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)
Meta Platforms 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 to Equity
- The debt to equity ratio shows a rising trend over the years, starting from 0 in 2020 and increasing steadily to 0.16 by 2024. When including operating lease liabilities, the ratio is higher but follows a similar upward trajectory, reaching 0.27 in 2024 from 0.09 in 2020. This indicates the company has gradually increased its reliance on debt financing relative to equity, although overall leverage remains moderate.
- Debt to Capital
- The debt to capital ratio also rises gradually, from 0 in 2020 to 0.14 in 2024. Including operating lease liabilities, the ratio is consistently higher yet still increases moderately, moving from 0.08 in 2020 to 0.21 in 2024. This pattern further confirms the company’s increased use of capital sourced through debt but maintains a conservative capital structure overall.
- Debt to Assets
- Similarly, the debt to assets ratio trends upward from negligible levels in 2020 to 0.11 in 2024. When factoring in operating lease liabilities, it increases from 0.07 in 2020 to 0.18 in 2024. This suggests that debt, including lease obligations, constitutes a larger portion of the company's asset base over time, but still represents a relatively small part of total assets.
- Financial Leverage
- Financial leverage shows a gradual increase from 1.24 in 2020 to 1.51 in 2024. The steady rise indicates that the company is incrementally enhancing its use of debt financing relative to equity, thus increasing total assets per unit of equity. While rising, the financial leverage ratio remains relatively low, indicating conservative financial risk.
- Interest Coverage Ratio
- The interest coverage ratio exhibits a sharp decline from an exceptionally high 2371 in 2020 to 99.83 in 2024. Despite this significant reduction, the ratio remains very strong, indicating the company has ample earnings to cover interest expenses comfortably, though its margin of coverage has narrowed considerably over the period.
- Fixed Charge Coverage Ratio
- The fixed charge coverage ratio shows fluctuations but generally remains at robust levels, moving from 24.62 in 2020 up to 31.41 in 2021, then dipping to 15.18 in 2022 before increasing again to 23.99 in 2024. This reflects some variability in the company’s ability to cover fixed financial charges, yet the ratio remains well above critical thresholds, suggesting strong capacity to meet fixed obligations.
- Summary Insight
- Overall, the financial data reflect a deliberate and gradual increase in leverage across multiple metrics, including debt to equity, debt to capital, and debt to assets ratios, both including and excluding operating lease liabilities. This indicates a strategic shift toward utilizing more debt, albeit maintaining a conservative risk profile. Meanwhile, coverage ratios decline from extraordinarily high levels but signify that interest and fixed charges are well-covered by earnings. The company demonstrates prudent financial management with increasing but controlled reliance on debt financing.
Debt Ratios
Coverage Ratios
Debt to Equity
Meta Platforms 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) | ||||||
| Finance lease liabilities, current | 76) | 90) | 129) | 75) | 54) | |
| Long-term debt | 28,826) | 18,385) | 9,923) | —) | —) | |
| Finance lease liabilities, non-current | 633) | 600) | 558) | 506) | 469) | |
| Total debt | 29,535) | 19,075) | 10,610) | 581) | 523) | |
| Stockholders’ equity | 182,637) | 153,168) | 125,713) | 124,879) | 128,290) | |
| Solvency Ratio | ||||||
| Debt to equity1 | 0.16 | 0.12 | 0.08 | 0.00 | 0.00 | |
| Benchmarks | ||||||
| Debt to Equity, Competitors2 | ||||||
| Alphabet Inc. | 0.05 | 0.05 | 0.06 | 0.06 | 0.07 | |
| Comcast Corp. | 1.16 | 1.17 | 1.17 | 0.99 | 1.15 | |
| 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
= 29,535 ÷ 182,637 = 0.16
2 Click competitor name to see calculations.
- Total Debt
- The total debt shows a significant upward trend over the analyzed periods. Starting from a relatively low base of 523 million USD in 2020, the total debt increased modestly to 581 million USD in 2021. However, a sharp rise can be observed from 2021 onwards, with total debt escalating to 10,610 million USD in 2022, further climbing to 19,075 million USD in 2023, and reaching 29,535 million USD by the end of 2024. This indicates a substantial increase in leverage or borrowing activities during the later years.
