Analysis of Solvency Ratios
Quarterly Data
Solvency ratios also known as long-term debt ratios measure a company ability to meet long-term obligations.
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- Income Statement
- Common-Size Income Statement
- Common-Size Balance Sheet: Assets
- Analysis of Profitability Ratios
- Analysis of Long-term (Investment) Activity Ratios
- Capital Asset Pricing Model (CAPM)
- Selected Financial Data since 2005
- Total Asset Turnover since 2005
- Price to Sales (P/S) since 2005
- Analysis of Debt
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Solvency Ratios (Summary)
DexCom Inc., solvency ratios (quarterly data)
Based on: 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).
The financial ratios over the quarters indicate several notable trends in the company's capital structure and financial health.
- Debt to Equity Ratios
-
Both the standard debt to equity ratio and the ratio including operating lease liabilities generally declined from early 2019 through 2021, reaching lows around the end of 2021 with debt to equity near 0.76 and 0.81 respectively. Afterward, there was some volatility with a significant increase in mid-2023, where the ratios spiked to 1.53 and 1.58 respectively, indicating a rise in leverage relative to equity before easing slightly by September 2023.
- Debt to Capital Ratios
-
The debt to capital ratio and its lease-inclusive variant followed a similar declining trend from 0.6 in early 2019 to about 0.43-0.45 at the end of 2021, reflecting a reduction in debt relative to total capital. Subsequently, the ratios rose gradually, peaking again at 0.6 for debt to capital in mid-2023 before a modest decrease.
- Debt to Assets Ratios
-
The company's debt to assets ratios decreased steadily from 0.52 (or 0.54 including lease liabilities) in early 2019 down to approximately 0.35-0.37 at the end of 2021, implying less debt burden against asset bases. Similar to other leverage metrics, these ratios climbed back upward in 2022 and 2023, reaching levels close to 0.47 to 0.49 before declining slightly.
- Financial Leverage
-
Financial leverage showed a gradual decrease from about 2.95 at the start of 2019 to a low of approximately 2.16-2.25 in late 2021, indicating reduced use of debt relative to equity. There was an increase again in 2022 and 2023, with a spike to 3.25 in mid-2023 before falling close to 2.91 by the third quarter of 2023.
- Interest Coverage Ratio
-
The interest coverage ratio demonstrated a profound improvement over the observed period. Starting with negative values near -3 in early 2019, it turned positive by the end of 2019 and then showed a consistent upward trajectory, surging dramatically in 2022 and 2023. By the third quarter of 2023, the ratio exceeded 128, indicating a substantial increase in the company's ability to service its interest obligations from operating earnings.
Overall, the data reflect a trend of decreasing leverage and improving financial stability from 2019 through late 2021, followed by a moderate re-leveraging in 2022 and 2023. The sharp increase in interest coverage ratios suggests marked improvements in operating performance or earnings relative to interest expense, enhancing the company’s capacity to meet debt obligations despite fluctuations in leverage ratios.
Debt Ratios
Coverage Ratios
Debt to Equity
DexCom Inc., debt to equity calculation (quarterly data)
| Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||||||
| Current portion of long-term senior convertible notes | |||||||||||||||||||||||||
| Long-term senior convertible notes | |||||||||||||||||||||||||
| Total debt | |||||||||||||||||||||||||
| Stockholders’ equity | |||||||||||||||||||||||||
| Solvency Ratio | |||||||||||||||||||||||||
| Debt to equity1 | |||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||
| Debt to Equity, Competitors2 | |||||||||||||||||||||||||
| Abbott Laboratories | |||||||||||||||||||||||||
| Elevance Health Inc. | |||||||||||||||||||||||||
| Intuitive Surgical Inc. | |||||||||||||||||||||||||
| Medtronic PLC | |||||||||||||||||||||||||
| UnitedHealth Group Inc. | |||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).
