Twenty-First Century Fox Inc. (NASDAQ:FOX)

The financial leverage exhibited a rising trend from September 2012 to around September 2016, increasing from approximately 2.27 to a peak around 3.54, indicating growing use of debt in the company's capital structure. Subsequent periods saw a gradual decrease in financial leverage, dropping to about 2.06 by December 2018, reflecting a deleveraging phase.

The debt to equity ratio followed a generally increasing pattern from late 2012 through mid-2016, ascending from 0.63 to roughly 1.44, signaling higher reliance on debt as compared to shareholder equity. From that point forward, this ratio declined steadily, reaching 0.60 by the end of 2018, consistent with the lowering of financial leverage observed.

A similar pattern emerged in the debt to capital ratio, which climbed from 0.39 in September 2012 to around 0.59 during 2016, showing increased debt proportion in the firm's total capital. After this peak, a downward trend prevailed, with the ratio falling to approximately 0.38 by the end of 2018, underscoring a reduction in debt relative to total capital.

Debt to assets ratio mirrored these movements, rising from 0.28 in late 2012 to about 0.41 in 2016, indicating a higher percentage of assets financed by debt. This ratio then eased to roughly 0.29 by the last quarter of 2018, further attesting to diminished leverage.

Interest coverage, available intermittently from March 2013 onwards, showed notable fluctuations. Initial values were strong, with levels such as 9.22 and 7.70 in 2013 but gradually declined over the years, hitting lows around 4.27 to 4.83 between late 2016 and 2018, implying reduced interim earnings relative to interest expenses. A significant spike to 13.7 in December 2018 suggests a substantial improvement in the company's ability to cover interest obligations in that quarter.

Overall, the data indicate a period of increasing leverage up to 2016, followed by a systematic deleveraging characterized by reductions in debt relative to equity, capital, and assets, alongside a modest recovery in interest coverage towards the end of the period analysed.

Debt to Equity

Increased from 0.63 to 1.44 between 2012 and 2016; declined thereafter to 0.60 by end of 2018.

Debt to Capital

Ranged upward from 0.39 to approximately 0.59 by 2016; then decreased steadily to 0.38 in 2018.

Debt to Assets

Rose from 0.28 in 2012 to 0.41 in 2016; followed by a decline to about 0.29 in 2018.

Financial Leverage

Increased notably from 2.27 to 3.54 through 2016; then decreased to 2.06 by end 2018.

Interest Coverage

Started strong with a peak above 9 in 2013, declined to roughly 4.3-4.8 through 2016-2018, with a sharp rise to 13.7 in late 2018.

The analysis of the quarterly financial data reveals several notable trends in the company's capital structure over the observed periods.

Total Debt

The total debt level remained relatively stable from late 2012 through mid-2013, fluctuating slightly around USD 16.5 billion. From the third quarter of 2013, debt increased steadily, peaking near USD 20.2 billion in the third quarter of 2014. Following this peak, total debt stabilized around the USD 19 billion to USD 20 billion range for several quarters. In 2017 and 2018, a gradual downward trend is evident, culminating in a reduction to approximately USD 19.2 billion by the end of 2018.

Total Stockholders’ Equity

Equity demonstrated a significant variability throughout the periods. Initially, it increased steadily from about USD 26.3 billion in the third quarter of 2012 to over USD 30 billion in the first quarter of 2013. However, a pronounced decrease occurred immediately after, with equity declining sharply to below USD 17 billion by the middle of 2013. Following this decline, equity remained relatively flat or showed minor fluctuations for several quarters, generally staying below USD 20 billion. Starting in late 2016, a consistent upward movement in equity is observed, reaching a substantial increase to USD 32 billion by the end of 2018.

Debt to Equity Ratio

The debt to equity ratio exhibited considerable fluctuation, reflecting the movements in debt and equity. Initially, the ratio was below 0.7, indicative of a balanced capital structure. However, following the equity decline and increasing debt in 2013 and 2014, the ratio surged above 1.0, peaking near 1.44 in the second quarter of 2016, signaling higher leverage and increased reliance on debt financing. After this peak, the ratio gradually decreased, falling below 1.0 by late 2018, corresponding with the substantial equity increase and slight debt reduction. This trend suggests an improvement in financial leverage and a stronger equity base toward the end of the analyzed period.

