Verizon Communications Inc (VZ)
Interest coverage
| 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 |
| Interest expense (ttm) | US$ in thousands | 5,524,000 | 5,030,000 | 4,534,000 | 4,034,000 | 3,613,000 | 3,247,000 | 3,111,000 | 3,170,000 | 3,485,000 | 3,826,000 | 4,069,000 | 4,314,000 | 4,247,000 | 4,326,000 | 4,428,000 | 4,554,000 | 4,730,000 | 4,770,000 | 4,835,000 | 4,842,000 |
| Interest coverage | 3.99 | 6.40 | 7.06 | 8.00 | 8.69 | 8.73 | 9.66 | 9.79 | 9.28 | 8.57 | 7.50 | 6.75 | 6.51 | 5.83 | 5.96 | 5.63 | 5.70 | 5.16 | 5.06 | 5.10 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $22,030,000K ÷ $5,524,000K
= 3.99
Verizon Communications Inc's interest coverage ratio has shown a declining trend over the last eight quarters. The interest coverage ratio measures the company's ability to meet its interest payment obligations with its operating income.
The interest coverage ratio for Q4 2023 is 5.54, which indicates that the company's operating income is able to cover its interest expenses 5.54 times over. This is a decrease from the previous quarter's ratio of 6.29. The declining trend in the interest coverage ratio may raise concerns about the company's ability to comfortably meet its interest obligations in the future.
Despite the decrease in the interest coverage ratio from Q3 2023 to Q4 2023, it is worth noting that the ratio remains above 1, indicating that Verizon Communications Inc is generating sufficient operating income to cover its interest expenses. However, investors and creditors may monitor this trend closely to assess the company's financial health and debt servicing capacity.
Peer comparison
Dec 31, 2023
See also:
Verizon Communications Inc Interest Coverage (Quarterly Data)