1 Q3 2023 Calculation
Debt to equity = Total debt ÷ Stockholders’ equity
= ÷ =
2 Click competitor name to see calculations.
- Total Debt
- The total debt level demonstrated a gradual increase from March 2019 to March 2020, moving from approximately $1.02 billion to $1.07 billion. A substantial rise occurred in the second quarter of 2020, reaching around $1.66 billion by the end of that year. Debt levels continued to increase more moderately through 2021, peaking near $1.97 billion by December 2022. A significant spike is observed in June 2023, where total debt sharply rose to about $3.20 billion, followed by a notable decrease to approximately $2.56 billion in September 2023.
- Stockholders’ Equity
- Stockholders’ equity showed consistent growth from March 2019 to December 2021, increasing steadily from about $669 million to $2.25 billion. However, in 2022, equity experienced volatility, declining to roughly $1.82 billion in September before rebounding to $2.13 billion by December. In 2023, equity remained relatively stable, fluctuating slightly around the $2.1 billion to $2.27 billion range.
- Debt to Equity Ratio
- The debt to equity ratio reveals a downward trend from 1.53 in March 2019 to a low of 0.76 by December 2021, indicating improving financial leverage and a stronger equity base relative to debt. From early 2022, the ratio began to rise again, reflecting increasing debt levels relative to equity. There was a peak ratio of 1.53 in June 2023, corresponding with the sharp increase in total debt, before a decline to 1.13 by September 2023. This pattern suggests heightened leverage and increased financial risk during mid-2023, followed by partial deleveraging.
Debt to Equity (including Operating Lease Liability)
DexCom Inc., debt to equity (including operating lease liability) calculation (quarterly data)
Based on: 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).
1 Q3 2023 Calculation
Debt to equity (including operating lease liability) = Total debt (including operating lease liability) ÷ Stockholders’ equity
= ÷ =
The analysis of the financial position reveals distinct trends in the company's total debt, stockholders’ equity, and the debt-to-equity ratio over the observed quarters from March 2019 through September 2023.
- Total Debt (including operating lease liability)
- The total debt exhibited a generally increasing trend from early 2019 through mid-2021, rising from approximately $1.06 billion to about $1.83 billion. A notable surge occurred between March 2020 and June 2020, where debt increased sharply from around $1.16 billion to $1.75 billion. After remaining relatively stable around $1.8 billion through to December 2021, debt again increased reaching over $2 billion by March 2022. A significant spike was observed in June 2023 where debt escalated drastically to $3.31 billion, before declining to $2.66 billion by September 2023. Overall, the total debt reflects periods of substantial borrowing activity, particularly in mid-2020 and mid-2023.
- Stockholders’ Equity
- Stockholders’ equity showed a steady growth trend from March 2019 through December 2021, increasing from approximately $669 million to $2.25 billion. This growth indicates a strengthening equity base during this period. However, from March 2022 to September 2022, equity experienced a setback, declining to around $1.82 billion by September 2022. Subsequently, equity values fluctuated with a gradual recovery, reaching around $2.27 billion by September 2023. Despite some volatility in the later periods, the equity overall more than tripled over the full duration analyzed.
- Debt to Equity Ratio (including operating lease liability)
- The debt-to-equity ratio declined steadily from 1.59 at the beginning of 2019 to a low point of 0.81 in December 2021, indicating improved balance sheet leverage and a relatively stronger equity position against debt. This trend corresponds with the increases in equity and relatively stable debt levels during this timeframe. However, from early 2022 onwards, the ratio became more volatile; it increased to 1.14 by September 2022 and peaked sharply at 1.58 in June 2023. This spike aligns with the significant rise in total debt recorded in mid-2023 and indicates higher financial leverage and potential increased risk. The ratio then decreased to 1.17 by September 2023, reflecting some deleveraging.
