Analysis of Solvency Ratios
Quarterly Data
Solvency ratios also known as long-term debt ratios measure a company ability to meet long-term obligations.
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- Balance Sheet: Assets
- Cash Flow Statement
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Geographic Areas
- Enterprise Value to FCFF (EV/FCFF)
- Capital Asset Pricing Model (CAPM)
- Dividend Discount Model (DDM)
- Selected Financial Data since 2005
- Price to Earnings (P/E) since 2005
- Analysis of Revenues
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Solvency Ratios (Summary)
Paramount Global, solvency ratios (quarterly data)
Based on: 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).
The analysis of the financial leverage and debt-related ratios over the reviewed quarters reveals a clear downward trend in the company's reliance on debt financing relative to equity, capital, and assets.
- Debt to Equity
- This ratio shows a significant decline from 2.15 in the first quarter of 2019 to approximately 0.73 by the first quarter of 2023, indicating reduced financial risk and lower leverage. When including operating lease liabilities, a similar decreasing pattern is observed, though values remain slightly higher due to the additional liabilities considered.
- Debt to Capital
- The ratio decreases from 0.68 in the first quarter of 2019 to around 0.42 by the first quarter of 2023, reflecting a gradual reduction in the proportion of debt in the company's capital structure. The inclusion of operating lease liabilities slightly increases these ratios but preserves the downward trend consistently throughout the periods.
- Debt to Assets
- The debt to assets ratios reveal a modest decline from roughly 0.39 down to 0.28 over the time span analyzed, suggesting increasing asset coverage against debts. The ratios, when including operating lease liabilities, descend from about 0.43 to 0.30, which demonstrates a parallel trend and confirms decreasing leverage relative to total assets.
- Financial Leverage
- The financial leverage ratio decreases markedly from 5.54 in early 2019 to about 2.59 in the first quarter of 2023. This substantial reduction indicates a trend towards a more conservative capital structure and reduced risk stemming from debt usage.
- Interest Coverage
- The interest coverage ratio exhibits more volatility. It declines from 6.37 in early 2019 to a low of 0.01 by the first quarter of 2023, with occasional recoveries in between. This suggests increasing difficulty in covering interest expenses from operating earnings, particularly towards the most recent period where the ratio is almost negligible. The sharp decrease in interest coverage raises concerns regarding the company's ability to service debt efficiently in the short term.
Overall, the company's capital structure has become less leveraged over time, with debt ratios steadily decreasing. However, the worsening interest coverage ratio in recent periods indicates potential earnings pressures relative to interest obligations, warranting careful monitoring of operating performance and debt servicing capacity going forward.
Debt Ratios
Coverage Ratios
Debt to Equity
Paramount Global, debt to equity calculation (quarterly data)
| Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||
| Current debt | |||||||||||||||||||||||
| Long-term debt, net of current portion | |||||||||||||||||||||||
| Total debt | |||||||||||||||||||||||
| Total Paramount stockholders’ equity | |||||||||||||||||||||||
| Solvency Ratio | |||||||||||||||||||||||
| Debt to equity1 | |||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||
| Debt to Equity, Competitors2 | |||||||||||||||||||||||
| Alphabet Inc. | |||||||||||||||||||||||
| Comcast Corp. | |||||||||||||||||||||||
| Meta Platforms Inc. | |||||||||||||||||||||||
| Netflix Inc. | |||||||||||||||||||||||
| Trade Desk Inc. | |||||||||||||||||||||||
| Walt Disney Co. | |||||||||||||||||||||||
Based on: 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).
1 Q1 2023 Calculation
Debt to equity = Total debt ÷ Total Paramount stockholders’ equity
= ÷ =
2 Click competitor name to see calculations.
The financial data reveals several notable trends in the company's capital structure over the observed periods.
- Total Debt
- The total debt level remained relatively stable around US$9.3 to US$9.4 billion through the first three quarters of 2019, then experienced a significant spike to approximately US$18.7 billion by the end of 2019. This elevated debt level was maintained through 2020, fluctuating slightly but staying near the US$19.7 billion mark. Starting in 2021, total debt declined progressively to roughly US$15.8 billion by early 2023, indicating a marked deleveraging effort in recent years.
- Total Stockholders’ Equity
- Stockholders’ equity demonstrated a strong upward trajectory throughout the period measured. Initially ranging from about US$4.3 billion to US$5 billion during early 2019, equity surged notably to over US$13 billion by the end of 2019. Growth continued steadily thereafter, reaching a peak of approximately US$23 billion by late 2022. A slight decline was observed in early 2023 with equity around US$21.9 billion, though still significantly higher than earlier years. This overall increase reflects sustained capital accumulation or retained earnings expansion over time.
