Amphenol Corp. (NYSE:APH)

The analysis of the financial ratios over the five-year period reveals several notable trends concerning the company's operational efficiency, liquidity, leverage, profitability, and returns.

Total Asset Turnover

The reported and adjusted total asset turnover ratios exhibit a moderate fluctuation. Starting at 0.76 in 2019, the ratio decreased to 0.7 in 2020, recovered to 0.74 in 2021, peaked at 0.82 in 2022, and then fell back to 0.76 in 2023. This indicates a somewhat variable efficiency in utilizing assets to generate sales, with the best efficiency observed in 2022 but a return to the initial level by 2023.

Current Ratio

Both reported and adjusted current ratios increased significantly from 2019 through 2021, rising from approximately 1.97–1.99 to around 2.43–2.45. The ratios stabilized near this higher level through 2022 but then declined somewhat in 2023 to approximately 2.17–2.19. This suggests an initial strengthening of short-term liquidity followed by a slight reduction, maintaining still relatively strong liquidity levels.

Debt to Equity and Debt to Capital

The reported and adjusted debt to equity ratios reveal a consistent downward trend from 0.8–0.79 in 2019 to around 0.52–0.53 in 2023, indicating a reduction in financial leverage relative to shareholder equity. Similarly, debt to capital ratios decreased steadily from 0.44 in 2019 to about 0.34–0.35 in 2023, confirming a lower reliance on debt financing over time and a more conservative capital structure.

Financial Leverage

Financial leverage showed a declining pattern, with reported figures dropping from 2.39 in 2019 to 1.98 in 2023 and adjusted figures moving from 2.24 to 1.88 over the same period. This reduction complements the decreasing debt metrics and suggests a conscious strategy to reduce risk through lower leverage.

Net Profit Margin

The reported net profit margin improved steadily across the period, beginning at 14.04% in 2019 and increasing to 15.36% by 2023, indicating better profitability per unit of revenue. The adjusted net profit margin series is less consistent, with a peak at 16.46% in 2020, followed by a dip and recovery to 15.06% in 2023. Overall, net profitability remained strong despite some variability.

Return on Equity (ROE)

The reported ROE shows a generally positive trend from 25.5% in 2019 through 27.12% in 2022, before declining to 23.1% in 2023. Adjusted ROE, however, demonstrates a gradual decrease over the entire period, moving from 23.66% in 2019 down to 21.57% in 2023. This divergence may reflect differences in calculation adjustments but suggests some pressure on equity returns in recent years.

Return on Assets (ROA)

The reported ROA increased from 10.68% in 2019 to a peak of 12.41% in 2022, then slightly decreased to 11.67% in 2023, indicating improving asset use efficiency until recently. The adjusted ROA figures showed some variation, with a notable increase in 2020, but generally remain in the range of about 10.5% to 11.5%, reflecting relatively stable returns on assets.

In summary, the company has demonstrated enhanced profitability and reduced financial leverage over the period. Liquidity improved until 2021 and remained solid thereafter, though it showed a slight downward adjustment in the latest year. Asset efficiency and returns have been somewhat variable but generally improved until 2022, with a small decline noted in 2023. The reduction in debt ratios and leverage may reflect a strategic shift towards a more conservative financial position, potentially prioritizing stability over aggressive growth in the most recent years.

The financial data indicates several notable trends over the five-year period ending in 2023.

Net Sales

Net sales exhibited a consistent growth trajectory from 2019 to 2022, increasing from approximately $8.23 billion to $12.62 billion. However, in 2023, net sales experienced a slight decline to around $12.55 billion, indicating a potential plateau or minor contraction after several years of expansion.

Total Assets

Total assets steadily increased year over year, rising from about $10.82 billion in 2019 to $16.53 billion in 2023. This trend demonstrates ongoing asset base expansion, suggesting investment in growth or acquisition strategies.

Reported Total Asset Turnover

The reported total asset turnover ratio showed some variability. It started at 0.76 in 2019, dipped to 0.7 in 2020, then gradually rose to 0.82 in 2022 before falling again to 0.76 in 2023. This pattern reflects fluctuations in how effectively the company utilized its assets to generate sales, with peak efficiency seen in 2022.

Adjusted Total Assets

Adjusted total assets closely mirror the trend in total assets, increasing steadily from approximately $10.77 billion in 2019 to about $16.50 billion in 2023. The adjustment appears minor but consistent.

Adjusted Total Asset Turnover

Adjusted total asset turnover trends are identical to those of the reported ratio. Starting at 0.76 in 2019, the ratio declined to 0.7 in 2020, improved to a peak of 0.82 in 2022, and then reverted to 0.76 in 2023. This consistency indicates that the adjustments to assets did not materially affect turnover efficiency measurements.

