Illumina Inc. (NASDAQ:ILMN)

The financial leverage remained relatively stable over the reported periods, fluctuating modestly between 1.42 and 1.95. This suggests consistent use of debt relative to equity in the company’s capital structure, without extreme volatility.

The debt to equity ratio showed a gradual decline over time, from a high of 0.58 in late 2016 to a low of 0.16 by the fourth quarter of 2021, indicating a reduced reliance on debt financing compared to equity. When considering operating lease liabilities, the trend was less consistent, with the ratio peaking at 0.62 at the end of Q1 2019 before declining to 0.23 by Q4 2021. This points to some variability in the lease-related obligations’ impact on leverage over the period.

The debt to capital ratios demonstrated a similar downward movement. The standard ratio dropped from 0.37 in Q4 2016 to 0.14 in late 2021, signifying an improving capital structure with lower debt proportion. Including operating leases, the ratio was generally higher, reaching 0.38 at the end of Q1 2019 and reducing to 0.19 by Q4 2021, reinforcing the indication that leases add a material component to the overall debt profile.

Debt to assets ratios mirrored the debt to capital insight, decreasing steadily from approximately 0.30 in late 2016 to 0.11 in Q4 2021 in the traditional form. Including operating leases, the ratio showed a peak of 0.33 in early 2019 and declined to 0.16 by the end of 2021, confirming a reduced debt burden relative to the asset base over time, but highlighting lease liabilities as a significant factor.

Interest coverage ratios showed robust and stable levels throughout the available periods, consistently remaining above 15, with an initial peak of 30.05 in Q1 2017 and minor variations thereafter. This suggests the company maintained strong earnings relative to interest expenses, indicating good capacity to meet interest obligations even as debt levels shifted.

Overall, the data reflects a general trend toward deleveraging and improved financial stability, with declining debt ratios and sustained strong interest coverage. The inclusion of operating lease liabilities provides an additional layer that temporarily heightened perceived leverage around early 2019 but declined subsequently. The consistent financial leverage figure supports the view of balanced financing strategy across the observed quarters.

Debt to Equity

Gradual decline from 0.58 to 0.16 over the period, showing reduced debt reliance; inclusion of lease liabilities shows temporary increase and subsequent reduction.

Debt to Capital

Decreasing trend indicating improved capital structure; higher ratios when leases are included highlight their impact on debt levels.

Debt to Assets

Declined consistently, signaling less debt relative to asset base; operating leases contribute to higher ratios, especially around early 2019.

Financial Leverage

Relatively stable, minor fluctuations, suggesting steady leverage policy.

Interest Coverage

Strong and stable coverage above 15, indicating solid ability to meet interest payments.

The analyzed financial data reveals several notable trends in the company's debt and equity positions over the examined periods.

Total Debt

Over the time frame from April 2016 to October 2021, total debt exhibited fluctuations with periods of both increases and decreases. Initially, total debt gradually increased from approximately $1,023 million in April 2016 to a peak of around $1,997 million by December 2018. After this peak, there was a significant reduction to nearly $1,120 million by June 2019, maintaining a relatively stable range around $1,140 million to $1,180 million until December 2020. Notably, in April 2021, total debt surged sharply to about $2,160 million before decreasing again to approximately $1,687 million by October 2021.

Total Illumina Stockholders’ Equity

Stockholders’ equity generally showed an upward trend throughout the examined period. Starting from about $1,991 million in April 2016, equity increased steadily with some acceleration in growth after 2017. By December 2020, equity was at $4,694 million, showing a more than twofold increase compared to the start of the period. This growth accelerated further in 2021, with equity rising dramatically to approximately $10,593 million by October 2021, representing a significant equity base expansion during that year.

Debt to Equity Ratio

The debt to equity ratio displayed variability corresponding to changes in both debt and equity components. Early ratios hovered around 0.5 to 0.58, indicating moderate leverage initially. The ratio decreased noticeably during mid-2019 and remained low around 0.25 throughout much of 2019 and 2020, reflecting a period of reduced leverage possibly due to the equity growth and relatively stable debt levels. However, in 2021, the ratio first increased to 0.44 and then sharply declined to 0.16 by October 2021, driven largely by the substantial increase in stockholders’ equity outpacing changes in debt.

