Cytokinetics Inc. (NASDAQ:CYTK)

Debt to Equity Ratio

The debt to equity ratio exhibits significant fluctuation over the periods presented. It starts at a low level around 0.32 at the end of March 2018 and rises sharply to 1.64 by December 2018. A notable spike occurs in March 2019, where the ratio hits 12.63, followed by a lack of data for several subsequent quarters. Resuming data in mid-2020 shows lower ratios generally below 3.0, with another spike reaching 8.44 in December 2020. Later periods reflect moderate variability, ending near the lower end in recent quarters.

Debt to Equity Ratio Including Operating Lease Liability

This ratio mirrors the trend of the standard debt to equity ratio but generally registers higher values due to the inclusion of operating lease liabilities. Peaks in March 2019 (15.53) and December 2020 (14.98) suggest significant lease-related obligations impacting overall leverage during those times. Between such peaks, the ratio follows a similar diminishing trend but remains elevated compared to the base metric.

Debt to Capital Ratio

The debt to capital ratio increases steadily from 0.24 in early 2018 to a higher level above 0.6 by late 2019. Thereafter, it fluctuates, but generally remains between 0.3 and 0.9 until the end of 2022. Starting from early 2023, this ratio trends upward sharply, reaching values above 3.5 in the latest quarter, indicating increased reliance on debt within the company’s capital structure.

Debt to Capital Ratio Including Operating Lease Liability

This metric is consistently higher than the debt to capital ratio excluding leases, reflecting the impact of lease obligations. The pattern follows the same overall trajectory of growth, decline, and resurgence observed in the standard ratio, with recent values indicating a growing proportion of debt plus lease commitments relative to total capital.

Debt to Assets Ratio

The debt to assets ratio shows a gradual increase from 0.11 in early 2018 to approximately 0.57 by mid-2020, indicating more than a fivefold increase in debt relative to assets during this period. The ratio then declines and stabilizes between 0.17 and 0.26 over the next year, before climbing again starting from about early 2023 to reach levels above 0.8, pointing to a more leveraged asset base.

Debt to Assets Ratio Including Operating Lease Liability

Inclusion of operating lease liabilities in this ratio results in consistently higher values, especially noticeable from mid-2021 onwards where this ratio trends upwards from approximately 0.4 to surpassing 1.0 in the most recent quarter. This suggests that operating lease obligations form a material portion of the company's liabilities secured against assets.

Financial Leverage Ratio

The financial leverage ratio starts moderately at 2.81 in early 2018 and rises sharply to 8.14 by the end of 2018. A substantial peak is observed in March 2019 where the ratio jumps dramatically to 58.9, indicating exceptional leveraging at that point. Following periods show lower ratios, with another notable increase to 34.22 in December 2020 before settling into moderate but elevated levels in the range of approximately 3 to 8 in subsequent quarters, demonstrating fluctuating leverage intensity.

Interest Coverage Ratio

The interest coverage ratio remains negative throughout the periods with available data, starting near -27 at the end of 2018 and improving modestly but still negative in subsequent quarters. Values fluctuate between about -6.7 and -19.0, indicating persistent challenges in covering interest expenses from operating earnings. The consistently negative figures highlight ongoing operating losses or insufficient earnings relative to interest obligations across all periods examined.

The financial data reveals notable fluctuations in the company's leverage and equity position over the observed periods. Key points from the analysis are summarized below.

Total Debt

The total debt shows a general upward trend from March 31, 2018, through September 30, 2023. Starting at $31,954 thousand in early 2018, debt increased gradually, with a significant jump by December 31, 2019, reaching $129,257 thousand. Following this, debt levels continued to rise moderately and peaked substantially at $608,530 thousand in September 30, 2022, remaining around this high level through subsequent quarters up to September 30, 2023.

