Meta Platforms Inc. (NASDAQ:META)

Solvency ratios for the analyzed period demonstrate a general trend of increasing leverage across multiple metrics. Initially, the ratios exhibited relative stability, but a noticeable upward trajectory began in the latter half of 2022 and continued through 2025. This suggests a growing reliance on debt financing over time.

Debt to Equity

The debt to equity ratio remained relatively low and stable at 0.08 from September 2022 through March 2023. However, it increased to 0.14 in June 2023 before moderating slightly to 0.12 by December 2023. A more significant increase is observed in the later periods, reaching 0.27 by December 2025, indicating a substantially higher proportion of debt relative to equity.

Debt to Equity (Including Operating Lease Liability)

Including operating lease liabilities presents a higher leverage picture. This ratio started at 0.11 in March 2022 and steadily increased, reaching 0.39 by December 2025. The inclusion of these liabilities consistently results in higher ratios compared to those excluding them, highlighting their material impact on the company’s capital structure. The increase is consistent throughout the period, though the rate of increase appears to accelerate in the later quarters.

Debt to Capital

Similar to the debt to equity ratio, debt to capital remained stable around 0.07 in the earlier part of the analyzed period. Beginning in June 2023, the ratio began to climb, reaching 0.21 by December 2025. This indicates a growing proportion of debt financing within the company’s overall capital structure.

Debt to Capital (Including Operating Lease Liability)

The debt to capital ratio, inclusive of operating lease liabilities, shows a similar pattern of increasing leverage. Starting at 0.10 in March 2022, it rose to 0.28 by December 2025. This ratio consistently exceeds the debt to capital ratio excluding operating lease liabilities, reinforcing the significance of these obligations.

Debt to Assets

The debt to assets ratio demonstrates a gradual increase from 0.05 in December 2022 to 0.16 by December 2025. This suggests that a larger portion of the company’s assets are financed by debt over time. The increase is relatively consistent, though slightly more pronounced in the later quarters.

Debt to Assets (Including Operating Lease Liability)

Including operating lease liabilities results in a higher debt to assets ratio, starting at 0.09 in March 2022 and increasing to 0.23 by December 2025. This highlights the impact of these liabilities on the company’s asset financing structure.

Financial Leverage

Financial leverage, measured as total assets to total equity, increased from 1.33 in March 2022 to 1.68 by December 2025. This indicates a growing reliance on debt to amplify returns, but also increases financial risk. The increase is relatively steady throughout the period, with a slight acceleration in the later quarters.

Overall, the observed trends suggest a deliberate or necessary shift towards increased debt financing. While not immediately indicative of financial distress, the continued upward trend in these solvency ratios warrants monitoring to assess potential risks associated with higher leverage.

The debt to equity ratio exhibits a clear upward trend over the observed period. Initially, the ratio remained stable at 0.08 from September 30, 2022, through December 31, 2022. A noticeable increase began in the first quarter of 2023, rising to 0.14 by June 30, 2023, before moderating slightly to 0.12 by the end of 2023.

The ratio continued to climb in 2024, reaching 0.18 by September 30, 2024, and settling at 0.16 by the close of the year. However, the most significant increase occurred in the first half of 2025, with the ratio escalating to 0.27 by December 31, 2025. This represents a substantial change from the initial levels observed in 2022.

Debt to Equity Ratio - Trend Analysis

The ratio demonstrates a consistent increase, indicating a growing reliance on debt financing relative to equity. The acceleration in the ratio during 2025 suggests a more aggressive debt strategy or potentially slower growth in equity.

Debt to Equity Ratio - Magnitude

While the ratio remained relatively low for much of the period, the final value of 0.27 indicates a moderate level of financial leverage. This suggests that for every dollar of equity, the company has 27 cents of debt.

Debt to Equity Ratio - Potential Implications

The increasing ratio could signal heightened financial risk, as the company becomes more vulnerable to fluctuations in interest rates and economic downturns. However, it could also indicate strategic investments funded by debt, aiming for higher returns than the cost of borrowing.

The observed pattern suggests a shift in the company’s capital structure, with a greater proportion of funding coming from debt sources. Continued monitoring of this ratio is recommended to assess the long-term sustainability of this trend and its impact on the company’s financial health.

The debt to equity ratio, including operating lease liability, demonstrates a generally increasing trend over the analyzed period, spanning from March 31, 2022, to December 31, 2025. Initially, the ratio remained relatively low, but experienced a notable rise beginning in mid-2022, continuing through early 2023, before stabilizing and then increasing again towards the end of the period.

Initial Phase (Mar 31, 2022 – Jun 30, 2022)

The debt to equity ratio began at 0.11 and increased to 0.13. This indicates a modest increase in leverage during this period, with debt growing at a slightly faster rate than equity.