In summary, the company demonstrated a pattern of increasing debt aligned with periods of expansion or asset funding, accompanied by overall growth in stockholders’ equity. The leverage ratio improved substantially until late 2021 but experienced marked fluctuations in 2022 and 2023, with a pronounced increase in mid-2023 signaling higher leverage risk during that period. The later quarters suggest a partial correction with reduced debt-to-equity levels.
Debt to Capital
DexCom Inc., debt to capital calculation (quarterly data)
| Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||||||
| Current portion of long-term senior convertible notes | |||||||||||||||||||||||||
| Long-term senior convertible notes | |||||||||||||||||||||||||
| Total debt | |||||||||||||||||||||||||
| Stockholders’ equity | |||||||||||||||||||||||||
| Total capital | |||||||||||||||||||||||||
| Solvency Ratio | |||||||||||||||||||||||||
| Debt to capital1 | |||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||
| Debt to Capital, Competitors2 | |||||||||||||||||||||||||
| Abbott Laboratories | |||||||||||||||||||||||||
| Elevance Health Inc. | |||||||||||||||||||||||||
| Intuitive Surgical Inc. | |||||||||||||||||||||||||
| Medtronic PLC | |||||||||||||||||||||||||
| UnitedHealth Group Inc. | |||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).
1 Q3 2023 Calculation
Debt to capital = Total debt ÷ Total capital
= ÷ =
2 Click competitor name to see calculations.
The analysis of the financial data reveals notable trends in the company's debt and capital structure over the observed periods. Total debt shows a gradual increase from the first quarter of 2019 through the first quarter of 2021, growing from 1,022,400 thousand USD to approximately 1,688,800 thousand USD. In mid-2020, there is a significant jump in total debt, reaching 1,658,800 thousand USD, a notable increase from previous quarters. The debt level remains relatively stable through 2021 but rises sharply in the first half of 2023, peaking at 3,204,400 thousand USD in June 2023 before decreasing to 2,556,600 thousand USD in September 2023.
Total capital follows a generally upward trajectory throughout the timeframe, progressing from 1,691,000 thousand USD in the first quarter of 2019 to a peak of 5,304,800 thousand USD in June 2023. There is a marked increase during 2020 and the first half of 2021, indicating potentially substantial capital injections or growth in capital-intensive activities. A slight dip in total capital is observed in the third quarter of 2022 but recovers in subsequent quarters.
The debt to capital ratio reflects the balance of debt and capital financing. This ratio gradually declines from 0.60 in early 2019 to a low of 0.43 by the end of 2021, suggesting a reduced reliance on debt financing relative to total capital during this period. However, beginning in 2022, the ratio exhibits some volatility, increasing again to 0.52 by the third quarter of 2022. A significant spike occurs in mid-2023, where the ratio rises sharply to 0.60, coinciding with the observed peak in total debt. By September 2023, the ratio declines slightly to 0.53 but remains elevated compared to the prior years.
Overall, the data indicate that the company experienced a phase of capital expansion and reduced dependency on debt financing until 2021, followed by increased leverage in 2022 and 2023. The sharp increases in total debt and the corresponding rise in the debt to capital ratio in 2023 may suggest strategic financing decisions, possibly reflecting new borrowings or refinancing activities. Monitoring these trends will be important to assess the company's financial stability and risk profile going forward.
Debt to Capital (including Operating Lease Liability)
DexCom Inc., debt to capital (including operating lease liability) calculation (quarterly data)
Based on: 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).
1 Q3 2023 Calculation
Debt to capital (including operating lease liability) = Total debt (including operating lease liability) ÷ Total capital (including operating lease liability)
= ÷ =
- Total Debt (including operating lease liability)
- The total debt level demonstrated an overall upward trend from March 31, 2019, through June 30, 2023, with notable fluctuations in specific periods. The debt rose gradually from approximately $1.06 billion in early 2019 to around $1.85 billion at the end of 2021. Subsequently, a significant increase occurred by June 30, 2023, peaking at about $3.31 billion before decreasing to approximately $2.66 billion in the latest quarter. This suggests episodic leverage increases potentially linked to financing activities or capital expenditures during 2022 and early 2023.
