Lumen Technologies Inc (LUMN)
Solvency ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 72.19 | 81.58 | 4.37 | 4.90 | 5.32 |
Lumen Technologies Inc's solvency ratios indicate a consistently low level of debt relative to its assets, capital, and equity over the past five years. The Debt-to-assets ratio, Debt-to-capital ratio, and Debt-to-equity ratio have all been recorded at 0.00 in each year from 2020 to 2024, reflecting that the company has no significant debt obligations compared to its total assets, capital, and equity.
However, the Financial leverage ratio shows a significant increase from 2020 to 2023, reaching 81.58 before decreasing to 72.19 in 2024. This sharp increase in financial leverage in 2023 suggests that the company may have taken on more debt relative to its equity, which could potentially pose a risk to its financial stability.
Overall, while Lumen Technologies Inc has maintained a very low level of debt in relation to its assets, capital, and equity, the notable spike in the Financial leverage ratio in 2023 warrants further investigation into the company's capital structure and potential risk management strategies.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 0.83 | -7.84 | 0.26 | 2.72 | 0.49 |
The interest coverage ratio measures a company's ability to cover its interest expenses with its operating income. Looking at the data provided for Lumen Technologies Inc over the years, we can see fluctuations in their interest coverage ratio:
1. December 31, 2020: The interest coverage ratio stood at 0.49, indicating that Lumen Technologies had less than a dollar available to cover every dollar of interest expense. This suggests a potential financial strain on the company.
2. December 31, 2021: The interest coverage ratio improved significantly to 2.72, showing that the company's operating income was more than sufficient to cover its interest costs. This indicates a healthier financial position compared to the previous year.
3. December 31, 2022: The interest coverage ratio dropped to 0.26, signaling a deteriorating ability to cover interest expenses with operating income. This decrease may raise concerns about the company's financial stability.
4. December 31, 2023: The interest coverage ratio recorded a negative value of -7.84, indicating that Lumen Technologies' operating income was insufficient to cover its interest expenses. This is a concerning sign as negative interest coverage can lead to financial distress.
5. December 31, 2024: The interest coverage ratio slightly improved to 0.83, but it still remains below 1, suggesting that the company's operating income may not be adequate to cover its interest obligations.
In conclusion, Lumen Technologies Inc has experienced fluctuations in its interest coverage ratio over the years, indicating varying levels of financial health and stability. It is important for investors and stakeholders to monitor these ratios closely to assess the company's ability to meet its debt obligations.