Waste Management Inc. (NYSE:WM)

Debt Ratios

The debt to equity ratio shows an increasing trend overall, rising from 1.58 in 2017 to 1.88 in 2021. Notably, the sharpest increase occurred between 2018 and 2019, from 1.6 to 1.91, followed by slight fluctuations in the subsequent years with a minor decrease in 2020 and a modest increase in 2021. Including operating lease liabilities, this ratio follows a similar pattern but with marginally higher values each year, indicating that lease obligations contribute slightly to total liabilities.

The debt to capital ratio also increased from 0.61 in 2017 to 0.66 in 2019 and then stabilized around 0.65-0.66 through 2021. The inclusion of operating lease liabilities again leads to a slight increase in the ratio, confirming the impact of lease obligations on capital structure.

The debt to assets ratio rises from 0.43 in 2017 to a peak of 0.49 in 2019, followed by a gradual decline to 0.46 by 2021. Adjusted figures including operating leases remain consistently higher, peaking at 0.5 in 2019 and reducing slightly to 0.48 in 2021. This suggests a modest deleveraging of asset financing post-2019.

Financial Leverage

Financial leverage has increased steadily from 3.63 in 2017 to 4.08 in 2021. This rise reflects an increased use of debt relative to shareholders’ equity, suggesting that the company has been progressively relying more on borrowed funds to finance its operations or growth over the period.

Interest and Fixed Charge Coverage

Interest coverage ratios exhibit a slight decline from 6.95 in 2017 to a low of 5.14 in 2020, followed by a recovery to 7.26 in 2021. This decline and subsequent rebound indicate some variability in the company’s ability to meet interest obligations from operating earnings, with 2021 showing improved financial health in this respect.

Fixed charge coverage mirrors the interest coverage trend, decreasing from 5.36 in 2017 to 4.17 in 2020, then rising again to 5.43 in 2021. This pattern likewise reflects fluctuating capability to cover fixed financial obligations, with a notable improvement in the most recent period.

Total Debt

Over the five-year period, total debt exhibited a generally increasing trend, rising from $9,491 million in 2017 to a peak of $13,810 million in 2020. However, in 2021, total debt slightly decreased to $13,405 million, indicating a minor reduction following continuous growth in previous years. This trend suggests a growing reliance on debt financing up to 2020, with a modest attempt at deleveraging or stabilization in the most recent year observed.

Total Stockholders’ Equity

Stockholders’ equity showed a consistent upward trajectory from $6,019 million in 2017 to $7,452 million in 2020, reflecting accumulated earnings and possibly additional equity injections during this timeframe. In 2021, equity decreased slightly to $7,124 million, indicating a reduction in net assets attributable to shareholders toward the end of the period. Despite the slight decrease in 2021, equity levels were still notably higher compared to the beginning of the period.

Debt to Equity Ratio

The debt to equity ratio followed an overall increasing pattern, starting at 1.58 in 2017 and peaking at 1.91 in 2019. The ratio then decreased slightly to 1.85 in 2020 before rising marginally again to 1.88 in 2021. This ratio indicates a tendency towards increased financial leverage, suggesting that debt has grown at a faster pace than equity over the period. The fluctuations in the last two years denote some variability in the company’s capital structure, balancing between debt and equity financing.

Total debt (including operating lease liability)

The total debt increased from $9,491 million in 2017 to a peak of $14,326 million in 2020, reflecting a substantial rise over the period. However, in 2021, the total debt slightly decreased to $13,928 million, indicating a marginal reduction following the peak year.

Total Waste Management, Inc. stockholders’ equity

Stockholders' equity showed a generally upward trend from $6,019 million in 2017 to $7,452 million in 2020, demonstrating consistent growth in equity capital. In 2021, equity declined slightly to $7,124 million, which suggests a minor reduction compared to the previous year.

Debt to equity (including operating lease liability)

The debt-to-equity ratio increased from 1.58 in 2017 to 1.97 in 2019, signaling an increasing leverage position. While it decreased slightly to 1.92 in 2020, it rose again to 1.96 in 2021, maintaining a high leverage level throughout the latter years. This indicates the company consistently relied on debt financing relative to equity over the analyzed period.

