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Portfolio AT&T Horizontal and Vertical Analysis
Finance & Accounting
Pages 4 (1004 words)
The total revenues of AT&T during fiscal year 2012 were $94,220 million. The firm’s revenues increase by 1% in comparison with the previous year. AT&T’s operating expenses in 2012 went down by $111 million. The vertical analysis illustrated that in comparison to its sales operating expenses are 80% in 2012.
AT&T had a net margin of 11.93%. In comparison with the industry average net margin of 7.8% the firm’s net margin is 4.03% higher (Dun & Bradstreet, 2012). As of September 30, 2012 the total assets of AT&T were $266,849 million dollars. In comparison with fiscal year 2011 the total assets of the firm decreased by 1%. ”Total assets include cash and other items of value that can be converted into cash that are owned by a person or company” (Crutchfield, 2012).The current assets of the company in 2012 were $18,958 million which represents a decline in current assets of $4,069 million in comparison with the previous year. Based on the vertical performed the current assets of the company represent 7% of total assets. The current and total liabilities of the company during 2012 were $30,758 million and $165,575 million respectively. The current ratio shows the ability of the company to pay off its current debt. AT&T’s current ratio during 2012 was 0.62. The current ratio of the company is bad considering the fact that a good current ratio is above the 1.0 threshold. The formula to calculate current ratio is current assets divided by current liabilities. AT&T must improve its current ratio; otherwise the company might face liquidity problems. The return on assets (ROA) metric measures how profitable a company is in relation to its total assets (Investopedia, 2012). ...
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