Analysis of Solvency Ratios
Solvency ratios also known as long-term debt ratios measure a company ability to meet long-term obligations.
Solvency Ratios (Summary)
Debt Ratios
Coverage Ratios
DexCom 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).
The solvency profile demonstrates a general trend of strengthening from 2018 through 2021, followed by a moderate increase in leverage ratios in 2022. The overall trajectory indicates a strategic reduction in debt dependency and a substantial improvement in the capacity to meet financial obligations.
- Leverage and Capital Structure
- Debt to equity ratios experienced a steady decline from 1.53 in 2018 to a low of 0.78 in 2021, before returning to 0.95 in 2022. A similar pattern is observed in the debt to capital and debt to assets ratios, both of which reached their lowest points in 2021. The inclusion of operating lease liabilities consistently maintains these ratios at a slightly higher level, though they follow the same directional trend, suggesting that lease obligations represent a consistent portion of the total liability structure.
- Debt Coverage Capacity
- A significant transformation is evident in the coverage ratios. Interest coverage transitioned from a negative value of -4.57 in 2018 to a high of 22.01 in 2022, indicating a massive increase in the ability to service interest expenses from operating earnings. Fixed charge coverage followed a parallel trajectory, moving from -2.59 in 2018 to 10.49 in 2022, confirming a strengthened ability to cover all fixed financial commitments.
- Financial Leverage
- Financial leverage decreased from 2.89 in 2018 to 2.16 in 2021, reflecting a reduction in the proportion of assets financed through debt. However, this ratio rose to 2.53 in 2022, aligning with the slight upward movement observed in the debt-to-equity and debt-to-asset metrics during the final year of the period.
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Debt to Equity
DexCom 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) | ||||||
| Short-term finance lease liabilities | 4,200) | 3,300) | 8,800) | 600) | —) | |
| Current portion of long-term senior convertible notes | 772,600) | —) | —) | —) | —) | |
| Long-term senior convertible notes | 1,197,700) | 1,702,700) | 1,667,200) | 1,059,700) | 1,010,300) | |
| Long-term finance lease liabilities | 59,600) | 57,000) | 54,000) | 14,400) | 7,300) | |
| Total debt | 2,034,100) | 1,763,000) | 1,730,000) | 1,074,700) | 1,017,600) | |
| Stockholders’ equity | 2,131,800) | 2,251,500) | 1,826,500) | 882,600) | 663,300) | |
| Solvency Ratio | ||||||
| Debt to equity1 | 0.95 | 0.78 | 0.95 | 1.22 | 1.53 | |
| Benchmarks | ||||||
| Debt to Equity, Competitors2 | ||||||
| Abbott Laboratories | 0.46 | 0.50 | — | — | — | |
| Elevance Health Inc. | 0.66 | 0.64 | — | — | — | |
| Intuitive Surgical Inc. | 0.00 | 0.00 | — | — | — | |
| Medtronic PLC | 0.46 | 0.51 | — | — | — | |
| UnitedHealth Group Inc. | 0.74 | 0.64 | — | — | — | |
| Debt to Equity, Sector | ||||||
| Health Care Equipment & Services | 0.57 | 0.55 | — | — | — | |
| Debt to Equity, Industry | ||||||
| Health Care | 0.72 | 0.80 | — | — | — | |
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
= 2,034,100 ÷ 2,131,800 = 0.95
2 Click competitor name to see calculations.
The solvency profile from 2018 to 2022 is characterized by a simultaneous increase in both total liabilities and equity, resulting in a general improvement in leverage until 2021, followed by a slight reversal in 2022.
- Total Debt Trajectory
- Total debt increased steadily from 1,017,600 thousand US$ in 2018 to 2,034,100 thousand US$ in 2022. A notable acceleration in borrowing occurred between 2019 and 2020, where debt rose by approximately 61%, indicating a significant expansion of obligations during that fiscal period.
- Stockholders' Equity Growth
- Equity demonstrated strong upward momentum, rising from 663,300 thousand US$ in 2018 to a peak of 2,251,500 thousand US$ in 2021. This growth outpaced the increase in debt for the majority of the analyzed period, suggesting a strengthening of the internal capital base. However, a slight contraction was observed in 2022, with equity decreasing to 2,131,800 thousand US$.
