||
| Convertible notes, net | ||||||
| Long-term finance lease liabilities | ||||||
| Total debt | ||||||
| Short-term operating lease liabilities | ||||||
| Long-term operating lease liabilities | ||||||
| Total debt (including operating lease liability) | ||||||
| Stockholders’ equity (deficit) | ||||||
| Solvency Ratio | ||||||
| Debt to equity (including operating lease liability)1 | ||||||
| Benchmarks | ||||||
| Debt to Equity (including Operating Lease Liability), Competitors2 | ||||||
| AbbVie Inc. | ||||||
| Amgen Inc. | ||||||
| Bristol-Myers Squibb Co. | ||||||
| Danaher Corp. | ||||||
| Eli Lilly & Co. | ||||||
| Gilead Sciences Inc. | ||||||
| Johnson & Johnson | ||||||
| Merck & Co. Inc. | ||||||
| Pfizer Inc. | ||||||
| Regeneron Pharmaceuticals Inc. | ||||||
| Thermo Fisher Scientific Inc. | ||||||
| Vertex Pharmaceuticals Inc. | ||||||
| Debt to Equity (including Operating Lease Liability), Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | ||||||
| Debt to Equity (including Operating Lease Liability), Industry | ||||||
| Health Care | ||||||
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Debt to equity (including operating lease liability) = Total debt (including operating lease liability) ÷ Stockholders’ equity (deficit)
= ÷ =
2 Click competitor name to see calculations.
- Total Debt (including operating lease liability)
-
The total debt of the entity shows a consistent upward trend over the observed period. Beginning at $42.4 million in 2018, the debt increased sharply to $136.1 million in 2019. Following marginal growth in 2020 at $138.9 million, the debt almost doubled in 2021 to $271.2 million and then reached a significant peak of $751.3 million in 2022. This demonstrates a substantial increase in leverage and obligations over the five-year span.
- Stockholders’ Equity (Deficit)
-
Stockholders' equity exhibits considerable volatility and fluctuation throughout the periods analyzed. Starting with a positive value of $25.9 million in 2018, it declined into a negative equity position of -$10.9 million in 2019. This was followed by a remarkable recovery and growth to $113.4 million in 2020 and further to $243.9 million in 2021. However, in 2022, equity again turned negative, reaching -$107.9 million. This pattern indicates significant swings in net asset value, reflecting either operational challenges, financial structuring, or extraordinary items affecting equity balances.
- Debt to Equity Ratio (including operating lease liability)
-
The debt to equity ratio is reported for selected years, showing a decrease from 1.64 in 2018 to 1.23 in 2020, and then further declining to 1.11 in 2021. These changes suggest an improving capital structure relative to equity during these specific years. The absence of data for 2019 and 2022 limits the ability to assess trends for these years, particularly given the significant equity fluctuations and the surge in total debt observed in 2022. However, the downward trend in the ratio until 2021 suggests a moderation in leverage relative to equity at least through that period.
Debt to Capital
Cytokinetics Inc., debt to capital calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Current portion of term loan | ||||||
| Short-term finance lease liabilities | ||||||
| Term loan, net, excluding current portion | ||||||
| Convertible notes, net | ||||||
| Long-term finance lease liabilities | ||||||
| Total debt | ||||||
| Stockholders’ equity (deficit) | ||||||
| Total capital | ||||||
| Solvency Ratio | ||||||
| Debt to capital1 | ||||||
| Benchmarks | ||||||
| Debt to Capital, Competitors2 | ||||||
| AbbVie Inc. | ||||||
| Amgen Inc. | ||||||
| Bristol-Myers Squibb Co. | ||||||
| Danaher Corp. | ||||||
| Eli Lilly & Co. | ||||||
| Gilead Sciences Inc. | ||||||
| Johnson & Johnson | ||||||
| Merck & Co. Inc. | ||||||
| Pfizer Inc. | ||||||
| Regeneron Pharmaceuticals Inc. | ||||||
| Thermo Fisher Scientific Inc. | ||||||
| Vertex Pharmaceuticals Inc. | ||||||
| Debt to Capital, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | ||||||
| Debt to Capital, Industry | ||||||
| Health Care | ||||||
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Debt to capital = Total debt ÷ Total capital
