Verizon Communications Inc. (NYSE:VZ)

Debt to Equity Ratio

The debt to equity ratio initially decreased from 1.96 at the end of Q1 2020 to 1.78 in Q3 2020, then rose sharply to 2.23 in Q1 2021. Following this peak, the ratio generally declined over subsequent quarters, reaching 1.42 by Q2 2025. This trend suggests an overall reduction in leverage relative to equity after a period of increased indebtedness in early 2021.

Debt to Equity Ratio (Including Operating Lease Liability)

The pattern mirrors the conventional debt to equity ratio, starting at 2.31 in Q1 2020, peaking at 2.52 in Q1 2021, and then gradually declining to 1.65 by Q2 2025. The inclusion of operating lease liabilities consistently results in higher leverage ratios, but the trend toward deleveraging in later periods remains evident.

Debt to Capital Ratio

This ratio shows a moderate decline over time, beginning at 0.66 in Q1 2020, peaking briefly at 0.69 in Q1 2021, and trending downward to 0.59 by Q2 2025. The decrease indicates a relative reduction in debt as a proportion of total capital employed by the company.

Debt to Capital Ratio (Including Operating Lease Liability)

The inclusion of operating lease liabilities results in slightly higher ratios, with a peak of 0.72 in Q1 2021 and a gradual decline to 0.62 by Q2 2025. This supports the view of progressive deleveraging when considering comprehensive debt obligations.

Debt to Assets Ratio

Starting at 0.40 in Q1 2020, the ratio increased to 0.46 in Q1 2021, then stabilized and showed a slight downward trend toward 0.38 by Q2 2025. This suggests some fluctuation in debt relative to total assets but an overall trend towards reduced asset leverage in recent periods.

Debt to Assets Ratio (Including Operating Lease Liability)

Higher throughout due to lease liabilities, this ratio reached 0.52 in Q1 2021 and decreased to 0.44 by Q2 2025. The trend is consistent with the company's overall efforts to reduce debt-related leverage over time.

Financial Leverage Ratio

The financial leverage ratio decreased steadily from 4.89 in Q1 2020 to 3.72 in Q2 2025, indicating improved equity cushion relative to total assets. This reflects a strengthening equity base or reduction in liabilities over the period examined.

Interest Coverage Ratio

Starting from no available data in early 2020, the interest coverage ratio rose significantly, peaking at 9.97 in Q2 2022, indicating strong ability to meet interest obligations. After this peak, the ratio declined substantially to 3.21 in Q4 2024 before recovering slightly to 4.64 by Q2 2025. The decline suggests increasing interest burden or declining earnings before interest and taxes in late periods, though the ratio remains above critical thresholds, reflecting ongoing capacity to cover interest expenses.

Total Debt

The total debt shows fluctuations over the periods observed. Initially, total debt was approximately 117.7 billion US dollars at the end of the first quarter of 2020, followed by a decline to around 112.8 billion by mid-2020. There was an upward trend reaching 129.1 billion at the end of 2020, then a significant increase in the first quarter of 2021 peaking at about 158.5 billion. Following this peak, total debt generally decreased and stabilized with minor fluctuations, ending at approximately 146.0 billion by the second quarter of 2025. This suggests active management of debt levels, with periods of incurrence followed by gradual reduction and stabilization.

Equity Attributable to Verizon

Equity attributable to Verizon displayed a consistent upward trend throughout the entire timeframe. Starting at about 60.2 billion US dollars in the first quarter of 2020, equity increased steadily every quarter, reaching approximately 103.1 billion by the second quarter of 2025. The progressive rise in equity indicates continued growth in shareholders’ equity, possibly reflecting retained earnings, capital issuance, or favorable market valuation adjustments over time.

Debt to Equity Ratio

The debt to equity ratio exhibited notable volatility initially but trended downward over the long term. It began at a high of 1.96 in March 2020, decreased to 1.78 by the third quarter of 2020, then spiked to 2.23 in the first quarter of 2021, coinciding with the peak in total debt. Subsequently, the ratio steadily declined, reflecting a relative decrease in debt compared to increases in equity. By mid-2025, the ratio reached approximately 1.42, the lowest in the observed period. This declining debt to equity ratio suggests an improvement in the company's financial leverage position, indicating a potentially lower risk profile and greater equity buffer relative to debt obligations.

