DexCom Inc. (NASDAQ:DXCM)

Debt to Equity Ratios

The debt to equity ratio demonstrated a declining trend from 1.53 in 2018 to 0.78 in 2021, indicating a progressive reduction in reliance on debt relative to equity over these years. However, in 2022, the ratio increased to 0.95, suggesting a slight uptick in leverage. Including operating lease liabilities, the pattern is similar, with values slightly higher, reflecting the additional liabilities considered.

Debt to Capital Ratios

There was a consistent decrease in the debt to capital ratio from 0.61 in 2018 to 0.44 in 2021, indicating an improved capital structure with reduced debt proportion. Like the debt to equity metrics, there was a modest increase to 0.49 in 2022. The measures that include operating lease liabilities show parallel behavior at marginally higher levels due to the lease liabilities’ impact.

Debt to Assets Ratios

The debt to assets ratio followed a downward trend from 0.53 in 2018 to 0.36 in 2021, signaling a gradual reduction in debt relative to total assets. In 2022, this ratio slightly increased to 0.38. Ratios including operating lease liabilities maintain a similar trend but are consistently higher, reflecting lease obligations as part of the debt structure.

Financial Leverage

Financial leverage decreased steadily from 2.89 in 2018 to 2.16 in 2021, suggesting a lower reliance on debt financing compared to equity. In 2022, the ratio increased to 2.53, indicating a moderate rise in leverage.

Interest Coverage

Interest coverage improved markedly over the period. The negative value of -4.57 in 2018 reflects insufficient earnings to cover interest expenses initially. This turned positive in 2019 at 2.73, showing progress. Coverage ratios remained relatively stable through 2021 but spiked sharply to 22.01 in 2022, indicating significantly enhanced ability to meet interest obligations, which may suggest increased earnings or decreased interest expenses.

Fixed Charge Coverage

Similarly, fixed charge coverage moved from negative territory (-2.59 in 2018) to positive values, reaching 2.41 in 2021. In 2022, the ratio surged to 10.49, reflecting a substantial improvement in covering fixed financial charges, aligning with the trend observed in interest coverage.

Total Debt

The total debt exhibited a consistent upward trend over the five-year period. It increased from approximately $1.02 billion in 2018 to over $2.03 billion in 2022. Notably, there was a significant jump between 2019 and 2020, where debt rose by around $655 million. The growth in debt slowed somewhat from 2020 to 2021 but resumed an upward trajectory from 2021 to 2022.

Stockholders’ Equity

Stockholders’ equity demonstrated substantial growth from 2018 through 2021, more than tripling from about $663 million to $2.25 billion within this period. This sharp increase reflects a strong accumulation of equity capital. However, in 2022, equity declined moderately to approximately $2.13 billion, indicating a slight reversal after the prior years of growth.

Debt to Equity Ratio

The debt to equity ratio showed a declining trend from 1.53 in 2018 to a low of 0.78 in 2021, suggesting improved financial leverage and a reduction in reliance on debt relative to equity over this period. In 2022, the ratio increased again to 0.95, reflecting the combined effect of rising total debt and a reduction in equity. Despite this uptick, the ratio remained below the initial 2018 level, indicating overall borrowing remained more balanced relative to equity compared to the start of the period.

The analysis of the financial data over the five-year period reveals notable trends in the company's capital structure and leverage.

Total Debt (including operating lease liability)

The total debt has shown a consistent upward trend from 2018 to 2022. Starting at $1,017,600 thousand in 2018, the debt increased steadily each year to reach $2,149,200 thousand by the end of 2022, more than doubling over five years. This indicates an increased reliance on debt financing over the period.

Stockholders’ Equity

Stockholders’ equity has also experienced significant growth from 2018 through 2021, rising from $663,300 thousand to $2,251,500 thousand, more than tripling in that timeframe. However, in 2022, equity declined slightly to $2,131,800 thousand. This overall increase in equity, especially pronounced between 2019 and 2021, reflects strong retained earnings or additional equity issuance during those years. The slight decline in 2022 may warrant further investigation.

Debt to Equity Ratio (including operating lease liability)

The debt to equity ratio demonstrates an important shift in the capital structure. The ratio decreased from 1.53 in 2018 to a low of 0.84 in 2021, indicating a movement toward a less leveraged position with greater relative equity financing. However, in 2022, the ratio increased again to 1.01, suggesting a modest rise in leverage. The trend shows that while the company reduced its leverage for a few years, debt growth outpaced equity growth in the latest year measured.

In summary, while total debt has consistently increased, the company simultaneously increased its equity substantially through 2021, resulting in a decreasing debt to equity ratio over that period. The increase in the ratio in 2022 suggests a shift back toward higher leverage. The data reflects dynamic capital management with changing levels of debt and equity financing over the years.

Total Debt

The total debt showed a consistent increase over the years. Starting from approximately 1,017,600 thousand US dollars at the end of 2018, it rose to about 2,034,100 thousand US dollars by the end of 2022. There was a notable jump between 2019 and 2020, where the debt increased by roughly 610,000 thousand US dollars. Subsequent years saw more gradual increases in total debt.

