Lumen Technologies Inc (LUMN)

The solvency ratios of Lumen Technologies Inc indicate its ability to meet its long-term financial obligations and the extent of its financial leverage over the years.

1. Debt-to-assets ratio: This ratio has increased steadily over the past five years, indicating that Lumen's proportion of debt relative to its total assets has been on the rise. The latest figure of 0.59 suggests that 59% of the company's assets are financed by debt.

2. Debt-to-capital ratio: The trend in this ratio also shows an increasing pattern, reaching 0.98 in 2023. This implies that Lumen has relied more heavily on debt to finance its operations and investments in relation to its capital structure.

3. Debt-to-equity ratio: This ratio has shown significant fluctuations, with a sharp increase in 2023 to 47.93, compared to 1.97 in 2022. This considerable spike indicates a substantial increase in the company's financial leverage through debt financing relative to equity.

4. Financial leverage ratio: The financial leverage ratio has been climbing steadily over the years, and at 81.58 in 2023, it signifies a high level of financial risk. This ratio indicates the extent to which the company's operations are financed by debt, implying that the company has a higher degree of financial leverage.

In summary, Lumen Technologies Inc has seen a consistent increase in its debt levels and financial leverage ratios over the years, which might indicate a higher risk associated with its financial obligations. An elevated reliance on debt financing can amplify risks during economic downturns or fluctuations in interest rates. Investors and creditors should closely monitor these solvency ratios to assess the company's ability to manage its debt levels effectively and avoid potential financial distress.

---

Coverage ratios

Lumen Technologies Inc's interest coverage ratio has fluctuated over the past five years, ranging from a low of 1.10 in 2023 to a high of 2.82 in 2021. The interest coverage ratio measures the company's ability to meet its interest obligations from its earnings before interest and taxes (EBIT). A ratio below 1 indicates that the company is not generating enough earnings to cover its interest payments.

In 2023, the interest coverage ratio of 1.10 indicates that Lumen Technologies Inc's earnings were just sufficient to cover its interest expenses. This could suggest a tighter financial position or increased interest costs compared to previous years. However, in 2021 and 2022, the company exhibited stronger interest coverage ratios of 2.82 and 2.47 respectively, indicating an improved ability to meet its interest obligations from operating earnings.

Overall, while the recent decrease in interest coverage to 1.10 in 2023 may raise some concerns about the company's ability to cover its interest expenses from its operating earnings, the historical trend shows that Lumen Technologies Inc has managed to maintain a reasonable level of interest coverage over the past five years. Investors and stakeholders should continue monitoring the company's financial health and its ability to generate sufficient earnings to cover its interest payments in the future.