At&T Financial Analysis Essay

1879 Words May 1st, 2012 8 Pages

One of the most important objectives of the curse is that as students we should be able to make better financial decisions. Have a better understanding and ability to process and implement strategies and make successful decisions. Financial data from past periods of a company, provides a perspective for future outcomes. Investors give proper attention to different ratios. In this report I am analyzing the financial position and financial performance of AT & T, a US. Telecommunication Company. The objective and conclusion of this analysis will be, if is either good or not to invest in the company.
The analysis will be base on the most important ratios as, Liquidity, Profitability, and Solvency Ratios.
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The company’s financial position, results of its operations and cash flows.
The auditors also report that they have evaluated the internal controls system of the company and according to them there is no material weakness in its system and hence they give an unqualified opinion.
The management’s discussion and analysis:
1. Reports the variance in the main income statement and balance sheet accounts and the reasons thereof.
2. Presents an analysis of performance and position in different dimensions, for example territory, products, etc.
3. Explains the impact of extraordinary important transactions on the company’s performance and positions for example BellSouth’s acquisition.
4. Discloses major uncertainties and contingencies such as litigation, etc.
5. Analyzes the past environment faced by the company, its stock performance, risks associated, etc.
6. Looks forward to the future environment facing the company and presents their plan to optimize on opportunities, minimize risks, etc.
7. Explains the changes in accounting pronouncements and their impact on the financial statements.
Liquidity Analysis
Liquidity represents a company’s ability to pay its short-term obligations. In the following schedule is the calculation of the ratios that are indicators of the liquidity position of a company. LIQUIDITY RATIOS -1 Current Ratio 2010 2009 Current Assets 268,488.00 268,312.00 ÷

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