AT&T Inc (T) Extended Graph Analysis
October 19th, 2020 Posted by criseldar Extended Analysis No Comment yetCompany Profile
AT&T is a global networking company, a broadband connectivity provider. The company has two segments, the business services, and consumer services business which provides domestic and international long-distance telephone services. The business services segment includes global communications services with three million customers from small to large businesses.
AT&T (T) Extended Graph Analysis
1. AT&T CASH FLOWS
2015 | 2016 | 2017 | 2018 | 2019 | 2020 | |
Net cash flow provided by operating activitIes | 35,880,000,000 | 39,340,000,000 | 39,150,000,000 | 43,600,000,000 | 48,670,000,000 | 44,260,000,000 |
Net cash used for investing activities | -49,140,000,000 | -24,220,000,000 | -20,370,000,000 | -63,150,000,000 | -16,690,000,000 | -19,670,000,000 |
Net cash provided by (used for) financing activities | 9,780,000,000 | -14,460,000,000 | 25,930,000,000 | -25,990,000,000 | -25,080,000,000 | -16,210,000,000 |
Capital expenditure | -19,218,000,000 | -21,516,000,000 | -20,647,000,000 | -20,758,000,000 | -19,435,000,000 | -18,265,000,000 |
Free cash flow | 16,662,000,000 | 17,828,000,000 | 18,504,000,000 | 22,844,000,000 | 29,233,000,000 | 25,992,000,000 |
Working Capital | -11,824,000,000 | -12,207,000,000 | -2,243,000,000 | -12,993,000,000 | -14,150,000,000 | -14,150,000,000 |
Facts:
- Cash provided by operating activities was $44 billion in the trailing twelve months.
- Net cash used for investing activities was -$19.7 billion in the trailing twelve months.
- Cash provided by (used for) financing activities was -$16 billion in the trailing twelve months.
- Capital expenditures were -$18 billion in the trailing twelve months.
- Free cash flow was $26 billion in the trailing twelve months.
- Working capital was -$14 billion in the trailing twelve months.
Explanation
- Cash from operation grew 23 percent in five years However, in 2020 trailing twelve months it fell 9 percent from 2019.
- Cash from investing activities was purchases of property, plant, and equipment, and purchase and acquisition of a business.
- Net cash from financing activities was insurance and repayment and cash dividends paid
- Capital expenditures were purchases of property, plant, and equipment.
- Free cash flow grew 56 percent in five years.
- Working capital was negatively impacted in the last five years due of current liabilities was higher than the current assets.
Interpretation
The company has managed to generate positive cash flow from operation in the last five years and was able to produce free cash flows. However, due to the higher liabilities than that of the current assets, working capital was negative from 2015 to 2020 trailing twelve months.
2. AT&T BALANCE SHEET
2015 | 2016 | 2017 | 2018 | 2019 | |
Total cash | 5,120,000,000 | 5,790,000,000 | 50,500,000,000 | 5,200,000,000 | 12,130,000,000 |
Current Assets | 5,990,000,000 | 38,370,000,000 | 79,150,000,000 | 51,430,000,000 | 54,760,000,000 |
Net property, plant and equipment | 124,450,000,000 | 124,900,000,000 | 125,220,000,000 | 131,470,000,000 | 154,170,000,000 |
Total non-current assets | 366,680,000,000 | 365,450,000,000 | 364,950,000,000 | 480,440,000,000 | 496,910,000,000 |
Total assets | 402,670,000,000 | 403,820,000,000 | 444,100,000,000 | 531,860,000,000 | 551,670,000,000 |
Current liabilities | 47,820,000,000 | 50,580,000,000 | 81,390,000,000 | 64,420,000,000 | 68,910,000,000 |
Non-current liabilities | 231,220,000,000 | 229,140,000,000 | 220,700,000,000 | 273,560,000,000 | 280,820,000,000 |
Total liabilities | 279,030,000,000 | 279,710,000,000 | 302,090,000,000 | 337,980,000,000 | 349,740,000,000 |
Retained earnings | 33,670,000,000 | 34,730,000,000 | 50,500,000,000 | 58,750,000,000 | 57,940,000,000 |
Stockholders equity | 123,640,000,000 | 124,110,000,000 | 142,010,000,000 | 193,880,000,000 | 201,930,000,000 |
Facts:
- The total cash was $12 billion in 2019.
- Current assets were $55 billion in 2019.
- Net property, plant, and equipment were $154 billion in 2019.
- Total non-current assets were $497 billion in 2019.
- Total assets were $552 billion in 2019.
- Current liabilities were $69 billion in 2019.
- Non-current liabilities were $281 billion in 2019.
- Total liabilities were $350 billion in 2019.
- Retained earnings were $58 billion in 2019.
- Stockholders’ equity was $202 billion in 2019.
Explanation:
- Total cash represents 22 percent of current assets.
- Current assets represent 10 percent of total assets.
