Stock Analysis on Net

Verizon Communications Inc. (NYSE:VZ)

Analysis of Operating Leases

Microsoft Excel

An operating lease is treated like a rental contract. Neither the leased asset nor the associated liability is reported on the lessee balance sheet, but the rights may be very similar to the rights of an owner. The lessee only records the lease payments as a rental expense in income statement.


Adjustments to Financial Statements for Operating Leases

Verizon Communications Inc., adjustments to financial statements

US$ in millions

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Adjustment to Total Assets
Total assets (as reported) 384,711 380,255 379,680 366,596 316,481
Add: Operating lease right-of-use asset (before adoption of FASB Topic 842)1
Total assets (adjusted) 384,711 380,255 379,680 366,596 316,481
Adjustment to Total Debt
Total debt (as reported) 144,014 150,674 150,639 150,868 129,062
Add: Operating lease liability (before adoption of FASB Topic 842)2
Add: Current operating lease liabilities 4,415 4,266 4,134 3,859 3,485
Add: Non-current operating lease liabilities 19,928 20,002 21,558 23,203 18,000
Total debt (adjusted) 168,357 174,942 176,331 177,930 150,547

Based on: 10-K (reporting date: 2024-12-31), 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).

1, 2 Equal to total present value of future operating lease payments.


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


Adjusted Financial Ratios for Operating Leases (Summary)

Verizon Communications Inc., adjusted financial ratios

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Total Asset Turnover1
Reported total asset turnover 0.35 0.35 0.36 0.36 0.41
Adjusted total asset turnover 0.35 0.35 0.36 0.36 0.41
Debt to Equity2
Reported debt to equity 1.45 1.63 1.65 1.84 1.90
Adjusted debt to equity 1.70 1.89 1.93 2.18 2.22
Return on Assets3 (ROA)
Reported ROA 4.55% 3.05% 5.60% 6.02% 5.62%
Adjusted ROA 4.55% 3.05% 5.60% 6.02% 5.62%

Based on: 10-K (reporting date: 2024-12-31), 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).

Financial 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 2022 to 2023 and from 2023 to 2024.
Adjusted debt to equity A solvency ratio calculated as adjusted total debt divided by total shareholders’ equity. Verizon Communications Inc. adjusted debt to equity ratio improved from 2022 to 2023 and from 2023 to 2024.
Adjusted ROA A profitability ratio calculated as net income divided by adjusted total assets. Verizon Communications Inc. adjusted ROA deteriorated from 2022 to 2023 but then improved from 2023 to 2024 not reaching 2022 level.

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


Adjusted Total Asset Turnover

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
As Reported
Selected Financial Data (US$ in millions)
Operating revenues 134,788 133,974 136,835 133,613 128,292
Total assets 384,711 380,255 379,680 366,596 316,481
Activity Ratio
Total asset turnover1 0.35 0.35 0.36 0.36 0.41
Adjusted for Operating Leases
Selected Financial Data (US$ in millions)
Operating revenues 134,788 133,974 136,835 133,613 128,292
Adjusted total assets 384,711 380,255 379,680 366,596 316,481
Activity Ratio
Adjusted total asset turnover2 0.35 0.35 0.36 0.36 0.41

Based on: 10-K (reporting date: 2024-12-31), 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).

2024 Calculations

1 Total asset turnover = Operating revenues ÷ Total assets
= 134,788 ÷ 384,711 = 0.35

2 Adjusted total asset turnover = Operating revenues ÷ Adjusted total assets
= 134,788 ÷ 384,711 = 0.35

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 2022 to 2023 and from 2023 to 2024.

Adjusted Debt to Equity

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
As Reported
Selected Financial Data (US$ in millions)
Total debt 144,014 150,674 150,639 150,868 129,062
Equity attributable to Verizon 99,237 92,430 91,144 81,790 67,842
Solvency Ratio
Debt to equity1 1.45 1.63 1.65 1.84 1.90
Adjusted for Operating Leases
Selected Financial Data (US$ in millions)
Adjusted total debt 168,357 174,942 176,331 177,930 150,547
Equity attributable to Verizon 99,237 92,430 91,144 81,790 67,842
Solvency Ratio
Adjusted debt to equity2 1.70 1.89 1.93 2.18 2.22

Based on: 10-K (reporting date: 2024-12-31), 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).

2024 Calculations

1 Debt to equity = Total debt ÷ Equity attributable to Verizon
= 144,014 ÷ 99,237 = 1.45

2 Adjusted debt to equity = Adjusted total debt ÷ Equity attributable to Verizon
= 168,357 ÷ 99,237 = 1.70

Solvency ratio Description The company
Adjusted debt-to-equity A solvency ratio calculated as adjusted total debt divided by total shareholders’ equity. Verizon Communications Inc. adjusted debt-to-equity ratio improved from 2022 to 2023 and from 2023 to 2024.

Adjusted Return on Assets (ROA)

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to Verizon 17,506 11,614 21,256 22,065 17,801
Total assets 384,711 380,255 379,680 366,596 316,481
Profitability Ratio
ROA1 4.55% 3.05% 5.60% 6.02% 5.62%
Adjusted for Operating Leases
Selected Financial Data (US$ in millions)
Net income attributable to Verizon 17,506 11,614 21,256 22,065 17,801
Adjusted total assets 384,711 380,255 379,680 366,596 316,481
Profitability Ratio
Adjusted ROA2 4.55% 3.05% 5.60% 6.02% 5.62%

Based on: 10-K (reporting date: 2024-12-31), 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).

2024 Calculations

1 ROA = 100 × Net income attributable to Verizon ÷ Total assets
= 100 × 17,506 ÷ 384,711 = 4.55%

2 Adjusted ROA = 100 × Net income attributable to Verizon ÷ Adjusted total assets
= 100 × 17,506 ÷ 384,711 = 4.55%

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as net income divided by adjusted total assets. Verizon Communications Inc. adjusted ROA deteriorated from 2022 to 2023 but then improved from 2023 to 2024 not reaching 2022 level.