Stryker Corp. (NYSE:SYK)

Debt to Equity Ratio

The debt to equity ratio shows an overall increasing trend from 0.72 in 2017 to a peak of 1.07 in 2020, followed by a decline to 0.84 in 2021. Including operating lease liabilities, the pattern is similar, reaching 1.10 in 2020 before decreasing to 0.87 in 2021. This suggests a rise in leverage until 2020, then a reduction in debt relative to equity the following year.

Debt to Capital Ratio

The debt to capital ratio remained relatively stable over the period, hovering around 0.42 to 0.46 from 2017 to 2019, before increasing to 0.52 in 2020 and returning to 0.46 in 2021. Including operating lease liabilities, the ratio follows a similar pattern. This reflects a moderate increase in the proportion of debt within the company's capital structure in 2020, followed by a reversion to previous levels.

Debt to Assets Ratio

There is a gradual increase in the debt to assets ratio from 0.33 in 2017 up to 0.41 in 2020, then a decline to 0.36 in 2021. Including operating lease liabilities, the figures are slightly higher but follow the same trend. This indicates that debt grew faster than assets until 2020 but was relatively reduced in proportion to assets in 2021.

Financial Leverage

Financial leverage increased from 2.23 in 2017 to 2.62 in 2020, suggesting the company relied more on debt financing over this period. In 2021, the ratio decreased to 2.33, pointing to a modest deleveraging or increased equity base.

Interest Coverage Ratio

The interest coverage ratio was relatively stable around 9.3 to 9.9 from 2017 through 2019, indicating strong ability to meet interest obligations. However, it declined significantly to 7.20 in 2020 and slightly increased to 7.77 in 2021, implying reduced earnings relative to interest expenses, which may reflect increased debt costs, lower earnings, or both during this time.

Fixed Charge Coverage Ratio

Fixed charge coverage exhibited a downward trend, starting at 6.55 in 2017, rising slightly to 7.10 in 2019, then decreasing substantially to 5.39 in 2020 with a moderate recovery to 5.85 in 2021. This pattern indicates a tightening in the company’s ability to cover fixed financial obligations beyond interest, consistent with the trends observed in interest coverage.

Total Debt

The total debt increased steadily from 2017 through 2020, rising from US$7,222 million to a peak of US$13,991 million. In 2021, a reduction was observed, with total debt decreasing to US$12,479 million. This indicates that while the company took on more debt over the initial four-year period, it reduced its leverage somewhat in the most recent year reported.

Total Shareholders' Equity

Shareholders' equity shows a consistent upward trend across the entire five-year period, growing from US$9,966 million in 2017 to US$14,877 million in 2021. This steady increase suggests sustained profitability or equity infusions, contributing to strengthening the company's capital base.

Debt to Equity Ratio

The debt to equity ratio rose from 0.72 in 2017 to a high of 1.07 in 2020, reflecting a period where debt growth outpaced equity growth, indicating increased financial leverage. However, in 2021, this ratio declined to 0.84, showing a deleveraging effect consistent with the observed reduction in total debt, while equity continued to rise. This points to an improvement in the company’s balance between debt and equity financing after a peak in leverage.

Total debt (including operating lease liability)

The total debt increased consistently from 2017 to 2020, rising from $7,222 million to a peak of $14,425 million. However, in 2021, there was a notable decrease to $12,901 million, indicating a reduction in leverage or repayment activity during that year.

Total shareholders’ equity

Shareholders’ equity showed a steady upward trend over the entire period. It increased year over year, starting at $9,966 million in 2017 and reaching $14,877 million by the end of 2021. This growth suggests continued retention of earnings or capital infusion, contributing positively to the company’s net worth.

Debt to equity ratio (including operating lease liability)

The debt to equity ratio rose from 0.72 in 2017 to a high of 1.1 in 2020, reflecting an increasing reliance on debt financing relative to equity. In 2021, this ratio declined to 0.87, indicating a shift towards a more balanced capital structure with reduced leverage compared to the prior year’s peak.

The financial data for Stryker Corp. over the five-year period reveals several notable trends regarding its capital structure and indebtedness.

Total Debt

The total debt of the company increased consistently from 2017 to 2020, starting at US$7,222 million in 2017 and reaching a peak of US$13,991 million in 2020. However, a decline is observed in 2021, where total debt decreased to US$12,479 million. The upward trend until 2020 suggests an increasing reliance on debt financing, while the reduction in 2021 indicates some deleveraging or repayment of debt.

