Mosaic Co. (NYSE:MOS)

The financial ratios exhibit notable trends over the analyzed period, reflecting the company's evolving capital structure and leverage profile.

Debt to Equity Ratio

The debt to equity ratio starts at 0.43 in March 2017, showing a generally stable trend with slight fluctuations. It increases to a peak of 0.73 in March 2020, indicating a higher reliance on debt relative to equity during this period. After this peak, the ratio declines steadily to 0.40 by June 2022, suggesting a reduction in debt levels compared to equity or an increase in equity.

Debt to Capital Ratio

This ratio follows a similar pattern to the debt to equity ratio. Beginning at 0.30 in March 2017, it rises gradually to a high of 0.42 in March 2020. Post this peak, the ratio decreases consistently, reaching 0.29 by June 2022. The trend indicates initial increased leverage followed by deleveraging or improved capital base composition.

Debt to Assets Ratio

Starting at 0.24 in March 2017, the debt to assets ratio remains stable around this level until the end of 2017, when it increases to 0.30. During 2020, it reaches its highest point at 0.32, implying a higher portion of assets funded by debt. Thereafter, it declines steadily to 0.20 by mid-2022, indicating a reduction in debt-financed assets or asset growth outpacing debt increase.

Financial Leverage Ratio

Financial leverage, reflecting the ratio of total assets to equity, begins at 1.78 in the first quarter of 2017. It increases progressively, peaking at 2.26 in March 2020, which aligns with the peaks in the debt-related ratios. Following this peak, financial leverage diminishes moderately to approximately 2.04 by the middle of 2022, indicating a slight decrease in the extent of asset financing by equity.

Overall, the period from early 2017 to early 2020 is characterized by gradually increasing leverage, with all debt-related ratios and financial leverage peaking around March 2020. This suggests a period of expansion financed more heavily by debt. Following this peak, there is a clear deleveraging trend and reduction in financial risk, as evidenced by declining ratios through mid-2022. The consistent decline in leverage ratios post-2020 reflects improved balance sheet strength or strategic capital restructuring.

The financial data for the periods analyzed presents notable trends in total debt, stockholders' equity, and the debt to equity ratio over time.

Total Debt

Total debt initially shows a gradual upward trend from March 2017 to December 2017, increasing from approximately 4.15 billion to 5.61 billion US dollars. It then experiences a general decline with some fluctuations, reaching a low point in December 2020 at about 5.22 billion US dollars. After this point, the debt level varies moderately but shows a decreasing tendency towards June 2022, ending at approximately 4.75 billion US dollars.

Total Stockholders’ Equity

Stockholders' equity demonstrates a steady increase from March 2017, starting near 9.62 billion US dollars, peaking around September 2018 at approximately 10.44 billion US dollars. However, it declines significantly between September 2019 and March 2020, falling to 8.39 billion US dollars. After March 2020, equity rebounds and consistently rises, reaching its highest value of about 11.75 billion US dollars by June 2022. This overall trend after the dip suggests recovery and strengthening of the equity base.

Debt to Equity Ratio

The debt to equity ratio fluctuates over the periods but displays a few distinct phases. Initially stable around 0.42 to 0.43 through early 2017, it spikes to 0.58 by December 2017, reflecting increased leverage. Subsequently, it stabilizes near 0.49 to 0.53 through 2018 and 2019, then rises sharply to a peak of 0.73 in the first quarter of 2020, indicating heightened financial leverage possibly linked to the equity decline noted earlier. Following this peak, the ratio progressively decreases, reaching the lowest recorded point of 0.40 by mid-2022, signaling reduced leverage and a more conservative capital structure towards the end of the period.

In summary, the data reveals an initial phase of increasing debt and stable equity, followed by a period marked by equity contraction and higher leverage in early 2020. Subsequently, the company shows a recovery in equity levels accompanied by a reduction in debt ratios, indicating an overall strengthening of its financial structure by mid-2022.

The analysis of the quarterly financial data reveals several trends in the company’s debt levels and capital structure over the examined periods.

Total Debt

Total debt initially showed a moderate increase from approximately US$4.15 billion to a peak of about US$5.61 billion by December 2017. Following this peak, a gradual decrease occurred over the next few quarters, reaching around US$5.10 billion by December 2018. In 2019, total debt remained relatively stable, fluctuating near the US$5.2 billion to US$5.35 billion range. However, in early 2020, there was a notable increase, with total debt rising sharply to over US$6 billion by March 2020. After this peak, debt levels declined steadily throughout 2020 and 2021, dropping to approximately US$4.73 billion by June 2022.