Overall, the data shows a pattern of strategic shifts in capital structure, with significant equity growth and varying debt levels resulting in fluctuations in leverage. The remarkable equity increase in 2021 notably lowered the debt to equity ratio despite the temporary rise in debt, indicating a possibly strengthened financial position by the end of the analyzed period.

Total Debt (including operating lease liability)

Over the observed periods, total debt generally exhibited an upward trend, increasing from 1,023 million USD in April 2016 to 2,471 million USD by October 2021. Notable spikes occurred in late 2018, where debt rose sharply from approximately 1,369 million USD to 1,989 million USD in September 2018, and again toward 2021, peaking at 2,824 million USD in April 2021 before slightly declining in subsequent quarters.

Total Illumina Stockholders’ Equity

Stockholders’ equity consistently increased throughout the entire period, growing from 1,991 million USD in April 2016 to a substantial 10,593 million USD by October 2021. This increase was relatively steady and continuous, with equity more than quadrupling over the five and a half years. The most significant jump occurred late in the timeline, between July 2021 and October 2021, where equity surged from 5,180 million USD to 10,593 million USD.

Debt to Equity Ratio (including operating lease liability)

The debt to equity ratio fluctuated within a moderate range, demonstrating variability in the balance between debt and equity financing over time. Initially, the ratio hovered around 0.5 to 0.58 between mid-2016 and early 2017, indicating moderate leverage. A downward trend is observed from mid-2017 through late 2020, with the ratio decreasing to approximately 0.39-0.4, reflecting a relative increase in equity compared to debt. However, a brief resurgence to 0.57 occurred in April 2021, corresponding with the spike in debt, before the ratio sharply declined to 0.23 by October 2021. This final value suggests a significant strengthening of the equity base relative to debt.

Overall Analysis

The data suggests a company progressively strengthening its equity position while managing an increasing level of debt. The significant rise in stockholders' equity towards the end of the period notably reduces financial leverage, as evidenced by the marked decrease in the debt to equity ratio. The sharp increases in total debt during late 2018 and early 2021 indicate periods of considerable financing activity, which were balanced by corresponding equity growth later, enhancing the company’s financial stability. Overall, the trend points toward improved capitalization and potentially a more conservative financial structure by the latest quarter.

The analysis of the quarterly financial data reveals several notable trends regarding the company's debt structure relative to its overall capital.

Total Debt

The total debt exhibits a gradual increase from approximately $1,023 million in April 2016 to around $1,369 million by July 2018, indicating a steady rise in liabilities over this period. However, a significant spike occurs in the quarter ending September 2018, where debt jumps sharply to approximately $1,989 million and remains elevated around that level through December 2018. Following this peak, total debt declines notably in the first half of 2019, reaching a low near $1,120 million in June 2019, and then it stabilizes somewhat fluctuating between approximately $1,120 million and $1,184 million through December 2020. Another marked increase is observed in the quarter ending April 2021, with total debt surging to roughly $2,160 million, after which it decreases to about $1,679 million by July 2021 and slightly rises to $1,687 million in October 2021.

Total Capital

Total capital shows a general upward trajectory over the entire period. Starting from about $3,014 million in April 2016, it rises steadily to around $5,755 million by December 2018. This growth slows somewhat during 2019 and the first half of 2020, where capital remains in the range of approximately $5,452 million to $5,878 million. A substantial jump occurs in October 2021, when total capital reaches about $12,280 million, almost doubling compared to the previous quarter, signifying the possibility of significant equity issuance or asset revaluation during this period.

Debt to Capital Ratio

The debt to capital ratio fluctuates modestly between 0.33 and 0.37 from April 2016 through December 2016, suggesting a relatively stable leverage position during this time. Thereafter, the ratio trends downward steadily through 2017 and into 2019, reaching around 0.20 by the end of 2019 and maintaining at this low level through 2020. This decline suggests an improvement in the company's capital structure, potentially reflecting reduced reliance on debt financing or increased equity capitalization. Notably, the ratio spikes to 0.36 in September 2018, coinciding with the surge in total debt during that quarter. Following this, the ratio remains generally low before temporarily rising again to about 0.30 in April 2021. The final reported ratio in October 2021 drops significantly to approximately 0.14, aligning with the large increase in total capital noted during the same quarter, indicating a strong capital base relative to debt.

In summary, the data indicates that while the company experienced periods of increased debt, particularly notable in late 2018 and early 2021, it has generally strengthened its capital base over the analyzed timeframe. The trend toward a lower debt to capital ratio in recent quarters reflects a more conservative leverage position, enhanced equity capitalization, or possibly a combination of both factors. This shift may provide greater financial flexibility and lower risk from a debt servicing perspective.