Total Capital

Total capital also exhibited continuous growth throughout the period, rising from US$17,188 million in 2017 to US$27,356 million in 2021. This represents a steady expansion of the company’s overall capital base, albeit with a slower growth rate after 2020 compared to previous years.

Debt to Capital Ratio

The debt to capital ratio shows an increasing trend from 0.42 in 2017 to 0.52 in 2020, reflecting a higher proportion of capital structure financed by debt. In 2021, the ratio decreased back to 0.46, aligning with the reduction in total debt. This suggests that while the company increased its leverage progressively for several years, it took steps in 2021 to bring leverage down closer to previous levels.

Overall, the data indicates a period of increasing financial leverage until 2020, followed by a modest deleveraging in 2021. The growth in total capital, alongside rising debt levels for much of the timeframe, suggests strategic financing decisions possibly aimed at supporting expansion or investment activities. The slight reduction in both debt and the debt to capital ratio in the latest year reflects a cautious approach to balance sheet management.

Total Debt (Including Operating Lease Liability)

The total debt showed a consistent increase from 2017 to 2020, rising from $7,222 million to $14,425 million. However, in 2021, there was a decrease in total debt to $12,901 million, indicating a reduction of approximately 10.5% from the previous year.

Total Capital (Including Operating Lease Liability)

Total capital exhibited a steady upward trend over the entire period. It increased from $17,188 million in 2017 to $27,778 million in 2021. The most significant year-over-year increase occurred between 2019 and 2020, when total capital rose by approximately $3.2 billion.

Debt to Capital Ratio (Including Operating Lease Liability)

The debt to capital ratio increased from 0.42 in 2017 to a peak of 0.52 in 2020, signaling a growing reliance on debt financing relative to total capital during this period. In 2021, the ratio declined to 0.46, reflecting a modest reduction in leverage relative to capital, largely consistent with the observed decrease in total debt and slight increase in total capital.

Summary of Trends

Overall, the financial data indicate that leverage intensified through 2020, with both total debt and debt to capital ratio increasing. Despite the continuing growth in total capital, the rising debt levels led to higher leverage until 2020. The subsequent reduction in total debt and the concomitant decrease in the debt to capital ratio in 2021 suggest a strategic move toward deleveraging or managing debt levels. The steady expansion of total capital across all years demonstrates ongoing growth or investment activities.

Total Debt

The total debt exhibited an overall increasing trend from 2017 to 2020, rising from 7,222 million US dollars to a peak of 13,991 million US dollars. However, in 2021, there was a decline, with total debt decreasing to 12,479 million US dollars. This suggests that after a period of increasing leverage, the entity began reducing its debt level in the most recent year observed.

Total Assets

Total assets consistently increased throughout the period from 2017 to 2021. Starting at 22,197 million US dollars in 2017, assets grew each year, reaching 34,631 million US dollars in 2021. This steady growth in asset base indicates ongoing investments or acquisitions contributing to asset expansion over the five-year period.

Debt to Assets Ratio

The debt to assets ratio showed a rising trend from 0.33 in 2017 to a high of 0.41 in 2020, reflecting an increasing proportion of debt financing relative to total assets. In 2021, the ratio decreased to 0.36, consistent with the lowered total debt figure, indicating a recent move toward reducing financial leverage while still maintaining a higher ratio relative to the beginning of the period.

Total Debt (including operating lease liability)

The total debt showed a consistent upward trend from 2017 to 2020, increasing from 7,222 million USD to 14,425 million USD. This represents a doubling of debt within this period. However, in 2021, there was a decrease in debt to 12,901 million USD, suggesting a reduction in leverage or debt repayment during that year.

Total Assets

Total assets exhibited steady growth over the entire period, rising annually from 22,197 million USD in 2017 to 34,631 million USD in 2021. The asset base expanded by over 55% during these years, indicating ongoing investments and asset accumulation.

Debt to Assets Ratio (including operating lease liability)

The debt to assets ratio increased gradually from 0.33 in 2017 to a peak of 0.42 in 2020, suggesting a rising proportion of debt relative to the company's assets. Following this peak, the ratio declined to 0.37 in 2021, reflecting the noted reduction in total debt or growth in assets outpacing debt increases. The overall trend indicates increased leverage until 2020, followed by a partial deleveraging in the final year.

Summary

Over the analyzed period, the company expanded its asset base significantly while initially increasing its leverage by taking on more debt. The leverage reached its highest point in 2020 before a notable reduction in debt levels in 2021 led to a decreased debt to assets ratio. These dynamics suggest strategic adjustments in the company's balance sheet management towards the end of the period, potentially to manage financial risk or optimize capital structure.