Total Capital

Total capital exhibited an overall upward trend from about US$13.78 billion in March 2017 to US$15.50 billion in June 2022. The increase was relatively steady, with some fluctuations. Notable was a peak around mid-2018, followed by a moderate decrease into late 2019, reaching approximately US$14.54 billion by December 2019. After a dip in early 2020, total capital resumed growth, reaching a high of approximately US$16.95 billion in March 2022 before a slight decline in June 2022.

Debt to Capital Ratio

The debt to capital ratio reflected the dynamics seen in total debt and total capital. Beginning at around 0.30 in early 2017, it increased to 0.37 by the end of 2017, indicating a higher proportion of debt within capital. This ratio then moderated to approximately 0.33 throughout 2018 and 2019, suggesting relative stabilization. The sharp rise in total debt during early 2020 caused the ratio to peak at 0.42 in March 2020, reflecting greater leverage. Subsequently, the ratio declined consistently, reaching a low of 0.29 by June 2022, indicating reduced leverage and a more conservative capital structure in recent periods.

In summary, the company experienced notable fluctuations in its debt levels and capital structure. Specifically, there was a significant debt increase and leverage peak in early 2020, likely tied to external or strategic factors. Following this period, a deleveraging trend is evident, with decreasing total debt and improved debt to capital ratios, coupled with gradual capital growth. These patterns suggest a strategic focus on strengthening the balance sheet and managing financial risk over the most recent quarters.

Total Debt

The total debt exhibited a generally fluctuating trend over the analyzed period. Initially, from the first quarter of 2017 through the fourth quarter of 2017, there was a noticeable increase in total debt, peaking at approximately 5,613,900 thousand US dollars by the end of 2017. Following this peak, a decline trend is observed through 2018, reaching roughly 5,101,800 thousand US dollars at year-end. The debt slightly rose again during 2019 and early 2020, with a peak near 6,082,100 thousand US dollars in the first quarter of 2020. After this peak, a steady decline in total debt is evident, ending at about 4,754,300 thousand US dollars in mid-2022. This suggests that after several fluctuations, there has been a consistent reduction in debt levels starting from early 2020.

Total Assets

Total assets steadily increased from approximately 17,096,400 thousand US dollars in the first quarter of 2017 to a high near 23,985,600 thousand US dollars by mid-2022. The growth trend was relatively smooth despite minor short-term fluctuations. Notable increments occurred particularly after the first quarter of 2020, where total assets rose consistently from below 19,000,000 thousand US dollars to exceed 23,000,000 thousand US dollars by the end of the examined period. This indicates a positive expansion in asset base over the years.

Debt to Assets Ratio

The debt to assets ratio showed variability ranging mostly between 0.20 and 0.32 throughout the period. It increased from around 0.24 in early 2017 to a peak of roughly 0.32 in the first quarter of 2020, indicating a higher proportion of debt relative to assets at that point. From that peak onward, the ratio declined steadily, reaching approximately 0.20 by mid-2022. This decreasing ratio in the latest periods reflects an improving balance sheet structure, with debt reduction outpacing asset growth, which aligns with observed trends in both total debt and total assets.

Overall Insights

The overall financial profile suggests a company that experienced growth in asset base with episodes of debt increase followed by debt reduction. The rise and fall of total debt in conjunction with the debt to assets ratio imply active debt management, particularly aggressive deleveraging after early 2020. The consistent asset growth alongside debt reduction contributes to strengthening the capital structure and potentially improving financial stability over time.

Total Assets

The total assets show a generally increasing trend over the periods analyzed, starting at approximately 17.1 billion US dollars in March 2017 and rising to nearly 24.0 billion US dollars by June 2022. Despite some fluctuations, such as a dip around December 2019 and a slight decrease in March 2020, the overall asset base expanded by about 40% over the five-year span. This suggests a growth in the company’s asset holdings, which could be attributable to acquisitions, capital expenditures, or asset revaluations.

Total Mosaic Stockholders’ Equity

Stockholders’ equity begins at approximately 9.6 billion US dollars in March 2017 and shows variability throughout the periods. There is a notable decline starting in late 2018, continuing through 2019 and into early 2020, reaching its lowest point near 8.4 billion US dollars in March 2020. After this trough, equity recovers steadily, surpassing previous highs and reaching above 11.7 billion US dollars by June 2022. This pattern may reflect changes in retained earnings, issuance or repurchase of shares, or other equity-related transactions.

Financial Leverage

The financial leverage ratio fluctuates within a range of approximately 1.76 to 2.26 over the observed periods. Starting from 1.78 in March 2017, it peaks near 2.26 by March 2020, indicating increased use of debt relative to equity during that time. Following this peak, leverage declines to around 2.01-2.04 in 2022, suggesting a reduction in debt relative to equity or improved equity levels. The leverage trends align inversely with the equity fluctuations, reflecting the interplay between debt and equity financing strategies.