Stockholders’ Equity (Deficit)

Stockholders’ equity exhibits considerable volatility and a downward trend overall. The equity started positively at $99,599 thousand in March 31, 2018, but declined sharply over 2018 and 2019, becoming negative around mid-2019. Despite some recovery to positive values by late 2020 and into 2021 with a peak of $249,020 thousand in September 30, 2021, equity declined again and turned negative from early 2022 onwards. The deficit deepened through 2022 and 2023, reaching a valuation of -$438,801 thousand by September 30, 2023.

Debt to Equity Ratio

The debt-to-equity ratio, where provided, also reflects considerable volatility and leverage fluctuations. Initially, the ratio increased sharply from 0.32 in March 2018 to 1.64 by the end of 2018, indicating growing debt relative to equity. It spiked dramatically to 12.63 by March 31, 2019, suggesting a severe imbalance possibly due to the equity decrease. The ratio then fluctuates with periods around 0.9 to 2.02 through 2020 and 2021, and another spike to 8.44 in December 31, 2021. The later part of the data lacks available ratio values, likely due to the negative equity values making the ratio less meaningful or calculable.

Overall, the data reflects an increasing reliance on debt financing over the period, accompanied by significant erosion and recurring volatility in equity, which raises concerns about financial stability and capital structure sustainability. The spikes in leverage ratios indicate phases of heightened financial risk.

Total Debt (including Operating Lease Liability)

The total debt increased gradually from March 31, 2018, through December 31, 2019, starting at approximately $31.95 million and reaching a significant rise in the last quarter of 2019 at about $136.07 million. This upward trend continued with minor fluctuations, peaking sharply in the period ending September 30, 2022, at approximately $739.0 million. The debt level stabilized somewhat afterward, remaining close to $748 million through the subsequent quarters ending June 30, 2023, and September 30, 2023.

Stockholders' Equity (Deficit)

Stockholders’ equity exhibited considerable volatility over the periods. Starting at a positive value of about $99.6 million at March 31, 2018, it gradually declined through 2018 and early 2019, turning negative by June 30, 2019, and reaching its lowest negative value near -$49.9 million by September 30, 2019. A sharp swing occurred at September 30, 2020, where equity jumped to approximately $149.6 million but then decreased again in subsequent periods. The equity fluctuated considerably thereafter, with significant positive peaks near $249 million at September 30, 2021, followed by steep declines, turning negative again by March 31, 2023, and continuing to fall to around -$438.8 million by September 30, 2023.

Debt to Equity Ratio (including Operating Lease Liability)

The debt-to-equity ratio displays notable fluctuations corresponding to changes in both debt and equity values. Initial values in early 2018 were below 1.0, indicating relatively lower leverage. However, by March 31, 2019, the ratio surged sharply to 15.53, reflecting the drop in equity to negative territory alongside increased debt. The ratio remained elevated and volatile in later periods, with recorded values including 0.93 as of March 31, 2020, moving up and down in subsequent quarters, reaching values such as 14.98 and 3.37 throughout 2020 and 2021. The incomplete data for the last reported periods limits a full assessment, but the earlier large swings suggest periods of substantial financial leverage and instability.

The financial data reveals notable fluctuations in the key indicators of total debt, total capital, and the debt-to-capital ratio over the analyzed quarters. Each metric exhibits distinct trends and variations that provide insight into the company's financial structure and leverage position.

Total Debt

Total debt shows a generally increasing trend across the periods, rising from approximately 31,954 thousand USD in the first quarter of 2018 to over 609,000 thousand USD by the third quarter of 2023. There are several periods of marked increases, most prominently between late 2021 and late 2022, where total debt surged from around 142,838 thousand USD to 608,530 thousand USD. This steep rise in debt suggests substantial new borrowings or obligations incurred during this timeframe. Aside from this spike, the debt values increased more gradually, with occasional smaller jumps, indicating ongoing financing or refinancing activities.

Total Capital

Total capital presents a less consistent pattern compared to total debt. Starting at about 131,553 thousand USD in early 2018, the total capital amounts largely declined through late 2019, hitting a low of around 24,893 thousand USD in the third quarter of 2019. In subsequent quarters, total capital exhibits considerable volatility: a significant jump to roughly 283,627 thousand USD in the third quarter of 2020, followed by a decline and another peak near 389,983 thousand USD at the end of 2021. Post-2021, total capital decreased steadily again, falling to about 170,218 thousand USD by the third quarter of 2023. These wide variations may indicate fluctuations in equity, retained earnings, or capital injections combined with changes in liabilities.