- Stockholders’ Equity
- Stockholders’ equity displays a different growth pattern. It slightly declined from 128,290 million USD in 2020 to 124,879 million USD in 2021. Following this dip, equity values increased moderately to 125,713 million USD in 2022 and then experienced more pronounced growth in 2023 and 2024, rising to 153,168 million USD and 182,637 million USD respectively. This suggests an improvement in the company’s net asset position and possibly retained earnings or capital injections in the latter years.
- Debt to Equity Ratio
- The debt to equity ratio remained at zero for 2020 and 2021, indicating negligible or no leverage relative to equity during these years. Starting in 2022, this ratio began to increase steadily, reaching 0.08, then 0.12 in 2023, and 0.16 in 2024. This upward trend aligns with the substantial rise in total debt and suggests a growing reliance on debt financing relative to the company’s equity base. Despite the increase, the ratio remains below 0.2, which could imply that the company still maintains a relatively conservative leverage profile in absolute terms.
Debt to Equity (including Operating Lease Liability)
Meta Platforms 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) | ||||||
| Finance lease liabilities, current | 76) | 90) | 129) | 75) | 54) | |
| Long-term debt | 28,826) | 18,385) | 9,923) | —) | —) | |
| Finance lease liabilities, non-current | 633) | 600) | 558) | 506) | 469) | |
| Total debt | 29,535) | 19,075) | 10,610) | 581) | 523) | |
| Operating lease liabilities, current | 1,942) | 1,623) | 1,367) | 1,127) | 1,023) | |
| Operating lease liabilities, non-current | 18,292) | 17,226) | 15,301) | 12,746) | 9,631) | |
| Total debt (including operating lease liability) | 49,769) | 37,924) | 27,278) | 14,454) | 11,177) | |
| Stockholders’ equity | 182,637) | 153,168) | 125,713) | 124,879) | 128,290) | |
| Solvency Ratio | ||||||
| Debt to equity (including operating lease liability)1 | 0.27 | 0.25 | 0.22 | 0.12 | 0.09 | |
| Benchmarks | ||||||
| Debt to Equity (including Operating Lease Liability), Competitors2 | ||||||
| Alphabet Inc. | 0.09 | 0.11 | 0.12 | 0.11 | 0.13 | |
| Comcast Corp. | 1.23 | 1.25 | 1.26 | 1.06 | 1.20 | |
| 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
= 49,769 ÷ 182,637 = 0.27
2 Click competitor name to see calculations.
The financial data over the five-year period reveals significant trends in both the company's debt levels and equity base. A clear upward trajectory is observed in total debt, which has more than quadrupled from 11,177 million US dollars at the end of 2020 to 49,769 million US dollars by the end of 2024. This sharp increase suggests an aggressive leveraging strategy or expansion funded through borrowing.
Conversely, stockholders' equity has shown steady growth throughout the period. Beginning at 128,290 million US dollars at the end of 2020, equity slightly declined in 2021 but then increased consistently, reaching 182,637 million US dollars by the end of 2024. The rise in equity indicates that the company's retained earnings or capital injections have bolstered the ownership base despite the increasing debt.
The debt to equity ratio, which measures the relative proportion of company financing that comes from debt and equity, has correspondingly increased from a low 0.09 in 2020 to 0.27 in 2024. Although this ratio remains below 0.3, its rising trend highlights a growing reliance on debt financing. The ratio's steady climb indicates that the increase in debt has outpaced the growth in equity over the analyzed timeframe.
- Total Debt (Including Operating Lease Liability)
- Increased markedly, suggesting a shift towards higher leverage and potential expansion or investment activities financed by borrowing.
- Stockholders’ Equity
- Demonstrated a positive growth trend, reflecting reinvestment or additional equity financing, which supports the company's capital structure despite rising debt levels.
- Debt to Equity Ratio
- Rose steadily but remains relatively low indicating a cautious increase in financial leverage without compromising the equity base significantly.
Debt to Capital
Meta Platforms 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) | ||||||
| Finance lease liabilities, current | 76) | 90) | 129) | 75) | 54) | |
| Long-term debt | 28,826) | 18,385) | 9,923) | —) | —) | |
| Finance lease liabilities, non-current | 633) | 600) | 558) | 506) | 469) | |
| Total debt | 29,535) | 19,075) | 10,610) | 581) | 523) | |
| Stockholders’ equity | 182,637) | 153,168) | 125,713) | 124,879) | 128,290) | |