- Total Capital (including operating lease liability)
- Total capital exhibited steady growth over the timeframe analyzed, starting at $1.73 billion in March 2019 and rising to approximately $4.91 billion by September 2023. There was a pronounced acceleration in capital accumulation beginning mid-2020, with peaks exceeding $5.4 billion in mid-2023. The trends indicate consistent capital base expansion, although some periods, such as late 2022, experienced a slight contraction, reflecting possible changes in equity financing or asset valuation adjustments.
- Debt to Capital Ratio (including operating lease liability)
- The debt to capital ratio decreased gradually from 0.61 in early 2019 to a low of 0.45 by the end of 2021, indicating improved capital structure with a reduced relative debt burden during this period. However, from 2022 onward, the ratio showed increased volatility, rising to 0.61 by June 2023 before declining back to 0.54 in the most recent quarter. This temporary spike suggests episodic increases in leverage, possibly correlated with the marked rise in total debt around the same period. Overall, the company's leverage position has fluctuated but remained within a moderately leveraged range.
Debt to Assets
DexCom Inc., debt to assets calculation (quarterly data)
| Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||||||
| Current portion of long-term senior convertible notes | |||||||||||||||||||||||||
| Long-term senior convertible notes | |||||||||||||||||||||||||
| Total debt | |||||||||||||||||||||||||
| Total assets | |||||||||||||||||||||||||
| Solvency Ratio | |||||||||||||||||||||||||
| Debt to assets1 | |||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||
| Debt to Assets, Competitors2 | |||||||||||||||||||||||||
| Abbott Laboratories | |||||||||||||||||||||||||
| Elevance Health Inc. | |||||||||||||||||||||||||
| Intuitive Surgical Inc. | |||||||||||||||||||||||||
| Medtronic PLC | |||||||||||||||||||||||||
| UnitedHealth Group Inc. | |||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).
1 Q3 2023 Calculation
Debt to assets = Total debt ÷ Total assets
= ÷ =
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals several key trends in the company's debt and asset structure over the examined periods.
- Total Debt
- Total debt shows a general upward trend from March 2019 through September 2023. Initially, debt increased gradually from approximately 1,022 million USD to around 1,072 million USD by March 2020. A significant rise is noted starting in June 2020, where debt jumps sharply to about 1,659 million USD and remains relatively stable around that level through December 2020. A further increase is observed in early 2022, reaching nearly 1,966 million USD. A notable spike occurs in June 2023, where total debt peaks at approximately 3,204 million USD before declining to around 2,556 million USD by September 2023, which remains substantially higher than previous periods.
- Total Assets
- Total assets also demonstrate a consistent upward trajectory throughout the period. Starting at roughly 1,974 million USD in March 2019, total assets steadily rise with some acceleration from mid-2020 onward. The company’s assets exceed 5,000 million USD in early 2022 and peak above 6,800 million USD by June 2023. A slight decrease follows by September 2023, but asset levels remain significantly elevated compared to earlier periods.
- Debt to Assets Ratio
- The debt to assets ratio reveals fluctuating leverage dynamics. The ratio declines steadily from 0.52 in March 2019 to a low near 0.35 by December 2021, indicating a reduction in relative debt burden against asset growth. However, starting in early 2022, the ratio fluctuates upwards, reaching 0.39 in March 2022, followed by minor oscillations around this level through early 2023. A sharp increase is noted in June 2023, where the ratio escalates to 0.47, before retreating to 0.39 in the subsequent quarter. This suggests a period of increased leverage followed by some deleveraging or asset growth.
