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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- Balance Sheet: Assets
- Analysis of Profitability Ratios
- Analysis of Solvency Ratios
- Analysis of Short-term (Operating) Activity Ratios
- Analysis of Reportable Segments
- Enterprise Value (EV)
- Enterprise Value to FCFF (EV/FCFF)
- Dividend Discount Model (DDM)
- Current Ratio since 2005
- Total Asset Turnover since 2005
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Long-term Activity Ratios (Summary)
Verizon Communications Inc., long-term (investment) activity ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| 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: 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).
The analysis of the financial turnover ratios over the five-year period reveals a consistent downward trend across all metrics under review. This suggests a gradual decrease in the efficiency with which the company utilizes its assets and equity to generate sales.
- Net Fixed Asset Turnover
- This ratio declines steadily from 1.35 in 2020 to 1.24 in 2024, indicating that the company is generating fewer sales dollars per dollar of net fixed assets over time. The decrease, though gradual, points to a possible reduction in the operational efficiency of fixed asset use or an increase in the asset base without a proportional increase in sales.
- Net Fixed Asset Turnover (Including Operating Lease, Right-of-Use Asset)
- The inclusion of operating leases and right-of-use assets also reflects a similar but slightly more pronounced downward pattern, dropping from 1.09 in 2020 to 1.01 in 2024. The consistently lower values compared to the standard net fixed asset turnover indicate that the leased assets contribute less to revenue generation relative to owned assets or that lease capitalization has increased the asset base without a commensurate boost in sales.
- Total Asset Turnover
- This ratio remains relatively stable but shows a minor decline from 0.41 in 2020 to 0.35 in 2024. The plateauing around 0.35 in the last two years suggests that total asset efficiency is stabilizing at a lower level, possibly due to larger asset investments or slower sales growth relative to the asset base.
- Equity Turnover
- Equity turnover decreases more sharply from 1.89 in 2020 to 1.36 in 2024. This decline indicates diminished effectiveness in utilizing shareholders' equity to produce revenue, which could result from capital increases, retained earnings growth outpacing sales, or a comparatively slower sales expansion.
Overall, the downward trends across these turnover ratios highlight a reduction in asset and equity utilization efficiency over the period analyzed. This may warrant further investigation into the causes, such as changes in operational strategy, asset acquisitions, or market conditions impacting sales growth relative to asset and equity increments.
Net Fixed Asset Turnover
Verizon Communications Inc., net fixed asset turnover 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) | ||||||
| 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: 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
Net fixed asset turnover = Operating revenues ÷ Plant, property and equipment, net
= ÷ =
2 Click competitor name to see calculations.
- Operating Revenues
- The operating revenues exhibit an overall upward trend from 2020 to 2024. There was a steady increase from 128,292 million USD in 2020 to a peak of 136,835 million USD in 2022. However, a slight decline occurred in 2023, bringing revenues down to 133,974 million USD, followed by a modest recovery to 134,788 million USD in 2024. This pattern suggests some volatility after 2022 but maintaining a generally higher revenue base than the initial year.
- Plant, Property and Equipment, Net
- The net value of plant, property, and equipment displays a consistent upward trajectory throughout the analyzed period. Starting at 94,833 million USD in 2020, the asset base increased each year, reaching 108,522 million USD by 2024. The steady growth in fixed assets indicates ongoing capital investment or asset accumulation, potentially aimed at supporting operational capabilities or future growth.
- Net Fixed Asset Turnover
- The net fixed asset turnover ratio demonstrates a gradual decline from 1.35 in 2020 to 1.24 in 2023 and 2024. This downward trend suggests that the efficiency in generating revenue from the company's fixed assets has decreased over these years. The diminishing turnover ratio implies that despite the increase in plant, property, and equipment, revenue growth has not kept pace proportionally, possibly reflecting lower asset utilization or diminishing returns on these assets.
- Overall Analysis
- The combination of steadily increasing fixed assets alongside a fluctuating but mostly increasing revenue level, and a declining net fixed asset turnover ratio, indicates a scenario where the company has been investing in capital assets; however, these investments have not translated into proportionate revenue increases. This may warrant further examination into asset utilization strategies or the nature of investments made during this period to improve operational efficiency and revenue generation relative to assets employed.