= ÷ =
2 Click competitor name to see calculations.
- Total Debt
- The total debt shows a general upward trend over the analyzed periods. It increased from US$42,413 thousand at the end of 2018 to US$611,619 thousand by the end of 2022. The increase was moderate from 2018 to 2021, with values rising from US$42,413 thousand to US$144,143 thousand. However, between 2021 and 2022, total debt surged significantly, more than quadrupling.
- Total Capital
- Total capital also exhibited a consistent increase across the periods, starting at US$68,347 thousand at the end of 2018 and reaching US$503,719 thousand by the end of 2022. The growth was steady, with a notable acceleration from 2019 onward. Despite the strong increase in capital, the growth in debt outpaced capital increases in the final year reported.
- Debt to Capital Ratio
- The debt to capital ratio fluctuated significantly during the five-year period. It was 0.62 at the end of 2018, reached a peak of 1.09 in 2019, then declined to a low of 0.37 in 2021 before rising sharply to 1.21 in 2022. This indicates a transition from moderate leverage to high leverage, with the ratio exceeding 1.0 in the last two years, suggesting that debt exceeded total capital during those periods.
Debt to Capital (including Operating Lease Liability)
Cytokinetics Inc., debt to capital (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Current portion of term loan | ||||||
| Short-term finance lease liabilities | ||||||
| Term loan, net, excluding current portion | ||||||
| Convertible notes, net | ||||||
| Long-term finance lease liabilities | ||||||
| Total debt | ||||||
| Short-term operating lease liabilities | ||||||
| Long-term operating lease liabilities | ||||||
| Total debt (including operating lease liability) | ||||||
| Stockholders’ equity (deficit) | ||||||
| Total capital (including operating lease liability) | ||||||
| Solvency Ratio | ||||||
| Debt to capital (including operating lease liability)1 | ||||||
| Benchmarks | ||||||
| Debt to Capital (including Operating Lease Liability), Competitors2 | ||||||
| AbbVie Inc. | ||||||
| Amgen Inc. | ||||||
| Bristol-Myers Squibb Co. | ||||||
| Danaher Corp. | ||||||
| Eli Lilly & Co. | ||||||
| Gilead Sciences Inc. | ||||||
| Johnson & Johnson | ||||||
| Merck & Co. Inc. | ||||||
| Pfizer Inc. | ||||||
| Regeneron Pharmaceuticals Inc. | ||||||
| Thermo Fisher Scientific Inc. | ||||||
| Vertex Pharmaceuticals Inc. | ||||||
| Debt to Capital (including Operating Lease Liability), Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | ||||||
| Debt to Capital (including Operating Lease Liability), Industry | ||||||
| Health Care | ||||||
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Debt to capital (including operating lease liability) = Total debt (including operating lease liability) ÷ Total capital (including operating lease liability)
= ÷ =
2 Click competitor name to see calculations.
- Total Debt (including operating lease liability)
- The total debt shows a significant upward trend over the five-year period. Starting at $42.4 million in 2018, the debt rose sharply to $136.1 million in 2019 and remained relatively stable in 2020 at $138.9 million. Subsequently, it nearly doubled in 2021 to $271.2 million and experienced a substantial increase in 2022, reaching $751.3 million. This indicates a notable increase in the company's leverage through the accumulation of debt, especially pronounced in the most recent year.
- Total Capital (including operating lease liability)
- Total capital also grew consistently over the analyzed period. It increased from $68.3 million in 2018 to $125.1 million in 2019, followed by a significant jump to $252.3 million in 2020. The upward trend continued in 2021 with $515.1 million and further increased to $643.4 million in 2022. This growth in total capital is reflective of either increased borrowing, equity financing, or both, but the rise in total capital is smaller in scale relative to the swift increase in debt observed in the last year.