In summary, the company’s total assets and total debt have grown substantially over the examined period, with total assets increasing at a generally higher pace leading to improved leverage ratios until late 2021. From 2022 onwards, leverage ratios demonstrate volatility, implying changes in debt management or asset composition. The spike in total debt in mid-2023 and the concurrent rise in the debt to assets ratio indicate a temporary increase in financial leverage, which partially reverses by the following quarter. Overall, the company maintains a moderate debt to assets ratio, reflecting a balanced approach to utilizing debt in relation to asset expansion.
Debt to Assets (including Operating Lease Liability)
DexCom Inc., debt to assets (including operating lease liability) calculation (quarterly data)
Based on: 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).
1 Q3 2023 Calculation
Debt to assets (including operating lease liability) = Total debt (including operating lease liability) ÷ Total assets
= ÷ =
- Debt and Asset Levels
- The total debt, including operating lease liabilities, showed an increasing trend from early 2019 through mid-2021, rising from approximately $1.06 billion to around $1.83 billion. This upward movement was followed by a slight stabilization in the first half of 2022, then a notable increase peaking at approximately $3.31 billion in mid-2023, before declining to about $2.66 billion by the end of the third quarter of 2023. Total assets also exhibited consistent growth throughout the period, increasing from roughly $1.97 billion in early 2019 to over $6.82 billion by mid-2023. This demonstrates an expanding asset base alongside fluctuations in debt levels.
- Debt to Assets Ratio
- The debt to assets ratio demonstrated a general downward trend from approximately 0.54 in the first quarter of 2019 to about 0.37 by the end of 2021, indicating a reduction in leverage relative to asset size. However, there was some volatility thereafter; the ratio increased again to 0.41 in early 2022 and showed fluctuations through to the third quarter of 2023, reaching 0.49 mid-2023 before falling back to 0.40. These variations suggest periods of increased borrowing or shifts in asset composition impacting leverage.
- Insights
- The overall increase in total assets points to continued growth and investment over the period analyzed. The debt levels suggest a strategic approach to financing, with significant debt accumulation especially noted in 2020 and again in mid-2023, possibly linked to expansion or other capital-intensive activities. The fluctuating debt to assets ratio reveals an active management of capital structure, balancing growth initiatives with leverage considerations. The reduction in leverage through 2021 implies an emphasis on strengthening the balance sheet, whereas the later upticks might reflect opportunistic or necessary borrowing aligned with business objectives.
Financial Leverage
DexCom Inc., financial leverage calculation (quarterly data)
| Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||||||
| Total assets | |||||||||||||||||||||||||
| Stockholders’ equity | |||||||||||||||||||||||||
| Solvency Ratio | |||||||||||||||||||||||||
| Financial leverage1 | |||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||
| Financial Leverage, Competitors2 | |||||||||||||||||||||||||
| Abbott Laboratories | |||||||||||||||||||||||||
| Elevance Health Inc. | |||||||||||||||||||||||||
| Intuitive Surgical Inc. | |||||||||||||||||||||||||
| Medtronic PLC | |||||||||||||||||||||||||
| UnitedHealth Group Inc. | |||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).
1 Q3 2023 Calculation
Financial leverage = Total assets ÷ Stockholders’ equity
= ÷ =
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reflects several notable trends in the company’s asset and equity structure over the observed periods. Total assets have exhibited a consistent upward trajectory, increasing steadily from approximately $1,974 million at the end of the first quarter of 2019 to a peak of around $6,820 million by the third quarter of 2023. This growth reflects substantial asset accumulation and expansion activities over the span of more than four years.
Stockholders’ equity has also shown a general upward trend alongside asset growth, rising from about $669 million at the beginning of 2019 to roughly $2,268 million by the third quarter of 2023. Though equity growth is evident, the pace has been more moderate compared to total assets, resulting in fluctuations in financial leverage ratios.