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, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| 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: 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
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.
- Operating Revenues
- The operating revenues demonstrated a gradual upward trend from 2020 to 2022, increasing from 128,292 million US dollars to 136,835 million US dollars. However, in 2023, revenues experienced a slight decline to 133,974 million US dollars and showed a modest recovery to 134,788 million US dollars in 2024. Overall, the revenues have remained relatively stable with limited fluctuations in the most recent years.
- Plant, Property and Equipment, Net
- The net value of plant, property, and equipment, including operating lease right-of-use assets, steadily increased from 117,364 million US dollars in 2020 to a peak of 133,564 million US dollars in 2022. Following this peak, the net fixed assets slightly decreased over the next two years to 132,994 million US dollars by the end of 2024, reflecting a stabilization after a period of growth.
- Net Fixed Asset Turnover
- The net fixed asset turnover ratio consistently decreased over the years, starting at 1.09 in 2020 and declining each year until it stabilized at 1.01 in 2023 and 2024. This suggests a diminishing efficiency in utilizing fixed assets to generate operating revenues, indicating that incremental investments in fixed assets have not proportionately translated into increased revenue generation.
Total Asset Turnover
Verizon Communications Inc., total asset turnover 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) | ||||||
| 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: 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
Total asset turnover = Operating revenues ÷ Total assets
= ÷ =
2 Click competitor name to see calculations.
The financial data reveals several trends over the five-year period under consideration. Operating revenues increased from 128,292 million USD in 2020 to 134,788 million USD in 2024, reflecting a gradual growth trend with a slight dip observed in 2023 compared to the previous year. This suggests a mostly positive revenue performance, although the deceleration in the final two years indicates some potential challenges or market saturation.
Total assets exhibited a consistent upward trajectory throughout the entire period, rising from 316,481 million USD in 2020 to 384,711 million USD in 2024. This growth in asset base suggests ongoing investments and possibly acquisitions, reflecting an expanding capacity or operational scale.
Despite the increases in both revenues and total assets, the total asset turnover ratio declined steadily from 0.41 in 2020 to 0.35 in 2024. This reduction implies that while assets have grown, the efficiency in generating revenues from these assets has decreased. A lower asset turnover ratio often indicates that the company is not utilizing its assets as efficiently to produce sales compared to prior years.
Overall, the data points to a scenario where the company is expanding its asset base and growing revenues slightly, but the efficiency of asset utilization is diminishing over time. This could warrant further analysis to understand the causes, such as changes in asset composition, operational issues, or market conditions affecting revenue generation relative to assets.
- Operating Revenues
- Increased overall with a minor decline in the latter years, peaking in 2022.
- Total Assets
- Consistently increased, indicating growth in asset investment or acquisition.
- Total Asset Turnover
- Decreased steadily, signaling a drop in efficiency in generating revenue from assets.
Equity Turnover
Verizon Communications Inc., equity turnover 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) | ||||||
| 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: 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
Equity turnover = Operating revenues ÷ Equity attributable to Verizon
= ÷ =
2 Click competitor name to see calculations.
The analysis of the financial data reveals distinct trends over the reporting periods from 2020 to 2024. The operating revenues exhibit a general upward trajectory initially, followed by some fluctuations. Equity attributable to Verizon demonstrates consistent growth, while equity turnover shows a declining trend.
- Operating Revenues
- Operating revenues increased from US$128,292 million in 2020 to a peak of US$136,835 million in 2022. However, there was a slight decrease in 2023 to US$133,974 million, followed by a moderate recovery to US$134,788 million in 2024. This pattern suggests a period of growth followed by some volatility and stabilization.
- Equity Attributable to Verizon
- Equity attributable to Verizon has shown a consistent upward trend throughout the periods. It started at US$67,842 million in 2020 and increased steadily each year, reaching US$99,237 million by 2024. This indicates strengthening shareholder equity and potentially retained earnings or capital inflows over time.
- Equity Turnover Ratio
- The equity turnover ratio, which measures the efficiency of using equity to generate revenue, has declined progressively from 1.89 in 2020 to 1.36 in 2024. This decreasing ratio suggests that while equity has increased significantly, the growth in operating revenues has not kept pace at the same rate, implying a reduction in the efficiency of equity utilization for revenue generation.