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)
Verizon Communications 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).
- Leverage Ratios Trend
- The debt to equity ratio demonstrates a consistent decline from 1.9 in 2020 to 1.45 in 2024, indicating a gradual reduction in reliance on debt relative to shareholder equity. Similarly, the debt to equity ratio including operating lease liability also decreases from 2.22 to 1.7 over the same period, reflecting a similar deleveraging trend when lease obligations are considered.
- The debt to capital ratio mirrors this downward trend, falling from 0.66 in 2020 to 0.59 in 2024. Including operating lease liabilities, the ratio decreases from 0.69 to 0.63 across the five years, which suggests a sustained effort to lower the proportion of debt in the company's capital structure.
- The debt to assets ratio shows a slight reduction from 0.41 to 0.37, indicating a moderate decrease in the share of total assets financed by debt. When operating lease liabilities are included, the ratio also decreases from 0.48 to 0.44, reinforcing this observation.
- Financial leverage corresponds with the pattern of debt ratios, declining steadily from 4.66 in 2020 to 3.88 in 2024, which implies the company is progressively lowering its leverage and possibly strengthening its equity base relative to its asset funding.
- Coverage Ratios Analysis
- Interest coverage ratio shows significant volatility. It sharply increases from 6.64 in 2020 to 9.44 in 2021, before decreasing to 8.82 in 2022. The ratio then declines markedly to 4.08 in 2023, before a slight recovery to 4.46 in 2024. This fluctuation suggests variability in earnings relative to interest expenses, with a notable reduction in the company's ability to cover interest costs post-2022.
- Fixed charge coverage ratio follows a similar trajectory, rising from 3.59 in 2020 to 4.37 in 2021, then dipping to 4.16 in 2022. A pronounced decline occurs in 2023 to 2.55, followed by a modest improvement to 2.87 in 2024. These movements indicate a decreasing cushion for fixed charges such as lease payments and interest, highlighting increased financial pressure after 2022.
- Overall Financial Position Implications
- The data reflects a strategic trend of deleveraging, as evidenced by consistently declining leverage ratios over the five years. The decreasing debt levels relative to equity, capital, and assets point to reduced financial risk and potentially improved creditworthiness.
- However, the decreasing interest and fixed charge coverage ratios from 2022 onwards warrant attention. Despite lower leverage, the company's earnings relative to its fixed financial obligations have diminished, which may signal margin compression or increased interest expenses relative to earnings. This trend could influence future financial flexibility if not addressed.
Debt Ratios
Coverage Ratios
Debt to Equity
Verizon Communications 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) | ||||||
| Debt maturing within one year | 22,633) | 12,973) | 9,963) | 7,443) | 5,889) | |
| Long-term debt, excluding maturing within one year | 121,381) | 137,701) | 140,676) | 143,425) | 123,173) | |
| Total debt | 144,014) | 150,674) | 150,639) | 150,868) | 129,062) | |
| Equity attributable to Verizon | 99,237) | 92,430) | 91,144) | 81,790) | 67,842) | |
| Solvency Ratio | ||||||
| Debt to equity1 | 1.45 | 1.63 | 1.65 | 1.84 | 1.90 | |
| Benchmarks | ||||||
| Debt to Equity, Competitors2 | ||||||
| AT&T Inc. | 1.18 | 1.33 | 1.39 | 1.07 | 0.97 | |
| T-Mobile US Inc. | 1.31 | 1.20 | 1.07 | 1.11 | 1.13 | |
| Debt to Equity, Sector | ||||||
| Telecommunication Services | 1.31 | 1.40 | 1.40 | 1.28 | 1.22 | |
| 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 ÷ Equity attributable to Verizon
= 144,014 ÷ 99,237 = 1.45
2 Click competitor name to see calculations.
The financial data reveals several notable trends over the five-year period ending December 31, 2024. Total debt exhibited a general pattern of increase from 2020 to 2021, rising from $129,062 million to $150,868 million. From 2021 onwards, total debt remained relatively stable through 2023, fluctuating slightly but staying near the $150,600 million mark. However, in 2024, a decrease in total debt was observed, with the figure declining to $144,014 million.
