Analysis of Long-term (Investment) Activity Ratios
Activity ratios measure how efficiently a company performs day-to-day tasks, such us the collection of receivables and management of inventory.
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Long-term Activity Ratios (Summary)
Verizon Communications Inc., long-term (investment) activity ratios
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Net fixed asset turnover | ||||||
| Net fixed asset turnover (including operating lease, right-of-use asset) | ||||||
| Total asset turnover | ||||||
| Equity turnover |
Based on: 10-K (reporting date: 2025-12-31), 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).
An analysis of long-term activity ratios reveals generally declining efficiency in asset utilization over the five-year period. While some ratios demonstrate stabilization or slight improvement in the most recent year, the overall trend suggests a decreasing ability to generate revenue from invested assets.
- Net Fixed Asset Turnover
- The net fixed asset turnover ratio experienced a consistent, albeit gradual, decline from 1.34 in 2021 to 1.24 in 2023. The ratio remained at 1.24 in 2024 before showing a modest increase to 1.26 in 2025. This indicates a decreasing efficiency in generating sales from fixed assets, though the latest figure suggests a potential stabilization.
- Net Fixed Asset Turnover (Including Operating Lease, Right-of-Use Asset)
- Similar to the standard net fixed asset turnover, this ratio also exhibited a downward trend, decreasing from 1.05 in 2021 to 1.01 in 2023. It remained constant at 1.01 in 2024 and then increased to 1.04 in 2025. The inclusion of operating lease obligations and right-of-use assets appears to result in a lower turnover ratio, and the trend mirrors that of the standard calculation, suggesting the observed changes are not solely attributable to lease accounting.
- Total Asset Turnover
- The total asset turnover ratio demonstrated a steady decline from 0.36 in 2021 and 2022 to 0.35 in 2023 and 2024, concluding at 0.34 in 2025. This indicates a decreasing ability to generate sales from all assets, suggesting a potential issue with overall asset management or a shift in business strategy towards less asset-intensive operations.
- Equity Turnover
- The equity turnover ratio showed a consistent decrease from 1.63 in 2021 to 1.32 in 2025. This suggests a diminishing ability to generate sales from shareholder equity. The rate of decline slowed in the later years, but the overall trend remains negative, potentially indicating a less efficient use of equity financing.
In summary, the observed trends across these ratios point to a gradual decrease in asset utilization efficiency. While the most recent year shows some stabilization in certain ratios, the overall pattern suggests a need for further investigation into the underlying causes of these declines.
Net Fixed Asset Turnover
Verizon Communications Inc., net fixed asset turnover calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Operating revenues | ||||||
| Plant, property and equipment, net | ||||||
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover1 | ||||||
| Benchmarks | ||||||
| Net Fixed Asset Turnover, Competitors2 | ||||||
| AT&T Inc. | ||||||
| T-Mobile US Inc. | ||||||
| Net Fixed Asset Turnover, Sector | ||||||
| Telecommunication Services | ||||||
| Net Fixed Asset Turnover, Industry | ||||||
| Communication Services | ||||||
Based on: 10-K (reporting date: 2025-12-31), 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).
1 2025 Calculation
Net fixed asset turnover = Operating revenues ÷ Plant, property and equipment, net
= ÷ =
2 Click competitor name to see calculations.
The net fixed asset turnover ratio experienced a generally declining trend between 2021 and 2023, followed by a slight recovery in the subsequent two years. Operating revenues demonstrated moderate fluctuations, while plant, property, and equipment, net, consistently increased throughout the period.
- Net Fixed Asset Turnover
- The net fixed asset turnover ratio decreased from 1.34 in 2021 to 1.24 in 2023, indicating a diminishing ability to generate revenue from its fixed assets. This suggests a potential inefficiency in asset utilization during this timeframe. However, the ratio stabilized at 1.24 in 2024 and slightly improved to 1.26 in 2025, signaling a possible stabilization or modest improvement in asset efficiency.