In summary, the company experienced a period of increased leverage and decreased equity around 2013 to 2016, followed by a recovery phase characterized by growing equity and reduced leverage between 2016 and 2018. The capital structure improved over time, with the debt to equity ratio returning to more conservative levels by the close of 2018.

Total Debt

The total debt level shows a generally stable pattern from September 2012 through around 2015, fluctuating slightly between approximately $16.4 billion and $19.7 billion. From 2015 to 2018, total debt remains fairly consistent, mostly staying within a range of $19.0 billion to $20.0 billion. There is a slight declining trend apparent toward the end of 2018, where debt decreases to approximately $19.2 billion.

Total Capital

Total capital experiences more variability and notable structural changes over the covered periods. Starting at approximately $42.7 billion in September 2012, it increases gradually until March 2013, then shows a significant decline in June 2013, dropping to roughly $33.5 billion. Afterwards, total capital recovers gradually from late 2013 through 2015, fluctuating mostly between $33 billion and $39 billion. A marked upward trend is noticeable beginning in 2017, with total capital reaching over $51.2 billion by December 2018, indicating a substantial growth in the company’s capital base during the final part of the period.

Debt to Capital Ratio

The debt to capital ratio presents a noticeable shift over time. Initially, from late 2012 to early 2013, the ratio declines from about 0.39 to 0.35, indicating reduced reliance on debt relative to total capital. However, from mid-2013 through early 2016, the ratio rises steadily, peaking near 0.59, suggesting increased leverage during this interval. Subsequent to this peak, the ratio shows a consistent downtrend from 2016 to the end of 2018, decreasing to 0.38 by December 2018. This reduction indicates that although debt levels were relatively stable, the increase in total capital significantly improved the company’s capital structure, reducing its leverage ratio toward the later periods.

Overall Insights

The analysis reveals a period of relative stability in debt levels alongside fluctuations in total capital, which greatly influenced the debt to capital ratio. The early part of the timeline is characterized by low and stable leverage, followed by a phase of increasing debt relative to capital. The trend reverses in the latter years with a decrease in leverage, driven by growth in total capital rather than reductions in absolute debt. This pattern suggests a strategic shift toward strengthening the capital base, improving financial stability, and reducing risk associated with high leverage by the end of 2018.

The financial data reveals several notable trends relating to debt, assets, and leverage ratios over the reported quarters.

Total Debt

Total debt values initially display a relatively stable trend around the 16,400–17,500 million USD levels from September 2012 through to early 2014. Thereafter, there is a gradual increase peaking near 20,000 million USD in late 2014 and early 2015, followed by minor fluctuations generally maintaining levels close to 19,000 to 20,000 million USD for most quarters through 2017 and 2018. The overall trend suggests a moderate rise in indebtedness over the period, with some stabilization observed in the latter years.

Total Assets

Total assets show significant volatility across the reported periods. Beginning around 59,676 million USD in late 2012, asset figures rise sharply to a peak of approximately 68,490 million USD by March 2013 but then decline abruptly to around 50,944 million USD by June 2013. Following this drop, assets maintain relatively stable levels near 48,000 to 54,000 million USD through most of the reporting horizon. There is a noticeable increase towards the end of the dataset, with asset values rising to 65,886 million USD by December 2018. This late increase reverses earlier declines and may indicate acquisition, restructuring, or asset gain activities.

Debt to Assets Ratio

The debt to assets ratio experiences notable fluctuations corresponding to the movements in total debt and assets. Initially, the ratio falls from 0.28 in September 2012 to 0.24 by March 2013, reflecting a proportionally faster increase in assets relative to debt. However, the ratio rises sharply to 0.32 by June 2013, consistent with the observed asset decrease and steady or increasing debt. From mid-2013 onward, the leverage ratio generally trends upward, reaching 0.40–0.41 levels by late 2015 and mid-2016, indicating increased leverage. Subsequently, there is a gradual decline from approximately 0.40 in late 2016 to 0.29 by the end of 2018, driven by rising asset values and steady or slightly declining debt levels, suggesting an improvement in relative financial leverage.

Overall, the data reflect a period marked by significant asset volatility, moderate increases in debt, and corresponding fluctuations in leverage. The latter part of the timeline points to efforts in reducing leverage, possibly through asset growth or debt control.