- Debt to Equity Ratio Dynamics
- The debt to equity ratio exhibited a consistent downward trend from 1.53 in 2018 to a low of 0.78 in 2021, reflecting an overall reduction in financial leverage and improved solvency relative to equity. This trend reversed in 2022, as the ratio increased to 0.95, a change driven by the simultaneous rise in total debt and the decrease in stockholders' equity.
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Debt to Equity (including Operating Lease Liability)
DexCom Inc., debt to equity (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Short-term finance lease liabilities | 4,200) | 3,300) | 8,800) | 600) | —) | |
| Current portion of long-term senior convertible notes | 772,600) | —) | —) | —) | —) | |
| Long-term senior convertible notes | 1,197,700) | 1,702,700) | 1,667,200) | 1,059,700) | 1,010,300) | |
| Long-term finance lease liabilities | 59,600) | 57,000) | 54,000) | 14,400) | 7,300) | |
| Total debt | 2,034,100) | 1,763,000) | 1,730,000) | 1,074,700) | 1,017,600) | |
| Short-term operating lease liabilities | 20,500) | 20,500) | 16,500) | 13,600) | —) | |
| Long-term operating lease liabilities | 94,600) | 98,600) | 101,800) | 72,400) | —) | |
| Total debt (including operating lease liability) | 2,149,200) | 1,882,100) | 1,848,300) | 1,160,700) | 1,017,600) | |
| Stockholders’ equity | 2,131,800) | 2,251,500) | 1,826,500) | 882,600) | 663,300) | |
| Solvency Ratio | ||||||
| Debt to equity (including operating lease liability)1 | 1.01 | 0.84 | 1.01 | 1.32 | 1.53 | |
| Benchmarks | ||||||
| Debt to Equity (including Operating Lease Liability), Competitors2 | ||||||
| Abbott Laboratories | 0.49 | 0.54 | — | — | — | |
| Elevance Health Inc. | 0.69 | 0.67 | — | — | — | |
| Intuitive Surgical Inc. | 0.01 | 0.01 | — | — | — | |
| Medtronic PLC | 0.48 | 0.53 | — | — | — | |
| UnitedHealth Group Inc. | 0.80 | 0.70 | — | — | — | |
| Debt to Equity (including Operating Lease Liability), Sector | ||||||
| Health Care Equipment & Services | 0.61 | 0.58 | — | — | — | |
| Debt to Equity (including Operating Lease Liability), Industry | ||||||
| Health Care | 0.76 | 0.83 | — | — | — | |
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
= 2,149,200 ÷ 2,131,800 = 1.01
2 Click competitor name to see calculations.
The solvency profile between 2018 and 2022 is characterized by a simultaneous expansion of total obligations and shareholder equity, resulting in a period of deleveraging followed by a slight increase in the leverage ratio in the final year.
- Total Debt Trends
- Total debt, including operating lease liabilities, exhibited a consistent upward trajectory, rising from US$ 1,017.6 million in 2018 to US$ 2,149.2 million by the end of 2022. A significant increase occurred between 2019 and 2020, where obligations grew by approximately 59%, indicating a period of intensified borrowing or increased lease commitments.
- Stockholders' Equity Growth
- Equity showed substantial growth for the majority of the period, increasing from US$ 663.3 million in 2018 to a peak of US$ 2,251.5 million in 2021. This growth was most pronounced in 2020, mirroring the timing of the debt increase. A slight contraction was observed in 2022, with equity declining to US$ 2,131.8 million.
- Debt to Equity Ratio Interpretation
- The debt to equity ratio trended downward from 1.53 in 2018 to a minimum of 0.84 in 2021, suggesting a strategic improvement in the balance sheet structure as equity growth outpaced the accumulation of debt. However, this trend reversed in 2022, with the ratio returning to 1.01. This increase was driven by the concurrent rise in total debt and the reduction in stockholders' equity, returning the solvency position to a state where total debt and equity are roughly equal.
