Analysis of Solvency Ratios
Solvency ratios also known as long-term debt ratios measure a company ability to meet long-term obligations.
Solvency Ratios (Summary)
Alphabet Inc., solvency ratios
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
- Debt Ratios
- The debt to equity ratio shows a gradual decline from 0.07 in 2020 to 0.05 in 2024, indicating a reduction in reliance on debt relative to shareholders' equity. When including operating lease liabilities, the ratio similarly decreases from 0.13 to 0.09 over the same period. This suggests a consistent deleveraging trend even after accounting for lease-related obligations.
- The debt to capital ratio remains steady at 0.06 from 2020 through 2022, followed by a slight decrease to 0.05 in 2023 and 2024. Including operating lease liabilities, the debt to capital ratio exhibits a minor decrease from 0.11 in 2020 to 0.09 in 2024, reinforcing the observation of a cautious approach toward capital structure management with reduced debt components.
- Debt to assets ratio maintains a stable range between 0.05 and 0.04 during the period under review, reflecting a consistently conservative capital structure with minimal debt burden on total assets. Including operating lease liabilities, the ratio declines modestly from 0.09 to 0.07, indicating a slight improvement in asset financing mix when lease obligations are considered.
- Financial Leverage
- The financial leverage ratio remains relatively stable, declining slightly from 1.44 in 2020 to 1.39 in 2024. This indicates a marginal decrease in the use of debt financing relative to equity, consistent with the trends observed in debt ratios, supporting the view of a stable and sound financial position.
- Interest and Fixed Charge Coverage
- Interest coverage experiences significant fluctuations, dropping from a very high level of 357.16 in 2020 to 200.8 in 2022, then recovering to 448.07 by 2024. These values suggest that interest expenses are easily covered by operating income throughout the period, with improved coverage in the most recent year highlighting enhanced profitability or lower interest obligations.
- Fixed charge coverage shows more variability, starting at 21.02 in 2020, rising sharply to 30.8 in 2021, then declining and rising again to 34.54 by 2024. This pattern indicates generally sufficient capacity to meet fixed financial commitments, with some short-term volatility but an overall positive trajectory toward improved fixed charge coverage.
- Summary
- Overall, the data reflects a stable and conservative financial profile characterized by low leverage, strong interest coverage, and modest use of debt financing. The gradual reduction in debt ratios combined with consistently high coverage ratios suggests prudent financial management and a solid ability to service debt and fixed obligations. Improvements toward the latter years of the period point to enhanced operational efficiency and increased financial strength.
Debt Ratios
Coverage Ratios
Debt to Equity
Alphabet Inc., debt to equity calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current portion of finance lease liabilities | 235) | —) | —) | —) | —) | |
| Short-term debt | 3,299) | 1,363) | 298) | 113) | 1,100) | |
| Long-term debt, excluding current portion | 10,883) | 13,253) | 14,701) | 14,817) | 13,932) | |
| Long-term portion of finance lease liabilities | 1,442) | —) | —) | —) | —) | |
| Total debt | 15,859) | 14,616) | 14,999) | 14,930) | 15,032) | |
| Stockholders’ equity | 325,084) | 283,379) | 256,144) | 251,635) | 222,544) | |
| Solvency Ratio | ||||||
| Debt to equity1 | 0.05 | 0.05 | 0.06 | 0.06 | 0.07 | |
| Benchmarks | ||||||
| Debt to Equity, Competitors2 | ||||||
| Comcast Corp. | 1.16 | 1.17 | 1.17 | 0.99 | 1.15 | |
| Meta Platforms Inc. | 0.16 | 0.12 | 0.08 | 0.00 | 0.00 | |
| Netflix Inc. | 0.63 | 0.71 | 0.69 | 0.97 | 1.47 | |
| Take-Two Interactive Software Inc. | 0.54 | 0.34 | 0.00 | 0.00 | 0.00 | |
| Walt Disney Co. | 0.46 | 0.47 | 0.51 | 0.62 | 0.71 | |
| Debt to Equity, Sector | ||||||
| Media & Entertainment | 0.29 | 0.30 | 0.31 | 0.31 | 0.36 | |
| Debt to Equity, Industry | ||||||
| Communication Services | 0.56 | 0.62 | 0.65 | 0.65 | 0.67 | |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Debt to equity = Total debt ÷ Stockholders’ equity