The analysis of the quarterly financial data reveals several notable trends in the company's asset base, equity position, and financial leverage over the observed periods.

Total assets

The total assets exhibit fluctuation across the quarters. Starting from approximately 59.7 billion US dollars at the end of September 2012, the assets increased and peaked at nearly 68.5 billion by March 2013, followed by a sharp decline to around 50.9 billion by June 2013. After this drop, total assets remained relatively stable in the 50 billion range with minor declines until September 2015. From that point, a slight decrease persisted until mid-2016. Beginning late 2016, total assets showed a gradual recovery with steady increases and eventually culminated in a notable rise to approximately 65.9 billion by the end of December 2018.

Total stockholders’ equity

The total stockholders' equity showed a general upward movement until March 2013, increasing from about 26.3 billion to over 30 billion. However, from March 2013 to September 2015, equity declined consistently, dropping from roughly 30 billion to about 15.3 billion. After this period, the equity base remained relatively flat with a slight downward drift until mid-2016. From the latter part of 2016 onward, stockholders’ equity gradually recovered, registering steady increments each quarter, culminating in a substantial increase to 32 billion by December 2018, indicating a strong improvement in the company’s net worth towards the end of the period.

Financial leverage ratio

The financial leverage ratio started around 2.27 at the end of September 2012 and remained near this level through March 2013. A significant increase occurred between March 2013 and the third quarter of 2013, where the leverage ratio rose sharply from roughly 2.28 to above 3.3. This elevated leverage was sustained with minor fluctuations around the 3.0 to 3.5 range through 2016, reaching a peak of approximately 3.54 during the first half of 2016. After this peak, the leverage ratio exhibited a downward trend from late 2016 through to the end of 2018, falling from above 3.5 to around 2.06—indicating a reduction in the use of debt relative to equity by the company in the latter periods.

Overall, the data points to a period of volatility in total assets and equity, with an initial rise, subsequent decline, and eventual recovery by the end of the timeframe. The financial leverage ratio escalated notably during 2013-2016, implying increased reliance on debt financing, but was managed downward later, potentially indicating efforts to strengthen the balance sheet and reduce financial risk.

Earnings Before Interest and Tax (EBIT) Trend

The EBIT figures display a fluctuating pattern over the analyzed periods, with notable volatility quarter to quarter. Beginning with a high point of 2,872 million USD at the end of September 2012, EBIT drops sharply in December 2012 to 1,791 million USD, then rises significantly to 3,582 million USD by March 2013. Throughout 2013 and 2014, EBIT generally stabilizes in the range of approximately 1,300 to 1,900 million USD, with an exceptional peak of 6,799 million USD in December 2014. Post this peak, the amounts return to sub-2,000 million USD levels, with some quarters showing a decline to as low as 531 million USD in June 2015. Towards the end of the period, particularly in December 2018, EBIT reaches a substantial high of 11,848 million USD, reflecting a significant overall increase.

Interest Expense, Net

Interest expense exhibits a steady, incremental increase over the entire period, rising from 261 million USD in September 2012 to a peak of around 320 million USD, before decreasing slightly to 294 million USD by December 2018. The change is relatively smooth without sharp spikes, indicating consistent borrowing costs or interest obligations over time.

Interest Coverage Ratio

The interest coverage ratio, which measures the ability to meet interest payments from EBIT, shows some variability. Initial data points are missing; however, from mid-2013 onward, it varies mostly between approximately 4 and 10, illustrating moderate coverage capacity. Notably, a sharp increase to 13.7 is seen at the final period noted (December 2018), indicating a significant improvement in the company's ability to cover interest expenses with operating earnings. Earlier spikes around 10 occur during December 2014 and subsequent periods, coinciding with the EBIT peak at that time.

Overall Observations

The combined analysis reveals episodic peaks in EBIT that strongly influence the interest coverage ratio, while interest expense shows slow and steady growth but remains relatively stable. The substantial increases in EBIT toward the end of the data set suggest improved operating performance or one-time impacts boosting earnings. Correspondingly, the interest coverage ratio's increase implies enhanced financial health and decreased risk from interest obligations. However, the intermittent low EBIT quarters indicate periods of operational challenges or fluctuations in profitability.