- Net property, plant, and equipment represent 28 percent of the total assets.
- Total non-current assets represent 90 percent of the total assets.
- Current liabilities represent 20 percent of the total liabilities.
- Non-current liabilities represent 80 percent of total liabilities.
- Total liabilities represent 63 percent of the total liabilities and stockholders’ equity.
- Retained earnings represent 29 percent of the total liabilities and stockholders’ equity.
- Stockholders’ equity represents 37 percent of the total liabilities and stockholders’ equity.
Interpretation
The company doesn’t have enough liquid to meet its current obligation when the due date comes. The company’s non-current assets consist of buildings and improvements, and machinery, furniture, and equipment.
3. AT&T INCOME AND MARKET
2015 | 2016 | 2017 | 2018 | 2019 | 2020 | |
Revenue | 146,800,000,000 | 163,790,000,000 | 160,550,000,000 | 170,760,000,000 | 181,190,000,000 | 175,140,000,000 |
EBIT | 24,790,000,000 | 24,710,000,000 | 23,860,000,000 | 26,140,000,000 | 29,410,000,000 | 28,140,000,000 |
Net Income | 13,350,000,000 | 12,980,000,000 | 29,450,000,000 | 19,370,000,000 | 13,900,000,000 | 11,900,000,000 |
EBITDA | 46,830,000,000 | 50,570,000,000 | 45,830,000,000 | 61,260,000,000 | 55,110,000,000 | 53,400,000,000 |
Market Capitalization | 149,054,400,000 | 201,513,840,000 | 203,544,360,000 | 174,165,540,000 | 273,713,000,000 | 202,208,000,000 |
Intrinsic Value | 312,600,772,000 | 310,192,761,000 | 522,407,000,000 | 353,617,252,870 | 569,184,000,000 | 786,467,000,000 |
Facts:
- Asset turnover was averaging $0.32 in the trailing twelve months.
- Return on assets was 2.17 percent in the trailing twelve months.
- Return on equity was 6.61 percent in the trailing twelve months.
- Return on invested capital was 4.94 percent in the trailing twelve months.
- Debt/Equity was a 1.00 ratio in the trailing twelve months.
Explanation:
- Asset turnover indicates that for every dollar in the asset, the company generated 32 cents of sales.
- Return on assets indicates that the company generated 02.17 cents of net income for every dollar in assets.
- Return on equity indicates that the company generated 6.61 cents of net income for every dollar in common shareholders equity.
- Return on invested capital indicates that the return on its capital investment was 4.94 percent or 4.94 cents.
- Debt/Equity means that the investors and creditors have an equal stake in the business assets.
Interpretation
Financial ratios show that the company is generating profits for every dollar invested in assets and equity. The debt to equity ratio was not bad, hence investors and creditors have an equal stake in the assets of the company.
4. AT&T FINANCIAL RATIOS
2015 | 2016 | 2017 | 2018 | 2019 | 2020 | |
Asset turnover (average) | 0.42 | 0.41 | 0.38 | 0.35 | 0.33 | 0.32 |
Return on assets % | 3.84 | 3.22 | 6.95 | 3.97 | 2.57 | 2.17 |
Return on equity % | 12.77 | 10.56 | 22.31 | 11.92 | 7.55 | 6.61 |
Return on invested capital % | 7.70 | 6.57 | 12.04 | 7.74 | 5.68 | 4.94 |
Debt/Equity | 0.97 | 0.92 | 0.89 | 0.90 | 0.94 | 1.00 |
Facts:
- Asset turnover was averaging $0.32 in the trailing twelve months.
- Return on assets was 2.17 percent in the trailing twelve months.
- Return on equity was 6.61 percent in the trailing twelve months.
- Return on invested capital was 4.94 percent in the trailing twelve months.
- Debt/Equity was a 1.00 ratio in the trailing twelve months.
Explanation:
- Asset turnover indicates that for every dollar in the asset, the company generated 32 cents of sales.
- Return on assets indicates that the company generated 02.17 cents of net income for every dollar in assets.
- Return on equity indicates that the company generated 6.61 cents of net income for every dollar in common shareholders equity.
- Return on invested capital indicates that the return on its capital investment was 4.94 percent or 4.94 cents.
- Debt/Equity means that the investors and creditors have an equal stake in the business assets.
Interpretation
Financial ratios show that the company is generating profits for every dollar invested in assets and equity. The debt to equity ratio was not bad, hence investors and creditors have an equal stake in the assets of the company.