- Debt to Equity Ratio
- The debt to equity ratio exhibited a downward trend, highlighting an improvement in the company’s leverage position. The ratio started above 2.15 in early 2019, then sharply dropped to around 1.42 by the end of 2019. It continued to decline gradually, reaching a low of approximately 0.69 by mid to late 2022. A slight uptick to about 0.73 occurred in early 2023 but overall demonstrated enhanced equity cushioning against debt obligations.
In summary, the company underwent a period of increased indebtedness in late 2019, followed by a sustained phase of debt reduction and equity growth through 2022. The improved debt to equity ratio underscores stronger financial stability and potentially greater flexibility for future financing or investment activities. The trends may suggest strategic deleveraging concurrent with solid equity value creation over the analyzed timeframe.
Debt to Equity (including Operating Lease Liability)
Paramount Global, debt to equity (including operating lease liability) calculation (quarterly data)
| Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||
| Current debt | |||||||||||||||||||||||
| Long-term debt, net of current portion | |||||||||||||||||||||||
| Total debt | |||||||||||||||||||||||
| Noncurrent operating lease liabilities | |||||||||||||||||||||||
| Total debt (including operating lease liability) | |||||||||||||||||||||||
| Total Paramount stockholders’ equity | |||||||||||||||||||||||
| Solvency Ratio | |||||||||||||||||||||||
| Debt to equity (including operating lease liability)1 | |||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||
| Debt to Equity (including Operating Lease Liability), Competitors2 | |||||||||||||||||||||||
| Alphabet Inc. | |||||||||||||||||||||||
| Meta Platforms Inc. | |||||||||||||||||||||||
| Trade Desk Inc. | |||||||||||||||||||||||
Based on: 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).
1 Q1 2023 Calculation
Debt to equity (including operating lease liability) = Total debt (including operating lease liability) ÷ Total Paramount stockholders’ equity
= ÷ =
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals notable trends in the company's debt and equity structure over the observed periods.
- Total Debt (Including Operating Lease Liability)
- The total debt showed relative stability from March 2019 to September 2019, fluctuating slightly around the 10,200 to 10,367 million US dollars range. However, there was a significant increase by December 2019, roughly doubling to over 20,600 million US dollars. This elevated debt level persisted throughout 2020, peaking around June before gradually declining. From March 2021 onwards, the total debt exhibited a consistent downward trend, decreasing steadily to approximately 17,251 million US dollars by March 2023.
- Total Paramount Stockholders' Equity
- Stockholders' equity experienced substantial growth starting from March 2019 at 4,349 million US dollars, with a notable increase to 13,207 million US dollars by December 2019. This upward momentum continued through 2020 and 2021, reaching a peak of 23,036 million US dollars by December 2022. A modest decline was observed in the subsequent quarter, with equity falling slightly to 21,851 million US dollars by March 2023.
- Debt to Equity Ratio (Including Operating Lease Liability)
- The debt to equity ratio decreased markedly from 2.35 in March 2019 to 1.56 by December 2019, reflecting the rapid equity growth relative to debt during that period. Throughout 2020, the ratio continued to decline from 1.52 mid-year to 1.39 at year-end, indicating a gradual deleveraging trend. This downward trend accelerated from 2021 onwards, with the ratio dropping below 1.0 and reaching a low of 0.75 by December 2022. The ratio displayed a slight increase to 0.79 by March 2023.
Overall, the data illustrate a strategic reduction of leverage after a significant expansion phase in late 2019. Equity growth outpaced debt increases, improving the company's solvency position and lowering financial risk as demonstrated by the declining debt to equity ratio. The most recent data suggest the company maintained a relatively stable capital structure with a modest uptick in leverage at the end of the analysis period.
Debt to Capital
Paramount Global, debt to capital calculation (quarterly data)
| Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||
| Current debt | |||||||||||||||||||||||
| Long-term debt, net of current portion | |||||||||||||||||||||||
| Total debt | |||||||||||||||||||||||
| Total Paramount stockholders’ equity | |||||||||||||||||||||||
| Total capital | |||||||||||||||||||||||
| Solvency Ratio | |||||||||||||||||||||||
| Debt to capital1 | |||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||
| Debt to Capital, Competitors2 | |||||||||||||||||||||||
| Alphabet Inc. | |||||||||||||||||||||||
| Comcast Corp. | |||||||||||||||||||||||
| Meta Platforms Inc. | |||||||||||||||||||||||
| Netflix Inc. | |||||||||||||||||||||||
| Trade Desk Inc. | |||||||||||||||||||||||
| Walt Disney Co. | |||||||||||||||||||||||
Based on: 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).