| Total capital | 212,172) | 172,243) | 136,323) | 125,460) | 128,813) | |
| Solvency Ratio | ||||||
| Debt to capital1 | 0.14 | 0.11 | 0.08 | 0.00 | 0.00 | |
| Benchmarks | ||||||
| Debt to Capital, Competitors2 | ||||||
| Alphabet Inc. | 0.05 | 0.05 | 0.06 | 0.06 | 0.06 | |
| Comcast Corp. | 0.54 | 0.54 | 0.54 | 0.50 | 0.53 | |
| 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
= 29,535 ÷ 212,172 = 0.14
2 Click competitor name to see calculations.
- Total Debt
- The total debt experienced a significant increase over the observed five-year period. Starting from a relatively low level of 523 million USD in 2020, the debt rose slightly to 581 million USD in 2021. However, in 2022 there was a sharp escalation to 10,610 million USD, followed by continued substantial increases to 19,075 million USD in 2023 and 29,535 million USD in 2024. This indicates a strong upward trend in the company's leverage or borrowing activity.
- Total Capital
- The total capital, representing the sum of debt and equity, showed a generally increasing trend throughout the period. The capital base decreased slightly from 128,813 million USD in 2020 to 125,460 million USD in 2021, but from 2022 onwards, it increased significantly, reaching 136,323 million USD, then 172,243 million USD in 2023, and up to 212,172 million USD in 2024. This growth suggests substantial expansion or value accumulation within the company.
- Debt to Capital Ratio
- The debt to capital ratio was negligible in 2020 and 2021, effectively reported as zero, implying minimal leverage or very low debt relative to total capital. However, this ratio rose notably from 2022 onwards, reaching 0.08 in 2022, 0.11 in 2023, and 0.14 in 2024. This reflects an increasing reliance on debt financing as a component of the overall capital structure, indicating a shift in the company’s financial strategy toward leveraging more debt relative to total capital.
Debt to Capital (including Operating Lease Liability)
Meta Platforms 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) | ||||||
| Finance lease liabilities, current | 76) | 90) | 129) | 75) | 54) | |
| Long-term debt | 28,826) | 18,385) | 9,923) | —) | —) | |
| Finance lease liabilities, non-current | 633) | 600) | 558) | 506) | 469) | |
| Total debt | 29,535) | 19,075) | 10,610) | 581) | 523) | |
| Operating lease liabilities, current | 1,942) | 1,623) | 1,367) | 1,127) | 1,023) | |
| Operating lease liabilities, non-current | 18,292) | 17,226) | 15,301) | 12,746) | 9,631) | |
| Total debt (including operating lease liability) | 49,769) | 37,924) | 27,278) | 14,454) | 11,177) | |
| Stockholders’ equity | 182,637) | 153,168) | 125,713) | 124,879) | 128,290) | |
| Total capital (including operating lease liability) | 232,406) | 191,092) | 152,991) | 139,333) | 139,467) | |
| Solvency Ratio | ||||||
| Debt to capital (including operating lease liability)1 | 0.21 | 0.20 | 0.18 | 0.10 | 0.08 | |
| Benchmarks | ||||||
| Debt to Capital (including Operating Lease Liability), Competitors2 | ||||||
| Alphabet Inc. | 0.09 | 0.10 | 0.10 | 0.10 | 0.11 | |
| Comcast Corp. | 0.55 | 0.56 | 0.56 | 0.52 | 0.55 | |
| 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)
= 49,769 ÷ 232,406 = 0.21
2 Click competitor name to see calculations.
- Total debt (including operating lease liability)
- The total debt of the company has exhibited a consistent and significant upward trend over the five-year period. Starting at $11,177 million at the end of 2020, the debt increased moderately to $14,454 million by the end of 2021. Subsequently, a sharp acceleration occurred with debt rising to $27,278 million in 2022, followed by further increases to $37,924 million in 2023 and reaching $49,769 million by the end of 2024. This represents an overall increase of more than fourfold over the timeframe considered.
- Total capital (including operating lease liability)
- Total capital has also shown a consistent growth pattern, though at a slower rate relative to total debt. Starting at $139,467 million at the end of 2020, total capital remained relatively stable through 2021 with a slight decrease to $139,333 million. Thereafter, it rose to $152,991 million in 2022 and experienced marked growth in subsequent years, reaching $191,092 million in 2023 and $232,406 million in 2024. This indicates an expansion in the company’s capital base by approximately 67% over five years.
