T-Mobile US Inc. (NASDAQ:TMUS)

The financial ratios presented indicate evolving leverage and coverage trends over the five-year period ending in 2024.

Debt to Equity Ratios

The debt to equity ratio shows a moderate decreasing trend from 1.13 in 2020 to 1.07 in 2022, indicating a slight reduction in reliance on debt relative to equity during this period. However, it subsequently rises to 1.20 in 2023 and 1.31 in 2024, suggesting increased leverage in the later years. When including operating lease liabilities, the ratio remains higher but follows a similar pattern, decreasing initially from 1.59 to 1.53 (2020 to 2021), then rising steadily to 1.79 in 2024. This reflects growing financial obligations inclusive of lease commitments.

Debt to Capital Ratios

Debt to capital ratios remain relatively stable over the years. The ratio without lease liabilities slightly decreases from 0.53 in 2020 and 2021 to 0.52 in 2022 but then rises to 0.54 in 2023 and 0.57 in 2024, indicating a moderately increasing proportion of debt in the overall capital structure. Including operating lease liabilities, the ratio holds steady at 0.61 from 2020 to 2022, then increases modestly to 0.63 and 0.64 in 2023 and 2024, reinforcing the upward leverage trend when leases are considered.

Debt to Assets Ratios

The debt to assets ratio excluding leases declines slightly from 0.37 in 2020 and 2021 to 0.35 in 2022, before increasing again to 0.37 in 2023 and 0.39 in 2024. The inclusion of operating lease liabilities results in higher ratios, ranging from 0.51 to 0.53, with a marginal upward trend from 2021 onwards. Overall, this suggests a generally stable but slightly rising debt load relative to total assets in recent years.

Financial Leverage

Financial leverage remains relatively consistent, hovering around 3.0 from 2020 to 2022, then increasing to 3.21 in 2023 and to 3.37 in 2024. This upward movement indicates a growing use of debt financing relative to equity.

Interest and Fixed Charge Coverage

Interest coverage ratio displays a noteworthy improvement, declining from 2.31 in 2020 to 1.94 in 2022, which may signal increased difficulty in meeting interest obligations initially. However, it improves markedly to 4.30 in 2023 and further to 5.31 in 2024, reflecting enhanced earnings or reduced interest expenses relative to debt service during the last two years.

Similarly, fixed charge coverage decreases from 1.49 in 2020 to 1.32 in 2022 but then exhibits a strong recovery to 2.32 in 2023 and 2.79 in 2024. This suggests a significant enhancement in the company’s ability to cover fixed financial obligations, including interest and lease payments, towards the end of the period.

In summary, the period shows an initial phase of slight deleveraging followed by increased leverage from 2022 onwards, as evidenced by rising debt-related ratios. Concurrently, the coverage ratios demonstrate an initial weakening but substantial improvement in recent years, indicating strengthened capacity to meet financial obligations despite higher leverage. The inclusion of operating lease liabilities consistently elevates leverage ratios, implying substantial off-balance-sheet financial commitments that impact overall risk assessment.

The financial data exhibits distinct trends in the company's leverage and equity position over the given period.

Total Debt

The total debt demonstrates a generally increasing trend from 73,632 million US dollars in 2020 to 80,591 million US dollars in 2024. While there is a slight decrease observed in 2022 compared to 2021, the overall movement is upward, indicating a growing reliance on debt financing or increased borrowing activities over the years.

Stockholders’ Equity

The stockholders’ equity shows an initial increase from 65,344 million US dollars in 2020 to a peak of 69,656 million US dollars in 2022. However, from 2022 onwards, there is a noticeable decline, dropping to 61,741 million US dollars by 2024. This decline may reflect share repurchases, dividend payments exceeding net income, or losses impacting retained earnings during this period.

