AT&T Inc (T)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 24.56 | 25.97 | 25.88 | 22.17 | 25.08 |
| Receivables turnover | 12.69 | 11.90 | 10.53 | 7.63 | 7.08 |
| Payables turnover | 2.03 | 2.07 | 2.60 | 2.50 | 2.83 |
| Working capital turnover | — | — | — | 2.08 | — |
The activity ratios of AT&T Inc provide insights into the efficiency of the company's operations in managing its assets and liabilities.
1. Inventory Turnover:
- The inventory turnover ratio measures how many times a company's inventory is sold and replaced over a specific period.
- AT&T Inc experienced a slight decrease in inventory turnover from 25.08 in 2020 to 24.56 in 2024. This suggests a minor decline in the efficiency of inventory management.
2. Receivables Turnover:
- The receivables turnover ratio indicates how efficiently a company is collecting its accounts receivable from customers.
- AT&T Inc showed a consistent increase in receivables turnover from 7.08 in 2020 to 12.69 in 2024. This positive trend signifies an improvement in the collection of receivables over the years.
3. Payables Turnover:
- The payables turnover ratio measures how quickly a company pays its suppliers for goods or services purchased on credit.
- AT&T Inc experienced fluctuations in payables turnover, with a decrease from 2.83 in 2020 to 2.03 in 2024. This may suggest changes in payment terms or supplier relationships.
4. Working Capital Turnover:
- The working capital turnover ratio evaluates how efficiently a company utilizes its working capital to generate sales revenue.
- AT&T Inc only had data available for 2021, showing a ratio of 2.08. The absence of data for the following years makes it challenging to assess the trend or draw meaningful conclusions regarding working capital turnover.
In summary, while the receivables turnover ratio improved over the years, there were fluctuations in inventory turnover and payables turnover. The limited data for working capital turnover hinders a comprehensive analysis of this particular ratio. AT&T Inc may benefit from a closer examination of its inventory management and payables process to enhance operational efficiency and working capital utilization.
Average number of days
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 14.86 | 14.05 | 14.10 | 16.46 | 14.55 |
| Days of sales outstanding (DSO) | days | 28.76 | 30.68 | 34.66 | 47.85 | 51.58 |
| Number of days of payables | days | 179.63 | 176.29 | 140.47 | 146.11 | 128.99 |
Based on the provided data, we can analyze AT&T Inc's activity ratios as follows:
1. Days of Inventory on Hand (DOH):
- In December 2020, AT&T held inventory for an average of 14.55 days before selling it.
- This figure increased slightly to 16.46 days by December 2021.
- However, in the following years, the DOH decreased to 14.10 days in 2022, 14.05 days in 2023, and slightly increased to 14.86 days by December 2024.
- Overall, AT&T's inventory turnover improved from 2021 to 2023 but showed a slight increase in 2024.
2. Days of Sales Outstanding (DSO):
- In December 2020, AT&T took an average of 51.58 days to collect its accounts receivable.
- This number decreased to 47.85 days by December 2021 and significantly dropped to 34.66 days in 2022.
- By December 2023, the DSO decreased further to 30.68 days and continued to improve to 28.76 days by December 2024.
- The company's collection of accounts receivable became more efficient over the period analyzed.
3. Number of Days of Payables:
- In December 2020, AT&T took, on average, 128.99 days to pay its suppliers and vendors.
- This number increased to 146.11 days by December 2021 and decreased slightly to 140.47 days in 2022.
- However, by December 2023 and 2024, the days of payables increased significantly to 176.29 days and 179.63 days, respectively.
- AT&T extended its payment period to suppliers in 2023 and 2024, indicating a potential change in its working capital management strategy.
Overall, AT&T has shown some fluctuations in its activity ratios over the years. The company improved its inventory turnover and accounts receivable collection efficiency but extended its payment period to suppliers in recent years.
See also:
Long-term
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 0.95 | 0.95 | 0.95 | 1.10 | 1.18 |
| Total asset turnover | 0.31 | 0.30 | 0.30 | 0.24 | 0.27 |
The fixed asset turnover ratio for AT&T Inc has been on a declining trend over the past five years, decreasing from 1.18 in 2020 to 0.95 in 2022, and remaining at the same level in 2023 and 2024. This indicates that the company is generating slightly less revenue from its fixed assets over time.
In terms of total asset turnover, AT&T Inc's ratio has fluctuated slightly over the same period, with a low of 0.24 in 2021, and reaching 0.31 in 2024. This ratio measures how efficiently the company is generating sales from its total assets.
Overall, the long-term activity ratios suggest that AT&T Inc may be facing challenges in optimizing the utilization of both its fixed and total assets to generate revenue efficiently. Further analysis would be needed to understand the underlying reasons for these trends and to assess the company's operational performance and strategic direction.