- Debt to capital ratio (including operating lease liability)
- The debt to capital ratio has increased steadily each year, reflecting a rising proportion of debt financing within the overall capital structure. The ratio started at a low level of 0.08 at the end of 2020, increased to 0.10 by 2021, and then moved sharply higher to 0.18 in 2022. The upward trend continued with ratios of 0.20 in 2023 and 0.21 in 2024. This suggests a growing reliance on debt relative to total capital, reaching more than double the initial ratio within the period examined.
Debt to Assets
Meta Platforms Inc., debt to assets calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Finance lease liabilities, current | 76) | 90) | 129) | 75) | 54) | |
| Long-term debt | 28,826) | 18,385) | 9,923) | —) | —) | |
| Finance lease liabilities, non-current | 633) | 600) | 558) | 506) | 469) | |
| Total debt | 29,535) | 19,075) | 10,610) | 581) | 523) | |
| Total assets | 276,054) | 229,623) | 185,727) | 165,987) | 159,316) | |
| Solvency Ratio | ||||||
| Debt to assets1 | 0.11 | 0.08 | 0.06 | 0.00 | 0.00 | |
| Benchmarks | ||||||
| Debt to Assets, Competitors2 | ||||||
| Alphabet Inc. | 0.04 | 0.04 | 0.04 | 0.04 | 0.05 | |
| Comcast Corp. | 0.37 | 0.37 | 0.37 | 0.34 | 0.38 | |
| 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
= 29,535 ÷ 276,054 = 0.11
2 Click competitor name to see calculations.
- Total Debt
- The total debt demonstrated a pronounced upward trajectory over the five-year period. Starting at US$523 million at the end of 2020, it increased slightly to US$581 million in 2021, before experiencing a sharp rise to US$10,610 million in 2022. This growth continued aggressively, reaching US$19,075 million in 2023 and culminating in US$29,535 million by the close of 2024. This pattern indicates a substantial increase in leveraging activity or financing through debt instruments.
- Total Assets
- Total assets depicted a consistent and steady growth pattern throughout the analyzed timeframe. From US$159,316 million in 2020, the assets grew moderately to US$165,987 million in 2021, then accelerated to US$185,727 million in 2022. This upward trend progressed with significant increases to US$229,623 million in 2023 and further to US$276,054 million by the end of 2024, reflecting expansion and accumulation of resources or investments.
- Debt to Assets Ratio
- The debt to assets ratio remained negligible through 2020 and 2021, effectively at zero. However, starting in 2022, there was a noticeable rise in this ratio consistent with the increased debt levels. It increased from 0.06 in 2022 to 0.08 in 2023 and further to 0.11 in 2024. This indicates a gradual increase in financial leverage relative to the company’s asset base, suggesting greater reliance on debt financing as asset size grows.
Debt to Assets (including Operating Lease Liability)
Meta Platforms Inc., debt to assets (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Finance lease liabilities, current | 76) | 90) | 129) | 75) | 54) | |
| Long-term debt | 28,826) | 18,385) | 9,923) | —) | —) | |
| Finance lease liabilities, non-current | 633) | 600) | 558) | 506) | 469) | |
| Total debt | 29,535) | 19,075) | 10,610) | 581) | 523) | |
| Operating lease liabilities, current | 1,942) | 1,623) | 1,367) | 1,127) | 1,023) | |
| Operating lease liabilities, non-current | 18,292) | 17,226) | 15,301) | 12,746) | 9,631) | |
| Total debt (including operating lease liability) | 49,769) | 37,924) | 27,278) | 14,454) | 11,177) | |
| Total assets | 276,054) | 229,623) | 185,727) | 165,987) | 159,316) | |
| Solvency Ratio | ||||||
| Debt to assets (including operating lease liability)1 | 0.18 | 0.17 | 0.15 | 0.09 | 0.07 | |
| Benchmarks | ||||||
| Debt to Assets (including Operating Lease Liability), Competitors2 | ||||||
| Alphabet Inc. | 0.07 | 0.07 | 0.08 | 0.08 | 0.09 | |
| Comcast Corp. | 0.40 | 0.39 | 0.39 | 0.37 | 0.40 | |
| 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
= 49,769 ÷ 276,054 = 0.18
2 Click competitor name to see calculations.
- Total Debt (including operating lease liability)
- There is a clear upward trend in total debt over the observed five-year period. The debt increased significantly from $11,177 million at the end of 2020 to $49,769 million by the end of 2024. This represents more than a fourfold rise, indicating a substantial increase in leverage or financing activities during the period.
