Charter Communications Inc. (NASDAQ:CHTR)

The financial ratios over the analyzed quarters indicate several notable trends regarding the company's capital structure and ability to cover interest expenses.

Debt to Equity Ratio

The debt to equity ratio shows a clear upward trend starting at 4.04 and increasing steadily to a peak of 10.92. Following this peak, the ratio begins a gradual decline, reaching approximately 5.91 by the latest quarter. This suggests a period of increasing reliance on debt relative to equity, followed by a strategic reduction in leverage over the later periods.

Debt to Capital Ratio

This ratio remains consistently high throughout the period, ranging roughly between 0.80 and 0.92 in the earlier periods, then slightly declining to around 0.85 to 0.86 in the most recent quarters. The stable but high ratio indicates that debt forms the major component of the company's capital structure, with a modest reduction in debt proportion relative to total capital toward the end of the timeline.

Debt to Assets Ratio

A gradual increase is observed from 0.59 initially up to around 0.68 in the middle of the data set, followed by a subtle decrease back towards 0.63 towards the latest quarters. The ratio indicates that the debt load relative to total assets increased initially but has slightly moderated in the more recent periods.

Financial Leverage Ratio

The financial leverage ratio shows a marked increase from 6.83 to a high of over 16 in the middle period, reflecting a significant increase in asset exposure funded by equity. Subsequently, this ratio declines steadily to around 9.35, implying a reduction in leverage and possibly a strengthening equity base or asset base management in the latter periods.

Interest Coverage Ratio

This ratio steadily improves from 2.28 at the start to about 2.84 mid-period, indicating an enhanced ability to meet interest obligations, possibly due to improved earnings or reduced interest expenses. Later quarters show a slight downward correction, but the ratio remains relatively stable above 2.3, which still represents a comfortable coverage level.

Overall, the data reveals a cycle of increasing leverage through various measures, peaking approximately mid-period, followed by a consistent strategic effort to deleverage. Despite fluctuations in leverage, the interest coverage ratio remains stable to improving, indicating maintained or enhanced capacity to service debt interest expenses throughout the observed intervals.

The financial data reveals notable trends in the company's leverage and equity position over the analyzed periods. There is a clear trajectory in both total debt and shareholders’ equity values, resulting in significant fluctuations in the debt to equity ratio.

Total Debt

The total debt levels exhibited a general upward movement from the beginning through the middle of the timeline. Starting at approximately $84.9 billion, total debt rose steadily, peaking around $97.8 billion towards the later dates. After reaching high points in the early-mid periods, there was a marginal stabilization and slight decline in the most recent quarters, indicating possible attempts at managing or reducing debt obligations.

Total Charter Shareholders’ Equity

Shareholders’ equity, conversely, declined significantly in the initial periods, falling from about $21 billion to a low near $8.9 billion. Following this trough, the equity value gradually increased towards the later time frames, recovering up to approximately $16.2 billion. This pattern suggests an initial erosion of equity, potentially due to losses or capital restructuring, followed by a phase of rebuilding or capital infusion to strengthen equity.

Debt to Equity Ratio

The debt to equity ratio reflects the combined effect of changing debt and equity levels. Starting at a relatively moderate ratio of slightly above 4.0, the ratio surged dramatically to a peak exceeding 10.9, signaling heightened leverage and increased financial risk. During later periods, this ratio decreased consistently to around 5.9, indicating a reduction in leverage and an improved balance between debt and equity. This trend denotes a strategic shift towards deleveraging and enhancing financial stability.

Overall, the data indicates an initial phase characterized by increasing debt burden and decreasing equity, resulting in elevated financial leverage. This phase is followed by a recovery stage marked by equity restoration and debt management efforts, culminating in a more balanced capital structure. These shifts can imply a focus on strengthening the financial position and reducing risk exposure in the more recent periods.

The analysis of the financial leverage indicators reveals a consistent pattern in the company's capital structure over the observed periods.

Total Debt

The total debt shows a general upward trend from March 31, 2021, to March 31, 2025. Starting at approximately $84.9 billion, total debt increased steadily, peaking near $97.8 billion by the end of 2022. Following this peak, the total debt slightly declined, fluctuating in the range of approximately $95.0 billion to $97.7 billion through mid-2025, indicating some efforts toward debt stabilization or reduction in the later periods.

Total Capital

Total capital exhibits moderate growth throughout the timeframe, beginning at about $105.9 billion and gradually increasing to roughly $111.9 billion by mid-2025. The growth rate is modest but consistent, demonstrating a relatively stable capital base that supports the company's financial structure.

Debt to Capital Ratio

This ratio increased from 0.80 at the beginning of the period to a high of 0.92 in late 2022, indicating a rising reliance on debt financing. However, after this peak, the debt to capital ratio begins a gradual decrease, moving down to approximately 0.85–0.86 by mid-2025. This suggests a deliberate shift towards lowering financial leverage or balancing the capital structure after a period of heightened debt levels.