- Debt to Capital Ratio (including operating lease liability)
- The debt to capital ratio shows volatility and fluctuations during the period analyzed. Starting at 0.62 in 2018, it rose markedly to 1.09 in 2019, signifying that debt exceeded total capital at that point, which could indicate high financial risk or possible different accounting interpretations. The ratio then decreased sharply to 0.55 in 2020 and remained relatively stable at 0.53 in 2021, indicating a more balanced capital structure. However, in 2022, the ratio increased sharply to 1.17, the highest in the five-year span. This suggests that debt now substantially exceeds total capital, highlighting increased financial leverage and potentially increased risk exposure linked to debt financing in the most recent period.
- Overall Insights
- The data reveals a pattern in which debt levels have escalated significantly over time, especially in the last year, outpacing the growth in total capital. The fluctuations in the debt to capital ratio, particularly the sharp increases in 2019 and 2022, indicate periods of heightened leverage and financial risk. The overall trajectory suggests a strategic reliance on debt financing that has intensified, necessitating close monitoring of the company’s ability to service its debt and manage financial risk going forward.
Debt to Assets
Cytokinetics Inc., debt to assets calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Current portion of term loan | ||||||
| Short-term finance lease liabilities | ||||||
| Term loan, net, excluding current portion | ||||||
| Convertible notes, net | ||||||
| Long-term finance lease liabilities | ||||||
| Total debt | ||||||
| Total assets | ||||||
| Solvency Ratio | ||||||
| Debt to assets1 | ||||||
| Benchmarks | ||||||
| Debt to Assets, Competitors2 | ||||||
| AbbVie Inc. | ||||||
| Amgen Inc. | ||||||
| Bristol-Myers Squibb Co. | ||||||
| Danaher Corp. | ||||||
| Eli Lilly & Co. | ||||||
| Gilead Sciences Inc. | ||||||
| Johnson & Johnson | ||||||
| Merck & Co. Inc. | ||||||
| Pfizer Inc. | ||||||
| Regeneron Pharmaceuticals Inc. | ||||||
| Thermo Fisher Scientific Inc. | ||||||
| Vertex Pharmaceuticals Inc. | ||||||
| Debt to Assets, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | ||||||
| Debt to Assets, Industry | ||||||
| Health Care | ||||||
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Debt to assets = Total debt ÷ Total assets
= ÷ =
2 Click competitor name to see calculations.
- Total debt
- The total debt exhibited a consistent upward trajectory over the five-year period. Starting from $42.4 million at the end of 2018, it increased significantly to $129.3 million in 2019, which represents a threefold increase. The upward trend continued more moderately through 2020 and 2021, reaching $135.7 million and $144.1 million respectively. However, a pronounced spike is observed in 2022, when total debt surged dramatically to $611.6 million, more than quadrupling from the prior year.
- Total assets
- Total assets demonstrated robust growth across the reviewed timeframe. Beginning at $211.2 million in 2018, assets increased steadily each year, rising to $289.8 million in 2019 and accelerating further to $533.8 million in 2020. Growth maintained its momentum into 2021 and 2022, reaching $841.3 million and $1.015 billion respectively. This reflects a compound increase of nearly five times from the initial asset base in 2018.
- Debt to assets ratio
- The debt to assets ratio displayed considerable volatility during the period. Initially, it rose sharply from 0.20 in 2018 to 0.45 in 2019, corresponding with the large increase in debt relative to assets. However, this ratio declined over the next two years, falling to 0.25 in 2020 and further down to 0.17 in 2021, suggesting a period where asset growth outpaced debt accumulation or debt reduction. In 2022, the ratio reversed direction dramatically, climbing to 0.60, indicating a heavy relative increase in debt that outstripped asset growth, consistent with the major debt surge noted for the year.