Summary of Financial Trends

Overall, the company demonstrated a strategic approach to managing its capital structure. The rising equity base combined with a cautious reduction of debt following previous peaks reflects strengthening financial stability. The reduction in the debt to equity ratio over time indicates enhanced solvency and possibly more conservative financing policies. The fluctuations in debt levels might correspond with investments, refinancing activities, or other corporate financing decisions. The consistent growth in equity implies successful value creation and retention for shareholders during the period analyzed.

The financial data exhibits several notable trends over the observed quarters, particularly concerning total debt, equity attributable to the company, and the debt-to-equity ratio.

Total Debt (including operating lease liability)

The total debt demonstrates fluctuations throughout the periods. Initially, from Q1 2020 to Q4 2020, debt increased from approximately 139 billion USD to nearly 151 billion USD. This trend continued upward entering the first quarter of 2021, peaking near 180 billion USD by Q1 2022. However, from Q2 2022 through the last period in Q2 2025, a gradual decline or stabilization in total debt is visible, decreasing to about 170 billion USD. This suggests an initial phase of increased leverage followed by efforts to reduce or stabilize debt levels in later periods.

Equity Attributable to Verizon

Equity shows a generally upward trajectory over the full timeframe. Starting at around 60 billion USD in Q1 2020, it rises steadily each quarter up to approximately 98 billion USD in Q3 2023. A slight dip occurs in Q4 2023 followed by minor fluctuations, yet equity continues growing afterward, reaching roughly 103 billion USD by Q2 2025. This persistent equity growth reflects ongoing value accumulation and possibly retained earnings or capital increases over time.

Debt to Equity Ratio (including operating lease liability)

The ratio values reveal a meaningful trend in financial leverage. Initially, the ratio moves downward from 2.31 in Q1 2020 to a low near 1.65 by Q2 2025. This steady decline in debt-to-equity ratio over five years signifies a relatively stronger equity base in relation to total debt and reduced leverage risk. Notable declines include the period from Q1 2021 through Q3 2023, when the ratio descends from about 2.52 down to the low 1.7 range, indicating substantial deleveraging.

In summary, the company has experienced a phase of increasing total debt early in the timeline, which is followed by a consistent reduction or control of debt levels in subsequent periods. Concurrently, equity has steadily increased, bolstering the company’s financial stability. The resulting decrease in the debt-to-equity ratio reflects a strategic shift toward lower leverage and enhanced balance sheet strength over the analyzed quarters.

Total Debt

The total debt exhibits fluctuations over the observed periods, starting at approximately $117.7 billion in the first quarter of 2020 and rising sharply during 2021 to reach a peak near $158.5 billion in the first quarter of 2021. This peak is followed by a gradual decline and stabilization, with values consistently around $150 billion from late 2021 through 2024. Slight decreases are observed in mid-2023 and again towards the end of the data in 2025, ending near $146 billion, suggesting a moderate reduction in leverage over the longer term.

Total Capital

Total capital presents a generally upward trend through the timeframe. Starting from approximately $177.9 billion in early 2020, it increases steadily to reach about $232.7 billion by the end of 2021. The growth trajectory continues more gradually thereafter, fluctuating but maintaining slight increases until it reaches close to $249.1 billion by the middle of 2025. This pattern indicates sustained capital growth, which could reflect equity increases, retained earnings, or other forms of capital infusion.

Debt to Capital Ratio

The debt to capital ratio experiences a noticeable decrease over the period under review. Initially, the ratio stands at 0.66 in early 2020 and peaks slightly at 0.69 in the first quarter of 2021, coinciding with the rise in total debt. Following this peak, a gradual and consistent decline is observed, reaching approximately 0.59 by mid-2025. This downward trend implies a reduction in financial leverage and a strengthening of the capital structure, with the company relying less on debt relative to its capital base over time.

Overall Insights

The data indicates that while total debt increased substantially in early 2021, it was managed downward in subsequent periods. Concurrently, the company’s total capital steadily increased, contributing to a decreasing debt to capital ratio. This trend signals a strategic shift towards lower leverage, potentially improving financial stability and creditworthiness. The consistent total capital growth suggests ongoing investments in or contributions to the company’s equity or long-term resources, which may support sustained operations and growth prospects.

The analysis of the quarterly financial data reveals several notable trends in the company's debt structure and capital composition over the observed periods.

