Waste Management Inc. (NYSE:WM)

Debt to Equity Ratio

The debt to equity ratio exhibited moderate fluctuations over the analyzed periods. Initially, it started at 1.64 in the first quarter of 2017 and slightly increased, peaking near 1.97 during the mid to late 2019 quarters. Following this peak, a notable decline occurred, reaching a low of 1.46 in the third quarter of 2020. Subsequently, the ratio resumed an upward trend, stabilizing around 1.8 to 1.88 towards the end of 2021. This pattern suggests periods of increased leverage followed by deleveraging, then a return to higher leverage levels.

Debt to Capital Ratio

The debt to capital ratio exhibited relatively modest variation during the period under review. Values remained mostly within the 0.59 to 0.67 range. The ratio hovered around 0.62 from 2017 through early 2019, then marginally increased to approximately 0.66-0.67 during 2019 and early 2020. In the third quarter of 2020, the ratio showed a dip to 0.59 before returning to levels around 0.64-0.65 throughout 2021. Overall, debt to capital maintained a stable leverage level with minor short-term fluctuations.

Debt to Assets Ratio

The debt to assets ratio followed a pattern similar to other leverage metrics, reflecting modest variability. Beginning near 0.44 in early 2017, it slightly increased to around 0.49 in late 2019 and early 2020, indicating a higher proportion of assets financed by debt during that period. A decline followed in mid-2020 to 0.42, then the ratio climbed back to values between 0.45 and 0.47 through the end of 2021. These changes align with adjustments to financing structure and asset base over the periods.

Financial Leverage Ratio

The financial leverage ratio showed more pronounced fluctuations relative to the other ratios. Starting at 3.74 in the first quarter of 2017, it increased steadily to a peak of approximately 4.03 in early 2020. Thereafter, a decline to 3.46 was recorded in the third quarter of 2020, followed by a recovery to levels around 4.0 to 4.08 by the end of 2021. This indicates that the company's reliance on debt and equity financing to support its assets has varied, with a somewhat cyclical movement tied to broader capital structure adjustments.

Overall Trends and Insights

The leverage ratios collectively illustrate cyclical variations with peaks occurring generally around 2019 and early 2020, followed by a temporary easing of financial leverage during mid-2020. This easing period might reflect strategic deleveraging or asset adjustments, potentially influenced by external economic factors. By late 2020 and into 2021, there is a clear trend toward re-leveraging, as seen in the partial rebound of all ratios. Despite these fluctuations, the ratios remain within a relatively narrow range over time, suggesting controlled and moderate leverage management throughout the analyzed period.

The financial data demonstrates notable fluctuations in key balance sheet components over the examined periods, highlighting evolving leverage and equity trends.

Total Debt

The total debt level shows a generally increasing pattern from March 2017 through December 2019, rising steadily from approximately $9,042 million to $13,498 million. There is a notable peak in the second half of 2019, followed by a slight decline in the first half of 2020. Subsequently, debt levels fluctuate with a decrease evident in the third quarter of 2020, then an increase again by the end of 2020 into 2021, fluctuating around $13,000 to $13,800 million. These movements suggest active management of debt, possibly driven by capital expenditures, refinancing, or operational needs.

Total Stockholders’ Equity

Equity exhibits a more moderate upward trend over the same period, starting at around $5,517 million and increasing to a peak above $7,400 million in late 2020 and early 2021. Despite some minor fluctuations, equity remains relatively stable compared to debt, with slight declines visible in certain quarters such as the first quarter of 2020 and early 2021, possibly reflecting the impact of market or operational challenges.

Debt to Equity Ratio

The debt to equity ratio displays variability consistent with the movements in debt and equity. Starting near 1.64 in early 2017, the ratio generally increases over time, reaching up to about 1.99 in early 2020, indicating a rising leverage position. This peak suggests an increasing reliance on debt relative to equity during this period. Following this peak, the ratio declines significantly to around 1.46 by the third quarter of 2020, reflecting either increased equity, reduced debt, or a combination of both. However, the ratio then rises again through 2021, stabilizing in the range of 1.8 to 1.88, indicating persistent leverage but less extreme compared to the early 2020 peak.

Overall, the data points to a financial structure that is characterized by prudent equity growth alongside a deliberate, albeit fluctuating, use of debt financing. The variations in the debt to equity ratio reveal periods of increased leverage and subsequent deleveraging, likely in response to operational or market conditions. Such dynamics underscore an active financial strategy aimed at balancing growth with manageable risk levels.

The analysis of the financial data reveals trends in the company's debt levels and capital structure over the period from the first quarter of 2017 through the last quarter of 2021. The key focus areas are total debt, total capital, and the resulting debt to capital ratio.

Total Debt

Total debt exhibited a generally upward trajectory over the analyzed period, starting at approximately $9.04 billion in March 2017 and rising to a peak of around $13.8 billion by December 2020. Subsequent fluctuations were observed, with a slight decline to about $10.4 billion by March 2021 before increasing again towards the end of 2021, reaching approximately $13.4 billion in the final quarter. The trend reflects periods of debt accumulation interspersed with some repayment or reorganization.