= 15,859 ÷ 325,084 = 0.05
2 Click competitor name to see calculations.
- Total Debt
- The total debt exhibits relative stability over the five-year period, fluctuating between approximately 14.6 billion US dollars and 15.9 billion US dollars. After a slight decrease from 15.0 billion in 2020 to 14.6 billion in 2023, there is a noticeable increase to nearly 15.9 billion in 2024, representing the highest total debt value in the period analyzed.
- Stockholders’ Equity
- Stockholders’ equity shows a consistent and robust upward trend throughout the period. It increased from approximately 222.5 billion US dollars in 2020 to 325.1 billion US dollars in 2024. The most significant increments appear in the last two years, with equity rising by over 27 billion in 2023 and nearly 42 billion in 2024, indicating strong growth in the company’s net asset base.
- Debt to Equity Ratio
- The debt to equity ratio declines gradually from 0.07 in 2020 to 0.05 by 2023 and remains stable at 0.05 in 2024. This decreasing ratio suggests an improvement in financial leverage, with equity growing at a faster rate relative to debt. The stable low debt-to-equity ratio in the final years illustrates a conservative capital structure, emphasizing equity financing over debt.
Debt to Equity (including Operating Lease Liability)
Alphabet Inc., debt to equity (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current portion of finance lease liabilities | 235) | —) | —) | —) | —) | |
| Short-term debt | 3,299) | 1,363) | 298) | 113) | 1,100) | |
| Long-term debt, excluding current portion | 10,883) | 13,253) | 14,701) | 14,817) | 13,932) | |
| Long-term portion of finance lease liabilities | 1,442) | —) | —) | —) | —) | |
| Total debt | 15,859) | 14,616) | 14,999) | 14,930) | 15,032) | |
| Current portion of operating lease liabilities | 2,887) | 2,791) | 2,477) | 2,189) | 1,694) | |
| Long-term portion of operating lease liabilities | 11,691) | 12,460) | 12,501) | 11,389) | 11,146) | |
| Total debt (including operating lease liability) | 30,437) | 29,867) | 29,977) | 28,508) | 27,872) | |
| Stockholders’ equity | 325,084) | 283,379) | 256,144) | 251,635) | 222,544) | |
| Solvency Ratio | ||||||
| Debt to equity (including operating lease liability)1 | 0.09 | 0.11 | 0.12 | 0.11 | 0.13 | |
| Benchmarks | ||||||
| Debt to Equity (including Operating Lease Liability), Competitors2 | ||||||
| Comcast Corp. | 1.23 | 1.25 | 1.26 | 1.06 | 1.20 | |
| Meta Platforms Inc. | 0.27 | 0.25 | 0.22 | 0.12 | 0.09 | |
| Netflix Inc. | 0.73 | 0.82 | 0.81 | 1.14 | 1.67 | |
| Take-Two Interactive Software Inc. | 0.62 | 0.39 | 0.07 | 0.06 | 0.07 | |
| Walt Disney Co. | 0.49 | 0.51 | 0.55 | 0.66 | 0.75 | |
| Debt to Equity (including Operating Lease Liability), Sector | ||||||
| Media & Entertainment | 0.35 | 0.37 | 0.39 | 0.38 | 0.42 | |
| Debt to Equity (including Operating Lease Liability), Industry | ||||||
| Communication Services | 0.69 | 0.75 | 0.80 | 0.79 | 0.80 | |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Debt to equity (including operating lease liability) = Total debt (including operating lease liability) ÷ Stockholders’ equity
= 30,437 ÷ 325,084 = 0.09
2 Click competitor name to see calculations.
- Total debt (including operating lease liability)
- The total debt exhibits a gradual increasing trend over the five-year period. Beginning at $27,872 million at the end of 2020, it increased slightly to $28,508 million in 2021 and then to $29,977 million in 2022. A minor decrease is observed in 2023, with debt reducing to $29,867 million, followed by another increase to $30,437 million in 2024. Overall, the total debt remains relatively stable with moderate growth.