Equity attributable to Verizon demonstrated consistent growth throughout the period. Starting at $67,842 million in 2020, equity increased steadily each year to reach $81,790 million in 2021, $91,144 million in 2022, then $92,430 million in 2023, and finally $99,237 million in 2024. This upward trend suggests an overall strengthening of the company's equity base over time.
The debt to equity ratio shows a declining trend, indicating a gradual reduction in leverage. In 2020, the ratio was 1.9, which decreased to 1.84 in 2021 and then more significantly down to 1.65 in 2022. This downward progression continued in subsequent years, reaching 1.63 in 2023 and further declining to 1.45 by 2024. The decreasing ratio reflects a relative increase in equity compared to debt, consistent with the observed equity growth and the slight reduction in total debt.
- Total Debt
- Increased sharply between 2020 and 2021, then remained stable from 2021 through 2023, followed by a reduction in 2024.
- Equity
- Showed consistent, steady growth every year over the entire period, indicating strengthening equity positions.
- Debt to Equity Ratio
- Displayed a steady decline, implying a decreasing reliance on debt financing and improving financial stability.
Debt to Equity (including Operating Lease Liability)
Verizon Communications Inc., debt to equity (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Debt maturing within one year | 22,633) | 12,973) | 9,963) | 7,443) | 5,889) | |
| Long-term debt, excluding maturing within one year | 121,381) | 137,701) | 140,676) | 143,425) | 123,173) | |
| Total debt | 144,014) | 150,674) | 150,639) | 150,868) | 129,062) | |
| Current operating lease liabilities | 4,415) | 4,266) | 4,134) | 3,859) | 3,485) | |
| Non-current operating lease liabilities | 19,928) | 20,002) | 21,558) | 23,203) | 18,000) | |
| Total debt (including operating lease liability) | 168,357) | 174,942) | 176,331) | 177,930) | 150,547) | |
| Equity attributable to Verizon | 99,237) | 92,430) | 91,144) | 81,790) | 67,842) | |
| Solvency Ratio | ||||||
| Debt to equity (including operating lease liability)1 | 1.70 | 1.89 | 1.93 | 2.18 | 2.22 | |
| Benchmarks | ||||||
| Debt to Equity (including Operating Lease Liability), Competitors2 | ||||||
| AT&T Inc. | 1.38 | 1.53 | 1.62 | 1.22 | 1.13 | |
| T-Mobile US Inc. | 1.79 | 1.69 | 1.55 | 1.53 | 1.59 | |
| Debt to Equity (including Operating Lease Liability), Sector | ||||||
| Telecommunication Services | 1.59 | 1.70 | 1.71 | 1.53 | 1.48 | |
| 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) ÷ Equity attributable to Verizon
= 168,357 ÷ 99,237 = 1.70
2 Click competitor name to see calculations.
The financial data over the five-year period indicates several important trends related to the company's capital structure.
- Total debt (including operating lease liability)
- The total debt shows an initial increase from 150,547 million USD in 2020 to a peak of 177,930 million USD in 2021. Following this, there is a gradual decrease each year, reaching 168,357 million USD by the end of 2024. This suggests a period of debt accumulation succeeded by a cautious deleveraging effort over the last three years.
- Equity attributable to Verizon
- Equity has consistently increased throughout the period, starting at 67,842 million USD in 2020 and rising steadily to 99,237 million USD in 2024. This upward trend indicates growing shareholder value and potential retained earnings or capital infusions reinforcing the equity base.
- Debt to equity ratio (including operating lease liability)
- The debt to equity ratio decreases across the timeline from 2.22 in 2020 down to 1.70 in 2024. This downward trend reflects a strengthening equity position relative to debt, implying improved financial leverage and potentially lower financial risk. It aligns with the reduction in total debt and increase in equity observed previously.
