Verizon Communications Inc (VZ)

Interest coverage

		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
Interest expense	US$ in thousands	7,382,000	5,524,000	3,613,000	3,485,000	4,247,000
Interest coverage		3.89	3.99	8.69	9.28	6.51

December 31, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $28,686,000K ÷ $7,382,000K
= 3.89

Verizon Communications Inc's interest coverage has shown fluctuation over the past five years. The interest coverage ratio measures the company's ability to meet its interest payments on outstanding debt from its operating income.

As of December 31, 2020, Verizon's interest coverage ratio was 6.51, indicating that the company generated operating income 6.51 times greater than its interest expenses. This suggests a moderate ability to cover interest obligations.

By December 31, 2021, the interest coverage improved significantly to 9.28, indicating a stronger ability to cover interest payments from operating income. The ratio remained relatively high at 8.69 by December 31, 2022, reflecting continued strong performance in meeting interest obligations.

However, there was a notable decline in interest coverage by December 31, 2023, with the ratio dropping to 3.99. This decrease may suggest a lower ability to cover interest expenses from operating income during that period.

The trend continued in the following year, with the interest coverage falling further to 3.89 by December 31, 2024. This decline in the ratio indicates a continued decrease in the company's ability to cover interest payments from its operating income.

Overall, while Verizon Communications Inc's interest coverage ratio has shown some volatility over the years, it is important for stakeholders to monitor the trend to ensure the company can effectively manage its debt obligations in the future.