- Stockholders’ equity
- Stockholders’ equity shows a consistent and strong upward trajectory throughout the considered years. Starting at $222,544 million in 2020, equity increased significantly each year: reaching $251,635 million in 2021, $256,144 million in 2022, followed by a marked rise to $283,379 million in 2023, and culminating at $325,084 million in 2024. This suggests a solid accumulation of net assets and increased value for shareholders.
- Debt to equity (including operating lease liability)
- The debt to equity ratio exhibits a declining trend, indicating improving financial leverage. The ratio decreases from 0.13 in 2020 to 0.11 in 2021 and remains stable around 0.11-0.12 through 2022 and 2023, before dropping further to 0.09 in 2024. This decline reflects that the growth in stockholders’ equity outpaces the increase in total debt, resulting in a more conservative capital structure and potentially lower financial risk.
Debt to Capital
Alphabet Inc., debt to capital calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current portion of finance lease liabilities | 235) | —) | —) | —) | —) | |
| Short-term debt | 3,299) | 1,363) | 298) | 113) | 1,100) | |
| Long-term debt, excluding current portion | 10,883) | 13,253) | 14,701) | 14,817) | 13,932) | |
| Long-term portion of finance lease liabilities | 1,442) | —) | —) | —) | —) | |
| Total debt | 15,859) | 14,616) | 14,999) | 14,930) | 15,032) | |
| Stockholders’ equity | 325,084) | 283,379) | 256,144) | 251,635) | 222,544) | |
| Total capital | 340,943) | 297,995) | 271,143) | 266,565) | 237,576) | |
| Solvency Ratio | ||||||
| Debt to capital1 | 0.05 | 0.05 | 0.06 | 0.06 | 0.06 | |
| Benchmarks | ||||||
| Debt to Capital, Competitors2 | ||||||
| Comcast Corp. | 0.54 | 0.54 | 0.54 | 0.50 | 0.53 | |
| Meta Platforms Inc. | 0.14 | 0.11 | 0.08 | 0.00 | 0.00 | |
| Netflix Inc. | 0.39 | 0.41 | 0.41 | 0.49 | 0.60 | |
| Take-Two Interactive Software Inc. | 0.35 | 0.25 | 0.00 | 0.00 | 0.00 | |
| Walt Disney Co. | 0.31 | 0.32 | 0.34 | 0.38 | 0.41 | |
| Debt to Capital, Sector | ||||||
| Media & Entertainment | 0.22 | 0.23 | 0.24 | 0.24 | 0.27 | |
| Debt to Capital, Industry | ||||||
| Communication Services | 0.36 | 0.38 | 0.39 | 0.39 | 0.40 | |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Debt to capital = Total debt ÷ Total capital
= 15,859 ÷ 340,943 = 0.05
2 Click competitor name to see calculations.
The financial data presents key metrics related to debt and capital over a five-year period. The analysis reveals trends regarding the company's leverage and capital structure.
- Total Debt
- The total debt level remained relatively stable from 2020 to 2023, fluctuating slightly between approximately $14.6 billion and $15 billion. However, in 2024, there is a notable increase to about $15.9 billion, marking the highest debt amount in the five-year span.
- Total Capital
- Total capital shows a consistent upward trend across the entire period. Starting at approximately $237.6 billion in 2020, it increases each year to reach roughly $341 billion by 2024. This steady growth indicates an expansion in the company's capital base over time.
- Debt to Capital Ratio
- The debt to capital ratio remains stable at 0.06 from 2020 through 2022, before decreasing slightly to 0.05 in 2023 and maintaining that lower level in 2024. This decline, despite the rise in total debt in the final year, reflects the faster growth of total capital relative to debt.