Total Capital

Total capital experienced a significant upward trend across the period. It rose from 1,680,900 thousand US dollars in 2018 to 4,165,900 thousand US dollars in 2022. The largest increase occurred between 2019 and 2020, with capital nearly doubling. Growth continued at a slower pace in 2021 and 2022.

Debt to Capital Ratio

This ratio declined steadily from 0.61 in 2018 to 0.44 in 2021, indicating a decreasing proportion of debt relative to total capital during this period. However, in 2022, the ratio increased to 0.49, reversing part of the previous downward trend. This suggests an increase in leverage in the last year compared to previous years, despite overall growth in total capital.

Overall Analysis

The data indicates that while both total debt and total capital have increased substantially over the five-year span, the company's capital base has grown at a faster rate than its debt, particularly between 2018 and 2021. This has led to a decrease in financial leverage as shown by the declining debt to capital ratio during that time. The slight uptick in the debt to capital ratio in 2022 may warrant further investigation to understand the reasons for increased indebtedness relative to capital. Overall, the company appears to have been strengthening its capital position while managing debt levels prudently until the most recent year.

Total Debt (including operating lease liability)

The total debt amount exhibits a steady increase over the five-year period. Starting at approximately 1,017,600 thousand USD at the end of 2018, it rises consistently each year, reaching 2,149,200 thousand USD by the end of 2022. Notably, there is a significant uptick from 2019 to 2020 and a continued upward trajectory thereafter, indicating increasing leverage or borrowing during this timeframe.

Total Capital (including operating lease liability)

Total capital shows a pronounced growth trend as well. Beginning at 1,680,900 thousand USD in 2018, it nearly doubles by 2020 to 3,674,800 thousand USD, and continues to increase, albeit at a slower rate, reaching 4,281,000 thousand USD by 2022. This expansion suggests an overall growth in the company's financing base, encompassing both debt and equity components.

Debt to Capital Ratio (including operating lease liability)

The debt-to-capital ratio indicates a gradual reduction in leverage from 0.61 in 2018 to a low of 0.46 in 2021, reflecting a shift towards a more balanced capital structure with relatively less reliance on debt. However, in 2022, the ratio rebounds to 0.50, signaling a moderate increase in the proportion of debt within the total capital structure. This fluctuation suggests strategic adjustments in financing decisions over the period, balancing between debt and equity to optimize the capital mix.

Total Debt

There is a consistent upward trend in total debt from 2018 through 2022. The figure increased from 1,017,600 thousand US dollars in 2018 to 2,034,100 thousand US dollars in 2022. The most notable increase occurred between 2019 and 2020, where total debt rose sharply from 1,074,700 to 1,730,000 thousand US dollars. Subsequent years saw continued but relatively moderate increases.

Total Assets

Total assets show a steady and significant growth over the five-year span. The value more than doubled from 1,916,000 thousand US dollars in 2018 to 5,391,700 thousand US dollars in 2022. This represents a strong expansion in asset base, with particularly rapid growth evident between 2019 and 2020, aligning with the increase in total debt during the same period.

Debt to Assets Ratio

The debt to assets ratio demonstrates a consistent decline from 0.53 in 2018 to a low of 0.36 in 2021, indicating a reduction in leverage relative to the company's asset base despite the rise in absolute debt levels. In 2022, there is a slight increase to 0.38, suggesting a minor increase in leverage but still below earlier years. This pattern reflects that asset growth generally outpaced debt accumulation, enhancing the company’s financial stability over the period.

Total Debt (Including Operating Lease Liability)

The total debt of the company has increased consistently over the five-year period. Starting at approximately $1.018 billion in 2018, it rose to about $2.149 billion by the end of 2022, more than doubling its initial value. The most significant increase occurred between 2019 and 2020, where the debt increased by approximately 59%, followed by a steadier rise in subsequent years.

Total Assets

Total assets exhibited a substantial upward trend over the same period. Beginning at around $1.916 billion in 2018, total assets more than doubled to approximately $5.392 billion by 2022. Notably, the largest growth spurt happened between 2019 and 2020, with an increase of nearly 79%. Asset growth continued steadily thereafter but at a slower rate.

Debt to Assets Ratio (Including Operating Lease Liability)

This ratio has shown a consistent decline from 0.53 in 2018 to 0.39 by the end of 2021, indicating that the company’s leverage relative to its asset base decreased during this timeframe. The slight uptick to 0.40 in 2022 suggests a marginal increase in leverage but still remains below the initial ratio from 2018. This pattern indicates that asset growth outpaced debt growth for most of the period, improving the company's financial stability in terms of leverage.

The financial data reveals several notable trends for the analyzed periods.