- Summary Insights
- The financial data reveals a general trend of substantial expansion in both debt and assets, with asset growth being comparatively steadier until 2022. The sudden and significant increase in total debt in 2022 led to a marked rise in leverage as indicated by the debt to assets ratio, which reached its highest level in the five-year span. This shift suggests a strategic pivot towards greater indebtedness, which could imply increased financial risk or capital financing for expansion activities. Prior to this, the company demonstrated improving leverage ratios, reflecting cautious debt management relative to asset growth.
Debt to Assets (including Operating Lease Liability)
Cytokinetics Inc., debt to assets (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Current portion of term loan | ||||||
| Short-term finance lease liabilities | ||||||
| Term loan, net, excluding current portion | ||||||
| Convertible notes, net | ||||||
| Long-term finance lease liabilities | ||||||
| Total debt | ||||||
| Short-term operating lease liabilities | ||||||
| Long-term operating lease liabilities | ||||||
| Total debt (including operating lease liability) | ||||||
| Total assets | ||||||
| Solvency Ratio | ||||||
| Debt to assets (including operating lease liability)1 | ||||||
| Benchmarks | ||||||
| Debt to Assets (including Operating Lease Liability), Competitors2 | ||||||
| AbbVie Inc. | ||||||
| Amgen Inc. | ||||||
| Bristol-Myers Squibb Co. | ||||||
| Danaher Corp. | ||||||
| Eli Lilly & Co. | ||||||
| Gilead Sciences Inc. | ||||||
| Johnson & Johnson | ||||||
| Merck & Co. Inc. | ||||||
| Pfizer Inc. | ||||||
| Regeneron Pharmaceuticals Inc. | ||||||
| Thermo Fisher Scientific Inc. | ||||||
| Vertex Pharmaceuticals Inc. | ||||||
| Debt to Assets (including Operating Lease Liability), Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | ||||||
| Debt to Assets (including Operating Lease Liability), Industry | ||||||
| Health Care | ||||||
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Debt to assets (including operating lease liability) = Total debt (including operating lease liability) ÷ Total assets
= ÷ =
2 Click competitor name to see calculations.
- Total debt (including operating lease liability)
- The total debt has shown a substantial increase over the analyzed period. Starting at $42.4 million in 2018, it grew sharply to $136.1 million in 2019 and remained relatively stable in 2020 with $138.9 million. However, there was a significant rise in debt to $271.2 million in 2021, followed by a more than doubling to $751.3 million in 2022. This indicates a strong upward trend in debt levels, especially pronounced in the last two years.
- Total assets
- Total assets also increased consistently across the period. Beginning at $211.2 million in 2018, assets rose to $289.8 million in 2019 and nearly doubled to $533.8 million in 2020. The growth continued with $841.3 million in 2021 and reached over one billion dollars, $1.01 billion, in 2022. The asset base has expanded significantly, suggesting considerable investments or acquisitions during this timeframe.
- Debt to assets (including operating lease liability)
- The debt to assets ratio exhibits fluctuations with an overall upward trend. In 2018, the ratio was 0.20, indicating relatively low leverage. It jumped sharply to 0.47 in 2019, then dropped to 0.26 in 2020. The ratio increased again to 0.32 in 2021 but surged to 0.74 in 2022. The high ratio in 2022 suggests substantially higher leverage, with debt comprising nearly three-quarters of the asset base, which might raise concerns about financial risk and solvency.
- Summary
- Over the five-year period, the company experienced significant growth in both assets and debt. The rapid increase in debt, particularly in 2021 and 2022, outpaced asset growth, resulting in a marked rise in leverage. The elevated debt to asset ratio in 2022 indicates increased financial risk, potentially reflecting aggressive financing strategies or increased borrowing needs. The data highlights a transition to a more leveraged capital structure, warranting attention to debt management and its implications for financial stability.
