HCA Healthcare Inc. (NYSE:HCA)

The financial ratios indicate several notable trends over the analyzed quarters. Firstly, the debt to capital ratio demonstrates a gradual decline from 1.29 in March 2017 to around 1.03 by March 2020, suggesting a gradual reduction in leverage relative to capital. However, from March 2020 onward, there is a slight increase back to 1.06 by March 2022, indicating some increase in leverage during this latter period. When including operating lease liabilities, the pattern is similar, with slightly higher values but the same general trend.

Examining the debt to assets ratio, there is a consistent decline from 0.93 in March 2017 to a low of approximately 0.61 in September 2020, showing a reduction in debt relative to total assets. Post-September 2020, the ratio rises moderately to 0.72 by March 2022, indicating increased leverage on assets. Including operating lease liabilities presents the same trend with marginally higher ratios throughout.

The debt to equity ratio, although data is limited and mainly absent before March 2021, shows a substantial increase from 54.2 at March 2021 to 125.8 by June 2021, which signals a significant rise in debt relative to equity. This suggests a notable shift in the company's financing structure within that brief period. Similar behavior is observed when including operating lease liabilities, with a slightly higher value of 132.8 by June 2021.

The interest coverage ratio reveals a positive trend across the periods with available data. Starting at 3.59 in June 2017, it fluctuates mildly around the 3.8 to 4.4 range until early 2020. Thereafter, it exhibits a marked improvement, climbing steadily to 7.28 by December 2021 before slightly declining to 7.08 in March 2022. This increase indicates enhanced ability to cover interest expenses with operating earnings, reflecting better profitability or lower interest costs.

Data for financial leverage is scarce and only present for the periods from March 2021 to June 2021, showing an extraordinary increase from 83.02 to 191.4. This abrupt change, alongside the spike in debt to equity ratio, may indicate either accounting reclassification, acquisition activity, or considerable debt restructuring during this timeframe.

Overall, the general trend over the longer term is a decrease in leverage ratios up to early 2020 followed by a reversal with increasing leverage thereafter. The interest coverage ratio consistently improves, implying strengthened operational performance or refinancing benefits. The sudden spikes in certain debt ratios during 2021 merit further investigation to understand their drivers and implications fully.

Debt to capital ratio

Gradual decline through early 2020, slight increase thereafter.

Debt to assets ratio

Decreasing trend up to Q3 2020, followed by moderate increase through Q1 2022.

Debt to equity ratio

Significant increase from March to June 2021 indicating higher leverage relative to equity.

Interest coverage ratio

Steady improvement, particularly from 2020 onward, indicating better coverage of interest expenses.

Financial leverage

Sharp increase noted in early 2021, potentially linked to major financial changes or reporting adjustments.

The financial data reveals several notable trends in the capital structure of the company over the analyzed quarters.

Total Debt

The total debt exhibits a generally increasing trajectory from March 31, 2017, through March 31, 2022. Starting around $31.5 billion, total debt reached nearly $37.7 billion by the end of the period. Some fluctuations occurred, notably a rise through 2019 followed by a slight decrease during mid-2020, before trending upward again in 2021 and 2022.

Stockholders’ Equity

Stockholders' equity, which is reported as attributable to the company, remained negative throughout the entire period but showed fluctuations in its deficit size. Initially, the equity deficit was approximately -$7.0 billion in early 2017, improving gradually to a lesser deficit near -$0.97 billion around September 2020. However, after this point, the equity balance displays more volatility, turning positive at $572 million in March 2021 before declining again to a negative position exceeding -$2 billion by March 2022. This swing suggests periods of potential operational or market challenges followed by partial recovery and subsequent setbacks.

Debt to Equity Ratio

The debt-to-equity ratio is provided sporadically, with a significant reported value of 54.2 and 125.8 noted in the last year of the data. These extremely high ratios reflect the atypical financial condition of the company, primarily driven by the negative stockholders' equity figure. The sharp increase in this ratio around the reported periods highlights a shift in financial leverage and capital structure stress, implying heightened reliance on debt financing relative to shareholders’ claims.

Overall, the data indicates an increasing leverage over time, with debt levels rising and equity remaining negative for much of the period. The company appears to be operating with a capital structure heavily weighted towards debt, which suggests significant financial risk and potential challenges in balancing obligations with equity funding. The temporary improvements in equity during 2020–2021 hint at possible strategic or market influences but were not sustained into early 2022.