Significant Increase (Sep 30, 2022 – Jun 30, 2023)

A substantial increase in the ratio is observed, rising from 0.21 to 0.27. This period coincides with a significant increase in total debt, particularly between December 2022 and June 2023, while equity growth was comparatively slower. This suggests a deliberate strategy to increase debt financing or a period of lower profitability impacting equity accumulation.

Stabilization and Subsequent Rise (Jul 30, 2023 – Dec 31, 2024)

From July 2023 to December 2024, the ratio fluctuated between 0.24 and 0.30, indicating a period of relative stability in the company’s leverage. While debt continued to increase, equity also experienced growth, partially offsetting the impact on the ratio. However, a clear upward trend resumes in this phase.

Final Increase (Mar 31, 2025 – Dec 31, 2025)

The ratio concludes the analyzed period at 0.39, representing the highest value observed. This is driven by a substantial increase in total debt, reaching 83,897 US$ in millions, while equity growth, though present, did not keep pace. This final increase suggests a significant reliance on debt financing or a substantial investment strategy funded by debt.

Overall, the trend suggests a growing reliance on debt financing relative to equity over the analyzed timeframe. While the initial increases were moderate, the latter half of the period demonstrates a more pronounced shift towards higher leverage. The substantial increase in the ratio at the end of the period warrants further investigation to understand the underlying drivers and potential implications for the company’s financial risk profile.

The debt to capital ratio exhibits a clear upward trend over the observed period. Initially, the ratio remained stable at 0.07 from September 30, 2022, through March 31, 2023. A noticeable increase began in June 30, 2023, reaching 0.12, and subsequently moderated to fluctuate between 0.10 and 0.15 from March 31, 2024, through September 30, 2025. The most significant increase occurred between September 30, 2025, and December 31, 2025, with the ratio rising to 0.21.

Total Debt

Total debt remained relatively consistent between September 30, 2022, and June 30, 2023, hovering around US$9.9 billion to US$18.4 billion. A substantial increase in total debt is evident from June 30, 2023, culminating in US$58.7 billion by December 31, 2025. This increase is the primary driver of the observed trend in the debt to capital ratio.

Total Capital

Total capital generally increased throughout the period, moving from US$123.2 billion on March 31, 2022, to US$275.9 billion on December 31, 2025. While increasing, the growth in total capital did not keep pace with the growth in total debt, particularly in the latter half of the observed timeframe, contributing to the rising debt to capital ratio.

The consistent increase in the debt to capital ratio suggests a growing reliance on debt financing relative to equity and other forms of capital. The acceleration of this trend in the final quarter of 2025 warrants further investigation to understand the underlying reasons for the increased debt burden and its potential implications for the company’s financial flexibility and risk profile.

The Debt to Capital ratio, inclusive of operating lease liabilities, demonstrates a clear increasing trend over the observed period. Initially, the ratio remained relatively stable at low levels, but experienced a notable rise beginning in the latter half of 2022 and continuing through 2025.

Initial Stability (Mar 31, 2022 – Jun 30, 2022)

The ratio began the period at 0.10 and increased modestly to 0.11. This indicates a conservative capital structure with a low proportion of debt relative to total capital during this timeframe.

Significant Increase (Sep 30, 2022 – Jun 30, 2023)

A substantial increase is observed from 0.17 in September 2022 to 0.21 in June 2023. This suggests a deliberate shift towards increased leverage, potentially to fund growth initiatives or share repurchases. The absolute values of both Total Debt and Total Capital increased during this period, but the growth in Total Debt outpaced that of Total Capital.

Plateau and Subsequent Surge (Jul 30, 2023 – Dec 31, 2025)

Following the increase, the ratio stabilized around 0.20 to 0.23 for several quarters. However, a significant jump to 0.28 is evident by December 31, 2025. This final increase is driven by a substantial rise in Total Debt, while Total Capital also increased, but at a slower rate. This represents the highest level of debt relative to capital observed throughout the analyzed period.

Total Debt and Total Capital Trends

Throughout the period, both Total Debt and Total Capital generally increased. However, the acceleration in the growth of Total Debt, particularly in the latter half of the period, is the primary driver of the increasing Debt to Capital ratio. The increase in Total Capital appears more moderate in comparison.

The observed trend suggests a growing reliance on debt financing. While an increasing ratio does not automatically indicate financial distress, continued monitoring is warranted to assess the sustainability of this leverage and its potential impact on future financial flexibility.