- Total Assets
- Total assets also show consistent growth, increasing from $159,316 million at the end of 2020 to $276,054 million at the end of 2024. The growth appears steady and substantial, with asset bases expanding by approximately 73% over the timeframe, reflecting ongoing investment and asset accumulation.
- Debt to Assets Ratio (including operating lease liability)
- The debt to assets ratio exhibits a notable upward trend, rising from 0.07 in 2020 to 0.18 in 2024. This indicates that the portion of the company’s assets financed through debt nearly tripled, moving from 7% to 18%. While still moderate, the rising ratio suggests an increasing reliance on debt relative to the asset base, which could imply higher financial risk or strategic leverage.
- Overall Analysis
- The data collectively show that both total debt and total assets have grown significantly over the period. However, the growth rate of debt outpaces that of assets, as evidenced by the rising debt to assets ratio. This could reflect strategic debt-driven investments or increased financing needs. While the company’s asset base has expanded robustly, attention should be given to the increasing leverage to assess its impact on financial stability and risk profile.
Financial Leverage
Meta Platforms Inc., financial leverage calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Total assets | 276,054) | 229,623) | 185,727) | 165,987) | 159,316) | |
| Stockholders’ equity | 182,637) | 153,168) | 125,713) | 124,879) | 128,290) | |
| Solvency Ratio | ||||||
| Financial leverage1 | 1.51 | 1.50 | 1.48 | 1.33 | 1.24 | |
| Benchmarks | ||||||
| Financial Leverage, Competitors2 | ||||||
| Alphabet Inc. | 1.39 | 1.42 | 1.43 | 1.43 | 1.44 | |
| Comcast Corp. | 3.11 | 3.20 | 3.18 | 2.87 | 3.03 | |
| 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
= 276,054 ÷ 182,637 = 1.51
2 Click competitor name to see calculations.
- Total Assets
- The total assets showed a consistent upward trajectory over the five-year period, rising from 159,316 million US dollars at the end of 2020 to 276,054 million US dollars by the end of 2024. The growth accelerated particularly between 2022 and 2024, indicating significant asset expansion during the later years.
- Stockholders’ Equity
- Stockholders' equity exhibited minor fluctuations initially but remained relatively stable from 2020 through 2022. Beginning in 2023, there was a noticeable increase, culminating in 182,637 million US dollars at the end of 2024. This growth suggests an improvement in net assets and potentially retained earnings or capital contributions.
- Financial Leverage
- The financial leverage ratio steadily increased throughout the period, moving from 1.24 in 2020 to 1.51 in 2024. This trend reflects a gradual rise in the company’s use of debt relative to equity to finance its assets. The increases in leverage correspond with the expanding asset base and the comparatively slower growth in equity, indicating greater reliance on external financing.
Interest Coverage
Meta Platforms 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 | 62,360) | 39,098) | 23,200) | 39,370) | 29,146) | |
| Add: Income tax expense | 8,303) | 8,330) | 5,619) | 7,914) | 4,034) | |
| Add: Interest expense | 715) | 446) | 176) | 15) | 14) | |
| Earnings before interest and tax (EBIT) | 71,378) | 47,874) | 28,995) | 47,299) | 33,194) | |
| Solvency Ratio | ||||||
| Interest coverage1 | 99.83 | 107.34 | 164.74 | 3,153.27 | 2,371.00 | |
| Benchmarks | ||||||
| Interest Coverage, Competitors2 | ||||||
| Alphabet Inc. | 448.07 | 279.30 | 200.80 | 263.24 | 357.16 | |
| Comcast Corp. | 5.52 | 6.01 | 3.38 | 5.46 | 4.07 | |
| 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
= 71,378 ÷ 715 = 99.83
2 Click competitor name to see calculations.
The analysis of the financial data reveals significant fluctuations in earnings before interest and tax (EBIT) over the five-year period. EBIT increased notably from US$33,194 million in 2020 to US$47,299 million in 2021, representing a strong growth phase. However, there was a sharp decline to US$28,995 million in 2022. Following this dip, EBIT recovered markedly in 2023, reaching US$47,874 million, and continued an upward trajectory into 2024 with a peak of US$71,378 million, indicating substantial improvement in operating profitability.
Interest expense exhibited a consistent upward trend throughout the period. Starting at a relatively low value of US$14 million in 2020, the interest expense rose slightly to US$15 million in 2021 before increasing significantly to US$176 million in 2022. This trend accelerated in the subsequent years, with interest expense reaching US$446 million in 2023 and US$715 million in 2024. This rise suggests increasing debt levels or higher borrowing costs over time.