Debt to Capital Ratio

The debt-to-capital ratio fluctuates significantly and evidences high volatility throughout the timeline. Initial ratio values begin modestly at 0.24 in early 2018 but rise sharply to reach peaks above 1.0 multiple times. Clocking a high of 1.8 in late 2019, the ratio declines to about 0.36 by Q1 2022 but then escalates steeply again, peaking at 3.58 in the third quarter of 2023. Such elevated ratios, particularly above 1.0 and reaching over 3.5, reflect a capital structure highly leveraged with debt positioning the company predominantly financed by liabilities rather than equity or other capital sources. The sharp increases in this ratio generally correspond to periods where total debt surged or capital declined markedly.

Overall, the financial indicators collectively reveal increasing leverage and significant capital structure changes over the analyzed period. The company has undergone phases of elevated debt accumulation relative to capital, especially in the last two years, which could imply increasing financial risk or strategic financing decisions. The fluctuations in total capital and the strongly varying debt-to-capital ratio suggest dynamic adjustments in equity or financing arrangements. These trends warrant close monitoring, particularly the high leverage levels observed recently.

The financial data reveals notable fluctuations in total debt, total capital, and the debt to capital ratio over the quarters analyzed. These changes highlight significant shifts in the company's capital structure and leverage over the period under review.

Total Debt (including operating lease liability)

Total debt exhibits a general increasing trend with some pronounced changes. From March 2018 through December 2019, the debt rose steadily from approximately $31.95 million to $136.07 million, indicating a significant increase in liabilities.

Between 2020 and early 2021, total debt remained relatively stable with values clustering around $138 million. However, from early 2021 through the end of 2022, debt levels rose sharply again, peaking at nearly $739 million in September 2022, more than a fivefold increase in this period.

From September 2022 onwards to the latest data point in September 2023, total debt showed stability, hovering close to $748 million, indicating that the company maintained a high level of borrowing during the most recent quarters.

Total Capital (including operating lease liability)

Total capital decreased substantially from March 2018 through September 2019, falling from about $131.6 million to roughly $32.7 million. This suggests either a reduction in capital base or reclassification of liabilities affecting capital components.

In late 2019 and early 2020, total capital distribution appears volatile, with values fluctuating significantly — a sharp increase to $288 million in September 2020 followed by a decline to about $252 million in December 2020.

From 2021 onwards, total capital experienced marked growth, peaking at approximately $514 million in December 2021. Thereafter, it declined steadily, reaching a low of about $310 million by September 2023, indicating some contraction of capital base during the most recent quarters.

Debt to Capital Ratio (including operating lease liability)

The debt to capital ratio reflects considerable volatility and general upward trending leverage. This ratio increased from a modest 0.24 in March 2018 to as high as 1.61 by September 2019, indicating that debt exceeded total capital by a wide margin at that point.

Subsequent quarters through 2020 showed large fluctuations: a spike to 2.3 in June 2020 followed by a reduction to around 0.48 at September 2020. Such volatility suggests significant shifts in either debt, capital, or both, potentially due to financing activities or asset revaluations.

In 2021, the ratio rose again, peaking at 0.94 by June 2021, before dropping to near 0.51 by December 2021. Following this, it moved upward steadily reaching as high as 2.42 by September 2023, indicating an increasing reliance on debt financing relative to the overall capital base during this period.

Overall, the pattern indicates periods of increased leverage consistent with aggressive borrowing, particularly from late 2021 through 2023.

In summary, the company demonstrated a strategy involving substantial increases in debt while capital figures showed more erratic patterns of decline and growth. The resulting leverage ratios suggest a progressively higher reliance on debt to fund capital resources, especially evident in recent years. These trends underscore an evolving capital structure with heightened financial risk exposure due to increased leverage.