5. AT&T KEY EXECUTIVE COMPENSATION
2015 | 2016 | 2017 | 2018 | 2019 | |
Key Executive Compensation | |||||
Total | 19,639,491 | 24,347,235 | 30,211,935 | 45,044,485 | 56,226,035 |
John T. Stankey, Director, President, and CEO
|
|||||
Total | 10,040,810 | 12,765,295 | 10,094,583 | 16,552,583 | 22,473,006 |
Jefrey S. McElfresh, CEO AT&T Communications LLC
|
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Total | 7,676,325 | ||||
John S. Stephens, Senior EVP, Principal Accounting Officer, and CFO
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|||||
Total | 9,598,681 | 11,581,940 | 13,892,807 | 15,642,304 | 16,725,328 |
David R. McAfee, Senior EVP, and General Counsel
|
|||||
Total | 6,224,545 | 12,849,276 | 9,351,376 |
Facts:
- The total key executive compensation in 2015 was $19,639,491.
- The total key executive compensation in 2016 was $24,347,235.
- Total key executive compensation in 2017 was $30,211,935.
- Total key executive compensation in 2018 was $45,044,485.
- Key executive compensation in 2019 was $56,226,035.
Explanation
- The total key executive compensation represents 0.40 percent of the net income.
- The total key executive compensation of John T. Stankey, Director, President, and CEO represents 40 percent of the total key executive compensation.
- Jeffrey S. McElfresh, CEO AT&T Communications LLC compensation represents 14 percent of the total compensation.
- The compensation of John S. Stephens, Senior EVP, Principal Accounting Officer, and CFO represents 30 percent of the total key executive compensation.
- David R. McAfee, Senior EVP, and General Counsel compensation represent 17 percent of the total compensation.
Interpretation
Total executive compensation includes salary, restricted stock award, securities options, non-equity compensation, and other compensation.
6. AT&T LOBBYING AND CONTRIBUTIONS
PERIOD | AMOUNT |
1998 | $13,390,000 |
1999 | $23,290,000 |
2000 | $16,320,000 |
2001 | $16,450,000 |
2002 | $14,660,000 |
2003 | $15,820,000 |
2004 | $21,360,000 |
2005 | $23,440,000 |
2006 | $27,450,000 |
2007 | $16,560,000 |
2008 | $15,080,000 |
2009 | $14,730,000 |
2010 | $15,400,000 |
2011 | $20,230,000 |
2012 | $17,460,000 |
2013 | $15,940,000 |
2014 | $14,200,000 |
2015 | $16,370,000 |
2016 | $16,370,000 |
2017 | $16,780,000 |
2018 | $18,523,000 |
2019 | $12,820,000 |
2020 | $6,250,000 |
Facts:
From 1998 to the current date, AT&T is incurring lobbying and contributions expenditures to politicians. The annual record shows the above.
Explanation:
A note from OpenSecret.org Center for Responsive Politics quoted below:
“NOTE: Figures on this page are calculations by the Center for Responsive Politics based on data from the Senate Office of Public Records. Data for the most recent year was downloaded on April 22, 2020, and includes spending from January 1 – March 31. Prior years include spending from January through December.”
Interpretation
Lobbying and contributions to politicians vary every cycle; it may increase or decrease in amount depending on the attention given by the federal government on the issues of the company.
7. AT&T FINANCIAL STRENGTH
DATA:
Working Capital | -14,150,000,000 |
Total Assets | 547,900,000,000 |
Sales | 175,140,000,000 |
EBIT | 28,140,000,000 |
Market value of equity | 204,345,000,000 |
Book value of total liabilities | 354,450,000,000 |
Retained earnings | 13,502,000,000 |
CALCULATION
Ratio | Score | Result | |
A – Working Capital / Total Assets | -0.03 | 1.20 | -0.03 |
B – Retained Earnings / Total Assets | 0.02 | 1.40 | 0.03 |
C – EBIT / Total Assets | 0.05 | 3.30 | 0.17 |
D – Market Value of Equity / Book Value of Total Liabilities | 0.58 | 0.60 | 0.35 |
E – Sales / Total Assets | 0.32 | 1.00 | 0.32 |
Z-Score | 0.84 |
Formula: Z-Score = 1.2A + 1.4B + 3.3C + 0.6D + 1.0E
Explanation:
Z-Score is a statistical measurement that compares data points from different sets of data to find correlations. This measurement by Dr. Edward Altman is a significant measure in determining the financial strength of the company because it relies on different weighted financial liquidity and profitability metrics to come up with the overall score. This measure indicates the probability of bankruptcy.
Interpretation
According to Dr. Altman, a Z-Score of 0 to 1.8 indicates that the company will declare bankruptcy in the future. AT&T suffered negative working capital in the past five years because its current liabilities are higher than the current assets. The main factors of this statistical measurement are profitability, liquidity, leverage, and efficiency. Visa Inc has strong financial health.
Overview,
The company’s financial strength was not impressive at below a score of 1 which indicates that the company would likely declare bankruptcy in the near future. The score was impacted by the negative working capital due to the debt being higher than its current assets.
CITATION
https://about.att.com/pages/corporate_profile
http://www.opensecrets.org/orgs/at-t-inc/summary?id=d000000076
https://www.morningstar.com/stocks/xnys/t/quote
Researched and written by Criselda