The interest coverage ratio, which measures the ability to cover interest expenses with EBIT, decreased dramatically despite the high EBIT values. The ratio was exceptionally strong at 2371 in 2020 and improved further to 3153.27 in 2021, reflecting minimal risk in meeting interest obligations. However, it declined sharply to 164.74 in 2022, then dropped further to 107.34 in 2023 and to 99.83 in 2024. While the ratio remains comfortably above critical levels, the decreasing trend indicates a relative increase in financial risk, primarily due to the rising interest expense outpacing EBIT growth.
- EBIT Trend
- Fluctuated significantly with an initial growth, a mid-period dip, and a strong recovery to a new high by 2024.
- Interest Expense Trend
- Consistently increased each year, especially sharply after 2021, signaling growing debt service obligations.
- Interest Coverage Ratio Trend
- Decreased markedly from extremely high values, reflecting increased financial leverage and interest burden despite improving EBIT.
Fixed Charge Coverage
Meta Platforms Inc., fixed charge coverage calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income | 62,360) | 39,098) | 23,200) | 39,370) | 29,146) | |
| Add: Income tax expense | 8,303) | 8,330) | 5,619) | 7,914) | 4,034) | |
| Add: Interest expense | 715) | 446) | 176) | 15) | 14) | |
| Earnings before interest and tax (EBIT) | 71,378) | 47,874) | 28,995) | 47,299) | 33,194) | |
| Add: Operating lease cost | 2,359) | 2,091) | 1,857) | 1,540) | 1,391) | |
| Earnings before fixed charges and tax | 73,737) | 49,965) | 30,852) | 48,839) | 34,585) | |
| Interest expense | 715) | 446) | 176) | 15) | 14) | |
| Operating lease cost | 2,359) | 2,091) | 1,857) | 1,540) | 1,391) | |
| Fixed charges | 3,074) | 2,537) | 2,033) | 1,555) | 1,405) | |
| Solvency Ratio | ||||||
| Fixed charge coverage1 | 23.99 | 19.69 | 15.18 | 31.41 | 24.62 | |
| Benchmarks | ||||||
| Fixed Charge Coverage, Competitors2 | ||||||
| Alphabet Inc. | 34.54 | 24.36 | 22.90 | 30.80 | 21.02 | |
| Comcast Corp. | 4.50 | 4.87 | 2.82 | 4.48 | 3.47 | |
| 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
= 73,737 ÷ 3,074 = 23.99
2 Click competitor name to see calculations.
- Earnings before fixed charges and tax
- The earnings before fixed charges and tax exhibit significant fluctuations over the five-year period. Starting at 34,585 million USD in 2020, there is a marked increase to 48,839 million USD in 2021, followed by a decline to 30,852 million USD in 2022. Subsequently, the value rebounds strongly, reaching 49,965 million USD in 2023 and further rising to 73,737 million USD in 2024. This trend indicates periods of both contraction and robust growth, with overall earnings showing a substantial increase by the end of the period compared to the beginning.
- Fixed charges
- Fixed charges steadily increase each year, starting from 1,405 million USD in 2020 and rising to 3,074 million USD in 2024. The increase is consistent and relatively proportional across the years, indicating a growing burden of fixed financial obligations such as interest on debt or lease expenses.
- Fixed charge coverage ratio
- The fixed charge coverage ratio, which measures the ability to cover fixed financial obligations, demonstrates variability across the timeframe. Beginning at 24.62 in 2020, it improves to a peak of 31.41 in 2021, suggesting strong coverage. However, the ratio declines sharply to 15.18 in 2022, reflecting a reduced ability to cover fixed charges during that year. It gradually recovers over the next two years, increasing to 19.69 in 2023 and further to 23.99 in 2024. Despite the recovery, coverage in 2024 does not reach the peak levels observed in 2021, indicating some ongoing pressure on financial stability.
- Overall analysis
- The overall financial data indicates a dynamic operating environment with earnings susceptible to fluctuations. The steady increase in fixed charges points to rising financial commitments. While the fixed charge coverage ratio shows resilience in most years, the notable dip in 2022 signifies a period of financial challenge requiring attention. The recovery in earnings and coverage ratio in subsequent years suggests effective management measures or improved operational performance to strengthen financial health.