Overall, the data reveals a strategic shift towards reducing financial leverage and enhancing equity over the five years. The company appears to be improving its balance sheet stability by systematically lowering debt burden while simultaneously enhancing equity, which may improve its creditworthiness and investors' confidence.
Debt to Capital
Verizon Communications 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) | ||||||
| Debt maturing within one year | 22,633) | 12,973) | 9,963) | 7,443) | 5,889) | |
| Long-term debt, excluding maturing within one year | 121,381) | 137,701) | 140,676) | 143,425) | 123,173) | |
| Total debt | 144,014) | 150,674) | 150,639) | 150,868) | 129,062) | |
| Equity attributable to Verizon | 99,237) | 92,430) | 91,144) | 81,790) | 67,842) | |
| Total capital | 243,251) | 243,104) | 241,783) | 232,658) | 196,904) | |
| Solvency Ratio | ||||||
| Debt to capital1 | 0.59 | 0.62 | 0.62 | 0.65 | 0.66 | |
| Benchmarks | ||||||
| Debt to Capital, Competitors2 | ||||||
| AT&T Inc. | 0.54 | 0.57 | 0.58 | 0.52 | 0.49 | |
| T-Mobile US Inc. | 0.57 | 0.54 | 0.52 | 0.53 | 0.53 | |
| Debt to Capital, Sector | ||||||
| Telecommunication Services | 0.57 | 0.58 | 0.58 | 0.56 | 0.55 | |
| 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
= 144,014 ÷ 243,251 = 0.59
2 Click competitor name to see calculations.
The financial data reveals the following trends and insights regarding the company's debt and capital structure over the five-year period ending December 31, 2024.
- Total Debt
- The total debt increased significantly from approximately $129 billion in 2020 to about $151 billion by the end of 2021. This higher level of debt remained relatively stable through 2022 and 2023, hovering around the $150 billion mark. By the end of 2024, there was a modest reduction in total debt to approximately $144 billion. Overall, this indicates a period of elevated leverage maintained for multiple years, followed by a slight deleveraging in the most recent year.
- Total Capital
- Total capital exhibited consistent growth throughout the period, rising from around $197 billion in 2020 to over $243 billion by the end of 2024. This steady increase suggests ongoing capital accumulation, potentially fueled by retained earnings, equity financing, or a combination of both. The growth in capital outpaced the growth of debt, especially in the latter years, indicating an improving capital base.
- Debt to Capital Ratio
- The debt to capital ratio decreased progressively from 0.66 in 2020 to 0.59 in 2024. This decline reflects a reduction in financial leverage relative to the company’s capital structure. The modest decrease in total debt combined with the steady rise in total capital contributed to this improved ratio, signaling a strengthening financial position and potentially reduced risk from a creditor perspective.
In summary, the company has managed to stabilize its total debt after a significant increase up to 2021, while steadily growing its capital base. The resulting decline in the debt to capital ratio suggests a more balanced and potentially less risky financial structure as of the most recent reporting period.
Debt to Capital (including Operating Lease Liability)
Verizon Communications Inc., debt to capital (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Debt maturing within one year | 22,633) | 12,973) | 9,963) | 7,443) | 5,889) | |
| Long-term debt, excluding maturing within one year | 121,381) | 137,701) | 140,676) | 143,425) | 123,173) | |
| Total debt | 144,014) | 150,674) | 150,639) | 150,868) | 129,062) | |
| Current operating lease liabilities | 4,415) | 4,266) | 4,134) | 3,859) | 3,485) | |
| Non-current operating lease liabilities | 19,928) | 20,002) | 21,558) | 23,203) | 18,000) | |
| Total debt (including operating lease liability) | 168,357) | 174,942) | 176,331) | 177,930) | 150,547) | |
| Equity attributable to Verizon | 99,237) | 92,430) | 91,144) | 81,790) | 67,842) | |
| Total capital (including operating lease liability) | 267,594) | 267,372) | 267,475) | 259,720) | 218,389) | |
| Solvency Ratio | ||||||
| Debt to capital (including operating lease liability)1 | 0.63 | 0.65 | 0.66 | 0.69 | 0.69 | |
| Benchmarks | ||||||
| Debt to Capital (including Operating Lease Liability), Competitors2 | ||||||
| AT&T Inc. | 0.58 | 0.61 | 0.62 | 0.55 | 0.53 | |
| T-Mobile US Inc. | 0.64 | 0.63 | 0.61 | 0.61 | 0.61 | |
| Debt to Capital (including Operating Lease Liability), Sector | ||||||
| Telecommunication Services | 0.61 | 0.63 | 0.63 | 0.61 | 0.60 | |
| 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)