Total Debt

The total debt exhibits a generally increasing trend over the periods analyzed. Starting at approximately $32 million in March 2018, the debt rose steadily with a significant jump observed in December 2019, reaching over $129 million. Following a period of relative stability around $135-$142 million from late 2019 through early 2022, the total debt sharply increased again beginning in March 2022, peaking above $608 million by September 2022, and remained around $609 million through September 2023. This substantial increase indicates significant new borrowings or financing activities during this latter period.

Total Assets

Total assets exhibited a fluctuating pattern over the time frame. Initially, assets showed a downward trend from approximately $280 million in March 2018 to just under $188 million by September 2019. This was followed by a strong recovery starting in late 2019, with assets rising sharply to over $474 million by September 2020, and continuing to increase, reaching a high point of around $841 million in June 2021. Subsequently, assets decreased somewhat, with fluctuations around $770 million to $1.08 billion through early 2022 and beyond. Notably, after March 2022, assets declined gradually, ending just above $740 million in September 2023. The variations suggest periods of asset acquisitions or disposals and possible changes in valuation.

Debt to Assets Ratio

The debt to assets ratio closely mirrors the changes in both debt and asset levels and indicates changes in financial leverage over time. Initially low, the ratio increased from 0.11 in Q1 2018 to 0.24 by Q3 2019. A marked rise occurred in Q4 2019, reaching 0.45 and continuing upward to 0.57 by Q3 2020. The ratio stabilized somewhat through 2021, declining to around 0.17-0.25, implying improved balance sheet strength during that interval. However, from Q1 2022 onward, the ratio surged again, reaching as high as 0.82 by Q3 2023. This upward movement reflects the dramatic increase in debt relative to assets, indicating a higher leverage position and potentially increased financial risk during the latest periods.

Total Debt (including operating lease liability)

The total debt shows an overall increasing trend from March 31, 2018, through September 30, 2023. Initially, debt values remained relatively stable around $31,954k to $42,413k until the end of 2018. A significant increase is observed starting in December 2019, where debt nearly triples compared to previous quarters, reaching approximately $136,068k, and continuing to rise steadily to a peak near $738,991k in September 2022. After this peak, the debt remains substantially elevated and stabilizes around $749,000k through the last reported quarter in September 2023.

Total Assets

Total assets demonstrated volatility and a complex pattern over the analyzed period. Between March 2018 and December 2019, total assets generally declined from approximately $279,926k to a low of around $187,393k, followed by a sharp increase to about $289,814k at the end of 2019. Assets peaked at $856,253k in June 2022, showing significant growth during 2020 and 2021. Post-peak, asset values decrease gradually, falling to approximately $740,614k by September 2023. The data indicate considerable fluctuations with periods of asset growth interspersed with declines.

Debt to Assets Ratio (including operating lease liability)

The debt to assets ratio reflects a rising leverage trend over the period. Starting at a low ratio of 0.11 in March 2018, it experiences a steady increase through 2019 to reach nearly 0.47 by December 2019. This ratio spikes again during 2020 and 2021, with noticeable volatility, declining temporarily to 0.26 at the end of 2020 before rising sharply to 0.69 by March 2022. The trend continues upward, culminating in a ratio that surpasses 1.0 by September 2023, indicating that total debt exceeds total assets in the most recent quarters. This rise suggests increasing financial leverage and potential risk.

Summary Insights

The data depict a company experiencing substantial growth in debt levels over the examined period, particularly sharp increases from late 2019 onwards. Total assets fluctuated, with periods of both decline and growth, but overall, asset growth does not keep pace with the increase in debt in the most recent years. This disproportionate growth results in a debt to assets ratio exceeding 1.0 by the latest quarter, which may signal heightened financial risk and leverage pressure. The volatility in assets alongside increasing debt highlights the importance of close monitoring of capital structure and financial stability in future periods.

An analysis of the quarterly financial data for the period under review reveals several notable trends in the company’s asset base, equity position, and financial leverage ratios.

