Stock Analysis on Net
Stock Analysis on Net

Verizon Communications Inc. (NYSE:VZ)

Analysis of Goodwill and Intangible Assets

Microsoft Excel

Goodwill and Intangible Asset Disclosure

Verizon Communications Inc., balance sheet: goodwill and intangible assets

US$ in millions

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Wireless licenses 155,667 149,796 147,619 96,097 95,059
Deposits for wireless licenses — — — 2,772 —
Goodwill 22,843 28,671 28,603 24,773 24,389
Customer lists 4,335 4,335 4,201 4,021 3,896
Non-network internal-use software 25,524 23,421 21,310 21,685 20,530
Other 2,656 2,806 2,974 1,771 1,967
Other intangible assets, gross amount 32,515 30,562 28,485 27,477 26,393
Accumulated amortization (21,458) (19,101) (16,808) (18,064) (16,895)
Other intangible assets, net amount 11,057 11,461 11,677 9,413 9,498
Wireless licenses, goodwill and other intangible assets 189,567 189,928 187,899 133,055 128,946

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

Item Description The company
Goodwill Amount after accumulated impairment loss of an asset representing future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized. Verizon Communications Inc. goodwill increased from 2021 to 2022 but then decreased significantly from 2022 to 2023.
Wireless licenses, goodwill and other intangible assets Sum of the carrying amounts of all intangible assets, including goodwill, as of the balance sheet date, net of accumulated amortization and impairment charges. Verizon Communications Inc. wireless licenses, goodwill and other intangible assets increased from 2021 to 2022 but then slightly decreased from 2022 to 2023.

Adjustments to Financial Statements: Removal of Goodwill

Verizon Communications Inc., adjustments to financial statements

US$ in millions

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Adjustment to Total Assets
Total assets (as reported) 380,255 379,680 366,596 316,481 291,727
Less: Goodwill 22,843 28,671 28,603 24,773 24,389
Total assets (adjusted) 357,412 351,009 337,993 291,708 267,338
Adjustment to Equity Attributable To Verizon
Equity attributable to Verizon (as reported) 92,430 91,144 81,790 67,842 61,395
Less: Goodwill 22,843 28,671 28,603 24,773 24,389
Equity attributable to Verizon (adjusted) 69,587 62,473 53,187 43,069 37,006
Adjustment to Net Income Attributable To Verizon
Net income attributable to Verizon (as reported) 11,614 21,256 22,065 17,801 19,265
Add: Goodwill impairment charge 5,868 16 — — 186
Net income attributable to Verizon (adjusted) 17,482 21,272 22,065 17,801 19,451

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

Verizon Communications Inc., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: Removal of Goodwill (Summary)

Verizon Communications Inc., adjusted financial ratios

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Net Profit Margin
Reported net profit margin 8.67% 15.53% 16.51% 13.88% 14.61%
Adjusted net profit margin 13.05% 15.55% 16.51% 13.88% 14.75%
Total Asset Turnover
Reported total asset turnover 0.35 0.36 0.36 0.41 0.45
Adjusted total asset turnover 0.37 0.39 0.40 0.44 0.49
Financial Leverage
Reported financial leverage 4.11 4.17 4.48 4.66 4.75
Adjusted financial leverage 5.14 5.62 6.35 6.77 7.22
Return on Equity (ROE)
Reported ROE 12.57% 23.32% 26.98% 26.24% 31.38%
Adjusted ROE 25.12% 34.05% 41.49% 41.33% 52.56%
Return on Assets (ROA)
Reported ROA 3.05% 5.60% 6.02% 5.62% 6.60%
Adjusted ROA 4.89% 6.06% 6.53% 6.10% 7.28%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

Financial ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by revenue. Verizon Communications Inc. adjusted net profit margin ratio deteriorated from 2021 to 2022 and from 2022 to 2023.
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Verizon Communications Inc. adjusted total asset turnover ratio deteriorated from 2021 to 2022 and from 2022 to 2023.
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.		 Verizon Communications Inc. adjusted financial leverage ratio decreased from 2021 to 2022 and from 2022 to 2023.
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. Verizon Communications Inc. adjusted ROE deteriorated from 2021 to 2022 and from 2022 to 2023.
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. Verizon Communications Inc. adjusted ROA deteriorated from 2021 to 2022 and from 2022 to 2023.