= 168,357 ÷ 267,594 = 0.63
2 Click competitor name to see calculations.
- Total Debt (including operating lease liability)
-
The total debt increased from 150,547 million USD in 2020 to a peak of 177,930 million USD in 2021, followed by a gradual decline observed in the subsequent years, decreasing to 168,357 million USD by 2024. This indicates a reduction in debt levels after reaching the highest point in 2021, suggesting ongoing efforts to deleverage or manage debt more effectively over the last three years.
- Total Capital (including operating lease liability)
-
Total capital shows a strong upward trend from 218,389 million USD in 2020 to 267,594 million USD in 2024. The most notable growth occurred between 2020 and 2021, and thereafter the capital levels mostly stabilized with slight increments, maintaining around 267 billion USD from 2022 onwards. This indicates increased capitalization, with the company maintaining a stable capital base in recent years.
- Debt to Capital Ratio (including operating lease liability)
-
The debt to capital ratio remained steady at 0.69 in both 2020 and 2021, followed by a consistent decrease each year through 2024, reaching 0.63. This downward trend points to an improving capital structure, with a lower proportion of debt relative to total capital. It reflects a strategic shift towards reducing financial leverage and potentially lowering financial risk over the analyzed period.
Debt to Assets
Verizon Communications 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) | ||||||
| Debt maturing within one year | 22,633) | 12,973) | 9,963) | 7,443) | 5,889) | |
| Long-term debt, excluding maturing within one year | 121,381) | 137,701) | 140,676) | 143,425) | 123,173) | |
| Total debt | 144,014) | 150,674) | 150,639) | 150,868) | 129,062) | |
| Total assets | 384,711) | 380,255) | 379,680) | 366,596) | 316,481) | |
| Solvency Ratio | ||||||
| Debt to assets1 | 0.37 | 0.40 | 0.40 | 0.41 | 0.41 | |
| Benchmarks | ||||||
| Debt to Assets, Competitors2 | ||||||
| AT&T Inc. | 0.31 | 0.34 | 0.34 | 0.32 | 0.30 | |
| T-Mobile US Inc. | 0.39 | 0.37 | 0.35 | 0.37 | 0.37 | |
| Debt to Assets, Sector | ||||||
| Telecommunication Services | 0.35 | 0.37 | 0.36 | 0.36 | 0.35 | |
| 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
= 144,014 ÷ 384,711 = 0.37
2 Click competitor name to see calculations.
- Total Debt
- The total debt increased from 129,062 million US dollars in 2020 to a peak of 150,868 million US dollars in 2021. It remained relatively stable in 2022 and 2023, with values of 150,639 million and 150,674 million US dollars respectively. In 2024, total debt declined to 144,014 million US dollars, indicating a slight deleveraging trend in the most recent period.
- Total Assets
- Total assets showed consistent growth over the five-year period. Starting at 316,481 million US dollars in 2020, assets increased significantly to 366,596 million in 2021, and continued to rise to 379,680 million in 2022. The upward trend persisted at a slower pace in 2023 with 380,255 million and further grew to 384,711 million US dollars in 2024. This demonstrates steady asset expansion throughout the period under review.