Overall, the data illustrates that while the company’s total debt experienced minor fluctuations with an uptick in the final year, the total capital expanded steadily, resulting in a slight reduction in leverage as measured by the debt to capital ratio. This suggests an improving capital structure and potentially enhanced financial stability over the period analyzed.
Debt to Capital (including Operating Lease Liability)
Alphabet Inc., debt to capital (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current portion of finance lease liabilities | 235) | —) | —) | —) | —) | |
| Short-term debt | 3,299) | 1,363) | 298) | 113) | 1,100) | |
| Long-term debt, excluding current portion | 10,883) | 13,253) | 14,701) | 14,817) | 13,932) | |
| Long-term portion of finance lease liabilities | 1,442) | —) | —) | —) | —) | |
| Total debt | 15,859) | 14,616) | 14,999) | 14,930) | 15,032) | |
| Current portion of operating lease liabilities | 2,887) | 2,791) | 2,477) | 2,189) | 1,694) | |
| Long-term portion of operating lease liabilities | 11,691) | 12,460) | 12,501) | 11,389) | 11,146) | |
| Total debt (including operating lease liability) | 30,437) | 29,867) | 29,977) | 28,508) | 27,872) | |
| Stockholders’ equity | 325,084) | 283,379) | 256,144) | 251,635) | 222,544) | |
| Total capital (including operating lease liability) | 355,521) | 313,246) | 286,121) | 280,143) | 250,416) | |
| Solvency Ratio | ||||||
| Debt to capital (including operating lease liability)1 | 0.09 | 0.10 | 0.10 | 0.10 | 0.11 | |
| Benchmarks | ||||||
| Debt to Capital (including Operating Lease Liability), Competitors2 | ||||||
| Comcast Corp. | 0.55 | 0.56 | 0.56 | 0.52 | 0.55 | |
| Meta Platforms Inc. | 0.21 | 0.20 | 0.18 | 0.10 | 0.08 | |
| Netflix Inc. | 0.42 | 0.45 | 0.45 | 0.53 | 0.63 | |
| Take-Two Interactive Software Inc. | 0.38 | 0.28 | 0.06 | 0.05 | 0.07 | |
| Walt Disney Co. | 0.33 | 0.34 | 0.35 | 0.40 | 0.43 | |
| Debt to Capital (including Operating Lease Liability), Sector | ||||||
| Media & Entertainment | 0.26 | 0.27 | 0.28 | 0.28 | 0.30 | |
| Debt to Capital (including Operating Lease Liability), Industry | ||||||
| Communication Services | 0.41 | 0.43 | 0.44 | 0.44 | 0.44 | |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Debt to capital (including operating lease liability) = Total debt (including operating lease liability) ÷ Total capital (including operating lease liability)
= 30,437 ÷ 355,521 = 0.09
2 Click competitor name to see calculations.
- Total Debt (including operating lease liability)
- The total debt exhibits a gradual upward trend over the five-year period. Starting at $27,872 million at the end of 2020, the debt increased moderately each year, reaching $30,437 million by the end of 2024. The most notable increment occurred between 2023 and 2024, indicating a possible increase in financing or lease obligations during this period.
- Total Capital (including operating lease liability)
- Total capital shows a consistent and significant increase year over year. It rose from $250,416 million in 2020 to $355,521 million in 2024. The growth rate accelerated notably from 2022 onward, suggesting that the company expanded its capital base substantially, which might reflect reinvested earnings or new equity financing activities.
- Debt to Capital Ratio (including operating lease liability)
- The debt to capital ratio remains relatively stable and low throughout the period, oscillating slightly between 0.11 and 0.09. This indicates a conservative capital structure, where debt forms a small proportion of the total capital base. The slight decline to 0.09 by the end of 2024 suggests a marginal reduction in leverage, corresponding with the more rapid increase in total capital compared to debt levels.