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Debt to Capital
DexCom 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) | ||||||
| Short-term finance lease liabilities | 4,200) | 3,300) | 8,800) | 600) | —) | |
| Current portion of long-term senior convertible notes | 772,600) | —) | —) | —) | —) | |
| Long-term senior convertible notes | 1,197,700) | 1,702,700) | 1,667,200) | 1,059,700) | 1,010,300) | |
| Long-term finance lease liabilities | 59,600) | 57,000) | 54,000) | 14,400) | 7,300) | |
| Total debt | 2,034,100) | 1,763,000) | 1,730,000) | 1,074,700) | 1,017,600) | |
| Stockholders’ equity | 2,131,800) | 2,251,500) | 1,826,500) | 882,600) | 663,300) | |
| Total capital | 4,165,900) | 4,014,500) | 3,556,500) | 1,957,300) | 1,680,900) | |
| Solvency Ratio | ||||||
| Debt to capital1 | 0.49 | 0.44 | 0.49 | 0.55 | 0.61 | |
| Benchmarks | ||||||
| Debt to Capital, Competitors2 | ||||||
| Abbott Laboratories | 0.31 | 0.34 | — | — | — | |
| Elevance Health Inc. | 0.40 | 0.39 | — | — | — | |
| Intuitive Surgical Inc. | 0.00 | 0.00 | — | — | — | |
| Medtronic PLC | 0.31 | 0.34 | — | — | — | |
| UnitedHealth Group Inc. | 0.43 | 0.39 | — | — | — | |
| Debt to Capital, Sector | ||||||
| Health Care Equipment & Services | 0.36 | 0.35 | — | — | — | |
| Debt to Capital, Industry | ||||||
| Health Care | 0.42 | 0.44 | — | — | — | |
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
= 2,034,100 ÷ 4,165,900 = 0.49
2 Click competitor name to see calculations.
An analysis of the solvency metrics from 2018 through 2022 reveals a strategic expansion of the capital base that outpaced the growth of absolute debt for most of the period, resulting in an overall improvement in the leverage profile despite an increase in total liabilities.
- Total Debt Trends
- Total debt exhibited a consistent upward trajectory, rising from 1,017,600 thousand US dollars in 2018 to 2,034,100 thousand US dollars by 2022. A significant acceleration in borrowing occurred between 2019 and 2020, where debt increased by approximately 61%, indicating a period of intensified capital acquisition.
- Total Capital Expansion
- Total capital grew substantially over the five-year window, increasing from 1,680,900 thousand US dollars to 4,165,900 thousand US dollars. The most pronounced growth occurred in 2020, where capital nearly doubled, suggesting a significant influx of equity or other capital sources that bolstered the company's financial structure.
- Debt to Capital Ratio Dynamics
- The debt to capital ratio demonstrated a general downward trend from 2018 to 2021, declining from 0.61 to a low of 0.44. This indicates that the growth in total capital significantly exceeded the growth in total debt during this interval, thereby reducing the company's relative reliance on borrowed funds. However, a reversal occurred in 2022, with the ratio increasing to 0.49, reflecting a year where debt accumulation once again outpaced the expansion of the total capital base.
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Debt to Capital (including Operating Lease Liability)
DexCom 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) | ||||||
| Short-term finance lease liabilities | 4,200) | 3,300) | 8,800) | 600) | —) | |
| Current portion of long-term senior convertible notes | 772,600) | —) | —) | —) | —) | |
| Long-term senior convertible notes | 1,197,700) | 1,702,700) | 1,667,200) | 1,059,700) | 1,010,300) | |
| Long-term finance lease liabilities | 59,600) | 57,000) | 54,000) | 14,400) | 7,300) | |
| Total debt | 2,034,100) | 1,763,000) | 1,730,000) | 1,074,700) | 1,017,600) | |
| Short-term operating lease liabilities | 20,500) | 20,500) | 16,500) | 13,600) | —) | |
| Long-term operating lease liabilities | 94,600) | 98,600) | 101,800) | 72,400) | —) | |
| Total debt (including operating lease liability) | 2,149,200) | 1,882,100) | 1,848,300) | 1,160,700) | 1,017,600) | |
| Stockholders’ equity | 2,131,800) | 2,251,500) | 1,826,500) | 882,600) | 663,300) | |
| Total capital (including operating lease liability) | 4,281,000) | 4,133,600) | 3,674,800) | 2,043,300) | 1,680,900) | |
| Solvency Ratio | ||||||
| Debt to capital (including operating lease liability)1 | 0.50 | 0.46 | 0.50 | 0.57 | 0.61 | |
| Benchmarks | ||||||
| Debt to Capital (including Operating Lease Liability), Competitors2 | ||||||
| Abbott Laboratories | 0.33 | 0.35 | — | — | — | |
| Elevance Health Inc. | 0.41 | 0.40 | — | — | — | |
| Intuitive Surgical Inc. | 0.01 | 0.01 | — | — | — | |
| Medtronic PLC | 0.32 | 0.35 | — | — | — | |
| UnitedHealth Group Inc. | 0.45 | 0.41 | — | — | — | |
| Debt to Capital (including Operating Lease Liability), Sector | ||||||
| Health Care Equipment & Services | 0.38 | 0.37 | — | — | — | |
| Debt to Capital (including Operating Lease Liability), Industry | ||||||
| Health Care | 0.43 | 0.45 | — | — | — | |
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)
