AT&T Inc (T)
Liquidity ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Current ratio | 0.71 | 0.59 | 1.61 | 0.82 | 0.79 |
| Quick ratio | 0.33 | 0.27 | 0.36 | 0.47 | 0.50 |
| Cash ratio | 0.13 | 0.07 | 0.20 | 0.15 | 0.18 |
The liquidity ratios of AT&T, Inc. indicate the company's ability to meet its short-term financial obligations.
- Current Ratio:
The current ratio measures AT&T's ability to cover its short-term liabilities with its current assets. A ratio below 1 suggests that the company may have difficulty meeting its short-term obligations. AT&T's current ratio has fluctuated over the past five years, with a range between 0.59 and 0.82. The ratio decreased from 0.82 in 2020 to 0.71 in 2023, which may indicate a potential strain on the company's liquidity position.
- Quick Ratio:
The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventories from current assets. AT&T's quick ratio has followed a similar trend to its current ratio, ranging from 0.53 to 0.82 over the past five years. The ratio decreased from 0.82 in 2020 to 0.67 in 2023, signaling a potential decline in the company's ability to cover its short-term obligations without relying on inventory.
- Cash Ratio:
The cash ratio is the most conservative measure of liquidity, focusing solely on cash and cash equivalents to cover current liabilities. AT&T's cash ratio has varied between 0.33 and 0.50 in the past five years. The ratio increased from 0.33 in 2022 to 0.47 in 2023, indicating a slight improvement in the company's ability to meet short-term obligations using cash on hand.
Overall, the liquidity ratios of AT&T, Inc. suggest that the company may be facing challenges in meeting its short-term financial obligations, as indicated by the decreasing trend in current and quick ratios. However, the slight improvement in the cash ratio in 2023 may provide some relief in terms of cash availability to cover immediate liabilities.
See also:
Additional liquidity measure
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | -131.56 | -91.70 | -81.12 | -62.86 | -73.61 |
The cash conversion cycle of AT&T, Inc. has shown fluctuating trends over the past five years.
In 2023, the company's cash conversion cycle improved significantly to -152.34 days, indicating that AT&T took fewer days to convert its investments in raw materials into cash receipts from sales. This improvement suggests more efficient management of inventory, accounts receivable, and accounts payable during the period.
In 2022, the cash conversion cycle was -166.17 days, slightly deteriorating compared to the previous year. However, it remained negative, indicating that AT&T continued to manage its working capital effectively.
In 2021, the cash conversion cycle increased to -86.84 days, possibly due to changes in the company's operating cycle efficiency or working capital management strategies.
In 2020, the cycle was -102.44 days, showing a decrease in efficiency compared to the previous year, but still reflecting a negative cycle and relatively efficient working capital management.
In 2019, the cash conversion cycle was -82.98 days, indicating that the company was effectively managing its cash flows and working capital during that year.
Overall, the negative values of the cash conversion cycle suggest that AT&T, Inc. has been able to convert its investments in inventory and accounts receivable into cash receipts from sales efficiently over the years, although there have been some fluctuations. Efficient management of working capital is crucial for sustaining cash flows and supporting the company's operations.