- Debt to Assets Ratio
- The debt to assets ratio remained relatively stable around 0.40 to 0.41 from 2020 through 2023, reflecting a consistent leverage position relative to asset base despite fluctuations in debt and asset values. In 2024, the ratio declined to 0.37, indicating a reduction in leverage, driven by the combination of slightly lower debt and continued growth in total assets. This improvement suggests enhanced financial stability and potentially lower financial risk as of the most recent period.
Debt to Assets (including Operating Lease Liability)
Verizon Communications 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) | ||||||
| Debt maturing within one year | 22,633) | 12,973) | 9,963) | 7,443) | 5,889) | |
| Long-term debt, excluding maturing within one year | 121,381) | 137,701) | 140,676) | 143,425) | 123,173) | |
| Total debt | 144,014) | 150,674) | 150,639) | 150,868) | 129,062) | |
| Current operating lease liabilities | 4,415) | 4,266) | 4,134) | 3,859) | 3,485) | |
| Non-current operating lease liabilities | 19,928) | 20,002) | 21,558) | 23,203) | 18,000) | |
| Total debt (including operating lease liability) | 168,357) | 174,942) | 176,331) | 177,930) | 150,547) | |
| Total assets | 384,711) | 380,255) | 379,680) | 366,596) | 316,481) | |
| Solvency Ratio | ||||||
| Debt to assets (including operating lease liability)1 | 0.44 | 0.46 | 0.46 | 0.49 | 0.48 | |
| Benchmarks | ||||||
| Debt to Assets (including Operating Lease Liability), Competitors2 | ||||||
| AT&T Inc. | 0.37 | 0.39 | 0.39 | 0.37 | 0.35 | |
| T-Mobile US Inc. | 0.53 | 0.53 | 0.51 | 0.51 | 0.52 | |
| Debt to Assets (including Operating Lease Liability), Sector | ||||||
| Telecommunication Services | 0.43 | 0.44 | 0.45 | 0.43 | 0.42 | |
| 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
= 168,357 ÷ 384,711 = 0.44
2 Click competitor name to see calculations.
The analysis of the provided annual financial data reveals several key trends in the company's financial structure over the five-year period under review.
- Total debt (including operating lease liability)
- The total debt shows an initial increase from 150,547 million US dollars at the end of 2020 to a peak of 177,930 million US dollars in 2021. Thereafter, a gradual decline is evident, with total debt reducing to 176,331 million in 2022, 174,942 million in 2023, and further down to 168,357 million in 2024. This indicates a strategy of debt reduction following a period of increased leverage.
- Total assets
- Total assets consistently increased throughout the period from 316,481 million US dollars in 2020 to 384,711 million by the end of 2024. The growth is steady year-over-year, reflecting asset accumulation or appreciation, which may be associated with business expansion, investments, or capital expenditures.
- Debt to assets ratio (including operating lease liability)
- The debt to assets ratio started at 0.48 in 2020 and experienced a slight increase to 0.49 in 2021. Following this peak, the ratio declined gradually, moving to 0.46 in both 2022 and 2023, and further decreasing to 0.44 in 2024. This trend suggests an improving debt position relative to asset base, reflecting reduced financial risk through deleveraging or enhanced asset growth relative to liabilities.
Overall, the data indicates an initial increase in debt levels in 2021, possibly linked to specific strategic initiatives, followed by a disciplined reduction in debt in subsequent years. Concurrently, asset growth was maintained steadily, leading to a decreasing leverage ratio and potentially stronger balance sheet resilience by 2024.