Overall, the data reveals strong growth in sales and assets over the five-year period, with a notable slowdown in sales growth in the final year. Asset utilization, as measured by turnover ratios, fluctuated but peaked in 2022, demonstrating varying operational efficiency in linking asset base to sales revenue.

The analysis of the annual financial data reveals several notable trends in the company's liquidity position over the five-year period from 2019 to 2023.

Current Assets

Current assets exhibited steady growth throughout the period, increasing from $4,211,200 thousand in 2019 to $6,835,300 thousand in 2023. This consistent rise indicates an expansion in resources that are expected to be converted into cash within a year, suggesting improved operational capacity or asset management.

Current Liabilities

Current liabilities also increased over the timeframe, from $2,132,700 thousand in 2019 to $3,152,700 thousand in 2023. The upward movement in liabilities may reflect increased short-term obligations or financing needs, potentially linked to the growth in current assets and ongoing business activities.

Reported Current Ratio

The reported current ratio, representing the coverage of current liabilities by current assets, improved from 1.97 in 2019 to a peak of 2.43 in 2021. Following this peak, the ratio slightly declined to 2.17 by 2023. Despite the recent decrease, the ratio remains above 2, indicative of a strong liquidity position overall, although the downward trend from 2021 suggests a relatively faster increase in liabilities compared to assets in recent years.

Adjusted Current Assets and Ratio

Adjusted current assets mirrored the pattern of reported current assets, rising steadily from $4,244,800 thousand in 2019 to $6,903,700 thousand in 2023. The adjusted current ratio followed a similar trajectory as the reported current ratio, improving from 1.99 in 2019 to 2.45 in 2021, then experiencing a slight decline to 2.19 in 2023. The adjusted measures suggest a consistent liquidity trend, accounting for potential adjustments or reclassifications in asset valuation.

In summary, the company's liquidity position strengthened significantly through 2021, driven by growth in current assets. However, the subsequent modest decline in the current ratio despite continued asset growth points to comparatively higher increases in current liabilities. Maintaining a current ratio above 2 indicates the company continues to hold a comfortable margin to meet short-term obligations, though monitoring liability trends remains advisable to sustain this liquidity buffer.

Total Debt

The total debt exhibits an increasing trend from 2019 to 2021, rising from approximately 3.61 billion to nearly 4.80 billion US dollars. From 2021 onwards, a decline is observed, with total debt reducing to 4.58 billion in 2022 and further to 4.34 billion by 2023.

Stockholders’ Equity Attributable to Amphenol Corporation

Stockholders' equity follows a consistent upward trajectory over the period analyzed. Starting at around 4.53 billion US dollars in 2019, it increases steadily each year, reaching approximately 8.35 billion US dollars by 2023, indicating significant growth in shareholders’ investment and retained earnings.

Reported Debt to Equity Ratio

The reported debt to equity ratio demonstrates a gradual decline over the five-year span. Beginning at 0.80 in 2019, it decreases to 0.72 in 2020, slightly rises to 0.76 in 2021, and then declines notably to 0.65 in 2022 and further to 0.52 in 2023. This trend suggests improving financial leverage, with equity growing faster than debt, reducing relative debt burden.

Adjusted Total Debt

Adjusted total debt mirrors the trend observed in total debt, with values increasing from roughly 3.81 billion US dollars in 2019 to over 5.05 billion in 2021. Subsequently, adjusted debt declines to approximately 4.87 billion in 2022 and 4.64 billion in 2023, consistent with efforts to manage debt levels downward after peaking.

Adjusted Total Equity

Adjusted total equity shows continuous growth each year, increasing from about 4.81 billion US dollars in 2019 to 8.76 billion in 2023. The steady rise indicates strengthening equity base, aligning with reported equity trends and reinforcing capital structure improvement.

Adjusted Debt to Equity Ratio

The adjusted debt to equity ratio follows a similar pattern to the reported ratio, starting at 0.79 in 2019, dipping slightly to 0.72 in 2020, rising to 0.75 in 2021, then decreasing notably to 0.65 in 2022 and reaching 0.53 in 2023. This reflects a consistent reduction in leverage when adjusted figures are considered, underscoring enhanced financial stability.

Total Debt

The total debt shows an increasing trend from 2019 through 2021, rising from approximately 3.61 billion US dollars to nearly 4.80 billion US dollars. Subsequently, there is a decline in 2022 and 2023, with total debt reducing to around 4.58 billion and then to approximately 4.34 billion US dollars by the end of 2023.