= 2,149,200 ÷ 4,281,000 = 0.50
2 Click competitor name to see calculations.
The solvency profile exhibits a period of simultaneous expansion in both total debt and total capital, characterized by an overall reduction in financial leverage between 2018 and 2021, followed by a slight uptick in 2022.
- Debt Accumulation Trends
- Total debt, including operating lease liabilities, increased consistently from US$ 1,017,600 thousand in 2018 to US$ 2,149,200 thousand in 2022. The most significant growth occurred between 2019 and 2020, where debt rose by approximately 59%.
- Capital Base Expansion
- Total capital experienced a substantial increase over the five-year period, growing from US$ 1,680,900 thousand in 2018 to US$ 4,281,000 thousand in 2022. The capital base expanded at a faster rate than total debt, particularly between 2019 and 2020, when total capital increased by nearly 80%.
- Debt to Capital Ratio Interpretation
- The debt to capital ratio followed a downward trajectory from 2018 to 2021, declining from 0.61 to 0.46. This trend indicates that the growth in equity or other capital sources outpaced the accumulation of debt, effectively reducing the company's reliance on borrowed funds. However, this trend reversed in 2022, as the ratio increased to 0.50, suggesting a moderate shift back toward a higher proportion of debt within the total capital structure.
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Debt to Assets
DexCom 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) | ||||||
| Short-term finance lease liabilities | 4,200) | 3,300) | 8,800) | 600) | —) | |
| Current portion of long-term senior convertible notes | 772,600) | —) | —) | —) | —) | |
| Long-term senior convertible notes | 1,197,700) | 1,702,700) | 1,667,200) | 1,059,700) | 1,010,300) | |
| Long-term finance lease liabilities | 59,600) | 57,000) | 54,000) | 14,400) | 7,300) | |
| Total debt | 2,034,100) | 1,763,000) | 1,730,000) | 1,074,700) | 1,017,600) | |
| Total assets | 5,391,700) | 4,863,600) | 4,290,500) | 2,395,000) | 1,916,000) | |
| Solvency Ratio | ||||||
| Debt to assets1 | 0.38 | 0.36 | 0.40 | 0.45 | 0.53 | |
| Benchmarks | ||||||
| Debt to Assets, Competitors2 | ||||||
| Abbott Laboratories | 0.23 | 0.24 | — | — | — | |
| Elevance Health Inc. | 0.23 | 0.24 | — | — | — | |
| Intuitive Surgical Inc. | 0.00 | 0.00 | — | — | — | |
| Medtronic PLC | 0.27 | 0.28 | — | — | — | |
| UnitedHealth Group Inc. | 0.23 | 0.22 | — | — | — | |
| Debt to Assets, Sector | ||||||
| Health Care Equipment & Services | 0.23 | 0.23 | — | — | — | |
| Debt to Assets, Industry | ||||||
| Health Care | 0.28 | 0.30 | — | — | — | |
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
= 2,034,100 ÷ 5,391,700 = 0.38
2 Click competitor name to see calculations.
Between 2018 and 2022, the balance sheet exhibited a consistent expansion, characterized by a simultaneous increase in both absolute liabilities and total assets. Although total debt rose steadily throughout the period, the growth rate of total assets significantly outpaced the accumulation of debt, resulting in an overall improvement in the solvency position for the majority of the timeframe.
- Total Debt Trajectory
- Total debt followed a continuous upward trend, increasing from US$ 1,017,600 thousand in 2018 to US$ 2,034,100 thousand by 2022. The most pronounced absolute increase occurred between 2019 and 2020, during which debt rose by approximately US$ 655.3 million.