Financial Leverage
Verizon Communications 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 | 384,711) | 380,255) | 379,680) | 366,596) | 316,481) | |
| Equity attributable to Verizon | 99,237) | 92,430) | 91,144) | 81,790) | 67,842) | |
| Solvency Ratio | ||||||
| Financial leverage1 | 3.88 | 4.11 | 4.17 | 4.48 | 4.66 | |
| Benchmarks | ||||||
| Financial Leverage, Competitors2 | ||||||
| AT&T Inc. | 3.78 | 3.94 | 4.13 | 3.32 | 3.25 | |
| T-Mobile US Inc. | 3.37 | 3.21 | 3.03 | 2.99 | 3.06 | |
| Financial Leverage, Sector | ||||||
| Telecommunication Services | 3.72 | 3.82 | 3.85 | 3.55 | 3.54 | |
| 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 ÷ Equity attributable to Verizon
= 384,711 ÷ 99,237 = 3.88
2 Click competitor name to see calculations.
- Total Assets
- The total assets demonstrate a consistent upward trend over the five-year period. Starting at approximately $316.5 billion in 2020, total assets increased steadily each year, reaching around $384.7 billion by the end of 2024. This reflects a growth of roughly 21.5% over the entire period, indicating ongoing asset accumulation or investment.
- Equity Attributable to Verizon
- Equity attributable to Verizon also shows a clear and continuous increase from 2020 through 2024. Beginning at about $67.8 billion in 2020, equity grew progressively each year to reach approximately $99.2 billion in 2024. This rise, equating to nearly 46.3% growth, suggests strengthening shareholder value and retained earnings over time.
- Financial Leverage
- The financial leverage ratio displays a consistently declining pattern throughout the observed period. Starting at 4.66 in 2020, the ratio decreases each year, reaching 3.88 by 2024. The reduction in this ratio implies a gradual decrease in the proportion of total assets financed by debt relative to equity, indicating a trend towards a more conservative capital structure or improved equity funding.
Interest Coverage
Verizon Communications Inc., interest coverage calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income attributable to Verizon | 17,506) | 11,614) | 21,256) | 22,065) | 17,801) | |
| Add: Net income attributable to noncontrolling interest | 443) | 481) | 492) | 553) | 547) | |
| Add: Income tax expense | 5,030) | 4,892) | 6,523) | 6,802) | 5,619) | |
| Add: Interest expense | 6,649) | 5,524) | 3,613) | 3,485) | 4,247) | |
| Earnings before interest and tax (EBIT) | 29,628) | 22,511) | 31,884) | 32,905) | 28,214) | |
| Solvency Ratio | ||||||
| Interest coverage1 | 4.46 | 4.08 | 8.82 | 9.44 | 6.64 | |
| Benchmarks | ||||||
| Interest Coverage, Competitors2 | ||||||
| AT&T Inc. | 3.47 | 3.96 | 0.49 | 4.91 | 0.64 | |
| T-Mobile US Inc. | 5.31 | 4.30 | 1.94 | 2.00 | 2.31 | |
| Interest Coverage, Sector | ||||||
| Telecommunication Services | 4.23 | 4.07 | 3.16 | 5.36 | 2.66 | |
| 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
= 29,628 ÷ 6,649 = 4.46
2 Click competitor name to see calculations.
- Earnings Before Interest and Tax (EBIT)
- The EBIT showed an overall fluctuating trend over the five-year period. Starting at 28,214 million USD in 2020, the figure increased notably to 32,905 million USD in 2021, indicating improved operational profitability. However, this was followed by a slight decline in 2022 to 31,884 million USD. A significant decrease occurred in 2023, with EBIT falling to 22,511 million USD, representing a substantial reduction in earnings. This downward trend reversed somewhat in 2024, with EBIT rebounding to 29,628 million USD, though not reaching the peak levels observed in 2021.
- Interest Expense
- Interest expenses exhibited an increasing trend throughout the period. From 4,247 million USD in 2020, the interest outlay decreased slightly to 3,485 million USD in 2021, marking the lowest level in the timeframe. Subsequently, interest expenses rose marginally to 3,613 million USD in 2022, then escalated sharply in 2023 to 5,524 million USD. The upward trajectory continued in 2024, with interest expenses reaching 6,649 million USD, reflecting rising borrowing costs or increased debt levels.