The debt-to-assets ratio exhibits a generally increasing trend over the observed period, though with fluctuations. Initially, the ratio is unavailable for the first two quarters. Beginning in September 2022, the ratio stands at 0.06, indicating that 6% of the company’s assets are financed by debt. This ratio remains relatively stable at 0.05 and 0.05 for the subsequent two quarters, ending December 2022 and March 2023 respectively.

Trend Analysis (September 2022 – December 2023)

A noticeable increase in the debt-to-assets ratio begins in June 2023, rising to 0.09, and continues through December 2023, reaching 0.08. This suggests an increased reliance on debt financing during this period. The ratio remains at 0.08 for the first two quarters of 2024.

Further increases are observed in the latter half of 2024. The ratio climbs to 0.11 in September 2024 and then slightly decreases to 0.10 in December 2024. This indicates a growing proportion of assets financed by debt. The ratio remains stable at 0.10 for the first two quarters of 2025.

Significant Increase (December 2025)

A substantial jump in the debt-to-assets ratio occurs in December 2025, reaching 0.16. This represents a significant increase in the company’s leverage, with 16% of assets now financed by debt. This is the highest ratio observed throughout the analyzed period.

Overall, the company demonstrates a clear trend towards increased debt financing, particularly pronounced in the latter part of the observed timeframe. The ratio more than doubles from its initial value in September 2022 to its final value in December 2025, suggesting a shift in the company’s capital structure.

The debt to assets ratio, including operating lease liabilities, exhibits an increasing trend over the observed period, spanning from March 31, 2022, to December 31, 2025. Initially, the ratio remained relatively stable, but experienced a notable rise beginning in the latter half of 2022 and continuing into 2023. This trend accelerated significantly in the latter half of 2024 and into 2025.

Initial Stability (Mar 31, 2022 – Jun 30, 2022)

The ratio began at 0.09 and remained consistent through the first two quarters of the period. This indicates a stable relationship between total debt and total assets during this timeframe.

Gradual Increase (Sep 30, 2022 – Dec 31, 2023)

From September 30, 2022, the ratio began to increase, moving from 0.14 to 0.16 by December 31, 2023. This suggests a growing reliance on debt financing relative to the asset base. The increase is moderate but consistent.

Accelerated Increase (Mar 31, 2024 – Dec 31, 2025)

A more pronounced increase is observed from March 31, 2024, onward. The ratio climbed from 0.17 to 0.23 by December 31, 2025. This represents a substantial shift in the company’s capital structure, with debt growing at a faster pace than assets. The most significant jump occurs between September 30, 2025, and December 31, 2025, indicating a considerable increase in debt during that quarter.

Total Debt and Total Assets

Total debt increased from US$14,053 million in March 2022 to US$83,897 million in December 2025, representing a significant absolute increase. Total assets also increased, moving from US$164,218 million to US$366,021 million over the same period. However, the rate of increase in debt appears to have outpaced the rate of increase in assets, contributing to the rising debt to assets ratio.

The observed trend suggests a potential increase in financial leverage. While an increasing ratio does not automatically indicate financial distress, continued monitoring is warranted to assess the sustainability of this trend and its potential impact on the company’s financial flexibility and risk profile.

The financial leverage ratio for the analyzed period demonstrates a generally increasing trend, indicating a growing reliance on debt financing relative to equity. While fluctuations occur, the overall pattern suggests a moderate increase in financial risk over the observed timeframe.

Overall Trend

The financial leverage ratio began at 1.33 in March 2022 and rose to 1.68 by December 2025. This represents an approximate 26% increase over the period. The most significant increases occurred between March 2022 and December 2022, and again between March 2024 and December 2025.

Short-Term Fluctuations

Despite the overall upward trend, the ratio experienced some short-term declines. A slight decrease was observed from June 2022 to September 2022, and again from September 2023 to December 2023. These temporary dips suggest periods where equity growth outpaced debt accumulation, or debt was reduced.

Recent Performance

The most recent quarters show continued increases in financial leverage. The ratio moved from 1.51 in September 2024 to 1.56 in December 2024, and then to 1.68 in December 2025. This suggests a renewed emphasis on debt financing in the latter part of the analyzed period.

Relationship to Asset Base

Total assets increased substantially over the period, from US$164,218 million to US$366,021 million. While the increase in assets provides a larger base to support debt, the concurrent rise in financial leverage indicates that debt financing has been a key component of this asset growth.

Stockholders’ Equity

Stockholders’ equity also increased, moving from US$123,228 million to US$217,243 million. However, the rate of increase in debt appears to have exceeded the rate of increase in equity, contributing to the observed rise in financial leverage.

In conclusion, the financial leverage ratio indicates a growing reliance on debt financing. While the company has increased both its asset base and equity, the proportional increase in debt suggests a heightened level of financial risk. Continued monitoring of this ratio is recommended.