Financial leverage, defined as the ratio of total assets to stockholders’ equity, has trended downward from a ratio of 2.95 in the first quarter of 2019 to a low of 2.16 by the end of 2021, suggesting a strengthening equity base relative to assets. However, from the start of 2022 through mid-2023, leverage ratios have rebounded, climbing to as high as 3.25 in September 2023 before slightly decreasing to 2.91 in the last reported quarter. This increase indicates a renewed rise in the relative proportion of assets funded through liabilities or debt compared to equity.
Overall, the company has significantly expanded its asset base, supported by equity growth, albeit with periods of increased reliance on leverage. The recent uptick in financial leverage ratios could imply heightened risk exposure or strategic leveraging for growth initiatives.
- Total Assets
- Steadily increased from $1,974 million (Q1 2019) to $6,820 million (Q3 2023), indicating consistent asset growth and business expansion.
- Stockholders’ Equity
- Grew from $669 million (Q1 2019) to $2,268 million (Q3 2023), marking solid growth but at a slower pace relative to total assets.
- Financial Leverage
- Decreased from 2.95 (Q1 2019) to 2.16 (Q4 2021), showing strengthened equity proportion; increased thereafter to 3.25 (Q3 2023), signaling increased use of debt or liabilities in financing.
Interest Coverage
DexCom Inc., interest coverage calculation (quarterly data)
| Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |||||||
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| Interest Coverage, Competitors2 | |||||||||||||||||||||||||
| Abbott Laboratories | |||||||||||||||||||||||||
| Elevance Health Inc. | |||||||||||||||||||||||||
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| UnitedHealth Group Inc. | |||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).
1 Q3 2023 Calculation
Interest coverage
= (EBITQ3 2023
+ EBITQ2 2023
+ EBITQ1 2023
+ EBITQ4 2022)
÷ (Interest expenseQ3 2023
+ Interest expenseQ2 2023
+ Interest expenseQ1 2023
+ Interest expenseQ4 2022)
= ( + + + )
÷ ( + + + )
=
2 Click competitor name to see calculations.
The earnings before interest and tax (EBIT) exhibit a notable upward trend over the analyzed periods. Initially, there was a negative EBIT of $11.7 million in the first quarter of 2019, which quickly transitioned into positive territory and experienced steady growth, peaking at $240.4 million in the third quarter of 2023. Intermittent fluctuations are observed, such as a drop to $10.5 million in the last quarter of 2021 before resuming a strong upward trajectory. Overall, the data indicate strengthening operational profitability over time.
Interest expense shows some variability but remains relatively stable within a certain range for the majority of the timeline. Starting at $14.9 million in early 2019, it generally hovers between approximately $15 million and $25 million through 2021. A significant decrease is evident from the first quarter of 2022 onwards, with interest expense dropping to around $4.6 million and maintaining that lower level in subsequent quarters. This decline suggests potential debt reduction, refinancing, or improved interest cost management.
The interest coverage ratio, which represents EBIT relative to interest expense, demonstrates a marked improvement throughout the periods. In early 2019, the ratio was negative, reflecting EBIT losses that could not cover interest costs. By the end of 2019, the ratio became positive and continued to increase steadily, indicating stronger earnings in relation to interest obligations. Notably, from 2022 onwards, the ratio surged dramatically from 3.36 to an exceptionally high 128.11 by the third quarter of 2023. This substantial increase is attributable to both the growth in EBIT and the reduction in interest expense, together suggesting a significantly enhanced capacity to meet interest payments and reduced financial risk.
In summary, the financial data reflect a robust improvement in the company’s operational profitability and financial stability, as evidenced by increasing EBIT and a fortification of interest coverage. The lowering of interest expenses starting in 2022 further contributes to improved financial health, facilitating a strong ability to service debt obligations.
- Key Observations:
- EBIT progressed from negative figures in early 2019 to a strong upward trend, peaking in mid-2023.
- Interest expense remained mostly stable at higher levels through 2021 before declining substantially from 2022 onwards.
- Interest coverage ratio improved from negative values to an exceptionally high level, indicating enhanced earnings relative to interest costs and lower financial risk.