Lumen Technologies Inc (LUMN)

Debt-to-capital ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Long-term debt	US$ in thousands	19,703,000	20,255,000	28,635,000	—	—
Total stockholders’ equity	US$ in thousands	417,000	10,374,000	11,840,000	11,162,000	13,470,000
Debt-to-capital ratio		0.98	0.66	0.71	0.00	0.00

December 31, 2023 calculation

Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $19,703,000K ÷ ($19,703,000K + $417,000K)
= 0.98

The debt-to-capital ratio of Lumen Technologies Inc has shown variability over the past five years. The ratio stood at 0.98 at the end of 2023, indicating that the company financed 98% of its capital structure through debt. This represents a significant increase from the previous year when the ratio was 0.66.

Comparing to earlier years, in 2021, the ratio was 0.71, suggesting a lower reliance on debt for capital funding compared to 2023. In 2020 and 2019, the ratios were 0.74 and 0.72, respectively, showing a relatively stable debt-to-capital structure during those years.

The upward trend in the debt-to-capital ratio from 2021 to 2023 signals that Lumen Technologies Inc has been increasingly using debt to finance its operations and investments. This may indicate a higher risk exposure to debt obligations, which could lead to financial challenges in the future if not managed effectively. Overall, a high debt-to-capital ratio can be a cause for concern for investors and creditors due to the potential financial risks associated with high levels of indebtedness.