1 Q1 2023 Calculation
Debt to capital = Total debt ÷ Total capital
= ÷ =
2 Click competitor name to see calculations.
The financial data indicates distinct trends in the company's leverage and capital structure over the observed periods. Total debt remained relatively stable from early 2019 through the third quarter of 2019, with a significant increase toward the end of 2019, nearly doubling compared to the previous quarters. This elevated level persisted throughout 2020 before starting a gradual decrease from early 2021, continuing through to the first quarter of 2023.
Total capital exhibited a similar pattern. It held steady during the initial quarters of 2019, followed by a sharp rise at the end of the year, reflective of the increased debt level. Throughout 2020, total capital continued to grow moderately. From 2021 onward, total capital peaked around the fourth quarter of 2021 and then showed a gradual decline or stabilization through early 2023.
The debt-to-capital ratio reflects these movements, showing a high leverage ratio around 0.65 to 0.68 in the first three quarters of 2019. This ratio decreased notably by the end of 2019 and continued to decline steadily through 2021, reaching about 0.41. The reduction in this ratio implies a de-risking of the capital structure, with lower reliance on debt relative to total capital. In 2022 and early 2023, the ratio stabilized around 0.41 to 0.42, suggesting a consistent and possibly targeted leverage position.
- Total Debt
- Initially stable with a sharp increase in late 2019, followed by a gradual reduction starting in 2021.
- Total Capital
- Moderate growth until the end of 2019 with a significant jump, subsequent stabilization, and slight decline starting in late 2021.
- Debt to Capital Ratio
- High leverage in early 2019, decreasing steadily thereafter to a more conservative leverage level maintained through 2022 and early 2023.
Debt to Capital (including Operating Lease Liability)
Paramount Global, debt to capital (including operating lease liability) calculation (quarterly data)
| Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||
| Current debt | |||||||||||||||||||||||
| Long-term debt, net of current portion | |||||||||||||||||||||||
| Total debt | |||||||||||||||||||||||
| Noncurrent operating lease liabilities | |||||||||||||||||||||||
| Total debt (including operating lease liability) | |||||||||||||||||||||||
| Total Paramount stockholders’ equity | |||||||||||||||||||||||
| Total capital (including operating lease liability) | |||||||||||||||||||||||
| Solvency Ratio | |||||||||||||||||||||||
| Debt to capital (including operating lease liability)1 | |||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||
| Debt to Capital (including Operating Lease Liability), Competitors2 | |||||||||||||||||||||||
| Alphabet Inc. | |||||||||||||||||||||||
| Meta Platforms Inc. | |||||||||||||||||||||||
| Trade Desk Inc. | |||||||||||||||||||||||
Based on: 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).
1 Q1 2023 Calculation
Debt to capital (including operating lease liability) = Total debt (including operating lease liability) ÷ Total capital (including operating lease liability)
= ÷ =
2 Click competitor name to see calculations.
The financial data reveals notable trends in the company's debt profile and capital structure over the examined periods. The total debt, including operating lease liability, remained relatively stable during the early periods from March 2019 to September 2019, fluctuating slightly around 10 billion US dollars. However, there was a significant increase in total debt by the end of 2019, more than doubling to over 20 billion US dollars, which then persisted through 2020. Starting from March 2021, the total debt showed a consistent decreasing trend, declining steadily to about 17.3 billion US dollars by March 2023.
Total capital, which also includes operating lease liabilities, followed a somewhat parallel trajectory to total debt. It exhibited growth from approximately 14.6 billion US dollars in early 2019 to over 33 billion by the end of 2019, then continued to increase moderately reaching a peak near 41.7 billion US dollars in December 2021. Post this peak, total capital experienced a gradual decline, reaching about 39.1 billion US dollars by March 2023.
The ratio of debt to capital demonstrates a clear and consistent downward trend over the entire period. From an initial high ratio of 0.70 in March 2019, this leverage metric declined steadily, dropping below 0.50 in early 2021 and stabilizing around 0.43 to 0.44 during the last observed quarters. This indicates an improvement in the company's capital structure by reducing its reliance on debt financing relative to its total capital base.