Debt to Assets
Alphabet Inc., debt to assets calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current portion of finance lease liabilities | 235) | —) | —) | —) | —) | |
| Short-term debt | 3,299) | 1,363) | 298) | 113) | 1,100) | |
| Long-term debt, excluding current portion | 10,883) | 13,253) | 14,701) | 14,817) | 13,932) | |
| Long-term portion of finance lease liabilities | 1,442) | —) | —) | —) | —) | |
| Total debt | 15,859) | 14,616) | 14,999) | 14,930) | 15,032) | |
| Total assets | 450,256) | 402,392) | 365,264) | 359,268) | 319,616) | |
| Solvency Ratio | ||||||
| Debt to assets1 | 0.04 | 0.04 | 0.04 | 0.04 | 0.05 | |
| Benchmarks | ||||||
| Debt to Assets, Competitors2 | ||||||
| Comcast Corp. | 0.37 | 0.37 | 0.37 | 0.34 | 0.38 | |
| Meta Platforms Inc. | 0.11 | 0.08 | 0.06 | 0.00 | 0.00 | |
| Netflix Inc. | 0.29 | 0.30 | 0.30 | 0.35 | 0.42 | |
| Take-Two Interactive Software Inc. | 0.25 | 0.19 | 0.00 | 0.00 | 0.00 | |
| Walt Disney Co. | 0.23 | 0.23 | 0.24 | 0.27 | 0.29 | |
| Debt to Assets, Sector | ||||||
| Media & Entertainment | 0.17 | 0.17 | 0.17 | 0.17 | 0.19 | |
| Debt to Assets, Industry | ||||||
| Communication Services | 0.25 | 0.26 | 0.26 | 0.27 | 0.27 | |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Debt to assets = Total debt ÷ Total assets
= 15,859 ÷ 450,256 = 0.04
2 Click competitor name to see calculations.
The financial data reveals several noteworthy trends regarding the company's debt and asset management over the five-year period. The total debt exhibits a relatively stable pattern with minor fluctuations. Initially, total debt slightly decreased from US$15,032 million at the end of 2020 to US$14,930 million in 2021, followed by a modest increase in 2022 to US$14,999 million. In 2023, total debt dipped again to US$14,616 million, the lowest within the observed timeframe, but then rose substantially in 2024, reaching US$15,859 million, the highest point over the five years.
Contrastingly, total assets demonstrated consistent growth across all periods, expanding from US$319,616 million in 2020 to US$450,256 million in 2024. This upward trajectory suggests a steady accumulation or appreciation of assets at a robust pace.
When evaluating the debt-to-assets ratio, the data indicates a consistently low and stable leverage position. This ratio remained almost constant at around 0.04 to 0.05 throughout the years, implying that the company maintained a conservative approach to financing by relying minimally on debt relative to its asset base. Specifically, it started at 0.05 in 2020 and dropped to 0.04 from 2021 onward, sustaining this lower level through 2024 despite the increase in nominal debt in the last year.
In summary, the data reflects a strategy focused on asset growth while carefully managing debt levels to maintain a low leverage ratio. The increase in total assets is significant and consistent, indicating strengthening asset coverage. The minimal volatility in the debt-to-assets ratio despite fluctuations in absolute debt figures underscores disciplined financial management aimed at preserving financial stability and reducing risk exposure.