Debt to Equity Ratio

The debt to equity ratio exhibits a fluctuating but generally upward trend. It starts at 1.13 in 2020, decreasing slightly to 1.07 in 2022, which aligns with the peak in equity and a slight dip in total debt. After 2022, the ratio increases more sharply to 1.31 by 2024. This rising leverage ratio suggests the company is adopting a more debt-heavy capital structure relative to equity in recent years, which could imply higher financial risk or an aggressive growth or capital expenditure strategy.

In summary, the data indicates that the company has been steadily increasing its total debt while its equity base has weakened since 2022. Consequently, the leverage ratio has increased, signalling a shift toward higher debt reliance that may require closer monitoring of the company's capacity to service debt and maintain financial stability going forward.

The financial data exhibits a consistent increase in total debt over the five-year period. Starting at $104,219 million in 2020, the total debt, including operating lease liabilities, rises steadily to $110,280 million by the end of 2024. This gradual upward trend indicates a growing reliance on debt financing during the years observed.

Conversely, stockholders' equity demonstrates a different pattern. It increases from $65,344 million in 2020 to a peak of $69,656 million in 2022 but then declines in subsequent years to $61,741 million by the end of 2024. This decrease in equity in the latter years may point to accumulated losses, share repurchases, or dividend payments that have exceeded new equity issuance.

The debt to equity ratio, which measures financial leverage, reflects these trends. Beginning at 1.59 in 2020, the ratio slightly decreases to 1.53 in 2021, then rises slightly to 1.55 in 2022, followed by a more pronounced increase to 1.79 in 2024. The rising ratio from 2022 onwards suggests that debt is growing faster than equity, indicating increased leverage and potentially higher financial risk.

Total Debt

Steady increase from $104.2 billion in 2020 to $110.3 billion in 2024.

Stockholders’ Equity

Initial growth from $65.3 billion in 2020 to $69.7 billion in 2022, followed by a decline to $61.7 billion in 2024.

Debt to Equity Ratio

Fluctuated moderately with a decrease in 2021, followed by an increase to 1.79 by 2024, indicating rising leverage.

In summary, the company’s financial structure over the observed period shows an increasing trend in debt levels coupled with a decline in equity after 2022, resulting in higher leverage. This may imply greater financial risk and necessitates careful monitoring of the company's ability to service its debt in the future.

Total Debt

The total debt level exhibits a generally rising trend over the observed periods. Starting at approximately $73.6 billion at the end of 2020, the debt increased to around $76.8 billion by the end of 2021, followed by a slight decrease in 2022 to approximately $74.5 billion. Subsequently, the debt resumed its growth, reaching roughly $77.5 billion at the end of 2023 and further increasing to about $80.6 billion by the end of 2024. This pattern indicates a fluctuating but overall upward movement in debt levels over the five-year span.

Total Capital

Total capital experienced a gradual decline after peaking in 2021. It increased from approximately $139.0 billion at the end of 2020 to about $145.9 billion at the end of 2021. Thereafter, it decreased progressively each year, falling to $144.1 billion in 2022, $142.2 billion in 2023, and finally $142.3 billion in 2024. Despite the reductions observed after 2021, total capital remained relatively stable in the latter years.

Debt to Capital Ratio

The debt to capital ratio remained relatively stable initially, holding at 0.53 in both 2020 and 2021, then slightly decreasing to 0.52 in 2022. However, from 2022 onwards, the ratio increased steadily, reaching 0.54 by the end of 2023 and rising further to 0.57 at the end of 2024. This trend suggests an increasing reliance on debt financing relative to the total capital base over the most recent periods.

The financial data over the five-year period indicates a consistent increase in the total debt of the company, including operating lease liabilities. Total debt rose from approximately $104.2 billion at the end of 2020 to $110.3 billion by the end of 2024, demonstrating a gradual increase every year.

Total capital, also including operating lease liabilities, shows a different trend. It grew from roughly $169.6 billion in 2020 to a peak of about $177.5 billion in 2022, after which it declined over the subsequent two years, reaching approximately $172.0 billion by the end of 2024. This suggests a contraction in the company’s total capital base in the latter years of the period under review.