Overall, the data reflects a phase of increasing leverage, reaching a maximum in late 2022, followed by a stabilization and modest deleveraging trend up through mid-2025. The company appears to be managing its capital structure carefully, balancing debt with equity to maintain a relatively stable debt-to-capital ratio close to the high end of the 0.80–0.90 range throughout the period.

The financial data reveals several key trends in the company's capital structure and asset base over the reported periods.

Total Debt

The total debt shows an overall upward trend from US$84,887 million at the end of the first quarter of 2021 to a peak of approximately US$97,965 million by the first quarter of 2024. From this point, a gradual decline is observed, reaching US$95,718 million by the second quarter of 2025. This pattern indicates an initial increase in leverage followed by a phase of debt reduction or stabilization.

Total Assets

Total assets have steadily increased throughout the analyzed period, rising from US$143,439 million at the start of 2021 to US$151,589 million by mid-2025. This growth denotes an expansion of the company's asset base, reflecting possible investments, acquisitions, or asset revaluations that have contributed to enhancing the company's overall size and capacity.

Debt to Assets Ratio

The debt to assets ratio exhibits a rising trend from 0.59 at the beginning of 2021, peaking at 0.68 between the end of 2022 and early 2023. After this peak, the ratio gradually decreases to 0.63 by the second quarter of 2025. This ratio movement corresponds with the trends in total debt and assets, indicating that while the company initially increased its leverage relative to assets, subsequent debt decreases and continued asset growth have contributed to a lower leverage ratio in recent periods.

In summary, the company experienced a phase of increased borrowing relative to its asset base, reaching maximum leverage around late 2022 to early 2023. Following this, the firm appears to have undertaken efforts to reduce debt levels while simultaneously expanding its assets, leading to a more conservative debt to asset structure by mid-2025.

Total assets

The total assets of the company exhibited a relatively stable trend throughout the observed period, fluctuating slightly but maintaining an overall upward trajectory. Starting at approximately $143.4 billion, total assets increased gradually to about $151.6 billion by mid-2025. This steady increase suggests ongoing asset accumulation or appreciation, although the growth rate appears moderate without abrupt changes.

Total Charter shareholders’ equity

Shareholders’ equity showed a notable decline between early 2021 and late 2022, decreasing from roughly $21 billion to below $9 billion within this period. This trend indicates a significant reduction in net equity, which could imply operational challenges, increased liabilities, or distributions exceeding earnings. From late 2022 onwards, there was a clear recovery phase, with equity rising steadily to approximately $16.2 billion by mid-2025. This rebound suggests improvements in profitability, capital management, or reductions in debt levels.

Financial leverage (ratio)

The financial leverage ratio increased substantially from 6.83 in early 2021, peaking at 16.16 in the third quarter of 2022. This sharp rise indicates a growing reliance on debt financing relative to equity during that timeframe. After peaking, the leverage ratio decreased consistently to levels around 9.3 by mid-2025, reflecting a deleveraging process and potentially strengthening the company’s financial structure. The inverse relationship between shareholders’ equity and leverage during the early period suggests that declining equity contributed to higher leverage, whereas later equity increases contributed to a reduction in leverage.

The earnings before interest and tax (EBIT) displayed a general upward trend from March 2021 through June 2024, increasing from 2,120 million US dollars to a peak of 3,320 million US dollars in December 2024. This growth was marked by periodic fluctuations, with some quarters experiencing dips, such as in March 2022 and September 2022. Post-December 2024, EBIT showed a slight decline but remained relatively stable above 3,000 million US dollars through June 2025.

Interest expense followed a steady increasing trajectory over the entire period under review. Starting at 983 million US dollars in March 2021, expenses rose consistently each quarter, reaching a high of 1,328 million US dollars in June 2024 before slightly declining but remaining high around the 1,240 to 1,260 million US dollar range by the middle of 2025.

Interest coverage, which represents the ratio of EBIT to interest expense, showed improvement from 2.28 in March 2021 to a peak of 2.84 in June 2022. However, subsequent quarters saw a gradual decrease in this ratio, signaling a marginal reduction in the company’s ability to cover interest obligations despite overall growth in EBIT. From late 2022 through mid-2024, the interest coverage stabilized between 2.3 and 2.5, with a slight upward trend towards the end of the series, reaching 2.51 by June 2025.

EBIT Trends

General growth with notable quarterly fluctuations, peaking in late 2024.

Interest Expense Trends

Consistent and steady increase throughout the period with minor declines near the end.

Interest Coverage Ratio Trends

Improved significantly until mid-2022, followed by a moderate decline and stabilization in the 2.3 to 2.5 range, with a slight recovery towards mid-2025.

Overall, the data suggest an expansion in operational earnings accompanied by rising interest costs. The improvement in interest coverage up to mid-2022 indicated enhanced financial strength, but subsequent declines suggest that interest cost growth somewhat tempered this advantage. Still, by mid-2025, interest coverage remains at a comfortable level, implying the company maintains adequate earnings relative to its interest obligations.