- Operating Revenues
- Operating revenues increased from US$133,613 million in 2021 to US$136,835 million in 2022, representing a growth of approximately 2.4%. A subsequent decrease to US$133,974 million was observed in 2023. Revenues then showed a slight increase in 2024 to US$134,788 million, and continued to rise to US$138,191 million in 2025. These fluctuations in revenue contribute to the observed trends in the net fixed asset turnover ratio.
- Plant, Property, and Equipment, Net
- Plant, property, and equipment, net, consistently increased throughout the period, rising from US$99,696 million in 2021 to US$109,467 million in 2025. This continuous investment in fixed assets, coupled with the fluctuating revenue figures, likely contributed to the initial decline in the net fixed asset turnover ratio. The stabilization and slight increase in the ratio in 2024 and 2025 may indicate that the benefits of these investments are beginning to materialize, or that revenue growth is catching up to the asset base.
Overall, the analysis suggests a period of potentially decreasing efficiency in asset utilization, followed by a period of stabilization and slight improvement. The continued investment in fixed assets requires monitoring in conjunction with revenue performance to assess long-term asset efficiency.
Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset)
Verizon Communications Inc., net fixed asset turnover (including operating lease, right-of-use asset) calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Operating revenues | ||||||
| Plant, property and equipment, net | ||||||
| Operating lease right-of-use assets | ||||||
| Plant, property and equipment, net (including operating lease, right-of-use asset) | ||||||
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover (including operating lease, right-of-use asset)1 | ||||||
| Benchmarks | ||||||
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Competitors2 | ||||||
| AT&T Inc. | ||||||
| T-Mobile US Inc. | ||||||
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Sector | ||||||
| Telecommunication Services | ||||||
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Industry | ||||||
| Communication Services | ||||||
Based on: 10-K (reporting date: 2025-12-31), 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).
1 2025 Calculation
Net fixed asset turnover (including operating lease, right-of-use asset) = Operating revenues ÷ Plant, property and equipment, net (including operating lease, right-of-use asset)
= ÷ =
2 Click competitor name to see calculations.
The net fixed asset turnover ratio, calculated using plant, property, and equipment net of accumulated depreciation and including operating lease right-of-use assets, demonstrates a generally stable, albeit slightly declining, trend over the five-year period. Operating revenues experienced moderate fluctuations, while the net value of fixed assets remained relatively consistent.
- Overall Trend
- The ratio decreased from 1.05 in 2021 to 1.01 in both 2022 and 2023, indicating a slight reduction in the efficiency with which fixed assets generated revenue. A modest recovery to 1.04 is observed in 2025.
- Revenue Analysis
- Operating revenues increased from US$133,613 million in 2021 to US$136,835 million in 2022, representing a growth of approximately 2.4%. However, revenues then decreased to US$133,974 million in 2023 before stabilizing and increasing to US$138,191 million in 2025. This revenue volatility contributes to the fluctuations in the turnover ratio.
- Fixed Asset Base
- The net value of plant, property, and equipment, including operating lease right-of-use assets, increased from US$127,579 million in 2021 to US$133,564 million in 2022. Following this increase, the asset base remained relatively stable, fluctuating between US$133,036 million and US$132,965 million from 2023 to 2025. The relative stability of the asset base suggests that changes in the turnover ratio are primarily driven by revenue fluctuations.
- Ratio Interpretation
- A net fixed asset turnover ratio of around 1.0 indicates that for every dollar invested in fixed assets, approximately one dollar of revenue is generated. The slight decline in the ratio from 2021 to 2023 suggests a marginally decreasing efficiency in asset utilization. The increase in 2025 indicates a potential improvement in this efficiency, aligning with the revenue increase observed in that year.
In conclusion, the observed trends suggest a generally consistent, though slightly variable, relationship between revenue generation and the company’s investment in fixed assets. Further investigation into the drivers of revenue fluctuations may provide additional insights into the observed changes in the net fixed asset turnover ratio.