- Total Asset Expansion
- Total assets grew substantially, rising from US$ 1,916,000 thousand in 2018 to US$ 5,391,700 thousand in 2022. A significant acceleration in asset accumulation is observed in 2020, where the asset base nearly doubled compared to the 2019 balance.
- Debt to Assets Ratio Analysis
- The debt to assets ratio demonstrated a general decline from 2018 through 2021, moving from 0.53 to a period low of 0.36. This downward trend indicates a reduction in financial leverage and a decreased reliance on debt relative to the total asset base. A slight reversal is noted in 2022, as the ratio increased to 0.38, suggesting that debt growth slightly exceeded the rate of asset expansion in the final year of the analysis.
The analysis indicates that the company successfully leveraged its balance sheet to expand its asset base, which effectively lowered its solvency risk over the long term. Despite the absolute increase in debt, the strengthened asset position has resulted in a more favorable leverage ratio compared to the 2018 baseline.
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Debt to Assets (including Operating Lease Liability)
DexCom 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) | ||||||
| Short-term finance lease liabilities | 4,200) | 3,300) | 8,800) | 600) | —) | |
| Current portion of long-term senior convertible notes | 772,600) | —) | —) | —) | —) | |
| Long-term senior convertible notes | 1,197,700) | 1,702,700) | 1,667,200) | 1,059,700) | 1,010,300) | |
| Long-term finance lease liabilities | 59,600) | 57,000) | 54,000) | 14,400) | 7,300) | |
| Total debt | 2,034,100) | 1,763,000) | 1,730,000) | 1,074,700) | 1,017,600) | |
| Short-term operating lease liabilities | 20,500) | 20,500) | 16,500) | 13,600) | —) | |
| Long-term operating lease liabilities | 94,600) | 98,600) | 101,800) | 72,400) | —) | |
| Total debt (including operating lease liability) | 2,149,200) | 1,882,100) | 1,848,300) | 1,160,700) | 1,017,600) | |
| Total assets | 5,391,700) | 4,863,600) | 4,290,500) | 2,395,000) | 1,916,000) | |
| Solvency Ratio | ||||||
| Debt to assets (including operating lease liability)1 | 0.40 | 0.39 | 0.43 | 0.48 | 0.53 | |
| Benchmarks | ||||||
| Debt to Assets (including Operating Lease Liability), Competitors2 | ||||||
| Abbott Laboratories | 0.24 | 0.26 | — | — | — | |
| Elevance Health Inc. | 0.24 | 0.25 | — | — | — | |
| Intuitive Surgical Inc. | 0.01 | 0.01 | — | — | — | |
| Medtronic PLC | 0.27 | 0.29 | — | — | — | |
| UnitedHealth Group Inc. | 0.25 | 0.24 | — | — | — | |
| Debt to Assets (including Operating Lease Liability), Sector | ||||||
| Health Care Equipment & Services | 0.25 | 0.25 | — | — | — | |
| Debt to Assets (including Operating Lease Liability), Industry | ||||||
| Health Care | 0.29 | 0.31 | — | — | — | |
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
= 2,149,200 ÷ 5,391,700 = 0.40
2 Click competitor name to see calculations.
Analysis of the solvency position between 2018 and 2022 reveals a period of significant balance sheet expansion characterized by asset growth that outpaced the accumulation of liabilities.
- Total Asset Expansion
- Total assets demonstrated a strong upward trajectory, increasing from 1,916,000 thousand US dollars in 2018 to 5,391,700 thousand US dollars by the end of 2022. A particularly substantial increase occurred in 2020, where assets rose from 2,395,000 thousand to 4,290,500 thousand US dollars, indicating a rapid expansion of the resource base.
- Debt Accumulation Trends
- Total debt, including operating lease liabilities, rose consistently over the five-year period, moving from 1,017,600 thousand US dollars in 2018 to 2,149,200 thousand US dollars in 2022. While the total debt more than doubled, the growth was less aggressive than the growth observed in total assets.
- Debt to Assets Ratio Analysis
- The debt to assets ratio indicates an overall improvement in the solvency profile and a reduction in relative financial leverage. The ratio declined from 0.53 in 2018 to a low of 0.39 in 2021. A marginal increase to 0.40 was observed in 2022, but the ratio remained substantially lower than the 2018 level, reflecting a more conservative leverage position relative to the size of the company's assets.