Total Capital

Total capital increased consistently from about $14.56 billion in March 2017 to a peak near $21.26 billion in December 2020. Following this peak, capital levels showed a modest decline but remained relatively stable, ending the period at approximately $20.5 billion. This growth trend in total capital suggests ongoing investment or asset growth alongside capital raises or retained earnings accumulation during most of the timeframe.

Debt to Capital Ratio

The debt to capital ratio remained relatively stable within a narrow range throughout the reporting quarters. Initially close to 0.62 in early 2017, it peaked slightly around 0.67 in March 2020 before declining to about 0.59 in March 2021. However, it resumed an upward trend toward the end of 2021, settling near 0.65. This pattern indicates that although total debt and total capital both increased, debt increased at a moderately faster pace during some periods, leading to modest fluctuations in leverage but without drastic changes in the company's capital structure.

Overall, the company maintained a consistent capital structure with a leverage ratio generally around two-thirds debt to total capital. The incremental increases in debt and capital suggest balanced growth, with leverage managed within a stable range. Occasional decreases in debt, particularly in early 2021, imply active management of debt levels, while sustained capital growth points toward overall financial expansion during the observed period.

Total Debt

The total debt exhibits a general upward trend from March 2017 through December 2019, rising from approximately $9,042 million to a peak of around $13,498 million. A noticeable decline occurs in the first three quarters of 2020, with debt reducing to about $10,422 million by September 2020. This is followed by volatility and a subsequent increase reaching around $13,810 million by December 2020. Post-2020, debt levels fluctuate but generally stabilize, ending near $13,405 million in December 2021.

Total Assets

Total assets demonstrate steady growth from about $20,650 million in March 2017 to nearly $27,743 million by December 2019. Thereafter, a slight decrease is observed during most of 2020, dipping to roughly $24,772 million in March 2021. From mid-2020 onward, assets increase again, peaking around $29,345 million in March 2021, and remain relatively stable through December 2021 at approximately $29,097 million.

Debt to Assets Ratio

The debt to assets ratio fluctuates modestly between 0.42 and 0.49 over the entire period. Initially maintaining around 0.43 to 0.45 between 2017 and early 2018, the ratio increases to about 0.49 by late 2019 and early 2020, correlating with heightened debt levels relative to assets. In 2020, the ratio decreases to 0.42, reflecting the reduction in debt and asset adjustments. Subsequently, it rises again and remains within a narrow range between 0.45 and 0.47 through the end of 2021, indicating a relative balance between debt and assets was restored.

Overall Analysis

The data depict a company managing increased debt levels alongside asset growth from 2017 to 2019, resulting in a higher leverage ratio. The year 2020 shows a corrective phase with debt reduction and asset adjustments, leading to a lower leverage ratio. Following this, increased borrowing and asset accumulation occur, with leverage ratios stabilizing at moderately high levels. This pattern suggests responsiveness to changing financial and possibly market conditions, with efforts to maintain a sustainable debt-to-asset balance over time.

The data exhibits several noteworthy trends regarding total assets, stockholders’ equity, and financial leverage over the analyzed periods.

Total Assets

Total assets show a generally increasing trend from March 2017 through December 2021, starting at approximately $20,650 million and rising to about $29,097 million. This growth, however, is not entirely steady. Notable fluctuations appear during 2019 and 2020; assets peak toward the end of 2019 at around $27,743 million, then decrease during 2020, reaching roughly $24,772 million by the third quarter. A rebound occurs in the last quarter of 2020 and continues into 2021, with total assets returning to approximately $29,097 million by the end of the year.

Stockholders’ Equity

Stockholders’ equity trends upward overall, starting near $5,517 million in early 2017 and rising to above $7,124 million by the end of 2021. The growth is moderate and relatively stable, with minor declines visible during the first quarters of 2020. The peak equity value appears at the end of 2020, approximately $7,452 million, after which a slight decrease is observed during 2021. The fluctuations in equity are less pronounced compared to total assets.

Financial Leverage

Financial leverage, defined as a ratio, fluctuates within a range of approximately 3.46 to 4.08 throughout the time frame. Initially, the ratio increases from about 3.74 in early 2017 to near 3.97 by the third quarter of that year, followed by a decline to roughly 3.61 by late 2018. Starting in 2019, leverage ratios rise and peak at around 4.03 by early 2020, then fall to a low of approximately 3.46 in the third quarter of 2020. From that point forward, a general upward trend resumes, culminating in the highest value of 4.08 at the end of 2021. These fluctuations suggest varying degrees of debt usage relative to equity over time, with a notable reduction in leverage during mid-2020 before increasing leverage in 2021.

In summary, the overall asset base expanded over the analyzed quarters with some temporary contractions. Stockholders’ equity increased steadily but exhibited some volatility during 2020. Financial leverage shows cyclical movements, highlighting periods of higher reliance on debt financing especially toward late 2019 and at the end of 2021, with a notable deleveraging phase in mid-2020. The data indicates a mixed but generally positive growth profile with prudent adjustments in capital structure during periods of economic or business fluctuations.