Lam Research Corp. (NASDAQ:LRCX)

Debt to Equity Ratios

There is a clear downward trend in the debt to equity ratio over the observed periods, decreasing from 1.12 in 2020 to 0.45 in 2025. When including operating lease liabilities, the pattern remains similar, with values slightly higher but following the same declining trajectory from 1.16 to 0.48. This indicates a gradual reduction in leverage and reliance on debt financing relative to equity.

Debt to Capital Ratios

The debt to capital ratio has steadily decreased from 0.53 in 2020 to 0.31 in 2025, with a consistent pattern when operating lease liabilities are considered (from 0.54 to 0.33). This decline suggests an improved capital structure with a lower proportion of debt in the company’s overall capital base.

Debt to Assets Ratios

The ratio of debt to assets shows a steady reduction, starting at 0.40 in 2020 and reaching 0.21 by 2025. Including operating lease liabilities, the decline follows the same trend from 0.41 to 0.22. This reflects decreased debt levels relative to total assets, implying stronger asset coverage and less financial risk.

Financial Leverage

Financial leverage exhibits a gradual decline over the years, from 2.81 in 2020 to 2.16 in 2025. This downward movement indicates a reduction in the extent to which equity is used to finance assets, suggesting a more conservative capital structure.

Interest Coverage Ratio

Interest coverage improves significantly over the periods, rising from 15.51 in 2020 to 34.43 in 2025, despite a slight dip in some intermediate years. This growth reflects enhanced ability to meet interest obligations from operating earnings, pointing to stronger financial health and profitability.

Fixed Charge Coverage Ratio

Similar to interest coverage, fixed charge coverage improves markedly from 12.52 in 2020 to 34.43 in 2025. There is an observable drop around 2024, but the overall trend is upwards, indicating strengthened capacity to cover fixed financial obligations such as leases and interest expenses.

Total Debt

The total debt exhibits a downward trend over the observed periods. Starting from approximately 5.81 billion US dollars in June 2020, total debt decreases steadily, reaching about 4.48 billion by June 2025. This decline suggests an ongoing effort to reduce liabilities over the years.

Stockholders’ Equity

Stockholders’ equity shows a consistent increase throughout the period. Beginning at roughly 5.17 billion US dollars in June 2020, it grows considerably, especially from June 2022 onward, culminating at nearly 9.86 billion by June 2025. This indicates strengthening financial health and growth in net assets.

Debt to Equity Ratio

The debt to equity ratio decreases substantially from 1.12 in June 2020 to 0.45 by June 2025. This decline reflects an improving capital structure, with equity increasing faster than debt, leading to a lower reliance on debt financing relative to equity.

Total Debt (including operating lease liability)

The total debt demonstrates a generally decreasing trend over the period under review, falling from approximately $5.98 billion in mid-2020 to about $4.76 billion by mid-2025. Notably, there was a significant reduction between 2020 and 2021, followed by a relatively stable phase through 2022 to 2024, and a notable decline in 2025.

Stockholders’ Equity

Stockholders' equity shows a consistent upward trajectory throughout the timeframe. Starting at $5.17 billion in mid-2020, it steadily grows each year, with a pronounced increase in 2023 and 2024, ultimately reaching around $9.86 billion in 2025. This indicates continuous reinforcement of the equity base over the period.

Debt to Equity Ratio (including operating lease liability)

The debt to equity ratio declines markedly over the years, from a peak of 1.16 in mid-2020 down to 0.48 in mid-2025. This reduction reflects a shift towards a lower reliance on debt financing relative to equity. The steepest decreases occur early in the period, with the ratio maintaining a downward slope subsequently, highlighting improved financial leverage and a strengthening capital structure.

The analysis of the financial data over the six-year period reveals a clear downward trend in the total debt of the company. Starting at approximately $5.81 billion in 2020, the total debt decreased significantly to about $4.48 billion by 2025. This consistent reduction indicates a strategic effort to lower financial leverage or improve debt management.

In contrast, total capital exhibited an upward trend, increasing from around $10.98 billion in 2020 to about $14.35 billion in 2025. The growth in total capital suggests an expansion in the company’s equity base or overall financing resources, which could reflect retained earnings growth, additional equity issuance, or asset growth.