Debt to Assets (including Operating Lease Liability)
Alphabet Inc., debt to assets (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current portion of finance lease liabilities | 235) | —) | —) | —) | —) | |
| Short-term debt | 3,299) | 1,363) | 298) | 113) | 1,100) | |
| Long-term debt, excluding current portion | 10,883) | 13,253) | 14,701) | 14,817) | 13,932) | |
| Long-term portion of finance lease liabilities | 1,442) | —) | —) | —) | —) | |
| Total debt | 15,859) | 14,616) | 14,999) | 14,930) | 15,032) | |
| Current portion of operating lease liabilities | 2,887) | 2,791) | 2,477) | 2,189) | 1,694) | |
| Long-term portion of operating lease liabilities | 11,691) | 12,460) | 12,501) | 11,389) | 11,146) | |
| Total debt (including operating lease liability) | 30,437) | 29,867) | 29,977) | 28,508) | 27,872) | |
| Total assets | 450,256) | 402,392) | 365,264) | 359,268) | 319,616) | |
| Solvency Ratio | ||||||
| Debt to assets (including operating lease liability)1 | 0.07 | 0.07 | 0.08 | 0.08 | 0.09 | |
| Benchmarks | ||||||
| Debt to Assets (including Operating Lease Liability), Competitors2 | ||||||
| Comcast Corp. | 0.40 | 0.39 | 0.39 | 0.37 | 0.40 | |
| Meta Platforms Inc. | 0.18 | 0.17 | 0.15 | 0.09 | 0.07 | |
| Netflix Inc. | 0.34 | 0.35 | 0.35 | 0.41 | 0.47 | |
| Take-Two Interactive Software Inc. | 0.29 | 0.22 | 0.04 | 0.03 | 0.04 | |
| Walt Disney Co. | 0.25 | 0.25 | 0.26 | 0.29 | 0.31 | |
| Debt to Assets (including Operating Lease Liability), Sector | ||||||
| Media & Entertainment | 0.20 | 0.21 | 0.21 | 0.21 | 0.23 | |
| Debt to Assets (including Operating Lease Liability), Industry | ||||||
| Communication Services | 0.30 | 0.32 | 0.33 | 0.32 | 0.33 | |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Debt to assets (including operating lease liability) = Total debt (including operating lease liability) ÷ Total assets
= 30,437 ÷ 450,256 = 0.07
2 Click competitor name to see calculations.
The financial data reveals several key trends with respect to the company's debt levels and asset base over the five-year period ending December 31, 2024.
- Total Debt (Including Operating Lease Liability)
- The total debt increased gradually from US$27,872 million in 2020 to US$30,437 million in 2024. This represents a steady, modest growth in debt over the analyzed period, with a slight dip in 2023 followed by a marginal rise in 2024.
- Total Assets
- Total assets showed consistent and substantial growth, increasing from US$319,616 million in 2020 to US$450,256 million in 2024. This indicates a strong expansion of the asset base, with the most significant increase occurring between 2022 and 2024.
- Debt to Assets Ratio (Including Operating Lease Liability)
- The debt to assets ratio demonstrated a declining trend, falling from 0.09 in 2020 to 0.07 in 2024. This decrease suggests an improvement in the company’s leverage position relative to its assets, reflecting greater asset growth relative to debt increments.
Overall, the data indicates that while total debt has slightly increased, the company's asset base has expanded at a significantly higher rate, leading to improved leverage ratios. This trend suggests a strengthening financial position with controlled increases in debt and substantial asset growth.
Financial Leverage
Alphabet Inc., financial leverage calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Total assets | 450,256) | 402,392) | 365,264) | 359,268) | 319,616) | |
| Stockholders’ equity | 325,084) | 283,379) | 256,144) | 251,635) | 222,544) | |
| Solvency Ratio | ||||||
| Financial leverage1 | 1.39 | 1.42 | 1.43 | 1.43 | 1.44 | |
| Benchmarks | ||||||
| Financial Leverage, Competitors2 | ||||||
| Comcast Corp. | 3.11 | 3.20 | 3.18 | 2.87 | 3.03 | |
| Meta Platforms Inc. | 1.51 | 1.50 | 1.48 | 1.33 | 1.24 | |
| Netflix Inc. | 2.17 | 2.37 | 2.34 | 2.81 | 3.55 | |
| Take-Two Interactive Software Inc. | 2.16 | 1.75 | 1.72 | 1.81 | 1.95 | |
| Walt Disney Co. | 1.95 | 2.07 | 2.14 | 2.30 | 2.41 | |
| Financial Leverage, Sector | ||||||
| Media & Entertainment | 1.73 | 1.80 | 1.83 | 1.82 | 1.85 | |
| Financial Leverage, Industry | ||||||
| Communication Services | 2.27 | 2.38 | 2.45 | 2.43 | 2.45 | |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Financial leverage = Total assets ÷ Stockholders’ equity
= 450,256 ÷ 325,084 = 1.39
2 Click competitor name to see calculations.
- Total assets
- The total assets demonstrated a consistent upward trajectory over the five-year period. Starting at 319,616 million US dollars at the end of 2020, assets increased each year, reaching 450,256 million US dollars by the end of 2024. This steady growth indicates a continuous expansion of the company's asset base.