The financial data indicates several notable trends regarding debt levels and capital structure over the analyzed periods.

Total Debt (including operating lease liability)

The total debt shows an overall upward trend from approximately 1,023 million USD in April 2016 to a peak of 2,824 million USD in April 2021, followed by a slight decline to 2,471 million USD by October 2021. The increase is gradual in the earlier periods but becomes more pronounced starting around September 2018 with a significant jump in debt levels by early 2021. This suggests a period of increased borrowing or recognition of lease liabilities during the latter years.

Total Capital (including operating lease liability)

Total capital also steadily increased from 3,014 million USD in April 2016 to a substantial 13,064 million USD by October 2021. Capital growth is consistent across the quarters, with notable acceleration from mid-2018 onward, paralleling the rise in total debt. The sharp increase toward the end of the period suggests either equity infusion, growth in assets, or a combination of both, reflecting expansion or acquisition activities.

Debt to Capital Ratio (including operating lease liability)

The debt to capital ratio fluctuates within the range of approximately 0.28 to 0.38 for the majority of the periods, indicating a relatively stable leverage position despite increasing absolute levels of debt and capital. The ratio was highest near 0.38 in March 2019, then it trended downward to 0.19 by October 2021. This decline in leverage ratio near the end of the dataset suggests capital growth outpacing the increase in debt, indicating a strengthening financial structure or reduced reliance on debt financing.

Overall, the data reflects a company that has increased its total capital base significantly over the years, with a corresponding rise in debt levels but a generally stable or improving leverage ratio. The recent decrease in the debt to capital ratio, especially the marked reduction towards the latest period, points to improved financial flexibility or a strategic shift toward lower relative indebtedness.

The analysis of the quarterly financial data reveals several key trends related to the company's debt levels, asset base, and leverage ratios over the observed periods.

Total Debt

The total debt shows an overall increasing trend from April 2016 through October 2021, starting at $1,023 million and reaching $1,687 million. There are fluctuations within the data, notable is a significant peak at the end of 2018 ($1,997 million) and another rise in early 2021 ($2,160 million) followed by reductions shortly thereafter. This indicates the company has periodically increased its debt, possibly for financing growth or restructuring, but also demonstrated some deleveraging efforts at certain intervals, particularly around mid-2019 and mid-2021.

Total Assets

Total assets consistently increased over the periods analyzed, beginning at $3,794 million in April 2016 and reaching a substantial $15,063 million by October 2021. This steady growth suggests ongoing investment and expansion of the company's asset base. Though there is a minor decline between early 2019 and 2020, the overall direction is upward, indicating strengthening asset accumulation possibly through acquisitions, capital expenditures, or retained earnings.

Debt to Assets Ratio

This ratio fluctuates but generally declines from 0.27 at the start of the period to 0.11 by October 2021. The ratio experiences some volatility, with highs around 0.29 in late 2016 and late 2018, implying periods of higher leverage, but a marked downward trend afterwards. The stark decrease towards the end of the period signals an improvement in financial leverage, with assets growing faster than debt, thereby reducing financial risk and potentially improving creditworthiness.

Overall, the company demonstrates a strategy of expanding its asset base while managing debt levels prudently, resulting in reduced leverage over time. The occasional spikes in debt may reflect tactical financing decisions to support specific initiatives, followed by repayments or asset growth that reduces leverage ratios. This trend points to a potentially stronger financial position and improved balance sheet stability approaching the end of the observed periods.

The financial data reveals several key trends over the observed periods. Total debt, including operating lease liability, generally increased from April 2016 through October 2018, rising from $1,023 million to a peak of $1,997 million. After reaching this level, total debt showed some fluctuation, dropping notably in June 2019 to $1,818 million and stabilizing around the $1,800 million to $1,850 million range through December 2020. Subsequently, there was a significant increase in total debt to $2,824 million by April 2021, followed by a decline to $2,471 million by October 2021.

Total assets exhibited a consistent upward trajectory throughout the periods, starting at $3,794 million in April 2016 and reaching a substantial $15,063 million by October 2021. Despite some minor fluctuations around 2019-2020, the overall growth in total assets was strong and steady, with the most pronounced increase occurring in 2021.

