Verizon Communications Inc (VZ)

Return on total capital

		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
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	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	26,940,000	24,631,000	24,453,000	24,681,000
Long-term debt	US$ in thousands	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Total stockholders’ equity	US$ in thousands	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	61,173,000	58,724,000	56,417,000	55,731,000
Return on total capital		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%	44.04%	41.94%	43.34%	44.29%

December 31, 2023 calculation

Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $22,030,000K ÷ ($—K + $91,774,000K)
= 24.00%

Verizon Communications Inc's return on total capital has exhibited a downward trend over the past eight quarters. Starting at 13.75% in Q1 2022, the return declined consistently to 11.79% in Q4 2023. This indicates a decreasing efficiency in generating returns from the total capital employed within the business. It is essential for the company to closely monitor and assess its capital allocation strategies to improve the return on total capital and enhance overall profitability.