- Total Debt Trends
- Relatively stable in early 2019; sharp increase at end of 2019; stable in 2020; steady decline from 2021 to 2023.
- Total Capital Trends
- Growth through 2019 to 2021; peaking in December 2021; gradual decline thereafter through early 2023.
- Debt to Capital Ratio
- Consistent decrease from 0.70 in March 2019 to approximately 0.44 by March 2023, indicating reduced leverage.
Overall, the company has demonstrated a strategic reduction in leverage and improved balance sheet strength during the recent periods, particularly from early 2021 onward. This is reflected in both the falling total debt levels and the declining debt to capital ratio, despite fluctuations in total capital. These trends suggest an emphasis on deleveraging and potentially a shift towards a more conservative financial stance over the analyzed timeline.
Debt to Assets
Paramount Global, debt to assets calculation (quarterly data)
| Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||
| Current debt | |||||||||||||||||||||||
| Long-term debt, net of current portion | |||||||||||||||||||||||
| Total debt | |||||||||||||||||||||||
| Total assets | |||||||||||||||||||||||
| Solvency Ratio | |||||||||||||||||||||||
| Debt to assets1 | |||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||
| Debt to Assets, Competitors2 | |||||||||||||||||||||||
| Alphabet Inc. | |||||||||||||||||||||||
| Comcast Corp. | |||||||||||||||||||||||
| Meta Platforms Inc. | |||||||||||||||||||||||
| Netflix Inc. | |||||||||||||||||||||||
| Trade Desk Inc. | |||||||||||||||||||||||
| Walt Disney Co. | |||||||||||||||||||||||
Based on: 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).
1 Q1 2023 Calculation
Debt to assets = Total debt ÷ Total assets
= ÷ =
2 Click competitor name to see calculations.
The financial data reveals several notable trends concerning debt, assets, and leverage ratios over the analyzed periods.
- Total Debt
- Total debt was relatively stable around the 9,300 to 9,400 million USD range in the first three quarters of 2019. It then experienced a significant increase by the end of 2019, nearly doubling to approximately 18,700 million USD. Through 2020, total debt remained elevated, fluctuating close to 20,000 million USD during the middle quarters, before gradually declining starting in 2021. By the first quarter of 2023, total debt had decreased to roughly 15,850 million USD, indicating a reduction in leverage in recent periods.
- Total Assets
- Total assets followed a somewhat parallel trajectory with an initial level near 24,000 million USD during early 2019. Assets sharply increased by the end of 2019, more than doubling to nearly 50,000 million USD. After this leap, total assets continued a generally upward trend through 2021, peaking near 58,600 million USD in the final quarter of 2021. A mild decrease and some fluctuation occurred through 2022 and into early 2023, with assets measured just above 56,500 million USD in the first quarter of 2023.
- Debt to Assets Ratio
- The debt to assets ratio remained around 0.38 to 0.39 from early 2019 up to the end of 2020, indicative of a moderate leverage position despite the increased debt level. From 2021 onwards, there was a clear downward trend in the leverage ratio, declining steadily from approximately 0.32 to below 0.28 by early 2023. This decrease reflects the company’s efforts or effects of market conditions leading to improved balance sheet strength characterized by either lowering debt levels relative to assets or growth in asset base exceeding debt increments.
Overall, the company encountered a major increase in liabilities and assets toward the end of 2019, possibly linked to significant transactions or financing activities. Subsequently, it managed to reduce debt levels while maintaining substantial asset levels, resulting in improved solvency ratios. The persistent reduction in the debt to assets ratio over the last three years suggests a focus on deleveraging and enhancing financial stability.
Debt to Assets (including Operating Lease Liability)
Paramount Global, debt to assets (including operating lease liability) calculation (quarterly data)
| Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||
| Current debt | |||||||||||||||||||||||
| Long-term debt, net of current portion | |||||||||||||||||||||||
| Total debt | |||||||||||||||||||||||
| Noncurrent operating lease liabilities | |||||||||||||||||||||||
| Total debt (including operating lease liability) | |||||||||||||||||||||||
| Total assets | |||||||||||||||||||||||
| Solvency Ratio | |||||||||||||||||||||||
| Debt to assets (including operating lease liability)1 | |||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||
| Debt to Assets (including Operating Lease Liability), Competitors2 | |||||||||||||||||||||||
| Alphabet Inc. | |||||||||||||||||||||||
| Meta Platforms Inc. | |||||||||||||||||||||||
| Trade Desk Inc. | |||||||||||||||||||||||
Based on: 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).