Total assets

The total assets increased consistently over the five-year span. Starting at approximately $1.92 billion in 2018, there was a significant rise to about $2.40 billion in 2019, followed by an even sharper increase to roughly $4.29 billion in 2020. This upward trend continued with total assets reaching approximately $4.86 billion in 2021 and $5.39 billion in 2022. The data indicates a strong expansion of the asset base year over year, suggesting ongoing growth and investment.

Stockholders’ equity

Stockholders’ equity showed a substantial increase from 2018 to 2021, beginning at about $663 million in 2018. Thereafter, it rose sharply to $883 million in 2019 and further surged to approximately $1.83 billion in 2020. The upward momentum persisted with equity reaching around $2.25 billion in 2021. However, in 2022, there was a slight decline to about $2.13 billion. While equity generally grew significantly over the period, the decrease in 2022 may indicate changes in retained earnings, share repurchases, or other equity transactions.

Financial leverage

The financial leverage ratio, which measures the proportion of total assets to stockholders’ equity, displayed a downward trend from 2018 through 2021. Initially, the ratio was 2.89 in 2018, decreasing annually to 2.71 in 2019, 2.35 in 2020, and 2.16 in 2021. This declining ratio suggests a reduced reliance on debt relative to equity during these years. However, in 2022, the financial leverage ratio increased to 2.53, indicating a moderate rise in leverage, potentially reflecting increased borrowing or changes in the equity base.

In summary, the company experienced strong growth in total assets and stockholders’ equity from 2018 through 2021, with equity growth outpacing asset growth, leading to declining financial leverage. The year 2022 deviated somewhat from these trends, with a slight drop in equity and an increase in leverage, suggesting a shift in the capital structure or financing strategy during the most recent period.

The financial data reveals significant variations and overall positive trends in key profitability and financial stability indicators over the five-year period.

Earnings before interest and tax (EBIT)

The EBIT shows a notable recovery and growth trajectory. Initially, there was a substantial loss recorded in 2018, with EBIT at -103,800 thousand US dollars. This figure improved dramatically by 2019, turning positive to 164,500 thousand US dollars, and continued to increase in the subsequent years, reaching 309,700 thousand in 2020 and 274,200 thousand in 2021. In 2022, the company achieved its highest EBIT in the observed period, amounting to 409,400 thousand US dollars. This pattern indicates a strong turnaround in operational profitability and sustained growth momentum after 2018.

Interest Expense

Interest expense experienced an upward trend from 2018 through 2021, increasing from 22,700 thousand US dollars to a peak of 100,300 thousand US dollars in 2021. However, there was a marked decrease in 2022, with interest expense falling to 18,600 thousand US dollars, the lowest level since 2018. This sudden reduction after continuous growth suggests a significant change in the company’s financing costs or debt structure, potentially due to debt repayment, refinancing, or improved credit terms.

Interest Coverage Ratio

The interest coverage ratio improved drastically over the period, reflecting enhanced capacity to meet interest obligations from operational earnings. In 2018, the ratio was negative (-4.57), indicative of losses before interest and inability to cover interest expenses. By 2019, this ratio turned positive and rose to 2.73, followed by further improvement to 3.66 in 2020. Although the ratio slightly decreased back to 2.73 in 2021, it dramatically increased to 22.01 in 2022, the highest and most favorable ratio observed. The exceptionally high ratio in 2022 corresponds with both the peak EBIT and the sharply reduced interest expense, highlighting a significantly strengthened financial position and robust debt servicing capability.

In summary, the data reflects a strong recovery from operational losses to robust profitability, coupled with improved management of interest expenses and enhanced ability to service debt. The trends suggest increased operational efficiency and possibly strategic financial adjustments that have yielded a healthier and more resilient financial state by the end of the period.

Earnings before fixed charges and tax

The earnings before fixed charges and tax exhibit a significant upward trend over the five-year period. Initially, there was a considerable loss of 91,300 thousand US dollars at the end of 2018. This figure turned positive in 2019 with 176,700 thousand US dollars and continued to increase substantially in the subsequent years, reaching 432,000 thousand US dollars by the end of 2022. This progression indicates a strong improvement in operating profitability before accounting for fixed charges.

Fixed charges

Fixed charges increased markedly from 35,200 thousand US dollars in 2018 to a peak of 123,600 thousand US dollars in 2021. However, there is a notable decline in fixed charges in 2022, dropping sharply to 41,200 thousand US dollars. This pattern suggests fluctuating obligations related to interest and other fixed costs, with a substantial reduction in the most recent year that may influence overall financial stability and earnings capacity.

Fixed charge coverage ratio

The fixed charge coverage ratio reflects the company’s ability to cover fixed charges with earnings before fixed charges and tax. The ratio improved significantly from -2.59 in 2018, indicating insufficient coverage, to values above 2.0 for the next three years, demonstrating adequate coverage and growing financial strength. In 2022, the ratio surged to 10.49, a marked increase that corroborates the substantial rise in earnings before fixed charges and tax combined with the reduction in fixed charges. This elevated coverage ratio suggests greatly enhanced capacity to meet fixed financial obligations.