Lumen Technologies Inc (LUMN)
Solvency ratios
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.58 | 0.55 | 0.55 | 0.43 | 0.44 | 0.45 | 0.00 | 0.00 | 0.49 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.98 | 0.90 | 0.90 | 0.64 | 0.66 | 0.66 | 0.00 | 0.00 | 0.71 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 47.25 | 8.83 | 8.65 | 1.78 | 1.95 | 1.98 | 0.00 | 0.00 | 2.42 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 81.58 | 16.19 | 15.84 | 4.14 | 4.40 | 4.36 | 4.72 | 4.73 | 4.90 | 5.21 | 5.04 | 5.20 | 5.32 | 4.57 | 4.77 | 4.82 | 4.81 | 4.73 | 4.72 | 4.79 |
The solvency ratios of Lumen Technologies Inc, as depicted by the data provided, exhibit fluctuations over the quarters analyzed.
1. Debt-to-assets ratio: This ratio indicates the proportion of the company's assets financed by debt. Lumen's debt-to-assets ratio has been in the range of 0.44 to 0.59, with a higher ratio in more recent quarters. This suggests that a significant portion of the company's assets is funded by debt, which may indicate higher financial risk.
2. Debt-to-capital ratio: This ratio signifies the percentage of the company's capital that is financed by debt. Lumen's debt-to-capital ratio has been fluctuating between 0.64 and 0.98, indicating a varying reliance on debt for financing its operations and investments.
3. Debt-to-equity ratio: This ratio highlights the amount of leverage used by the company and its reliance on debt financing compared to equity. Lumen's debt-to-equity ratio ranged from 1.81 to 47.93, with higher ratios indicating a higher level of debt relative to equity. The substantial increase in Q4 2023 suggests a significant increase in debt financing compared to preceding quarters.
4. Financial leverage ratio: This ratio assesses the company's financial risk by measuring the proportion of assets financed by debt. Lumen's financial leverage ratio has been between 4.14 and 81.58, with a notable spike in Q4 2023. A higher ratio implies a higher financial risk due to increased dependence on debt.
In summary, while Lumen Technologies Inc's solvency ratios have shown fluctuations, the company has exhibited higher levels of debt in recent quarters, indicating potentially increased financial risk and a higher reliance on debt for financing its operations and investments. Investors and analysts may view these trends with caution and closely monitor the company's ability to manage its debt levels effectively.
Coverage ratios
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | -7.84 | -8.82 | -7.43 | 0.12 | 0.26 | 3.02 | 2.84 | 2.93 | 2.77 | 0.88 | 0.73 | 0.64 | 0.53 | 2.01 | 1.93 | 1.87 | -1.36 | -2.60 | -2.54 | -2.61 |
Interest coverage is a measure of a company's ability to meet its interest payments on outstanding debt. For Lumen Technologies Inc, its interest coverage ratio has been declining over the past eight quarters, from a high of 2.98 in Q1 2022 to a low of 1.10 in Q4 2023. This downward trend suggests that the company's ability to cover its interest expenses with its operating income has weakened over time.
A lower interest coverage ratio indicates a higher risk of default on debt obligations, as the company may be struggling to generate enough operating income to meet its interest payments. It is important for investors and creditors to closely monitor Lumen Technologies Inc's financial health and management of its debt levels, as sustained low interest coverage ratios could signal financial distress.