1 Q1 2023 Calculation
Debt to assets (including operating lease liability) = Total debt (including operating lease liability) ÷ Total assets
= ÷ =
2 Click competitor name to see calculations.
The financial data reveals several notable trends regarding the company’s leverage and asset base over the examined periods.
- Total Debt (including operating lease liability)
- Total debt remained relatively stable around the 10,200 to 10,400 million US dollars range through the first three quarters of 2019, before nearly doubling at the end of 2019 and into 2020, peaking close to 21,800 million US dollars in mid-2020. Subsequently, there is a gradual decrease in total debt from late 2020 onwards, falling steadily to approximately 17,250 million US dollars by the first quarter of 2023. This indicates a significant deleveraging effort or repayment of obligations over the last few years.
- Total Assets
- Total assets experienced a substantial increase at the end of 2019, rising from around 24,400 million US dollars to nearly 49,520 million US dollars. Following this jump, assets showed a consistent upward trend, reaching a peak of approximately 58,600 million US dollars by the end of 2021. After that, assets slightly declined but remained stable in the mid-56,000 million US dollar range through the first quarter of 2023. This overall growth reflects asset accumulation or valuation changes during the period.
- Debt to Assets Ratio (including operating lease liability)
- The debt to assets ratio was around 0.42 to 0.43 for much of 2019 and 2020, reflecting a relatively balanced leverage position post-increasing debt and asset base. However, from early 2021 onward, the ratio shows a consistent downward trend, falling from 0.35 to approximately 0.30 by the first quarter of 2023. This decreasing ratio suggests an improvement in the company’s financial leverage, driven by a combination of asset growth and reduction in total debt levels.
In summary, the company underwent a significant increase in both debt and assets at the end of 2019, followed by a controlled reduction in debt alongside steady asset growth in subsequent years. The declining debt to assets ratio indicates a strengthening balance sheet and reduced financial risk over the recent periods.
Financial Leverage
Paramount Global, financial leverage calculation (quarterly data)
| Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||
| Total assets | |||||||||||||||||||||||
| Total Paramount stockholders’ equity | |||||||||||||||||||||||
| Solvency Ratio | |||||||||||||||||||||||
| Financial leverage1 | |||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||
| Financial Leverage, Competitors2 | |||||||||||||||||||||||
| Alphabet Inc. | |||||||||||||||||||||||
| Comcast Corp. | |||||||||||||||||||||||
| Meta Platforms Inc. | |||||||||||||||||||||||
| Netflix Inc. | |||||||||||||||||||||||
| Trade Desk Inc. | |||||||||||||||||||||||
| Walt Disney Co. | |||||||||||||||||||||||
Based on: 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).
1 Q1 2023 Calculation
Financial leverage = Total assets ÷ Total Paramount stockholders’ equity
= ÷ =
2 Click competitor name to see calculations.
- Total Assets
-
The total assets experienced considerable fluctuation over the observed periods. Initially, values hovered around 24 billion US dollars from the first quarter of 2019 through the third quarter of 2019. A significant increase occurred by the end of 2019, nearly doubling the total assets to just under 50 billion US dollars. Following this spike, the asset base exhibited moderate fluctuations but generally maintained a level between approximately 49 billion and 58 billion US dollars through to the first quarter of 2023.
This overall increase in asset base suggests substantial acquisition or revaluation activities around the end of 2019, after which the company maintained a relatively stable and somewhat growing asset structure.
- Total Paramount Stockholders’ Equity
-
Stockholders’ equity displayed a rising trend throughout the periods, with a notable leap from approximately 5 billion US dollars at the third quarter of 2019 to over 13 billion US dollars at the end of 2019, mirroring the asset growth trend. From 2020 onwards, equity continued to grow steadily, reaching a peak of around 23 billion US dollars in the fourth quarter of 2021.
After this peak, equity values showed relative stability with minor fluctuations, decreasing slightly during early 2023 but remaining above 21 billion US dollars. The increase in equity indicates improved retained earnings or capital infusion, which also aligns with the growth in total assets over the period.
- Financial Leverage Ratio
-
The financial leverage ratio demonstrated a consistent and significant downward trend throughout the observed timeframe. Starting at a very high level of 5.54 in the first quarter of 2019, the ratio declined steadily to approximately 3.75 by the end of 2019, corresponding with the asset and equity changes noted earlier.