Total Asset Turnover
Verizon Communications Inc., total asset turnover calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Operating revenues | ||||||
| Total assets | ||||||
| Long-term Activity Ratio | ||||||
| Total asset turnover1 | ||||||
| Benchmarks | ||||||
| Total Asset Turnover, Competitors2 | ||||||
| AT&T Inc. | ||||||
| T-Mobile US Inc. | ||||||
| Total Asset Turnover, Sector | ||||||
| Telecommunication Services | ||||||
| Total Asset Turnover, Industry | ||||||
| Communication Services | ||||||
Based on: 10-K (reporting date: 2025-12-31), 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).
1 2025 Calculation
Total asset turnover = Operating revenues ÷ Total assets
= ÷ =
2 Click competitor name to see calculations.
The analysis reveals a consistent, albeit gradual, decline in the total asset turnover ratio over the five-year period examined. This indicates a decreasing efficiency in utilizing assets to generate revenue.
- Total Asset Turnover
- The total asset turnover ratio decreased from 0.36 in 2021 to 0.34 in 2025. This represents a cumulative decrease of approximately 5.6%. The ratio remained stable at 0.36 for both 2021 and 2022 before beginning a consistent, year-over-year decline.
Operating revenues exhibited a slight increase overall, rising from US$133,613 million in 2021 to US$138,191 million in 2025. However, this revenue growth was outpaced by the growth in total assets, which increased from US$366,596 million in 2021 to US$404,258 million in 2025. This disparity is the primary driver of the observed decline in asset turnover.
- Revenue and Asset Growth
- While operating revenues increased by approximately 3.4% over the period, total assets grew by roughly 10.3%. The faster rate of asset accumulation, relative to revenue generation, suggests the company is investing in assets that are not yet translating into proportional revenue gains, or that existing assets are becoming less efficient at generating sales.
The consistent downward trend in the total asset turnover ratio warrants further investigation. Potential areas of inquiry include an examination of the composition of asset growth, the efficiency of asset utilization within specific business segments, and a comparison of this ratio to industry peers to assess relative performance.
Equity Turnover
Verizon Communications Inc., equity turnover calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Operating revenues | ||||||
| Equity attributable to Verizon | ||||||
| Long-term Activity Ratio | ||||||
| Equity turnover1 | ||||||
| Benchmarks | ||||||
| Equity Turnover, Competitors2 | ||||||
| AT&T Inc. | ||||||
| T-Mobile US Inc. | ||||||
| Equity Turnover, Sector | ||||||
| Telecommunication Services | ||||||
| Equity Turnover, Industry | ||||||
| Communication Services | ||||||
Based on: 10-K (reporting date: 2025-12-31), 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).
1 2025 Calculation
Equity turnover = Operating revenues ÷ Equity attributable to Verizon
= ÷ =
2 Click competitor name to see calculations.
The equity turnover ratio for the analyzed period demonstrates a consistent downward trend. This indicates a decreasing efficiency in generating revenue from the company’s equity base over the five-year period.
- Equity Turnover Trend
- The equity turnover ratio decreased from 1.63 in 2021 to 1.32 in 2025. This represents a cumulative decline of approximately 23.3%. The rate of decline has also accelerated; the decrease from 2021 to 2022 was 0.13, while the decrease from 2023 to 2024 was 0.09, and from 2024 to 2025 was 0.04.
Operating revenues exhibited some fluctuation but generally remained stable, ranging between US$133.6 billion and US$138.2 billion. This suggests that the declining equity turnover is not primarily driven by significant revenue changes, but rather by increases in equity attributable to Verizon.
- Relationship to Equity Growth
- Equity attributable to Verizon increased consistently throughout the period, moving from US$81.8 billion in 2021 to US$104.5 billion in 2025. This growth in equity, without a corresponding proportional increase in operating revenues, is the primary driver of the observed decrease in equity turnover. The company is reinvesting more equity into the business or retaining earnings, which dilutes the revenue generated per dollar of equity.
The continued decline in equity turnover warrants further investigation. While a lower ratio does not necessarily indicate poor performance, it suggests the company may be becoming less efficient in utilizing shareholder equity to generate sales. Potential areas for further analysis include examining the reasons for equity growth, such as share repurchases, retained earnings, or new equity issuance, and comparing the ratio to industry peers.