The debt-to-capital ratio declined steadily from 0.53 in 2020 to 0.31 in 2025. This ratio measures the proportion of debt used in the company’s capital structure, and its decline indicates a gradual shift toward a lower reliance on debt financing relative to the company's total capital. The reduction in this ratio aligns with the interplay of decreasing total debt and increasing total capital, highlighting an overall strengthening of the company’s financial position and potentially lower financial risk.

Total Debt (including operating lease liability)

The total debt shows a declining trend from the fiscal year ending June 28, 2020, through to June 29, 2025. Specifically, debt decreased from approximately $5.98 billion to around $4.76 billion over this period. This reflects a gradual reduction in the company’s leverage, albeit with minor fluctuations such as a slight increase between June 27, 2021, and June 25, 2023, before continuing the overall downward trend.

Total Capital (including operating lease liability)

Total capital exhibited a consistent upward movement over the analyzed years, increasing from about $11.16 billion in 2020 to approximately $14.62 billion in 2025. The capital growth accelerated notably after 2022, indicating increased investment or asset base expansion during the latter part of the period.

Debt to Capital Ratio (including operating lease liability)

The debt to capital ratio declined steadily over the six-year span, dropping from 0.54 in 2020 to 0.33 in 2025. This decreasing ratio suggests an improvement in the company’s capital structure, with a reduced proportion of debt relative to total capital. The trend indicates enhanced financial stability and possibly a strategic shift towards less reliance on debt financing.

Summary

Overall, the data reveals a clear pattern of deleveraging alongside capital growth. While total debt levels have moderately declined, total capital has expanded significantly, leading to a pronounced reduction in the debt to capital ratio. This reflects strengthening financial health and possibly a more conservative approach to leverage. The trend enhances the company's ability to manage its obligations and invest in growth opportunities with a more balanced capital structure.

The financial data reveals a clear downward trend in the company's total debt over the six-year period from 2020 to 2025. Total debt decreased from approximately 5.81 billion USD in 2020 to about 4.48 billion USD in 2025. This decline suggests a deliberate effort to reduce leverage or improve the debt structure.

Conversely, total assets show a consistent upward trajectory, increasing from roughly 14.56 billion USD in 2020 to over 21.34 billion USD in 2025. This growth in assets indicates expansion or accumulation of resources over time, which could be due to reinvestment of earnings, acquisitions, or other asset-building activities.

The ratio of debt to assets exhibits a steady decline throughout the period, falling from 0.40 in 2020 to 0.21 in 2025. This decreasing leverage ratio suggests that the company's financial risk is being reduced as liabilities shrink relative to assets. It also indicates improved balance sheet strength, potentially enhancing creditworthiness and financial stability.

Total Debt

Declined steadily from 5.81 billion USD (2020) to 4.48 billion USD (2025).

Total Assets

Increased consistently from 14.56 billion USD (2020) to 21.34 billion USD (2025).

Debt to Assets Ratio

Reduced from 0.40 in 2020 to 0.21 in 2025, indicating decreasing leverage and financial risk.

Overall, the data indicates an improving financial position, characterized by asset growth accompanied by debt reduction, resulting in a stronger and less leveraged capital structure over the examined periods.

Total Debt (Including Operating Lease Liability)

The total debt exhibits a decreasing trend over the analyzed periods. Starting at approximately $5.98 billion in 2020, the debt declines to around $4.76 billion by 2025. There is a noticeable reduction from 2020 to 2021, followed by relatively stable values between 2021 and 2024, and a more significant drop in 2025.

Total Assets

Total assets show a consistent and robust upward trajectory throughout the time frame. Beginning at approximately $14.56 billion in 2020, assets increase each year, reaching about $21.35 billion by 2025. This represents a substantial growth in asset base over the six-year period, underscoring a strengthening capital position.

Debt to Assets Ratio (Including Operating Lease Liability)

The debt-to-assets ratio declines steadily from 0.41 in 2020 to 0.22 in 2025. This downward movement indicates a reduction in leverage relative to the asset base, suggesting an improvement in financial stability. The company is increasingly relying less on debt financing proportionally, reflecting a more conservative capital structure.