- Interest Coverage Ratio
- The interest coverage ratio saw a general decrease over the period, suggesting a weakening ability to cover interest expenses from earnings. Starting at 6.64 in 2020, the ratio improved substantially to 9.44 in 2021, signifying stronger coverage. This was followed by a slight reduction to 8.82 in 2022. From 2022 onwards, the ratio declined sharply to 4.08 in 2023, indicating a significant deterioration in coverage capacity. A modest improvement occurred in 2024, with the ratio increasing to 4.46, yet remaining considerably lower than earlier years. This trend reflects growing financial pressure related to higher interest costs relative to earnings.
Fixed Charge Coverage
Verizon Communications 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 attributable to Verizon | 17,506) | 11,614) | 21,256) | 22,065) | 17,801) | |
| Add: Net income attributable to noncontrolling interest | 443) | 481) | 492) | 553) | 547) | |
| Add: Income tax expense | 5,030) | 4,892) | 6,523) | 6,802) | 5,619) | |
| Add: Interest expense | 6,649) | 5,524) | 3,613) | 3,485) | 4,247) | |
| Earnings before interest and tax (EBIT) | 29,628) | 22,511) | 31,884) | 32,905) | 28,214) | |
| Add: Operating lease cost | 5,607) | 5,432) | 5,345) | 5,248) | 5,016) | |
| Earnings before fixed charges and tax | 35,235) | 27,943) | 37,229) | 38,153) | 33,230) | |
| Interest expense | 6,649) | 5,524) | 3,613) | 3,485) | 4,247) | |
| Operating lease cost | 5,607) | 5,432) | 5,345) | 5,248) | 5,016) | |
| Fixed charges | 12,256) | 10,956) | 8,958) | 8,733) | 9,263) | |
| Solvency Ratio | ||||||
| Fixed charge coverage1 | 2.87 | 2.55 | 4.16 | 4.37 | 3.59 | |
| Benchmarks | ||||||
| Fixed Charge Coverage, Competitors2 | ||||||
| AT&T Inc. | 2.29 | 2.56 | 0.72 | 3.06 | 0.78 | |
| T-Mobile US Inc. | 2.79 | 2.32 | 1.32 | 1.36 | 1.49 | |
| Fixed Charge Coverage, Sector | ||||||
| Telecommunication Services | 2.63 | 2.49 | 1.92 | 2.92 | 1.80 | |
| 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
= 35,235 ÷ 12,256 = 2.87
2 Click competitor name to see calculations.
- Earnings before fixed charges and tax
- The earnings exhibited a fluctuating trend over the five-year period. Starting from 33,230 million US dollars in 2020, there was a noticeable increase to 38,153 million in 2021. This was followed by a slight decline to 37,229 million in 2022. A significant drop occurred in 2023, with earnings decreasing to 27,943 million, before partially recovering to 35,235 million in 2024.
- Fixed charges
- Fixed charges showed a general upward trend during the same period. Beginning at 9,263 million US dollars in 2020, there was a decrease to 8,733 million in 2021. From 2021 onwards, fixed charges increased steadily each year, reaching 12,256 million in 2024, representing the highest value in the period analyzed.
- Fixed charge coverage ratio
- The fixed charge coverage ratio, which measures the ability to cover fixed charges with earnings before fixed charges and tax, displayed significant variability. The ratio improved from 3.59 in 2020 to a peak of 4.37 in 2021. However, it declined moderately to 4.16 in 2022, followed by a sharp reduction to 2.55 in 2023. A slight recovery was noted in 2024 with a ratio of 2.87, yet this remained substantially below the earlier peak years.
- Overall analysis
- The data suggest that despite the variability in earnings before fixed charges and tax, fixed charges have generally increased over time, imposing higher financial obligations on the company. The fixed charge coverage ratio's decline after 2021 indicates a weakening capacity to cover fixed financial commitments, particularly marked in 2023. The partial rebound in 2024 is positive but does not fully restore the coverage to earlier levels, implying careful monitoring of financial leverage and earnings stability is warranted.