From 2020 to early 2023, the leverage ratio decreased continuously, reaching a low point around 2.5 to 2.6 range. This decline implies a reduction in the use of debt relative to equity, reflecting an improved capital structure and potentially lower financial risk. The reduction in financial leverage may also indicate increased equity financing or earnings retention rather than reliance on external debt.
- Overall Insights
-
The data indicates that the company underwent a major financial event around the end of 2019, significantly increasing both assets and equity, which likely contributed to a reduction in financial leverage. Since then, the company has maintained a larger asset base with steady growth in equity, while continuing to reduce reliance on debt financing.
The financial strategy appears to focus on strengthening the balance sheet by improving equity levels and lowering leverage over time, suggesting a more conservative and potentially more sustainable financial position entering 2023.
Interest Coverage
Paramount Global, interest coverage calculation (quarterly data)
| Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |||||||
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| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||
| Net earnings (loss) attributable to Paramount | |||||||||||||||||||||||
| Add: Net income attributable to noncontrolling interest | |||||||||||||||||||||||
| Less: Net earnings from discontinued operations, net of tax | |||||||||||||||||||||||
| Add: Income tax expense | |||||||||||||||||||||||
| Add: Interest expense | |||||||||||||||||||||||
| Earnings before interest and tax (EBIT) | |||||||||||||||||||||||
| Solvency Ratio | |||||||||||||||||||||||
| Interest coverage1 | |||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||
| Interest Coverage, Competitors2 | |||||||||||||||||||||||
| Comcast Corp. | |||||||||||||||||||||||
| Netflix Inc. | |||||||||||||||||||||||
Based on: 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).
1 Q1 2023 Calculation
Interest coverage
= (EBITQ1 2023
+ EBITQ4 2022
+ EBITQ3 2022
+ EBITQ2 2022)
÷ (Interest expenseQ1 2023
+ Interest expenseQ4 2022
+ Interest expenseQ3 2022
+ Interest expenseQ2 2022)
= ( + + + )
÷ ( + + + )
=
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals several noteworthy trends in the operational performance and financial health over the examined periods.
- Earnings Before Interest and Tax (EBIT)
- The EBIT figures demonstrate considerable volatility across the quarters. Initially, EBIT started strong in early 2019, with a peak of 1,815 million US dollars in the first quarter, followed by a declining trend throughout 2019, culminating in a negative value (-30 million) by the end of that year. This decline suggests a weakening operational profitability leading up to 2020.
- In 2020, EBIT partially recovered, displaying an upward movement to 1,253 million US dollars in the final quarter, reflecting improvement in operational earnings amid challenging global economic conditions. The first three quarters of 2021 witnessed relatively stable EBIT values, with a notable peak in the last quarter at 2,647 million US dollars, indicating a significant operational turnaround.
- However, from the beginning of 2022 onwards, the EBIT trend exhibited instability, with sharp decreases observed. The last quarter of 2022 saw EBIT drop to only 104 million US dollars, and the first quarter of 2023 reflects a substantial negative EBIT of -1,312 million US dollars. This sharp decline suggests deteriorating earnings performance and possible operational difficulties in the most recent periods.
- Interest Expense
- Interest expense remained relatively consistent over the observed period, ranging narrowly between 226 million and 268 million US dollars. This steadiness indicates stable debt levels or cost of borrowing without significant increases in interest obligations, suggesting controlled financing costs.
- Interest Coverage Ratio
- The interest coverage ratio, which measures the ability to meet interest payments from operating earnings, mirrors the fluctuations in EBIT. It starts high at 6.37 in early 2019 and decreases through the quarters, reaching a low of 4.42 by year-end 2019, aligned with declining EBIT.
- During 2020, the ratio fluctuated, dipping to a low of 2.86 in the third quarter before partially recovering to 6.19 by the end of 2021, coinciding with improved EBIT figures. This recovery period suggests improved capacity to cover interest expenses during a time of rising operational performance.
- From early 2022 onwards, the interest coverage ratio declined sharply to near zero (0.01 in the first quarter of 2023), closely aligned with the significant negative EBIT values, indicating an impaired ability to generate sufficient earnings to cover interest expenses. This trend raises concerns regarding financial stability and potential liquidity stress.
In summary, the data indicates that operational earnings displayed marked fluctuations, with periods of recovery followed by significant downturns. Despite stable interest expenses, the declining EBIT has increasingly strained the company’s ability to cover its interest obligations, particularly in the most recent quarters. The sharp drop in both EBIT and interest coverage signals potential financial stress that warrants close monitoring and possible strategic action to address operational efficiency and financial resilience.