Total assets

The total assets show a fluctuating pattern over the quarters. Initially, there is a downward trend from approximately 280 million US dollars at the end of the first quarter of 2018 to about 187 million by the third quarter of 2019. A significant upward spike occurs in the fourth quarter of 2019 where assets jump to nearly 290 million, followed by fluctuations around the 230 million to 530 million range through 2020 and early 2021. Thereafter, assets show a strong upward momentum, peaking at over 1 billion US dollars by the first quarter of 2023, before declining again in subsequent quarters to approximately 740 million US dollars by the third quarter of 2023.

Stockholders’ equity (deficit)

The stockholders’ equity demonstrates a generally declining trend with wide fluctuations and periods of deficit. Initially positive and moderate at around 100 million US dollars in early 2018, equity drops sharply to a deficit position by the third quarter of 2019 (approximately -20 million) and further worsens into a deeper deficit around -78 million by mid-2020. Following this, there is a recovery trend characterized by significant volatility: equity swings from a high of roughly 150 million in the third quarter of 2020 to negative equity again in the early quarters of 2023, reaching a deficit greater than -430 million US dollars by the third quarter of 2023. This pattern suggests substantial capital structure challenges with periods of both recovery and deterioration.

Financial leverage

The financial leverage ratio displays significant variability. In early 2018, leverage is moderate, increasing from approximately 2.81 to 8.14 by the end of 2018. The data shows an extreme value at 58.9 in the first quarter of 2019, indicating a potentially highly leveraged position or equity near zero, although this is followed by missing data in several subsequent periods. Available data resumes in 2020 showing leverage values ranging mostly between 3.17 and 8.51, with a notable spike to 34.22 in late 2021, indicating recurring episodes of elevated leverage. However, missing data in the most recent quarters limits the ability to fully assess leverage trends across the entire timeline.

Overall, the data reveals a company experiencing significant volatility in its asset base and equity position, alongside periods of elevated financial leverage. Such trends suggest dynamic changes in financing and capital structure, with episodes of distress particularly evidenced by sizable equity deficits and leverage spikes. The fluctuations in assets and equity might reflect strategic shifts, investment cycles, financing activities, or operational challenges affecting the company’s financial stability over time.

Earnings before interest and tax (EBIT)

The EBIT figures display a generally negative performance throughout the observed periods, indicating consistent operational losses. From March 2018 to June 2020, EBIT values fluctuate within a negative range, with an exceptional positive spike in September 2020 (801 thousand US$), likely representing an unusual one-time event. Following this, EBIT returns to negative territory and deepens substantially, reaching its lowest points in the quarters of December 2022 (-135,506 thousand US$) and March 2023 (-130,323 thousand US$). Overall, the trend suggests increasing operational losses over time, with more severe negative EBIT values in recent years compared to earlier periods.

Interest Expense

Interest expenses show an upward trend from the first quarter of 2018 through to early 2023. Starting at 863 thousand US$ in March 2018, interest expense generally increases, reaching peaks above 7,000 thousand US$ in the last three quarters of the data (December 2022 to September 2023). This indicates rising financing costs, likely stemming from increased debt levels or higher interest rates. There are minor fluctuations but the overall trajectory is consistently upward.

Interest Coverage Ratio

The interest coverage ratio is negative throughout the periods where data is available, reflecting EBIT losses that are insufficient to cover interest expenses. The ratio worsens significantly over time; for example, starting around -26.99 in December 2018 and progressively deteriorating to approximately -19.03 to -18.36 by mid to late 2023. This declining ratio indicates that earnings are increasingly unable to meet interest obligations, suggesting heightened financial stress and lower operational profitability relative to interest costs.

Overall Financial Performance and Risk Assessment

The analyzed data points collectively reveal a challenging financial environment characterized by persistent operational losses and growing interest expenses. The negative and deteriorating EBIT figures, combined with rising interest costs, contribute to a continually weakening interest coverage ratio. This pattern signals increasing financial strain and potential liquidity risks, emphasizing the need for strategic measures to improve profitability and manage financing costs.