- Stockholders’ equity
- Stockholders' equity also showed a positive trend, rising from 222,544 million US dollars in 2020 to 325,084 million US dollars by the end of 2024. The incremental increases each year suggest the company has been able to retain earnings or raise capital effectively, contributing to a strengthened equity position.
- Financial leverage
- The financial leverage ratio exhibited a gradual decline from 1.44 in 2020 to 1.39 in 2024. This slight decrease over the period implies a modest reduction in reliance on debt financing relative to equity, pointing towards a marginal improvement in the company’s solvency and risk profile.
Interest Coverage
Alphabet Inc., interest coverage calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income | 100,118) | 73,795) | 59,972) | 76,033) | 40,269) | |
| Add: Income tax expense | 19,697) | 11,922) | 11,356) | 14,701) | 7,813) | |
| Add: Interest expense | 268) | 308) | 357) | 346) | 135) | |
| Earnings before interest and tax (EBIT) | 120,083) | 86,025) | 71,685) | 91,080) | 48,217) | |
| Solvency Ratio | ||||||
| Interest coverage1 | 448.07 | 279.30 | 200.80 | 263.24 | 357.16 | |
| Benchmarks | ||||||
| Interest Coverage, Competitors2 | ||||||
| Comcast Corp. | 5.52 | 6.01 | 3.38 | 5.46 | 4.07 | |
| Meta Platforms Inc. | 99.83 | 107.34 | 164.74 | 3,153.27 | 2,371.00 | |
| Netflix Inc. | 14.87 | 9.87 | 8.45 | 8.63 | 5.17 | |
| Take-Two Interactive Software Inc. | -25.34 | -9.32 | 25.98 | 110.20 | 174.85 | |
| Walt Disney Co. | 4.66 | 3.42 | 4.41 | 2.66 | -0.06 | |
| Interest Coverage, Sector | ||||||
| Media & Entertainment | 28.71 | 22.36 | 18.97 | 24.88 | 14.59 | |
| Interest Coverage, Industry | ||||||
| Communication Services | 12.15 | 10.10 | 8.52 | 11.93 | 6.53 | |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Interest coverage = EBIT ÷ Interest expense
= 120,083 ÷ 268 = 448.07
2 Click competitor name to see calculations.
- Earnings before interest and tax (EBIT)
- The EBIT shows a positive trend overall, starting at 48,217 million US dollars in 2020 and nearly doubling to 91,080 million US dollars in 2021. There is a decline observed in 2022 to 71,685 million US dollars, followed by recovery and increase in 2023 to 86,025 million US dollars. The upward momentum continues in 2024, reaching 120,083 million US dollars, representing the highest value in the period analyzed.
- Interest expense
- Interest expense increased significantly from 135 million US dollars in 2020 to 346 million US dollars in 2021. A slight increase is seen in 2022 to 357 million US dollars, after which the interest expense declines in the subsequent years, falling to 308 million US dollars in 2023 and further down to 268 million US dollars in 2024.
- Interest coverage
- The interest coverage ratio demonstrates strong capacity to cover interest expenses through EBIT. The ratio is highest in 2020 at 357.16, decreases in the following years reaching a low of 200.8 in 2022. After 2022, the coverage ratio shows significant improvement, rising to 279.3 in 2023 and sharply increasing to 448.07 in 2024, indicating robust improvement in the company’s ability to meet interest obligations relative to EBIT.
- Summary
- Overall, the financial data reveals strong operational performance with EBIT growth interrupted only briefly in 2022. Interest expenses peaked in 2021 and 2022 but declined afterward, which, combined with the increased EBIT, led to an enhanced interest coverage ratio by 2024. This suggests improving financial health and operational efficiency over the period considered.
