Verizon Communications Inc (VZ)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 4.14 | 4.20 | 4.51 | 4.69 | 4.77 |
Verizon Communications Inc's solvency ratios indicate its ability to meet its financial obligations over the long term. The trend analysis of the ratios over the last five years shows relatively stable but slightly fluctuating values.
1. Debt-to-assets ratio: This ratio has been consistent around 0.40, indicating that approximately 40% of Verizon's assets are financed by debt. This suggests a strong asset base relative to its debt obligations.
2. Debt-to-capital ratio: Similarly, the debt-to-capital ratio has remained stable around 0.62, signifying that about 62% of the company's capital structure is funded by debt. This indicates a moderate reliance on debt for financing operations.
3. Debt-to-equity ratio: The debt-to-equity ratio has shown a slight decrease from 1.90 in 2020 to 1.63 in 2023. This suggests that Verizon's reliance on equity financing has increased relative to debt financing over the period, which can be seen as a positive trend for investors and creditors.
4. Financial leverage ratio: The financial leverage ratio, which measures the extent of total assets financed by debt, has also exhibited a decreasing trend from 4.75 in 2019 to 4.11 in 2023. This indicates that Verizon has been reducing its reliance on debt to finance its assets.
Overall, the solvency ratios demonstrate that Verizon Communications Inc has maintained a solid financial position with a prudent balance between debt and equity financing. The decreasing trend in the debt-to-equity and financial leverage ratios over the years reflects a strengthening solvency profile and a more sustainable capital structure.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 3.99 | 8.69 | 9.28 | 6.51 | 5.70 |
Verizon Communications Inc's interest coverage has shown fluctuations over the past five years. The interest coverage ratios for the years ending December 31, 2023, 2022, 2021, 2020, and 2019 were 5.54, 8.80, 9.35, 6.77, and 6.46 respectively.
The interest coverage ratio measures a company's ability to meet its interest obligations on outstanding debt. A higher ratio indicates that the company is more capable of servicing its debt through its operating income. In this case, Verizon's interest coverage has generally been at acceptable levels, with higher ratios in 2021 and 2022 compared to the other years.
The decrease in the interest coverage ratio in 2023 may indicate a slight decrease in the company's ability to cover its interest expenses from its operating income. However, it is essential to consider other factors such as changes in interest rates, debt levels, and operational performance when interpreting this ratio. Additional analysis and comparison with industry standards would provide further insights into Verizon's financial health and ability to manage its debt obligations.