Total debt

The total debt exhibited an overall increasing trend from 2017 to 2020, rising from $9,491 million to $13,810 million. This represents a peak in debt during 2020, followed by a slight decrease to $13,405 million in 2021, indicating a modest reduction in debt levels after a period of expansion.

Total capital

Total capital followed a similar pattern to total debt, increasing consistently from $15,510 million in 2017 to $21,262 million in 2020. In 2021, a decline to $20,529 million was observed, marking the first drop in this period, mirroring the decrease seen in total debt.

Debt to capital ratio

The debt to capital ratio remained relatively stable over the five-year period, fluctuating within a narrow band from 0.61 to 0.66. The ratio increased steadily from 0.61 in 2017 to a peak of 0.66 in 2019, then slightly decreased and stabilized at 0.65 through 2020 and 2021. This consistency suggests that the company's leverage ratio was maintained despite changes in absolute debt and capital amounts.

Summary

Overall, the company demonstrated growth in both total debt and total capital up to 2020, followed by slight declines in 2021. The stable debt to capital ratio throughout the period suggests a balanced approach to financing, with proportional changes in debt and capital levels. The peak debt and capital in 2020, followed by decreases in 2021, could reflect strategic shifts or responses to market conditions during that time.

The financial data indicates noteworthy developments in the company's leverage and capital structure over the five-year period.

Total Debt (including operating lease liability)

The total debt increased steadily from US$ 9,491 million at the end of 2017 to US$ 10,026 million in 2018, followed by a more pronounced rise to US$ 13,943 million in 2019. This upward trend continued into 2020, reaching US$ 14,326 million, before a slight reduction to US$ 13,928 million by the end of 2021. Overall, the total debt expanded by approximately 47% from 2017 to 2021.

Total Capital (including operating lease liability)

Total capital mirrored the debt trend, increasing from US$ 15,510 million in 2017 to US$ 16,301 million in 2018 and then rising significantly to US$ 21,011 million in 2019. By 2020, total capital reached US$ 21,778 million before slightly declining to US$ 21,052 million in 2021. The total capital grew by roughly 36% over the five-year span.

Debt to Capital Ratio (including operating lease liability)

The debt to capital ratio remained relatively stable but showed a gradual increase over time. Starting at 0.61 in 2017, it rose slightly to 0.62 in 2018, then increased to 0.66 in 2019 and remained at this level through 2020 and 2021. This indicates a modest increase in leverage, with debt constituting about two-thirds of the total capital toward the end of the period.

In summary, both total debt and total capital increased significantly between 2017 and 2021, with debt rising at a slightly faster pace than capital, leading to a slight increase in the leverage ratio. The consistency of the debt to capital ratio at around 0.66 during the last three years suggests the company maintained a stable capital structure despite fluctuations in absolute debt and capital amounts. The slight decline in total debt and capital in 2021 may indicate cautious financial management or adjustments in financing strategy.

Total Debt

Total debt exhibited an overall increasing trend from 2017 to 2020, rising from 9,491 million US dollars to 13,810 million US dollars.

In 2021, there was a slight reduction in total debt to 13,405 million US dollars, indicating a modest decrease after several years of growth.

Total Assets

Total assets demonstrated steady growth over the five-year period, increasing from 21,829 million US dollars in 2017 to a peak of 29,345 million US dollars in 2020.

In 2021, total assets slightly declined to 29,097 million US dollars, suggesting a minor contraction after consistent asset accumulation.

Debt to Assets Ratio

The debt to assets ratio gradually increased from 0.43 in 2017 to 0.49 in 2019, reflecting a rising proportion of debt relative to assets.

Subsequently, this ratio decreased to 0.47 in 2020 and further to 0.46 in 2021, indicating an improvement in the company's leverage position or an increase in asset base relative to debt.

Total Debt (including operating lease liability)

The total debt exhibited an overall upward trend from 2017 to 2019, increasing from 9,491 million US dollars to 13,943 million US dollars. It peaked in 2020 at 14,326 million US dollars before slightly declining to 13,928 million US dollars in 2021.

Total Assets

Total assets followed a consistent growth pattern over the analyzed period. Starting at 21,829 million US dollars in 2017, total assets increased steadily each year, reaching a high of 29,345 million US dollars in 2020, with a minor decline to 29,097 million US dollars in 2021.