Total Debt (Including Operating Lease Liability)

The total debt shows considerable fluctuation over the periods. Initially, from March 31, 2020, to December 31, 2020, there is an overall increasing trend, rising from $139,184 million to $150,547 million. Subsequently, debt jumps sharply to $179,804 million by March 31, 2021, peaking around the mid-2021 periods. Following this peak, a gradual decline is observed with intermittent minor fluctuations, decreasing to about $169,891 million by the end of 2024 and further dropping slightly to $167,714 million by June 30, 2025. Overall, the debt shows a pattern of an early increase during 2020 to early 2021, followed by a slow but steady decrease through mid-2025.

Total Capital (Including Operating Lease Liability)

Total capital exhibits a generalized upward trend across the timeline. Starting from $199,394 million at the beginning of 2020, it increases steadily, reaching around $251,036 million by March 31, 2021, and continuing to climb over subsequent quarters. The total capital peaks around late 2023 with figures exceeding $272,000 million. Despite some minor fluctuations, capital remains at elevated levels near the peak through to mid-2025, closing at approximately $272,954 million. This growth indicates consistent capital expansion, possibly through equity, retained earnings, or other components of capital.

Debt to Capital Ratio (Including Operating Lease Liability)

The debt to capital ratio initially stands at 0.70 in March 2020 and exhibits slight volatility in the early periods but generally trends downward. It peaks slightly around 0.72 in March 2021 coinciding with the highest debt levels observed. Thereafter, a gradual but consistent decline in the ratio is apparent, reaching 0.62 by mid-2025. This steady reduction in leverage ratio suggests improved capital structure management, with the company either reducing reliance on debt or increasing capital base, or a combination of both, contributing to a more balanced financial risk profile over time.

In summary, the company experienced an initial surge in total debt in early 2021 concurrent with increased total capital. Subsequently, total debt declined moderately while total capital continued to grow, leading to a meaningful reduction in the debt to capital ratio. This pattern indicates a strengthening capital structure and potentially enhanced financial stability as the company reduces its leverage slightly over the evaluated periods.

The analysis of the quarterly financial data reveals distinct trends in the company’s leverage and asset base over the examined periods.

Total Debt

Total debt exhibited noticeable fluctuations across the quarters. Beginning at approximately $117.7 billion in March 2020, total debt increased sharply to a peak of around $158.5 billion by March 2021, indicative of significant debt accumulation during this period. Following this spike, debt levels saw a gradual decline, stabilizing in the range of $144 billion to $153 billion from early 2023 through mid-2025, demonstrating relative consistency with minor quarterly variations towards the end of the timeframe.

Total Assets

Total assets showed a steady upward trend over the period analyzed. Starting from $294.5 billion in the first quarter of 2020, total assets increased consistently to reach a level around $384.7 billion by the second quarter of 2025. There were small fluctuations within this range, but the overall trajectory reflects continuous asset growth, suggesting ongoing investment or asset accumulation activities.

Debt to Assets Ratio

The debt to assets ratio, representing the proportion of total assets financed through debt, initially hovered around 0.38 to 0.41 during 2020. This ratio climbed to a high of approximately 0.46 in early 2021, paralleling the peak in total debt. Subsequently, the ratio trended downward and then stabilized around 0.37 to 0.40 from 2023 onward. This indicates that despite fluctuations in debt and asset levels, the company maintained a relatively stable leverage position in the latter periods, with a moderate reduction in relative debt financing compared to the asset base.

In summary, the data reflects an initial period of increased leverage and debt accumulation up to early 2021, followed by a phase of deleveraging or controlled debt management. Meanwhile, total assets expanded steadily throughout the timeline, contributing to a more balanced debt to asset ratio in recent periods. This suggests a strategic focus on strengthening the asset base while managing debt levels to maintain financial stability.

Total Debt (including operating lease liability)

The total debt showed a fluctuating trend over the observed periods. Starting at approximately 139 billion US dollars in March 2020, it initially decreased slightly by mid-2020 but then increased steadily, peaking near 179 billion US dollars by March 2021. Following this peak, total debt experienced a gradual decline with some minor fluctuations, reaching around 169 billion US dollars by June 2025. This overall pattern suggests an initial rise in leverage followed by a controlled reduction in debt levels in recent periods.

Total Assets

Total assets exhibited a generally upward trajectory throughout the timeline. Beginning at about 294.5 billion US dollars in March 2020, assets increased consistently with minor fluctuations, peaking near 385 billion US dollars by June 2025. This growth reflects an expansion of the company's asset base over time, indicating ongoing investment or acquisition activities contributing to asset accumulation.