Total Capital

Total capital exhibits a consistent upward trajectory across the entire period. It increases steadily year over year, starting from roughly 8.14 billion US dollars in 2019 to about 12.68 billion US dollars at the end of 2023, indicating substantial capital growth over five years.

Reported Debt to Capital Ratio

This ratio decreases over the five-year period, from 0.44 in 2019 to 0.34 in 2023. The decline reflects a reduction in the relative proportion of debt financing compared to total capital, particularly notable during 2022 and 2023, which aligns with the observed decrease in total debt alongside growth in total capital.

Adjusted Total Debt

The adjusted total debt follows a similar pattern to the reported total debt, increasing from approximately 3.81 billion US dollars in 2019 to about 5.05 billion US dollars in 2021, then declining in the subsequent years to around 4.64 billion US dollars by the end of 2023.

Adjusted Total Capital

Adjusted total capital shows a consistent increase throughout the period, from roughly 8.62 billion US dollars in 2019 to about 13.40 billion US dollars in 2023, paralleling the trend noted in total capital.

Adjusted Debt to Capital Ratio

The adjusted debt to capital ratio mirrors the pattern of the reported ratio, remaining stable at 0.44 in 2019, peaking at 0.43 in 2021, then declining to 0.35 in 2023. This downward trend after 2021 signifies an improved capital structure with proportionally less debt financing relative to overall capital.

Summary of Trends

The data indicates an initial phase of increased leverage up to 2021, as total and adjusted debts rise alongside growing capital. Post-2021, a deleveraging trend is evident, with debt figures declining while total and adjusted capital continue to expand. The consistent decrease in debt-to-capital ratios suggests strategic efforts to strengthen the capital base and reduce reliance on debt, improving financial stability in the most recent periods.

Total Assets

Total assets exhibited a consistent upward trajectory over the five-year period. Beginning at approximately 10.8 billion US dollars in 2019, the assets increased steadily each year, reaching about 16.5 billion US dollars by the end of 2023. This upward trend indicates growth in the company’s asset base, suggesting ongoing investment or acquisition activities.

Stockholders’ Equity Attributable to Amphenol Corporation

Stockholders’ equity also displayed continuous growth, rising from around 4.5 billion US dollars in 2019 to roughly 8.3 billion US dollars in 2023. The steady increase in equity aligns with the growth in total assets, indicating retained earnings and possibly new equity contributions that enhance the company’s capital base.

Reported Financial Leverage

The reported financial leverage ratio declined gradually from 2.39 in 2019 to 1.98 in 2023. This decreasing trend suggests a reduction in the company's reliance on debt relative to equity financing, implying an improvement in the capital structure and potentially a lower financial risk.

Adjusted Total Assets

The adjusted total assets follow a similar increasing pattern as the reported total assets, starting at approximately 10.8 billion US dollars in 2019 and progressing to around 16.5 billion US dollars in 2023. The close alignment between reported and adjusted figures suggests consistent adjustment practices without significant revaluation impacts.

Adjusted Total Equity

Adjusted total equity also showed a steady increase from about 4.8 billion US dollars in 2019 to nearly 8.8 billion US dollars in 2023. This mirrors the trend seen in reported equity, reinforcing the indication of strengthened equity position over time.

Adjusted Financial Leverage

The adjusted financial leverage ratio decreased from 2.24 in 2019 to 1.88 in 2023, reflecting a trend similar to the reported financial leverage. This decline in leverage under adjusted measures confirms the company’s strategic reduction in financial risk and improvement in balance sheet strength.

The financial data indicates consistent growth in key profitability measures over the five-year period ending in 2023. Net income attributable to the corporation has experienced a steady increase from 1,155,000 thousand US dollars in 2019 to 1,928,000 thousand US dollars in 2023. This upward trend reflects improving bottom-line results. Similarly, net sales have expanded significantly, rising from 8,225,400 thousand US dollars in 2019 to a peak of 12,623,000 thousand US dollars in 2022, with a slight decrease to 12,554,700 thousand US dollars in 2023.

Net Profit Margin

The reported net profit margin shows a generally positive trajectory, increasing from 14.04% in 2019 to 15.36% in 2023. This suggests enhanced efficiency or profitability relative to sales, although the rise is gradual rather than steep.

Adjusted Net Income and Margin

Adjusted net income also rose over the period but with some fluctuations. It increased from 1,137,800 thousand US dollars in 2019 to 1,890,200 thousand US dollars in 2023, with a notable jump between 2019 and 2020. The adjusted net profit margin, however, demonstrated variability: it moved up sharply in 2020 to 16.46% from 13.83% in 2019, then declined to 13.26% in 2022 before rising again to 15.06% in 2023. This volatility may indicate the impact of extraordinary items or adjustments affecting profitability differently than the reported figures.