Verizon Communications Inc., Financial Ratios: Reported vs. Adjusted

Adjusted Net Profit Margin

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to Verizon 11,614 21,256 22,065 17,801 19,265
Operating revenues 133,974 136,835 133,613 128,292 131,868
Profitability Ratio
Net profit margin1 8.67% 15.53% 16.51% 13.88% 14.61%
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Adjusted net income attributable to Verizon 17,482 21,272 22,065 17,801 19,451
Operating revenues 133,974 136,835 133,613 128,292 131,868
Profitability Ratio
Adjusted net profit margin2 13.05% 15.55% 16.51% 13.88% 14.75%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

1 Net profit margin = 100 × Net income attributable to Verizon ÷ Operating revenues
= 100 × 11,614 ÷ 133,974 = 8.67%

2 Adjusted net profit margin = 100 × Adjusted net income attributable to Verizon ÷ Operating revenues
= 100 × 17,482 ÷ 133,974 = 13.05%

Profitability ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by revenue. Verizon Communications Inc. adjusted net profit margin ratio deteriorated from 2021 to 2022 and from 2022 to 2023.

Adjusted Total Asset Turnover

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Operating revenues 133,974 136,835 133,613 128,292 131,868
Total assets 380,255 379,680 366,596 316,481 291,727
Activity Ratio
Total asset turnover1 0.35 0.36 0.36 0.41 0.45
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Operating revenues 133,974 136,835 133,613 128,292 131,868
Adjusted total assets 357,412 351,009 337,993 291,708 267,338
Activity Ratio
Adjusted total asset turnover2 0.37 0.39 0.40 0.44 0.49

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

1 Total asset turnover = Operating revenues ÷ Total assets
= 133,974 ÷ 380,255 = 0.35

2 Adjusted total asset turnover = Operating revenues ÷ Adjusted total assets
= 133,974 ÷ 357,412 = 0.37

Activity ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Verizon Communications Inc. adjusted total asset turnover ratio deteriorated from 2021 to 2022 and from 2022 to 2023.

Adjusted Financial Leverage

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Total assets 380,255 379,680 366,596 316,481 291,727
Equity attributable to Verizon 92,430 91,144 81,790 67,842 61,395
Solvency Ratio
Financial leverage1 4.11 4.17 4.48 4.66 4.75
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Adjusted total assets 357,412 351,009 337,993 291,708 267,338
Adjusted equity attributable to Verizon 69,587 62,473 53,187 43,069 37,006
Solvency Ratio
Adjusted financial leverage2 5.14 5.62 6.35 6.77 7.22

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

1 Financial leverage = Total assets ÷ Equity attributable to Verizon
= 380,255 ÷ 92,430 = 4.11

2 Adjusted financial leverage = Adjusted total assets ÷ Adjusted equity attributable to Verizon
= 357,412 ÷ 69,587 = 5.14

Solvency ratio Description The company
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.		 Verizon Communications Inc. adjusted financial leverage ratio decreased from 2021 to 2022 and from 2022 to 2023.

Adjusted Return on Equity (ROE)

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to Verizon 11,614 21,256 22,065 17,801 19,265
Equity attributable to Verizon 92,430 91,144 81,790 67,842 61,395
Profitability Ratio
ROE1 12.57% 23.32% 26.98% 26.24% 31.38%
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Adjusted net income attributable to Verizon 17,482 21,272 22,065 17,801 19,451
Adjusted equity attributable to Verizon 69,587 62,473 53,187 43,069 37,006
Profitability Ratio
Adjusted ROE2 25.12% 34.05% 41.49% 41.33% 52.56%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

1 ROE = 100 × Net income attributable to Verizon ÷ Equity attributable to Verizon
= 100 × 11,614 ÷ 92,430 = 12.57%

2 Adjusted ROE = 100 × Adjusted net income attributable to Verizon ÷ Adjusted equity attributable to Verizon
= 100 × 17,482 ÷ 69,587 = 25.12%

Profitability ratio Description The company
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. Verizon Communications Inc. adjusted ROE deteriorated from 2021 to 2022 and from 2022 to 2023.

Adjusted Return on Assets (ROA)

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to Verizon 11,614 21,256 22,065 17,801 19,265
Total assets 380,255 379,680 366,596 316,481 291,727
Profitability Ratio
ROA1 3.05% 5.60% 6.02% 5.62% 6.60%
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Adjusted net income attributable to Verizon 17,482 21,272 22,065 17,801 19,451
Adjusted total assets 357,412 351,009 337,993 291,708 267,338
Profitability Ratio
Adjusted ROA2 4.89% 6.06% 6.53% 6.10% 7.28%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

1 ROA = 100 × Net income attributable to Verizon ÷ Total assets
= 100 × 11,614 ÷ 380,255 = 3.05%

2 Adjusted ROA = 100 × Adjusted net income attributable to Verizon ÷ Adjusted total assets
= 100 × 17,482 ÷ 357,412 = 4.89%

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. Verizon Communications Inc. adjusted ROA deteriorated from 2021 to 2022 and from 2022 to 2023.