The debt-to-assets ratio, which provides an indication of leverage, displayed moderate variation but remained generally within a range of 0.23 to 0.33 for most of the periods. The ratio decreased steadily from 0.27 in early 2016 to about 0.24 in April 2018, indicating slightly lower leverage relative to assets during that time. However, there was a temporary increase up to 0.33 in March 2019, coinciding with a rise in total debt relative to assets. From mid-2019 to the end of 2020, the ratio stabilized around 0.24 to 0.25. Notably, the ratio dropped significantly to 0.16 by October 2021, reflecting a marked reduction in leverage due to the rapid growth of total assets outpacing the rise in debt.

Trend in Total Debt

Total debt gradually increased for the first two years, peaked in late 2018, then fluctuated at moderate levels until early 2021 when a sharp increase occurred, followed by a partial reduction by the end of that year.

Trend in Total Assets

Total assets showed continuous and substantial growth throughout the entire period, with a particularly rapid expansion seen in 2021.

Debt to Assets Ratio

The leverage ratio mostly oscillated within a tight bandwidth around 0.25, indicating stable debt levels relative to assets despite the absolute changes. The notable decline to 0.16 in late 2021 signals improved balance sheet strength or increased asset base relative to total debt.

The analysis of the financial data over the reported periods reveals several key trends in the company's asset base, stockholders' equity, and financial leverage. These trends provide insight into the company's overall financial structure and risk profile.

Total Assets

Total assets exhibited a consistent growth trajectory from April 2016 through October 2021, increasing from approximately $3.79 billion to $15.06 billion. The growth was generally steady, with notable acceleration in the most recent period ending October 3, 2021, where assets surged markedly by nearly $6.4 billion compared to the prior quarter. This sharp increase in the last period may suggest significant asset acquisitions or revaluations.

Total Illumina Stockholders’ Equity

Stockholders' equity increased steadily over the entire period, growing from around $1.99 billion in early 2016 to $10.59 billion in the last quarter reported. Growth was relatively smooth, with gains each quarter, culminating in a substantial increase in the final period that mirrors the surge in total assets. This parallel increase suggests strengthening of the equity base, potentially indicating retained earnings growth or equity financing events.

Financial Leverage

Financial leverage, defined as the ratio of total assets to stockholders' equity, fluctuated modestly throughout the period. Initially, leverage ratios hovered close to 1.9, suggesting a balanced use of debt and equity. From mid-2018 onwards, a downward trend in leverage was observed, reaching a low of approximately 1.42 in the last reported quarter. This decline indicates a reduced reliance on debt financing relative to equity, implying a conservative capital structure development over time. The decrease in leverage despite the rapid growth in total assets and equity underscores increased equity funding or repayment of liabilities.

The earnings before interest and tax (EBIT) exhibit notable fluctuations over the observed periods. Initially, EBIT starts at 124 million USD in April 2016 and experiences a general increase, peaking at 511 million USD in April 2017. Following this significant peak, the EBIT values display some volatility but generally stabilize around a range between approximately 180 million USD and 360 million USD for the remainder of the periods. The last recorded value in October 2021 is 434 million USD, indicating a strong recovery from lower values observed in early 2020.

Interest expense remains relatively stable across the quarters, mostly fluctuating in the range of 8 to 20 million USD. There is a slight increase noticeable around late 2018 to mid-2019, where interest expense peaks at 20 million USD, but this value returns to lower figures afterwards, mostly around 11 to 16 million USD. Overall, interest expense does not show substantial volatility or trends over time.

The interest coverage ratio, which indicates the ability to cover interest expenses with EBIT, shows a pattern consistent with the EBIT fluctuations. Initially missing for the first periods, the ratio rises sharply from April 2016 onward, reaching over 30 times coverage at its peak in early 2017. After this peak, it experiences a gradual decrease but remains relatively high, oscillating mostly between 15 and 23 times coverage. This suggests that despite fluctuations in EBIT, the company maintains a strong capacity to meet its interest obligations throughout the evaluated periods.

Summary of trends:

- EBIT reached a high point in April 2017 followed by periods of moderate volatility and eventual recovery by late 2021.

- Interest expense remained fairly steady, with a minor increase in late 2018 but no strong trend upward or downward overall.

- Interest coverage ratio peaked in early 2017 mirroring EBIT trends, but despite some decline thereafter, it consistently indicates a robust ability to cover interest costs.