The debt to capital ratio remained stable at 0.61 from 2020 through 2022, indicating a balanced proportion of debt relative to total capital during these years. However, from 2023 onward, this ratio increased to 0.63 and then 0.64 by 2024, signaling a rising reliance on debt within the capital structure. This trend aligns with the rising total debt and the declining total capital observed in the latter years.

Overall, the data reveals a gradual increase in leverage over the analyzed period, characterized by rising debt levels and a decreasing total capital base in the most recent years, which has slightly elevated the company's debt to capital ratio. This may reflect a strategic decision to finance operations or investments increasingly through debt or a reduction in other components of capital.

The financial data for the five-year period from 2020 to 2024 indicates several notable trends in the company's leverage and asset base. Total debt exhibited fluctuations over the years, starting at $73.6 billion in 2020, then increasing to $76.8 billion in 2021. A slight decrease was recorded in 2022, with debt falling to $74.5 billion, followed by a steady rise, reaching $80.6 billion by the end of 2024.

Total assets showed a generally upward trajectory initially, increasing from $200.2 billion in 2020 to a peak of $211.3 billion in 2022. However, in 2023, total assets declined slightly to $207.7 billion and remained relatively stable into 2024 at $208.0 billion.

The debt-to-assets ratio remained fairly stable throughout the period, hovering around 0.37 in both 2020 and 2021. There was a modest improvement in 2022, where the ratio decreased to 0.35, reflecting a reduction in leverage relative to total assets. This was followed by an increase to 0.37 in 2023 and further to 0.39 in 2024, indicating a gradual rise in leverage over the latter years.

Leverage and Debt Management

The company maintained a relatively consistent debt level relative to its assets throughout most of the period, with slightly elevated leverage in the final two years. The increase in total debt alongside stable total assets suggests a strategic decision to increase financial leverage, potentially to fund growth initiatives or other capital needs.

Asset Base

Total assets grew initially but then plateaued and slightly declined after 2022. This could signal a reduction in asset acquisitions or potential divestitures, impacting overall asset holdings.

Overall Trends

The combination of a relatively stable but slightly increasing debt-to-assets ratio in recent years suggests cautious changes in capital structure. The upward adjustment in debt levels coupled with stable assets implies increasing reliance on debt financing while asset growth has slowed.

Total Debt (including operating lease liability)

The total debt has shown a consistent upward trend over the analyzed period. Starting at approximately $104.2 billion at the end of 2020, the debt level increased each year, reaching about $110.3 billion by the end of 2024. This represents an increase of roughly 5.7% over the five-year span, indicating a steady reliance on debt financing or lease obligations.

Total Assets

Total assets initially increased from $200.2 billion in 2020 to $211.3 billion in 2022, signifying asset growth during the first three years. However, a slight decline occurred in 2023, dropping to $207.7 billion, with a marginal rebound to $208.0 billion in 2024. Overall, the asset base showed moderate growth but with some fluctuations, ultimately reflecting a net increase of approximately 3.9% from 2020 to 2024.

Debt to Assets Ratio (including operating lease liability)

The debt to assets ratio has remained relatively stable over the period, fluctuating slightly around the 0.51 to 0.53 range. Starting at 0.52 in 2020, it decreased marginally to 0.51 in 2021 and 2022, before increasing back to 0.53 in 2023 and maintaining that level in 2024. This suggests a consistent proportion of debt relative to assets, with a slight increase in leverage in the latter years.

Overall Financial Position Insights

The consistent increase in total debt coupled with relatively stable assets and a stable debt to assets ratio indicates that debt growth is aligned proportionally with the company's asset base changes. The stability in leverage suggests cautious debt management, maintaining a balance between financing and asset growth. The slight decrease in total assets in 2023 could warrant closer observation, but the company maintained its position by 2024.

Total assets

The total assets of the company showed a steady increase from 2020 through 2022, rising from 200,162 million US dollars to 211,338 million US dollars. However, in 2023, total assets experienced a slight decline to 207,682 million US dollars, followed by a marginal uptick to 208,035 million US dollars in 2024. Overall, total assets maintained a relatively stable level with minor fluctuations in the last two reported periods.