Debt to Assets ratio (including operating lease liability)

The debt to assets ratio started around 0.47 in March 2020, with some variability in the first year, peaking at 0.52 in March 2021, indicating a higher level of leverage relative to assets. After that, the ratio showed a gradual decline, stabilizing around 0.44 by June 2025. This trend reflects a reduction in leverage risk relative to the asset base, driven by either decreasing debt levels, increasing asset levels, or a combination of both, suggesting an improvement in the company's financial structure over time.

Summary of Trends and Insights

The data indicates that the company experienced a notable increase in debt levels through the first year and a half, accompanied by asset growth. Subsequently, debt levels were managed downward, while assets continued to grow moderately. This resulted in a decreasing leverage ratio, improving the balance sheet's strength in the latter periods. The management of debt relative to asset growth suggests a focus on maintaining financial stability and potentially reducing financial risk.

The total assets of the company exhibited a consistent upward trend from March 31, 2020, through December 31, 2023, increasing from approximately $294.5 billion to about $384.8 billion. However, starting in the first quarter of 2024, the assets showed a slight fluctuation, with values oscillating around the $380 billion to $384 billion range, indicating a period of stabilization or minor adjustment after continuous growth.

Equity attributable to the company also showed a general increasing trend over the observed period, rising from around $60.2 billion at the end of Q1 2020 to approximately $103.1 billion by Q2 2025. Notably, this growth was quite steady until Q4 2023, after which equity experienced minor fluctuations but generally continued trending upwards.

Financial leverage, calculated as a ratio, demonstrated a steady decline over time. Beginning at 4.89 in March 2020, it gradually decreased to 3.72 by June 2025. This downward trend in leverage indicates a reduction in the company's reliance on debt relative to equity, potentially reflecting an improvement in the company's capital structure and financial stability. Notably, the decline was more pronounced from 2022 onwards, suggesting a possible strategic focus on deleveraging or strengthening the equity base.

Total Assets

Increased steadily over the four-year period until late 2023, with values rising from approximately $294.5 billion to $384.8 billion, followed by a period of stabilization around $380–$384 billion.

Equity Attributable to Verizon

Exhibited consistent growth from $60.2 billion in early 2020 to over $100 billion by mid-2025, with minor fluctuations towards the end of the period but a sustained upward trajectory overall.

Financial Leverage

Showed a continuous decline from 4.89 in early 2020 to 3.72 by mid-2025, indicating reduced debt dependence and a stronger equity position over time.

Overall, the data reflects a financial position characterized by growth in asset base and equity coupled with a strategic reduction in leverage. This suggests increased financial robustness and potentially improved creditworthiness moving forward.

Earnings before interest and tax (EBIT)

The EBIT figures demonstrate notable volatility over the analyzed periods. Initially, EBIT increased steadily from $6,710 million in March 2020 to a peak of $9,916 million in December 2022. This upward trend showed strong operational performance through this timeframe. However, a significant drop occurred in December 2023, with EBIT turning negative to -$218 million, suggesting a substantial operational setback or extraordinary expense during that quarter. Following this decline, EBIT rebounded in subsequent quarters, stabilizing around the $8,000 million range by mid-2025, indicative of recovery dynamics but with some fluctuations remaining.

Interest Expense

Interest expense exhibited a generally increasing trend throughout the periods under review. Starting at $1,034 million in March 2020, the interest expense decreased somewhat through 2021, reaching as low as $739 million in December 2021. From early 2022 onward, interest expense steadily rose, peaking at $1,639 million by the end of June 2025. This upward movement suggests either an increase in debt or rising borrowing costs affecting the company's financial charges.

Interest Coverage Ratio

The interest coverage ratio, reflecting the company's ability to meet interest obligations from operating earnings, showed a fluctuating trend. Data available from June 2020 indicates an initial improvement, rising from 6.64 to a high of 9.97 in March 2022, signaling strong capacity to service interest. Post this peak, the ratio declined progressively, reaching a low of 3.21 by December 2024, which implies a weakening ability to cover interest expenses comfortably. Some recovery is observed thereafter, with the ratio rising to around 4.6 by June 2025. Overall, the trend reveals a decrease in financial cushioning against interest obligations in the later periods, potentially linked to increased interest expenses and volatile EBIT.

Overall Observations

The pattern in operational earnings and interest expenses suggests growing financial pressure over time, especially notable in the sharp EBIT decline in late 2023 and sustained increases in interest charges. Despite recovery signs in EBIT after the negative quarter, the corresponding interest coverage reduction points to increased risk in the company's financial structure. Monitoring of operational efficiencies and cost of debt is advised to maintain a stable interest coverage ratio and safeguard financial health.