Overall Analysis

The combined trends indicate an improving financial position. While total debt decreases modestly, total assets increase significantly, resulting in a marked reduction in the debt-to-assets ratio. This pattern implies enhanced solvency and potentially greater capacity to meet obligations without relying heavily on debt. The steady asset growth also suggests ongoing investments or accumulation of resources that could support future operations and expansion.

Total Assets

The total assets demonstrate a consistent upward trajectory over the observed periods, increasing from approximately $14.56 billion in mid-2020 to about $21.35 billion by mid-2025. This steady growth signals ongoing asset accumulation, reflecting potentially enhanced investment, expansion, or operational scaling activities within the organization.

Stockholders’ Equity

Stockholders’ equity has also exhibited a notable increase, rising from roughly $5.17 billion in mid-2020 to nearly $9.86 billion by mid-2025. The increase is marked by a significant jump between mid-2022 and mid-2023, suggesting substantial equity strengthening during this interval. Overall, the trend indicates improved net worth and potentially retained earnings accumulation.

Financial Leverage

Financial leverage ratios have shown a declining trend from 2.81 in mid-2020 to 2.16 by mid-2025. This decrease implies a reduction in the company’s reliance on debt financing relative to equity. The gradual decline suggests a strategic shift toward strengthening the equity base or reducing debt levels, which may contribute to a more conservative capital structure and lower financial risk.

Earnings before interest and tax (EBIT)

The earnings before interest and tax demonstrate a generally increasing trend over the observed periods. Starting at approximately 2.75 billion USD in mid-2020, this figure rises substantially to around 4.58 billion USD by mid-2021. A further increase is observed in mid-2022, peaking at approximately 5.38 billion USD. Although there is a slight decline in mid-2023 to about 5.30 billion USD and a more noticeable decrease in mid-2024 to roughly 4.55 billion USD, the EBIT rebounds significantly in mid-2025, reaching approximately 6.14 billion USD. This pattern indicates a strong overall growth trajectory with some volatility in the middle periods.

Interest expense

Interest expense values fluctuate mildly across the periods under review. Starting from around 177 million USD in mid-2020, the interest expenses increase slightly to approximately 209 million USD in mid-2021 but then show a gradual decline in the subsequent years. By mid-2025, the interest expense drops to about 178 million USD, nearing the initial amount from mid-2020. This trend suggests a relatively stable interest burden with minor fluctuations.

Interest coverage ratio

The interest coverage ratio, which measures the company's ability to service interest obligations, shows consistent improvement over time. Beginning at 15.51 in mid-2020, the ratio rises sharply to almost 22 by mid-2021, then continues to increase to 29.11 in mid-2022. It slightly decreases to 28.4 in mid-2023 and further to 24.54 in mid-2024 but then exhibits a notable increase to 34.43 in mid-2025. The overall trend indicates improved capacity to cover interest expenses, with only minor setbacks in the middle years, reflecting strengthening operational profitability relative to interest costs.

Earnings before fixed charges and tax

The earnings before fixed charges and tax exhibit a generally upward trend over the analyzed periods. Starting at approximately 2.8 billion US dollars in mid-2020, the figure increases significantly to over 5.4 billion by mid-2022. Although a slight decline is observed by mid-2024 to around 4.6 billion, the amount rebounds sharply in the latest period, reaching approximately 6.1 billion. This pattern suggests overall growth in core profitability despite some interim fluctuation.

Fixed charges

Fixed charges show a relatively stable pattern with modest growth over the first five years, rising from about 223.5 million US dollars in mid-2020 to roughly 269 million by mid-2024. However, a marked decrease is noted in the most recent year, dropping to approximately 178 million. This reduction in fixed charges may influence coverage ratios and suggests potential changes in the company's financing or cost structure.

Fixed charge coverage ratio

The fixed charge coverage ratio reflects the company's ability to meet fixed financial obligations from earnings. The ratio increases steadily from 12.52 in mid-2020 to a peak of 21.44 in mid-2022, indicating improved capacity to cover fixed charges. Although it decreases somewhat thereafter, reaching 17.23 in mid-2024, the ratio surges to 34.43 in the latest year. This sharp rise predominantly results from a combination of increased earnings and decreased fixed charges, signaling a substantially enhanced cushion for covering fixed costs.