The financial data over the reported quarters reveal several noteworthy trends regarding debt levels and equity position. Total debt, inclusive of operating lease liabilities, exhibited a generally increasing trend from March 31, 2017, through March 31, 2022. Starting at approximately $31.5 billion in early 2017, this figure increased gradually with some fluctuations, reaching approximately $39.5 billion by the first quarter of 2022. This indicates a rising leverage strategy or increased borrowing over the analyzed period.

Stockholders’ equity attributable to the company showed a persistent negative position throughout most of the period, beginning at nearly -$7 billion in early 2017. Although the deficit lessened to a minimum negative value around the end of 2020 (reaching positive territory briefly in March 2021 at $572 million), it reverted to negative values again thereafter. By March 31, 2022, the equity deficit expanded to roughly -$2 billion, reflecting ongoing challenges in achieving positive equity or retained earnings over this timeframe.

The debt to equity ratio was only reported for a limited range of dates and mainly for the latter portion of the timeline. On June 30, 2020, this ratio spiked significantly to 57.13 and by March 31, 2021, had escalated further to 132.8, indicating an extremely high leverage scenario. Such elevated ratios corroborate the earlier observation of high debt levels concurrent with negative or low equity bases, underscoring potential financial risk associated with capital structure during this period.

Total Debt Trends

Consistent increase from $31.5 billion to $39.5 billion over five years with minor fluctuations.

Stockholders’ Equity Trends

Predominantly negative equity position with a brief positive occurrence in early 2021 but generally reflecting a deficit between approximately -$7 billion and -$2 billion.

Debt to Equity Ratio

Extremely high ratios observed in 2020 and early 2021, peaking at 132.8, indicating substantial leverage.

Overall, the data depict a company maintaining high levels of debt relative to equity, with a challenging equity position throughout most of the period. The financial structure appears characterized by significant leverage and fluctuating equity deficits, suggesting potential constraints on financial flexibility and elevated risk exposure.

Total Debt

The total debt level demonstrated a gradual increase from March 2017 to March 2022. Starting at $31,514 million in March 2017, total debt reached a peak of $37,696 million by March 2022. There was a slight decline observed in mid-2020, dropping to around $30,942 million in June 2020, before trending upward again through the subsequent quarters.

Total Capital

Total capital showed a consistent upward trend over the analyzed period. Beginning at $24,497 million in March 2017, total capital increased steadily to $35,663 million by March 2022. Noteworthy is a dip in mid-2020, where total capital decreased to approximately $29,156 million in June 2020, followed by a recovery and continued growth thereafter.

Debt to Capital Ratio

In the earlier quarters, the debt to capital ratio was relatively high, with values exceeding 1.2 during 2017 and early 2018. This ratio steadily declined until the end of 2020, reaching a low of 0.98 in December 2020, indicating an improvement in the capital structure with lower reliance on debt relative to capital. However, starting from early 2021, the ratio modestly increased again, hovering slightly above 1.0 through to March 2022. This suggests a moderate increase in leverage after a period of deleveraging.

Overall Insights

The patterns suggest a general expansion in both debt and capital bases over the five-year span, with a temporary contraction observed during the middle of 2020, possibly attributed to external factors impacting financial strategy. The decline in the debt to capital ratio through 2020 indicates enhanced capital adequacy and reduced leverage during that period. Subsequent quarters demonstrate a cautious increase in leverage, aligned with the increase in total debt but sustained by corresponding growth in capital.

Total Debt (Including Operating Lease Liability)

The total debt showed a generally increasing trend over the period analyzed. Starting at $31,514 million in March 2017, the amount fluctuated slightly but remained near the $33,000 million level through 2018. A notable increase occurred between March 2019 and June 2019, reaching $37,653 million, followed by a moderate decline and stabilization around $32,000 to $33,000 million during late 2019 and early 2020. From March 2021 onward, the total debt again began to rise steadily, reaching a peak of $39,486 million by March 2022.

Total Capital (Including Operating Lease Liability)

Total capital showed a consistent upward trajectory from $24,497 million in March 2017 to $37,453 million in March 2022. The growth was relatively steady throughout the entire period, with no significant drops recorded. This steady increase in total capital suggests ongoing investment or accumulation of capital over the five-year span.