Stockholders’ equity

Stockholders’ equity trended upwards from 65,344 million US dollars in 2020 to a peak of 69,656 million US dollars in 2022. Subsequently, equity declined noticeably, dropping to 64,715 million US dollars in 2023 and further decreasing to 61,741 million US dollars in 2024. This downward trend in equity over the last two years indicates potential increases in liabilities or reduced retained earnings.

Financial leverage

The financial leverage ratio initially decreased from 3.06 in 2020 to 2.99 in 2021 but then experienced a gradual increase over the following years, reaching 3.03 in 2022, rising further to 3.21 in 2023, and finally climbing to 3.37 in 2024. This upward trend in leverage suggests an increased reliance on debt relative to equity, consistent with the observed decline in stockholders’ equity.

Earnings before interest and tax (EBIT)

The EBIT showed a generally positive trend over the five-year period. From 2020 to 2021, there was a moderate increase from 6,231 million to 6,693 million US dollars. However, in 2022, EBIT slightly declined to 6,510 million US dollars, indicating a minor contraction in operating profitability. This was followed by a significant surge in 2023, with EBIT more than doubling to 14,334 million US dollars, continuing to rise in 2024 to 18,123 million US dollars, highlighting a marked improvement in operational performance and profitability.

Interest expense, net

The net interest expense remained relatively stable throughout the period, fluctuating narrowly between 2,701 million and 3,411 million US dollars. After an increase from 2,701 million in 2020 to 3,342 million in 2021, the interest expense held steady around the 3,300 million mark for the subsequent years, ending at 3,411 million in 2024. This indicates a consistent cost of borrowing without significant increases or decreases.

Interest coverage ratio

The interest coverage ratio exhibited a notable improvement over the period. Starting at 2.31 in 2020, it declined slightly in 2021 and 2022 to 2.0 and 1.94 respectively, suggesting a tightening ability to cover interest expenses from operating earnings during these years. However, this trend reversed substantially from 2023 onwards, with the ratio rising to 4.3 and then to 5.31 in 2024. This reflects a stronger capacity to meet interest obligations, coinciding with the substantial growth in EBIT during the same timeframe.

Earnings Before Fixed Charges and Tax

The earnings before fixed charges and tax exhibit a consistent upward trajectory over the five-year period. Starting at $10,669 million in 2020, the earnings increased steadily each year, reaching $22,910 million by 2024. This represents more than a doubling of earnings, with a particularly notable acceleration between 2022 and 2023, where earnings rose sharply from $13,024 million to $19,321 million, followed by continued growth into 2024.

Fixed Charges

Fixed charges show an increasing trend from 2020 to 2022, rising from $7,139 million to $9,878 million. However, this trend reverses starting in 2023, with fixed charges decreasing to $8,322 million and slightly declining further to $8,198 million in 2024. This reduction in fixed charges in the latter years suggests improved cost management or refinancing efforts to reduce interest and related expenses.

Fixed Charge Coverage Ratio

The fixed charge coverage ratio declines gradually from 1.49 in 2020 to 1.32 in 2022, reflecting a slight decrease in the company’s ability to cover fixed charges with earnings before fixed charges and tax. Notably, this ratio improves significantly in 2023 to 2.32 and further to 2.79 in 2024. This improvement aligns with the sharp increase in earnings and the reduction in fixed charges, indicating enhanced financial health and a stronger capacity to meet fixed obligations.

Overall Trend and Insights

The financial data indicate robust growth in core earnings, coupled with an effective management of fixed financial obligations in the latter years. Although fixed charges increased initially, they were brought under control after 2022. The substantial improvement in fixed charge coverage ratio in 2023 and 2024 underscores a significant strengthening in the company’s financial leverage and risk profile. These patterns suggest a positive outlook regarding cash flow adequacy for covering fixed claims and potential for continued financial stability.