AT&T Inc (T)
Liquidity ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Current ratio | 0.66 | 0.71 | 0.59 | 1.61 | 0.82 |
| Quick ratio | 0.28 | 0.33 | 0.27 | 0.36 | 0.47 |
| Cash ratio | 0.07 | 0.13 | 0.07 | 0.20 | 0.15 |
AT&T Inc's liquidity ratios reflect fluctuations over the years. The current ratio, which measures the company's ability to meet short-term obligations with current assets, improved from 0.82 in 2020 to 1.61 in 2021 before declining to 0.59 in 2022, indicating a decrease in short-term liquidity. The quick ratio, a more stringent measure of liquidity, followed a similar trend, decreasing from 0.47 in 2020 to 0.36 in 2021 and further to 0.27 in 2022. These ratios suggest a potential challenge for AT&T to quickly cover its current liabilities with its most liquid assets like cash and equivalents.
The cash ratio, which focuses solely on the most liquid assets, also varied during the period. It improved from 0.15 in 2020 to 0.20 in 2021, suggesting a relatively stronger cash position. However, the ratio decreased to 0.07 in 2022, indicating a lower ability to settle current liabilities solely with cash on hand. Overall, AT&T's liquidity ratios show a mix of strengths and weaknesses, highlighting the importance of closely monitoring the company's ability to meet its short-term financial obligations.
See also:
Additional liquidity measure
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | -136.01 | -131.56 | -91.70 | -81.80 | -62.86 |
The cash conversion cycle of AT&T Inc has been showing a negative trend, indicating efficient management of its working capital. The company's cash conversion cycle decreased from -62.86 days in December 2020 to -136.01 days by December 2024. This suggests that AT&T is taking fewer days to convert its investments in inventory and other resources into cash inflows.
A negative cash conversion cycle implies that AT&T is effectively collecting payments from customers and managing its payables efficiently. This may also indicate strong relationships with suppliers and an optimized inventory management system. The decreasing trend in the cash conversion cycle over the years highlights the company's ability to enhance its liquidity position and generate cash flows, which is a positive sign for its financial health and sustainability. Overall, the company's performance in managing its working capital efficiently is reflected in the consistently declining cash conversion cycle.