Sales Trend

Net sales growth was strong, especially from 2020 to 2022, with an increase of nearly 37% over this two-year span. However, the slight decline in 2023 suggests a potential stabilization or minor contraction in sales volume or pricing. The growth in sales generally supports the improvements seen in net income and profit margins.

Overall, the data reflects a company that has successfully expanded its sales base and improved profitability over the period analyzed. Despite some fluctuations in adjusted profit margins, the consistent increase in net income and steady sales growth underpin positive operational performance. The slight dip in sales in the final year warrants monitoring to determine if it signals a new trend or a short-term variation.

Net Income

Net income attributable to the company exhibited a consistent upward trend over the five-year period. Starting at $1,155,000 thousand in 2019, it increased steadily each year, reaching $1,928,000 thousand in 2023. The most notable growth occurred between 2020 and 2022, where net income rose from $1,203,400 thousand to $1,902,300 thousand.

Stockholders’ Equity

Stockholders’ equity attributable to the company also increased continuously, reflecting a strengthening financial position. The equity base expanded from $4,530,300 thousand in 2019 to $8,346,500 thousand in 2023. The growth was particularly significant between 2022 and 2023, with an increase of over $1 billion.

Reported Return on Equity (ROE)

The reported ROE fluctuated over the period, starting at 25.5% in 2019 and peaking at 27.12% in 2022. However, there was a decline to 23.1% in 2023, indicating some reduction in the efficiency of generating profit from shareholders’ equity during that year despite higher net income levels.

Adjusted Net Income

Adjusted net income showed an overall upward trajectory, increasing from $1,137,800 thousand in 2019 to $1,890,200 thousand in 2023. Growth rates were variable but remained positive each year, with a more pronounced increase observed between 2019 and 2020 and again towards 2023.

Adjusted Total Equity

Adjusted total equity followed a similar upward pattern as the stockholders’ equity, rising from $4,809,800 thousand in 2019 to $8,763,400 thousand in 2023. This consistent increase supports the notion of strengthening capital base and resources available to the company.

Adjusted Return on Equity (ROE)

The adjusted ROE experienced moderate fluctuations, starting at 23.66% in 2019 and reaching its highest point of 24.84% in 2020. Following this peak, there was a gradual decline to 21.57% in 2023. This trend suggests a slight decreasing efficiency in generating adjusted net income relative to adjusted equity over time, despite the growth in absolute income and equity.

The financial data reveals a general upward trajectory in profitability and asset growth over the five-year period. Net income attributable to Amphenol Corporation increased steadily from 1,155,000 thousand US dollars in 2019 to 1,928,000 thousand US dollars in 2023, with notable acceleration between 2020 and 2022. This suggests effective operational performance and growth in earnings.

Total assets similarly expanded from 10,815,500 thousand US dollars at the end of 2019 to 16,526,400 thousand US dollars by the end of 2023, indicating ongoing investment in resources or asset accumulation supporting the company’s growth strategy.

Return on Assets (ROA):

The reported ROA experienced some fluctuations but generally trended upwards, starting at 10.68% in 2019, dipping slightly to 9.76% in 2020, then rising to a peak of 12.41% in 2022 before decreasing slightly to 11.67% in 2023. This pattern indicates efficiency improvements in asset utilization to generate profits, albeit with some volatility in the most recent year.

Adjusted ROA shows a somewhat different pattern, starting at 10.57% in 2019, increasing substantially to 11.53% in 2020, then declining to 10.55% in 2021, followed by a steady rise to 11.46% in 2023. Adjusted ROA smooths some of the fluctuations seen in reported ROA, suggesting that after adjustments, asset efficiency remained relatively stable with modest improvements toward the later years.

Adjusted net income figures likewise rose consistently, from 1,137,800 thousand US dollars in 2019 to 1,890,200 thousand US dollars in 2023, mirroring the trend in reported net income but with a somewhat smoother progression, which may reflect removal of one-time items or non-recurring effects to give a clearer picture of underlying profitability.

Adjusted total assets closely track the pattern of reported total assets, increasing each year from 10,768,700 thousand US dollars in 2019 to 16,496,300 thousand US dollars in 2023. This further supports the indication of steady asset base expansion.

Overall, the company exhibited growth in both earnings and asset base throughout the period, with relatively strong and improving asset turnover and profitability ratios after considering adjusted figures. The volatility in reported versus adjusted ROA suggests some impact of extraordinary or non-recurring factors on reported profitability, but the underlying performance remains robust and on an upward trend.