The financial data indicates several key trends over the five-year period ending December 31, 2021. Total assets have shown consistent growth each year, increasing from US$22,197 million in 2017 to US$34,631 million in 2021. This represents a substantial expansion in the company's asset base, reflecting ongoing investment and possibly acquisitions or asset accumulation.

Shareholders' equity has likewise increased steadily, rising from US$9,966 million in 2017 to US$14,877 million in 2021. This growth in equity alongside asset growth suggests the company has been able to increase its net worth, potentially through retained earnings or equity financing activities.

The financial leverage ratio shows some variation but remains relatively stable across the period. Beginning at 2.23 in 2017, the ratio increased gradually to a peak of 2.62 in 2020, before declining to 2.33 in 2021. This fluctuation indicates the company’s use of debt relative to equity has varied but stayed within a moderate range. The peak in 2020 could reflect increased borrowing, possibly in response to market conditions or strategic initiatives during that year.

Total Assets

Consistent year-over-year growth, expanding from 22,197 million USD in 2017 to 34,631 million USD in 2021.

Shareholders’ Equity

Continued upward trajectory from 9,966 million USD in 2017 to 14,877 million USD in 2021, indicating accumulation of retained earnings or capital infusion.

Financial Leverage

Ratio exhibits moderate variability, rising from 2.23 to 2.62 between 2017 and 2020, then decreasing to 2.33 in 2021, showing changes in debt relative to equity.

Earnings Before Interest and Tax (EBIT)

The EBIT exhibited a general upward trend from 2017 to 2019, increasing from 2310 million USD in 2017 to 2849 million USD in 2019. However, a notable decline occurred in 2020, dropping to 2269 million USD, likely reflecting an adverse impact during that year. The EBIT partially recovered in 2021, rising again to 2618 million USD, though it remained below the peak achieved in 2019.

Interest Expense

Interest expense steadily increased over the entire period, starting at 247 million USD in 2017 and rising each year to reach 337 million USD by 2021. This consistent increase suggests growing debt obligations or rising borrowing costs over the analyzed years.

Interest Coverage Ratio

The interest coverage ratio showed strong performance from 2017 through 2019, maintaining values close to 9.35 to 9.93, reflecting a comfortable ability to cover interest expenses from operating earnings. However, there was a significant decline in 2020 to 7.2, coinciding with the dip in EBIT and increased interest expenses, indicating reduced margin for covering interest costs. A slight improvement occurred in 2021, with the ratio rising to 7.77, yet still below the earlier high levels.

Overall Insights

The period reveals a growth phase up to 2019, followed by a setback in 2020 characterized by reduced EBIT and increased financial burdens. Despite partial recovery in 2021, financial leverage appears to have increased gradually, as shown by rising interest expense and diminished, although recovering, interest coverage ratio. The company’s ability to cover interest charges remains adequate but has weakened compared to its pre-2020 performance.

Earnings before fixed charges and tax

The earnings before fixed charges and tax showed an overall upward trend from 2017 to 2021, starting at 2,435 million US dollars in 2017 and peaking at 2,982 million US dollars in 2019. However, a decline is observed in 2020, where the figure decreased to 2,399 million US dollars, followed by a recovery to 2,751 million US dollars in 2021. This pattern suggests a strong financial performance with some volatility likely influenced by external factors in 2020.

Fixed charges

Fixed charges consistently increased over the five-year period, rising steadily from 372 million US dollars in 2017 to 470 million US dollars in 2021. The ongoing increase in fixed charges may indicate higher interest expenses or lease obligations, which could impact profitability if earnings do not increase proportionally.

Fixed charge coverage ratio

The fixed charge coverage ratio demonstrated a generally favorable position above 5.0 in all years, reflecting the company's ability to meet its fixed financial obligations. The ratio increased from 6.55 in 2017 to 7.1 in 2019, signaling improved capacity to cover fixed charges. However, there was a notable decline in 2020 to 5.39, corresponding with the dip in earnings before fixed charges and tax. In 2021, the ratio partially recovered to 5.85, indicating stabilization but still lower than the peak level in 2019.

Overall analysis

The financial data reveal positive growth in earnings before fixed charges and tax up to 2019, followed by a sharp downturn in 2020 and a partial rebound in 2021. Fixed charges have steadily increased throughout the period, placing additional pressure on the company’s earnings. Despite the dip in the fixed charge coverage ratio in 2020, the ratio remains above 5.0, which generally indicates a comfortable margin for covering fixed financial obligations. The trends suggest that while the company faced challenges likely due to external pressures in 2020, it maintained a solid capacity to meet fixed charges and demonstrated resilience with a recovery indicated in 2021.