Verizon Communications Inc (VZ)
Return on total capital
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 28,560,000 | 20,789,000 | 22,366,000 | 22,022,000 | 22,030,000 | 32,175,000 | 32,005,000 | 32,252,000 | 31,392,000 | 28,356,000 | 30,051,000 | 31,044,000 | 32,352,000 | 32,796,000 | 30,516,000 | 29,134,000 | 27,667,000 | 25,213,000 | 26,391,000 | 25,649,000 |
| Long-term debt | US$ in thousands | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 98,499,000 | 95,616,000 | 95,595,000 | 93,913,000 | 91,774,000 | 97,113,000 | 94,649,000 | 92,486,000 | 90,351,000 | 86,726,000 | 85,362,000 | 83,265,000 | 81,252,000 | 76,554,000 | 73,276,000 | 70,950,000 | 67,507,000 | 64,773,000 | 62,460,000 | 60,061,000 |
| Return on total capital | 29.00% | 21.74% | 23.40% | 23.45% | 24.00% | 33.13% | 33.81% | 34.87% | 34.74% | 32.70% | 35.20% | 37.28% | 39.82% | 42.84% | 41.65% | 41.06% | 40.98% | 38.93% | 42.25% | 42.70% |
December 31, 2024 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $28,560,000K ÷ ($—K + $98,499,000K)
= 29.00%
Verizon Communications Inc's return on total capital has shown fluctuations over the period from March 31, 2020, to December 31, 2024. The ratio started at a high of 42.70% in March 2020 and remained relatively stable above 40% until September 2021, indicating efficient utilization of both debt and equity in generating profits.
However, there was a noticeable decline in return on total capital in the subsequent quarters, with a significant decrease to 24.00% by December 31, 2023. This decline may suggest challenges in maintaining the profitability and efficiency of capital deployment during that period.
The ratio improved slightly to 29.00% by December 31, 2024, but it still remained below the earlier levels seen in 2020 and 2021. The decreasing trend in return on total capital in recent quarters could signal the need for Verizon to review and potentially optimize its capital allocation strategies to enhance overall profitability and shareholder value.
Peer comparison
Dec 31, 2024