Debt to Assets Ratio (including operating lease liability)

The debt to assets ratio showed a gradual increase from 0.43 in 2017 to 0.50 in 2019. Thereafter, it slightly decreased to 0.49 in 2020 and further declined to 0.48 in 2021, indicating a marginal reduction in leverage relative to total assets despite the high level of total debt.

Total Assets

Total assets increased steadily from 21,829 million US dollars at the end of 2017 to 29,345 million US dollars by the end of 2020, indicating continuous growth in the company’s asset base over this period. However, there was a slight decrease in total assets to 29,097 million US dollars by the end of 2021, suggesting a minor contraction or reallocation of assets after several years of expansion.

Total Stockholders’ Equity

Stockholders' equity followed an upward trajectory from 6,019 million US dollars in 2017 to a peak of 7,452 million US dollars in 2020. This represents a growth in the company’s net worth and retained earnings over these years. Notably, equity declined to 7,124 million US dollars in 2021, implying either shareholder distributions, losses, or other equity reductions during the final year under review.

Financial Leverage

The financial leverage ratio showed a gradual increase across the period, moving from 3.63 in 2017 to 4.08 in 2021. This trend indicates that the company has increasingly financed its assets through debt relative to equity, suggesting a rising reliance on external financing sources. The steady increase in leverage may point to a strategic shift or greater borrowing to fund growth or operations, despite the slight dip in total assets and equity at the end of the period.

Earnings before Interest and Tax (EBIT)

The EBIT values demonstrated fluctuation over the five-year period. Starting at 2559 million US dollars in 2017, EBIT increased in 2018 to 2760 million, followed by a decline in 2019 to 2569 million. This downward trend continued in 2020, reaching the lowest point during the period at 2350 million. However, in 2021, there was a notable recovery, with EBIT rising to 2724 million. Overall, the EBIT showed volatility but ended higher than the initial value in 2017.

Interest Expense

Interest expense showed an increasing trend from 2017 to 2019, rising from 368 million to 464 million US dollars. In 2020, interest expense slightly decreased to 457 million and dropped further to 375 million in 2021. The slight decrease in interest expense in the last two years contrasts with the earlier increasing trend, indicating possible changes in debt levels, refinancing, or interest rates.

Interest Coverage Ratio

The interest coverage ratio exhibited variability throughout the period, starting at 6.95 in 2017 and slightly increasing to 7.19 in 2018. It then declined significantly over the next two years to 5.54 in 2019 and further to 5.14 in 2020, indicating a decreasing ability to cover interest expenses through operating earnings. However, in 2021, the coverage ratio improved markedly to 7.26, surpassing the levels observed at the beginning of the period. This improvement aligns with the recovery in EBIT and the reduction in interest expense seen that year.

Earnings before fixed charges and tax

The earnings before fixed charges and tax experienced some fluctuation over the five-year period. Starting at 2,693 million US dollars in 2017, the earnings increased to a peak of 2,889 million US dollars in 2018. Subsequently, there was a decline to 2,701 million in 2019 and a further dip to 2,490 million in 2020. In 2021, the earnings recovered to 2,879 million, nearly reaching the 2018 peak level.

Fixed charges

Fixed charges showed a gradual increase from 502 million US dollars in 2017, rising steadily to reach 597 million in 2020. In 2021, fixed charges decreased to 530 million, indicating a reduction in fixed financial obligations compared to the previous year.

Fixed charge coverage ratio

The fixed charge coverage ratio started at 5.36 in 2017, reaching its highest point of 5.63 in 2018. It then declined notably to 4.53 in 2019 and further to 4.17 in 2020, reflecting a decreasing ability to cover fixed charges during this period. In 2021, the ratio improved significantly to 5.43, suggesting a stronger position to meet fixed financial commitments relative to prior years.

Overall trends and insights

The data reveals that the company's earnings before fixed charges and tax were generally robust with some year-to-year variability, particularly showing a dip in 2019 and 2020 that was partially reversed in 2021. Fixed charges show a steady increase until 2020 with a reduction in 2021, possibly reflecting changes in debt or lease obligations. The fixed charge coverage ratio mirrors these trends, indicating a temporary weakening in coverage between 2019 and 2020, followed by recovery in 2021. This suggests that despite some volatility, the company maintained an overall strong ability to meet its fixed charges across the period analyzed.