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Financial Leverage
DexCom 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 | 5,391,700) | 4,863,600) | 4,290,500) | 2,395,000) | 1,916,000) | |
| Stockholders’ equity | 2,131,800) | 2,251,500) | 1,826,500) | 882,600) | 663,300) | |
| Solvency Ratio | ||||||
| Financial leverage1 | 2.53 | 2.16 | 2.35 | 2.71 | 2.89 | |
| Benchmarks | ||||||
| Financial Leverage, Competitors2 | ||||||
| Abbott Laboratories | 2.03 | 2.10 | — | — | — | |
| Elevance Health Inc. | 2.83 | 2.70 | — | — | — | |
| Intuitive Surgical Inc. | 1.17 | 1.14 | — | — | — | |
| Medtronic PLC | 1.73 | 1.81 | — | — | — | |
| UnitedHealth Group Inc. | 3.16 | 2.96 | — | — | — | |
| Financial Leverage, Sector | ||||||
| Health Care Equipment & Services | 2.46 | 2.37 | — | — | — | |
| Financial Leverage, Industry | ||||||
| Health Care | 2.57 | 2.69 | — | — | — | |
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
= 5,391,700 ÷ 2,131,800 = 2.53
2 Click competitor name to see calculations.
The financial structure between 2018 and 2022 is characterized by substantial asset expansion and a fluctuating trend in financial leverage. Total assets increased steadily from US$ 1.92 billion in 2018 to US$ 5.39 billion by the end of 2022, representing a significant growth in the company's resource base.
- Asset and Equity Growth
- A sharp acceleration in total assets occurred between 2019 and 2020, where values rose from US$ 2.40 billion to US$ 4.29 billion. Stockholders' equity followed a similar upward trajectory during the same window, increasing from US$ 882.6 million in 2019 to US$ 1.83 billion in 2020. However, while assets continued to grow through 2022, stockholders' equity experienced a slight contraction in the final year, declining from US$ 2.25 billion in 2021 to US$ 2.13 billion in 2022.
- Financial Leverage Trends
- The financial leverage ratio exhibited a consistent downward trend from 2018 to 2021, decreasing from 2.89 to a low of 2.16. This indicates a period of deleveraging and an increased reliance on equity to fund asset growth, which typically enhances the solvency profile. This trend reversed in 2022, as the ratio climbed to 2.53, reflecting the divergence between rising total assets and falling stockholders' equity.
- Solvency Implications
- The overall trajectory indicates that while the company successfully reduced its leverage for the first four years of the observed period, the most recent data points toward an increase in financial risk relative to the 2021 baseline. The rise in the leverage ratio in 2022 suggests that recent asset expansion has been funded more heavily through liabilities rather than equity.
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Interest Coverage
DexCom 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 income (loss) | 341,200) | 154,700) | 493,600) | 101,100) | (127,100) | |
| Add: Income tax expense | 49,600) | 19,200) | (268,600) | 3,100) | 600) | |
| Add: Interest expense | 18,600) | 100,300) | 84,700) | 60,300) | 22,700) | |
| Earnings before interest and tax (EBIT) | 409,400) | 274,200) | 309,700) | 164,500) | (103,800) | |
| Solvency Ratio | ||||||
| Interest coverage1 | 22.01 | 2.73 | 3.66 | 2.73 | -4.57 | |
| Benchmarks | ||||||
| Interest Coverage, Competitors2 | ||||||
| Abbott Laboratories | 15.89 | 16.41 | — | — | — | |
| Elevance Health Inc. | 10.13 | 10.93 | — | — | — | |
| Intuitive Surgical Inc. | — | — | — | — | — | |
| Medtronic PLC | 10.98 | 5.21 | — | — | — | |
| UnitedHealth Group Inc. | 13.59 | 14.44 | — | — | — | |
| Interest Coverage, Sector | ||||||
| Health Care Equipment & Services | 13.22 | 12.30 | — | — | — | |
| Interest Coverage, Industry | ||||||
| Health Care | 14.75 | 14.14 | — | — | — | |
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
= 409,400 ÷ 18,600 = 22.01
2 Click competitor name to see calculations.
The analysis of solvency indicates a substantial improvement in the capacity to service debt obligations over the five-year period ending December 31, 2022. The trajectory is characterized by an initial period of operating deficits followed by a significant strengthening of the financial position and a dramatic reduction in interest burden.
