At&T Financial Analysis Essay

Review of Financial Research Report: This assignment is an analysis of a US publicly-traded company; its common stock could be a prospective investment.  The report is due in Week 10, in needs to be at least 5 pages, and it needs to cover the following topics:

In Part A, I will examine liquidity and coverage ratios, assessing each company’s ability to meet its debt obligations in both the short and long term, to pay dividends, and to cover its expected operating expenses. Next, in Part B, I will inspect profitability ratios, assessing the ability of each enterprise to provide its investors with a return on their

Basically the liquidity ratios are used to determine a company’s ability to cover its short term obligations when are in financial distress and these obligations are due.

Before beginning an analysis of a company it is necessary to have a complete set of financial statements, preferably for the pas few years so that historical trends can be obtained. Ratios are a way for anyone to get an idea of the financial performance of a company by using the information contained in the financial statements. Ratios are grouped into four basic categories, liquidity, activity, profitability, and financial leverage. This document will use a variety of these ratios to analyze the firm, Sample Company, as of December 31,2000.

Liquidity ratio is the tool for measuring the ability of a company to repay the short-term debt. The working capital of the fiscal period of 2011-2013 continued to increase, this fluctuation showed that the operating funds of the Wendy’s company are growing at the same time. However, in 2013, the current ratio, acid-test ratio and account receivable turnover a sudden decreased. Later in 2014, the short-term debt repayment ability of the Wendy's became strong and steady, this caused a significant development of average collection period. According to the data shown below, the financial position of the Wendy's is lack

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.

Ratio analysis with information from financial statements, cash flow statement and income statements provide investors and managers insight for company performance, issues, and efficiency. In other words, the intent of ratio analysis is to determine the financial position and financial trends of an organization (Andrijasevic, & Pasic, 2014). By analyzing the ratios, a manager can determine liquidity and solvency of the organization. Liquidity is the available resources that are cash or rapidly converted to cash. When something is “liquid,” the asset can be easily used for buying or selling, thus the utmost liquid asset is cash. Solvency refers to the organizations assets versus liabilities. Organizations that have solvency accrue profits that exceed their liabilities, thus a higher probability of covering the liabilities. However, a company that is high in

Liquidity reflects the ability of a firm to meet its short-term obligations using those assets that are most readily converted into cash. Liquidity ratios, current ratio and quick ratio, tell about the company’s ability to meet its immediate obligations. (Foster, 1986)

Liquidity ratios measure a business ' capacity to pay its debts as they come due. It also measures the cooperative’s ability to meet short-term obligations. Liquidity refers to the solvency of the firm’s overall financial position – the ease with which it can pay its bills. Because a common precursor to financial distress and bankruptcy is low or declining liquidity, these ratios can provide early signs of cash flow problems and impending business failure. The two basic measures of liquidity are the current ratio and the quick (acid test) ratio (Gitman, 2009).

Liquidity ratios determine the company’s liquid assets to pay off short-term debt. The current ratio shows for every dollar of current

Part 2 Industry Analysis 1. Cross-Sectional Industry performance 2. performance over time 3. Performance of companies within an industry 4. Performance Analysis Process 5.

Liquidity reflects the ability of a firm to meet its short-term obligations using assets that are most readily converted to cash. Short-term is usually considered as in 12 months or an operating cycle of a business. Assets that may be converted into cash in a short period of time are referred to liquid assets, which are recognised as current assets in financial statements. They are used to satisfy short-term obligations, or current liabilities. Liquidity is important because of changing business operation. A business must be able to pay its financial obligations when needed. Otherwise, it will go bankrupt.

Liquidity of a company is a company’s ability to measure the extent to which a business can convert assets or has cash availability in order to meet the short-term liabilities and immediate obligations. Without this a company can fail very quickly.

Liquidity ratios are the ratios that are used to calculate the company capability to assemble its short term liabilities that are fall due. The greater the ratio is more liquid a company

When deciding to invest there should be an extensive analysis of the company’s financial statement should be done. The analysis should involve a comparison of the company’s performance with other companies in the same industry. It should also involve and evaluation of trends in the company’s financial position over a period of time. The use of financial ratios is a way to gain important information that is neither simple nor obvious. Financial ratios are calculated by using data that can be found on the company’s balance sheets and income statements.