Debt to Capital Ratio (Including Operating Lease Liability)

The debt to capital ratio exhibited a declining trend from 1.29 in March 2017 to a low of 0.98 in December 2020, indicating a reduction in the proportion of debt relative to total capital. This suggests improvement in the company’s capital structure during this period, with either debt being reduced relative to capital or capital growing faster than debt. However, from December 2020 onwards, this ratio reversed direction and gradually increased to 1.05 by March 2022. The increase in the ratio during this later period implies a rising debt load or slower capital growth relative to debt, pointing to a modest shift towards higher leverage.

Overall Insights

Throughout the observed timeframe, total capital steadily increased, indicating solid capital accumulation or reinvestment. Total debt remained relatively stable initially, then increased more sharply after early 2019, followed by a temporary decline and a subsequent rise starting in 2021. The debt to capital ratio’s downward trend through 2020 signals improving leverage conditions, while the recent uptick suggests a cautious reversal towards higher leverage levels. The combination of increasing total capital and fluctuating debt levels indicates an active management of capital structure, balancing growth and leverage risk over time.

The analysis of the quarterly financial data reveals distinct trends in the company's debt structure and asset base over the observed periods.

Total Debt

Total debt shows a gradual increase from approximately $31.5 billion at the beginning of 2017 to just under $33 billion by the end of 2018. This is followed by a moderate rise until the end of 2019, peaking at about $34.7 billion. In the first half of 2020, there is a notable reduction to around $30.9 billion, likely indicating debt repayments or adjustments. From late 2020 onwards, total debt generally trends upward again, reaching nearly $37.7 billion by the first quarter of 2022, marking the highest level within the presented timeframe.

Total Assets

Total assets steadily increase from roughly $33.8 billion at the start of 2017 to about $39.2 billion at the end of 2018. The upward trajectory continues through 2019 and into early 2020, peaking just above $51 billion in the second quarter of 2020. Thereafter, assets experience a slight decline reaching about $47.5 billion by the end of 2020. From 2021 onwards, the trend reverses with total assets increasing consistently, reaching approximately $52.2 billion in the first quarter of 2022.

Debt to Assets Ratio

The debt to assets ratio exhibits a declining trend from a high of 0.93 in the first quarter of 2017 to a low of 0.61 in the second quarter of 2020, reflecting an improving balance between liabilities and asset holdings. This trend suggests effective management in controlling debt relative to asset growth during this period. Post mid-2020, the ratio begins to increase, moving upward to approximately 0.72 by the first quarter of 2022, indicating a relative rise in debt compared to assets. This could infer a strategic shift toward leveraging or increased borrowing during this latter period.

Overall, the financial data demonstrates growth in both assets and debt over the five-year span, with periods of debt reduction and asset value fluctuations. The initial steady improvements in the debt to assets ratio suggest conservative financial management, while recent increases in the ratio warrant attention to the company’s leverage strategy and potential risk exposure associated with rising debt levels relative to asset base.

Total debt (including operating lease liability)

The total debt exhibited a generally stable trend from the first quarter of 2017 through the fourth quarter of 2018, fluctuating within a narrow range around approximately $31 billion to $33 billion. In 2019, debt levels increased markedly, reaching a peak near $37 billion in the second quarter before slightly declining towards the end of 2019. The year 2020 saw a dip in total debt, dropping to around $32 billion in the second and third quarters, before recovering modestly in subsequent quarters. From early 2021 onwards, debt resumed an upward trajectory, culminating in a substantial rise to nearly $39.5 billion by the first quarter of 2022.

Total assets

Total assets demonstrated a consistent growth pattern over the entire period under review. Beginning at roughly $33.8 billion in the first quarter of 2017, assets increased steadily across successive quarters, with occasional minor fluctuations. The growth accelerated notably in 2019 and 2020, reaching over $50 billion in the second quarter of 2020. Despite a slight dip in the third quarter of 2020, total assets rebounded and continued their upward trend, reaching $52.2 billion by the first quarter of 2022, representing a substantial increase from the starting point.

Debt to assets ratio (including operating lease liability)

The debt to assets ratio revealed a decreasing trend from 0.93 at the start of 2017 to a low of 0.64 in the second quarter of 2020, indicating a reduction in leverage relative to asset base during this period. Following this trough, the ratio increased again, hovering around 0.69 to 0.72 through 2021 and climbing further to 0.76 in the first quarter of 2022. Overall, the ratio reflects an initial deleveraging phase up to mid-2020, followed by a renewed increase in leverage relative to assets thereafter.

