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). A high ROA is the preferable outcome. During 2012 the return on equity of the company was 4.24%. In comparison with the industry average of 17% AT&T is not exploiting and generating sufficient income from its assets (Dun & Bradstreet, 2012). The return on equity of AT&T in 2012 was 11.17%. Return on equity (ROE) is calculated by taking a year's worth of earnings and dividing them by the average shareholder equity for that year (Fool, 2012). The firm’s debt ratio is 0.62. A debt ratio is a financial metric that measures how much debt a company has in relation to its assets. The firm’s debt to equity ratio is 1.63. The debt to equity ratio is calculated dividing total equity by the total assets of the company. The financial analysis performed on AT&T shows that the company has good profitability, but the firm seems to be using too much debt to finance its operations. The low current ratio of the company is a warning sign. Assuming the company enjoys the same revenue growth of 1% in the following fiscal the projected sales of the company in 2013 are $95,162 million. Credit Worthiness The creditworthiness of a corporation can be evaluated in a variety of ways. Corporations just like individuals have credit scores from the major credit agencies. This information is private and not accessible to the general public. Banking institution gain access to a firm’s credit scores whenever a firm applies for a loan or others financial instruments. An investor can evaluate the credit worthiness of a firm using a combination of ratios. The current ratio measures a firm’s ability to pay off its current or short term debts. The debt to equity and debt ratio are two good indicators of how much leverage a firm has in the long term. Comparing these ratios to the industry standard is a good way to determine the credit position of the firm. Management Discussion and Analysis Four key findings for the MD&A section of the annual report of AT&T are: The future of wireless growth depends on the ability of companies to provide new innovative services and devices. The managerial staff
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…
Basically, businesses are set up to commercialize innovations and provide solutions to members of the public (Kotler, 1994). This therefore means that businesses are set up to provide something of value that consumers are prepared to exchange consideration for. Most businesses exist as profit making organisations for their owners.
The AT&T organization is an American company that offers telephone and telegraph services to the public. It is the leading company in the offering of telecommunication services throughout the country (Noll, 2007). This did occur after the merging of AT&T Company and the SBC group in the year 2005.
The paper uses probability measures to determine how frequent we anticipate various results to take place should we repeat a provided experiment repeatedly. The stakeholders of the four companies choose investment as a probability approach. The following data analysis is to present a standard report on the development of an event study of a statistical model of shares market data.
In respect of vertical analysis, PepsiCo is found to have earned much more growth as compared to Coca-Cola such that PepsiCo’s revenues increased by 8% and 11% respectively as compared to previous years whereas Coca-Cola’s revenues increased with 4% and 6% during the same periods.
Companies that manufacture hardware in previous years are now acquiring the production of software. Companies that only dealt with software are acquiring hardware production facilities in a bid to stay afloat; this occurred in the case of HP and Google.
However, when discrepancies arise significantly in percentages, it becomes very difficult to pinpoint the root cause of that change as well as the effect of those changes on other line items of income statement and balance sheet (Brigham et al, 2008).
The company is going through a lot of internal weaknesses that needs to be overcome, there are also opportunities given that the organization can avail. Then PEST analysis is done to review the political, economic, social and technological factors affecting the company due to these external issues.
Some of the tactics include: images of people from different cultural backgrounds to represent different demographics, figures representing financial performance, and colors that make numbers and important information clear
Mergers are important for businesses dealing in the same line of products. It can enable a collapsing company to continue with its operations and profitability. Similarly, it can increase the market shares of two independent companies if they operate as a single firm. Therefore, mergers are recommended for enterprises.
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