Verizon Communications Inc (VZ)
Return on total capital
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 28,686,000 | 22,030,000 | 31,392,000 | 32,352,000 | 27,667,000 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 98,499,000 | 91,774,000 | 90,351,000 | 81,252,000 | 67,507,000 |
| Return on total capital | 29.12% | 24.00% | 34.74% | 39.82% | 40.98% |
December 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $28,686,000K ÷ ($—K + $98,499,000K)
= 29.12%
Verizon Communications Inc's return on total capital has shown a declining trend over the years based on the provided data. The return on total capital was 40.98% as of December 31, 2020, and decreased to 39.82% by December 31, 2021. Subsequently, there was a further decline to 34.74% by December 31, 2022. The trend continued with a notable drop to 24.00% by December 31, 2023. However, there was a slight improvement to 29.12% by December 31, 2024.
The decreasing trend in return on total capital indicates that Verizon Communications Inc may be facing challenges in generating returns on the total capital employed in its operations. It is essential for the company to analyze the factors contributing to this decline and implement strategies to improve its efficiency in utilizing capital to generate returns for its shareholders and stakeholders.
Peer comparison
Dec 31, 2024