Summary

The financial data show a steady increase in total assets over the five-year span, suggesting ongoing expansion or accumulation of resources. Total debt remained relatively steady initially but escalated notably from 2019 and again in early 2022. The decline in the debt to assets ratio through mid-2020 implies improved balance sheet strength and lower relative leverage during that phase. However, the subsequent rise in the ratio indicates a reversal towards higher leverage levels in more recent periods. These patterns suggest a dynamic financial strategy balancing growth with varying use of debt financing.

Total assets

The total assets demonstrate a generally increasing trajectory over the observed periods. Starting from approximately $33.8 billion at the end of Q1 2017, assets grew steadily to exceed $39.2 billion by Q4 2018. A significant increase is noted between Q4 2018 and Q2 2020, where assets rose from $39.2 billion to nearly $48.7 billion. Thereafter, the asset base fluctuates slightly but maintains an upward trend, reaching $52.2 billion by Q1 2022. This growth suggests ongoing expansion or asset accumulation over the five-year horizon.

Stockholders’ equity (deficit) attributable to HCA Healthcare, Inc.

Stockholders’ equity exhibits a notable shift from a pronounced negative position to a positive standing and back. Initially, equity was in significant deficit, approximately negative $7.0 billion in Q1 2017, improving gradually through 2018 and the first half of 2019. By Q4 2020, the equity deficit had effectively reversed to a positive figure of $572 million, indicating a potential recapitalization, retained earnings growth, or other equity-enhancing events. However, this positive trend was short-lived as equity returned to negative territory from Q2 2021 onwards, showing a deficit deepening to approximately negative $2.0 billion by Q1 2022. The fluctuations reflect considerable volatility in equity value and may imply operational challenges, restructuring, or financial adjustments.

Financial leverage

Data for financial leverage is scarce and discontinuous. Notably, available information shows an extremely high and irregular leverage ratio of 83.02 in Q4 2020 and an even more elevated ratio of 191.4 in Q1 2021. These exceptional figures suggest a period of disproportionately high debt relative to equity during this timeframe, likely coinciding with the periods of declining equity as observed. The absence of earlier and later data prevents a full assessment of trends, but these values indicate a potentially heightened financial risk position in the early 2021 quarter.

Overall observations

The financial data indicates that total asset growth has been consistent, reflecting potential expansion activities. In contrast, stockholders’ equity has been volatile, transitioning between substantial deficits and brief positive phases, which raises concerns regarding equity stability. The sporadic and elevated financial leverage values underscore episodes of significant debt reliance. Together, these elements may suggest periods of financial restructuring, operational difficulties, or strategic financial management activities focused on capital structure optimization. The mixed trends warrant close monitoring and further detailed analysis to understand underlying causes and implications for financial health.

Earnings before interest and tax (EBIT)

The EBIT figures fluctuate over the examined periods, beginning at 1,485 million US dollars in March 2017 and showing a general upward trend until December 2017, where it peaks at 1,810 million. This is followed by a decline throughout most of 2018, reaching a low of 1,511 million in September. The EBIT then increases steadily toward the end of 2018 and remains relatively stable with minor fluctuations through 2019. A notable decline occurs in the first quarter of 2020, coinciding with the onset of unusual economic conditions, followed by a sharp recovery and growth through to the end of 2020 and into 2021. The EBIT peaks significantly in the last quarter of 2021 at 3,555 million, before falling to 2,222 million in the first quarter of 2022.

Interest expense

Interest expense remains relatively stable across the periods, fluctuating modestly within a range of approximately 383 to 461 million US dollars. The values show a slight increasing trend until the first quarter of 2019, after which a gradual decline is noticed through 2020. From late 2020 onwards, interest expenses stabilize again around the 383 to 408 million mark, suggesting consistent debt servicing costs despite fluctuations in EBIT.

Interest coverage ratio

Prior to March 31, 2017, the data for interest coverage is unavailable. Starting in March 2017, the ratio shows a steady increase from about 3.59 to a peak of approximately 4.04 in December 2017. This indicates improving ability to cover interest expenses with EBIT during this period. The ratio then fluctuates mildly through 2018 and 2019, maintaining generally stable coverage levels between 3.57 and 3.94. A marked improvement is observable beginning late 2020 and continuing through 2021, with the ratio rising sharply, reaching highs above 7. This substantial increase indicates enhanced coverage capacity, driven primarily by the significant EBIT growth in the periods toward the end of 2021. The ratio slightly decreases in the first quarter of 2022 but remains considerably higher than earlier periods.