Fixed Charge Coverage
Alphabet Inc., fixed charge coverage calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income | 100,118) | 73,795) | 59,972) | 76,033) | 40,269) | |
| Add: Income tax expense | 19,697) | 11,922) | 11,356) | 14,701) | 7,813) | |
| Add: Interest expense | 268) | 308) | 357) | 346) | 135) | |
| Earnings before interest and tax (EBIT) | 120,083) | 86,025) | 71,685) | 91,080) | 48,217) | |
| Add: Operating lease cost | 3,304) | 3,362) | 2,900) | 2,699) | 2,267) | |
| Earnings before fixed charges and tax | 123,387) | 89,387) | 74,585) | 93,779) | 50,484) | |
| Interest expense | 268) | 308) | 357) | 346) | 135) | |
| Operating lease cost | 3,304) | 3,362) | 2,900) | 2,699) | 2,267) | |
| Fixed charges | 3,572) | 3,670) | 3,257) | 3,045) | 2,402) | |
| Solvency Ratio | ||||||
| Fixed charge coverage1 | 34.54 | 24.36 | 22.90 | 30.80 | 21.02 | |
| Benchmarks | ||||||
| Fixed Charge Coverage, Competitors2 | ||||||
| Comcast Corp. | 4.50 | 4.87 | 2.82 | 4.48 | 3.47 | |
| Meta Platforms Inc. | 23.99 | 19.69 | 15.18 | 31.41 | 24.62 | |
| Netflix Inc. | 8.20 | 5.64 | 5.00 | 5.46 | 3.65 | |
| Take-Two Interactive Software Inc. | -15.75 | -4.59 | 8.17 | 16.58 | 15.32 | |
| Walt Disney Co. | 3.53 | 2.71 | 3.25 | 2.07 | 0.32 | |
| Fixed Charge Coverage, Sector | ||||||
| Media & Entertainment | 14.45 | 11.29 | 9.54 | 13.02 | 8.32 | |
| Fixed Charge Coverage, Industry | ||||||
| Communication Services | 6.56 | 5.42 | 4.32 | 6.04 | 3.78 | |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Fixed charge coverage = Earnings before fixed charges and tax ÷ Fixed charges
= 123,387 ÷ 3,572 = 34.54
2 Click competitor name to see calculations.
The financial data reveals notable variations in earnings before fixed charges and tax, fixed charges, and fixed charge coverage over the five-year period ending December 31, 2024.
- Earnings Before Fixed Charges and Tax
- This metric experienced significant fluctuations. Starting at 50,484 million US dollars in 2020, it increased substantially to 93,779 million in 2021. However, in 2022, earnings declined to 74,585 million before rebounding to 89,387 million in 2023. The highest value was recorded in 2024 at 123,387 million, indicating a strong upward trajectory in the most recent year.
- Fixed Charges
- Fixed charges followed a generally increasing trend from 2,402 million US dollars in 2020 to 3,670 million in 2023. A slight decrease occurred in 2024, where fixed charges fell marginally to 3,572 million. Despite this small decline, fixed charges maintained a relatively steady range compared to the pronounced variability seen in earnings.
- Fixed Charge Coverage Ratio
- This ratio, which indicates the ability to cover fixed charges with earnings, showed variability aligned with the earnings trends. It started at 21.02 in 2020, rose significantly to 30.8 in 2021, and then dropped to 22.9 in 2022. The ratio improved moderately to 24.36 in 2023 and surged to its peak of 34.54 in 2024. The elevated coverage ratio in 2024 reflects stronger earnings relative to fixed charges, suggesting enhanced capacity to meet fixed financial obligations.
Overall, earnings demonstrated periods of growth and decline, with a strong recovery and notable peak in the final year. Fixed charges increased steadily but remained relatively stable in comparison. The fixed charge coverage ratio mirrored the fluctuations in earnings, ultimately improving markedly in the latest period, which could indicate an enhanced financial stability and improved risk profile.