2011 at&T Financial Statement Analysis

Cellular communications is such a large aspect of today’s industries, and with the number of consumers already with cell phones drastically increasing all the time, it is good to think about the future, and maybe making the customers you already have, happy and content. There are only so many “new” customers you can gain in today’s market. Phone

Trends in the market include the growing number of people within the 15-29 age range. Also, phones are being used for much more than just calling, other functions like texting and music playing capabilities have dominated much of a user’s data usage. As for market characteristics, the mobile industry has reached almost 50% penetration with about 130 million subscribers, and reaching its maturity. The cost structure has been very confusing for consumers, with hidden fees, overcharges, and lacks to reward users who do not use their plans to the max. And finally, channels include all service provider stores and retail consumer stores, for example, Target, Walmart, and Best Buy.

SUMMARY OF STUDY OBJECTIVES 1Identify the sections of a classified balance sheet. In a classified balance sheet, companies classify assets as current assets; long-term investments; property, plant, and equipment; and intangibles. They classify liabilities as either current or long-term. A stockholders' equity section shows common stock and retained earnings. 2Identify and compute ratios for analyzing a company's profitability. Profitability ratios, such as earnings per share (EPS), measure aspects of the operating success of a company for a given period of time. 3Explain the relationship between a retained earnings statement

The telecommunications industry has steadily rebound since 2009; this is because of the growth of not only the mobile and broadband structures, but also the increase of the video market. In Figure 1, the projected outcome is indicates a steady increase in the new 4G mobile broadband networks which will fuel continued wireless growth. “Business customers in particular will continue to use this technology to expand their capabilities beyond the desktop computer. Emerging markets such as China, India and Latin America are expected to see strong growth,” (Verizon, 2011).

The operating cycle for AT&T experienced an overall decrease. It was 61 days in 2005; peaked at 73 days in 2006; dropped to 53 days in 2007, where it remained through 2008; and, ended 2009 at 52 days. This ratio represents the period of time that elapses between the acquisition of goods and the final cash realization resulting from sales and subsequent collections. But, due to the fact that AT&T uses the natural business year for accounting, the accounts receivable turnover and inventory turnover in days are likely understated, causing the liquidity to be overstated.

My objective in researching Verizon’s financial statements was gaining a better understanding of the company’s short and long term goals. As I embarked on this journey, I reviewed the requirements, after selecting Verizon, and subsequently realized that my choice was not a “traditional” manufacturing entity; as such I focused my analysis on key types of financial ratios. My analysis will discuss Verizon’s performance as it relates to Asset Productivity, Financial Strength, and Profitability. Through my research, paired with the course’s content my initial impression of this project changed, as did my appreciation for the role

Unambiguously, my current assignment sparked the interest to use Verizon as my research subject. My objective in researching Verizon’s financial statements was gaining a better understanding of the company’s short and long term goals, once again the old adage "Study the past if you would define the future...” has proven to be correct. As I embarked on this journey, I reviewed the requirements, after selecting Verizon, and subsequently realized that my choice was not a “traditional” manufacturing entity; as such I focused my analysis on key types of financial ratios. My analysis will discuss Verizon’s performance as it relates to Asset Productivity, Financial Strength, and Profitability. Through my research, paired with the course’s content my initial impression of this project changed, as did my appreciation for the role of the Verizon’s Financial Management team.

Net income is not a sufficient indicator of the financial health of an entity. It only serves as a basis of allocation of expenses from the revenues that are generated for a certain financial period. It involves “noncash expenses,” specifically “depreciation and amortization of intangible assets” that reduces its value, but have no effect on the net cash flows of the business. It also differs with cash flow under the context of timing of revenue and expense versus the actual “occurrence” of cash flows (Williams, et al.). There are other considerations that must be probed at, such as the procurement of funds from credit facilities, the ability to pay short-term and long-term financial obligations, distribution of annual dividends, cash inflow and outflow from operating, financing and investing activities. Along with the income statement, balance sheet and critical analysis of several factors, the use of cash flow statement of the company serves an important indicator of the financial health and continuous operations of the business.

If employers do not satisfy their employees with benefits that are beneficial to them and their families, employees will seek work elsewhere (Courville, J. (n.d.). If there is a low turnover rate, employees are satisfied and will continue their work journey with the employer. AT&T is one that has low employee turnover because they offer their employees attractive benefits packages that compensate for lower incomes. Increased productivity for employees will also perform their jobs well because they are familiar with what is required and will get the job done and go home (Courville, J. (n.d.). AT&T is one that have a competitive cost benefits package. One of the reasons is because AT&T has been in business longer than Verizon and Sprint. Also, AT&T is equipped with the best-qualified personnel. Also, AT&T saves money on training employees because the majority of workers are highly experienced in telecommunications. Therefore, AT&T sees the workforce as stable, resulting in increased productivity (Courville, J. (n.d.).

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Over a quite long period prior, telecommunication system has incredible improvements from the wire to wireless phone technology. “The ability to convey information quickly, accurately, and efficiently has always been one of the main focuses driving human innovation. From prehistoric man with their signal fires to the smartphone-wielding high-powered executives of today, communication still remains a key for survival and success.” (The History of Telecommunication) Telecommunications set a worldwide network helping people closer together. Nowadays, there are many firms with good services, such as AT&T, Sprint, PCS, T- Mobile, and Verizon in the US. Among these firms, AT&T is the telecommunicating firm that I would like to mention here about its mobile share value plans. Besides its services and products supplied, the mobile share value plans are one of the major changes of AT&T in 2014. The AT&T’s competitiveness, which is based on its pricing and servicing policies, is to measure against other companies in the Telecommunication Industry market.

AT&T, Inc. is a telecommunications company based out of Dallas, Texas that delivers advanced mobile services, next-generation TV, high-speed internet, and smart solutions for people and businesses. In 1983, it was established as Southwestern Bell Corporation, which changed its name to SBC Communications, Inc in 1995. Ten years later, SBC purchased AT&T Corp. and named itself as it is known today. As of December 2016, it had $41.841 billion in revenues, making it the world’s largest communications company by revenues. It’s primary operating segments are Business solutions, Entertainment group, Consumer mobility, and International. It trades in Technology sector on the New York Stock Exchange, focused on domestic telecommunication services.

Subscriber base exceeds 10.0 million: 3.7 million in fixed-line services, 5.7 million in mobile services, 0.5 million in broadband services. By 2013, the company plans to increase subscriber bases of local telephone services by 21,800 and this of broadband services by 34,800 subscribers. The investment volume as of 2008 totaled RUR 9,980 million (growth on 40.4% from the level of investment volume as of 2007.

Due to the financial downturn and the emergence of new devices in the global handset

The challenges that will face by the telecommunication industry can be identified as technology challenges, supply & demand market, government regulations, tight liquidity position and scarcity of skilled workforce are the major industry growth challenger. But increasing budget allocation, effective management, positive trend in telecommunication sector, new technological advancements, high investments made by private companies are the drivers providing the industry with competitive advantage.