Financial Leverage
Cytokinetics Inc., financial leverage calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Total assets | ||||||
| Stockholders’ equity (deficit) | ||||||
| Solvency Ratio | ||||||
| Financial leverage1 | ||||||
| Benchmarks | ||||||
| Financial Leverage, Competitors2 | ||||||
| AbbVie Inc. | ||||||
| Amgen Inc. | ||||||
| Bristol-Myers Squibb Co. | ||||||
| Danaher Corp. | ||||||
| Eli Lilly & Co. | ||||||
| Gilead Sciences Inc. | ||||||
| Johnson & Johnson | ||||||
| Merck & Co. Inc. | ||||||
| Pfizer Inc. | ||||||
| Regeneron Pharmaceuticals Inc. | ||||||
| Thermo Fisher Scientific Inc. | ||||||
| Vertex Pharmaceuticals Inc. | ||||||
| Financial Leverage, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | ||||||
| Financial Leverage, Industry | ||||||
| Health Care | ||||||
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Financial leverage = Total assets ÷ Stockholders’ equity (deficit)
= ÷ =
2 Click competitor name to see calculations.
- Total assets
- The total assets showed a consistent upward trend over the observed periods. From a value of 211,178 thousand US dollars at the end of 2018, total assets increased steadily each year, reaching 1,014,775 thousand US dollars by the end of 2022. This represents substantial growth, reflecting either asset accumulation, investments, or expansion activities within the company.
- Stockholders’ equity (deficit)
- Stockholders’ equity exhibited significant volatility during the period. Beginning with positive equity of 25,934 thousand US dollars at the end of 2018, it turned negative by the end of 2019, with a deficit of 10,937 thousand US dollars. This was followed by a strong recovery in 2020 and 2021, with equity reaching 113,383 thousand and 243,863 thousand US dollars respectively. However, by the end of 2022, equity again fell substantially into deficit, recording a negative value of 107,900 thousand US dollars. The fluctuations suggest varying capital structure dynamics, possibly due to retained earnings changes, capital injections, or losses impacting shareholders' equity distinctly across years.
- Financial leverage
- Financial leverage ratios were reported for three periods: 2018, 2020, and 2021. In 2018, the leverage ratio was high at 8.14, indicating a high level of liabilities relative to equity. The ratio decreased to 4.71 in 2020 and further to 3.45 in 2021, suggesting a reduction in relative indebtedness or an improvement in equity base during these years. Data for 2019 and 2022 were not available, limiting the ability to assess leverage trends comprehensively for the entire period. Overall, the observed leverage reduction from 2018 to 2021 may reflect deleveraging or equity strengthening efforts.
- Overall insights
- The data reveals an overall expansion in asset base with significant fluctuations in equity positions. The company's capital structure appeared unstable with dramatic swings between equity and deficit positions, highlighting periods of financial tension or restructuring. The decline in financial leverage between 2018 and 2021 aligns with increases in equity during those periods, but lack of data for 2019 and 2022 restricts full trend analysis. These patterns may merit further investigation into the causes of equity volatility and the sustainability of asset growth relative to liabilities.
Interest Coverage
Cytokinetics Inc., interest coverage calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net loss | ||||||
| Add: Income tax expense | ||||||
| Add: Interest expense | ||||||
| Earnings before interest and tax (EBIT) | ||||||
| Solvency Ratio | ||||||
| Interest coverage1 | ||||||
| Benchmarks | ||||||
| Interest Coverage, Competitors2 | ||||||
| AbbVie Inc. | ||||||
| Amgen Inc. | ||||||
| Bristol-Myers Squibb Co. | ||||||
| Danaher Corp. | ||||||
| Eli Lilly & Co. | ||||||
| Gilead Sciences Inc. | ||||||
| Johnson & Johnson | ||||||
| Merck & Co. Inc. | ||||||
| Pfizer Inc. | ||||||
| Regeneron Pharmaceuticals Inc. | ||||||
| Thermo Fisher Scientific Inc. | ||||||
| Vertex Pharmaceuticals Inc. | ||||||
| Interest Coverage, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | ||||||
| Interest Coverage, Industry | ||||||
| Health Care | ||||||
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Interest coverage = EBIT ÷ Interest expense