- Earnings Before Interest and Tax (EBIT) Trend
- A transition from operating losses to consistent profitability is observed. After recording a negative EBIT of 103.8 million USD in 2018, the figure grew steadily, reaching 409.4 million USD by 2022, notwithstanding a slight contraction in 2021.
- Interest Expense Dynamics
- Interest costs experienced a consistent upward trend between 2018 and 2021, climbing from 22.7 million USD to a peak of 100.3 million USD. A sharp reversal occurred in 2022, with expenses dropping to 18.6 million USD, which suggests a significant reduction in debt principal or a restructuring of liabilities.
- Interest Coverage Ratio Performance
- The interest coverage ratio reflects the convergence of rising operating income and falling interest costs. Starting at -4.57 in 2018, which indicated an inability to cover interest from operating profits, the ratio normalized and fluctuated between 2.73 and 3.66 from 2019 to 2021. By 2022, the ratio surged to 22.01, signaling a highly secure solvency position and a minimal risk of default.
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Fixed Charge Coverage
DexCom 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 income (loss) | 341,200) | 154,700) | 493,600) | 101,100) | (127,100) | |
| Add: Income tax expense | 49,600) | 19,200) | (268,600) | 3,100) | 600) | |
| Add: Interest expense | 18,600) | 100,300) | 84,700) | 60,300) | 22,700) | |
| Earnings before interest and tax (EBIT) | 409,400) | 274,200) | 309,700) | 164,500) | (103,800) | |
| Add: Operating lease cost | 22,600) | 23,300) | 18,400) | 12,200) | 12,500) | |
| Earnings before fixed charges and tax | 432,000) | 297,500) | 328,100) | 176,700) | (91,300) | |
| Interest expense | 18,600) | 100,300) | 84,700) | 60,300) | 22,700) | |
| Operating lease cost | 22,600) | 23,300) | 18,400) | 12,200) | 12,500) | |
| Fixed charges | 41,200) | 123,600) | 103,100) | 72,500) | 35,200) | |
| Solvency Ratio | ||||||
| Fixed charge coverage1 | 10.49 | 2.41 | 3.18 | 2.44 | -2.59 | |
| Benchmarks | ||||||
| Fixed Charge Coverage, Competitors2 | ||||||
| Abbott Laboratories | 10.10 | 10.21 | — | — | — | |
| Elevance Health Inc. | 8.82 | 8.48 | — | — | — | |
| Intuitive Surgical Inc. | 63.52 | 93.66 | — | — | — | |
| Medtronic PLC | 7.79 | 4.31 | — | — | — | |
| UnitedHealth Group Inc. | 8.77 | 8.80 | — | — | — | |
| Fixed Charge Coverage, Sector | ||||||
| Health Care Equipment & Services | 9.07 | 8.36 | — | — | — | |
| Fixed Charge Coverage, Industry | ||||||
| Health Care | 10.95 | 10.48 | — | — | — | |
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
= 432,000 ÷ 41,200 = 10.49
2 Click competitor name to see calculations.
The solvency profile from 2018 to 2022 indicates a substantial improvement in the capacity to service fixed obligations. The transition from negative earnings to strong profitability has significantly enhanced the safety margin for creditors and stakeholders.
- Earnings Before Fixed Charges and Tax
- A significant upward trajectory is observed, moving from a loss of $91.3 million in 2018 to $432 million in 2022. Despite a marginal contraction in 2021, the overall trend reflects consistent growth in operational earnings available to cover fixed costs.
- Fixed Charges
- Fixed charges exhibited a steady increase from $35.2 million in 2018 to a peak of $123.6 million in 2021. However, a sharp reduction to $41.2 million occurred in 2022, suggesting a significant decrease in interest or lease obligations.
- Fixed Charge Coverage Ratio
- The coverage ratio evolved from a deficit of -2.59 in 2018 to a robust 10.49 by 2022. After stabilizing between 2.41 and 3.18 from 2019 through 2021, the ratio experienced a dramatic escalation in 2022, driven by the simultaneous increase in earnings and the reduction of fixed charges.
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