AT&T Inc (T)

Short-term

Turnover ratios

The inventory turnover ratio for AT&T, Inc. has shown fluctuation over the past five years. In 2023, it significantly increased to 23.02 from 16.28 in 2022 and 23.04 in 2021, indicating that the company is managing its inventory more efficiently by selling and replacing inventory more frequently.

The receivables turnover ratio has been relatively stable, increasing gradually from 8.00 in 2019 to 11.90 in 2023. This suggests that AT&T is collecting its accounts receivable more quickly, thereby improving its cash flow and liquidity.

On the other hand, the payables turnover ratio has fluctuated over the years, with a slight decrease in 2023 to 1.84 from 1.63 in 2022. A lower payables turnover ratio may imply that the company is taking longer to pay its suppliers, potentially indicating liquidity issues or strained supplier relationships.

Unfortunately, working capital turnover information is not provided for the years analyzed, making it impossible to assess how efficiently AT&T is utilizing its working capital to generate sales.

Overall, the activity ratios present a mixed picture of AT&T's operational efficiency, with improvements in inventory turnover and receivables turnover, but some challenges in managing payables effectively.

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Average number of days

AT&T's activity ratios provide insights into the company's efficiency in managing its inventory, collecting receivables, and paying its payables.

1. Days of inventory on hand (DOH):
- In 2023, AT&T reduced its days of inventory on hand to 15.85 days from 22.42 days in 2022, indicating a more efficient management of inventory.
- The decrease in DOH suggests that AT&T is converting its inventory into sales more quickly, potentially improving cash flow and reducing the risk of inventory obsolescence.

2. Days of sales outstanding (DSO):
- AT&T managed to lower its days of sales outstanding (DSO) to 30.68 days in 2023 from 34.66 days in 2022. This indicates that the company is collecting its receivables more quickly.
- A lower DSO implies better liquidity and cash flow management, as the company is converting sales into cash faster.

3. Number of days of payables:
- AT&T extended the number of days it takes to pay its payables to 198.87 days in 2023 compared to 223.25 days in 2022.
- This increase in days of payables may allow AT&T to better manage its working capital by using suppliers' funds before paying them, potentially improving cash flow and liquidity.

Overall, AT&T's activity ratios demonstrate improvements in inventory management, receivables collection, and payable terms, which are essential components of a company's working capital management strategy. By effectively managing these activities, AT&T may enhance its financial performance and optimize its resources.

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See also:

AT&T Inc Short-term (Operating) Activity Ratios

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Long-term

The fixed asset turnover for AT&T, Inc. has shown consistency over the years, with values around 0.95 in 2023 and 2022, indicating that the company generated $0.95 in sales for each dollar invested in fixed assets. This suggests that AT&T may not be efficiently utilizing its fixed assets to generate revenue growth.

On the other hand, the total asset turnover has remained low, around 0.30, for the past five years. This indicates that the company generates $0.30 in sales for each dollar of total assets it owns. The declining trend in total asset turnover suggests that AT&T may be facing challenges in efficiently utilizing its total assets to generate sales.

Overall, the long-term activity ratios reveal that AT&T may need to focus on improving its asset utilization efficiency to drive revenue growth and enhance overall performance in the future.

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See also:

AT&T Inc Long-term (Investment) Activity Ratios