= ÷ =
2 Click competitor name to see calculations.
- Earnings before interest and tax (EBIT)
- The EBIT values have shown a consistently negative trend throughout the period analyzed, indicating ongoing operating losses. Starting at -102,492 thousand US dollars in 2018, the losses deepened progressively each year, reaching -369,541 thousand US dollars by the end of 2022. This represents a significant deterioration in operating profitability over the five-year span.
- Interest expense
- Interest expense has increased steadily over the years, rising from 3,797 thousand US dollars in 2018 to 19,414 thousand US dollars in 2022. This upward trend suggests either an increase in debt levels or rising interest rates impacting the cost of borrowing for the entity.
- Interest coverage
- The interest coverage ratio, which measures the ability to meet interest obligations from operating earnings, has remained negative and worsened over time. Beginning at -26.99 in 2018, the ratio indicates significant difficulty in covering interest expenses with earnings before interest and tax. The trend shows some fluctuations but overall a decline to -19.03 by 2022, demonstrating persistent and increasing financial stress in meeting interest payments.
Fixed Charge Coverage
Cytokinetics Inc., fixed charge coverage calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net loss | ||||||
| Add: Income tax expense | ||||||
| Add: Interest expense | ||||||
| Earnings before interest and tax (EBIT) | ||||||
| Add: Rent expense for operating and finance leases | ||||||
| Earnings before fixed charges and tax | ||||||
| Interest expense | ||||||
| Rent expense for operating and finance leases | ||||||
| Fixed charges | ||||||
| Solvency Ratio | ||||||
| Fixed charge coverage1 | ||||||
| Benchmarks | ||||||
| Fixed Charge Coverage, Competitors2 | ||||||
| AbbVie Inc. | ||||||
| Amgen Inc. | ||||||
| Bristol-Myers Squibb Co. | ||||||
| Danaher Corp. | ||||||
| Eli Lilly & Co. | ||||||
| Gilead Sciences Inc. | ||||||
| Johnson & Johnson | ||||||
| Merck & Co. Inc. | ||||||
| Pfizer Inc. | ||||||
| Regeneron Pharmaceuticals Inc. | ||||||
| Thermo Fisher Scientific Inc. | ||||||
| Vertex Pharmaceuticals Inc. | ||||||
| Fixed Charge Coverage, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | ||||||
| Fixed Charge Coverage, Industry | ||||||
| Health Care | ||||||
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Fixed charge coverage = Earnings before fixed charges and tax ÷ Fixed charges
= ÷ =
2 Click competitor name to see calculations.
- Earnings before fixed charges and tax
- The earnings before fixed charges and tax demonstrate a persistent negative trend from 2018 through 2022. Beginning at -$97.5 million in 2018, the losses deepened significantly over the years, reaching -$347.9 million in 2022. This trend indicates a substantial increase in pre-fixed charge expenses or declines in operating performance over the analyzed period.
- Fixed charges
- Fixed charges have shown a steady upward trajectory. Starting at approximately $8.8 million in 2018, these charges more than quadrupled by 2022, reaching just over $41.0 million. The consistent rise suggests increasing obligations related to interest expenses or lease commitments.
- Fixed charge coverage ratio
- The fixed charge coverage ratio is consistently negative, reflecting the company's inability to cover fixed charges from earnings. The ratio improved modestly from -11.08 in 2018 to -4.45 in 2021, implying a slight relative improvement in earnings before fixed charges and tax. However, it deteriorated substantially to -8.48 in 2022. This negative ratio throughout the period highlights ongoing financial stress and insufficient earnings relative to fixed obligations.