AT&T Inc (T)
Liquidity ratios
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 0.66 | 0.73 | 0.70 | 0.68 | 0.71 | 0.69 | 0.68 | 0.51 | 0.59 | 0.62 | 0.70 | 0.93 | 1.61 | 0.70 | 0.77 | 0.82 | 0.82 | 0.84 | 0.81 | 0.76 |
| Quick ratio | 0.28 | 0.29 | 0.30 | 0.29 | 0.33 | 0.32 | 0.35 | 0.22 | 0.27 | 0.27 | 0.31 | 0.68 | 0.36 | 0.46 | 0.34 | 0.37 | 0.47 | 0.49 | 0.52 | 0.43 |
| Cash ratio | 0.07 | 0.07 | 0.07 | 0.08 | 0.13 | 0.15 | 0.18 | 0.05 | 0.07 | 0.05 | 0.08 | 0.47 | 0.20 | 0.26 | 0.15 | 0.15 | 0.15 | 0.16 | 0.24 | 0.14 |
Based on the provided data, we can analyze the liquidity ratios of AT&T Inc over a series of quarters.
1. Current Ratio:
The current ratio measures the company's ability to pay its short-term obligations with its current assets. AT&T's current ratio fluctuated over the quarters, ranging from a low of 0.51 to a high of 1.61. Generally, a current ratio below 1 indicates that a company may have difficulty meeting its short-term obligations. AT&T's current ratio improved in some quarters but remained below ideal levels in most periods, suggesting potential liquidity challenges.
2. Quick Ratio:
The quick ratio, also known as the acid-test ratio, is a stricter measure of liquidity as it excludes inventory from current assets. AT&T's quick ratio varied from 0.22 to 0.68. A quick ratio below 1 signifies that a company may struggle to meet its short-term obligations without relying on selling inventory. AT&T's quick ratio showed some improvement in certain quarters but generally remained below the ideal threshold, indicating a potential need for improved liquidity management.
3. Cash Ratio:
The cash ratio specifically focuses on a company's ability to cover its short-term obligations with cash and cash equivalents. AT&T's cash ratio ranged from 0.05 to 0.47. A cash ratio below 1 implies that a company relies heavily on non-cash current assets to meet its short-term liabilities. While AT&T's cash ratio exhibited variability, it generally reflected a lower ability to cover obligations with cash alone, highlighting a potential need for better cash management practices.
In conclusion, the liquidity ratios of AT&T Inc indicate some variability and potential liquidity challenges. The company may need to focus on improving its ability to meet short-term obligations with its current assets, particularly cash, to ensure financial stability and operational resilience in the future.
See also:
Additional liquidity measure
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | -136.01 | 36.62 | 36.86 | 37.84 | -78.70 | 40.62 | 38.58 | 43.34 | -87.32 | 56.07 | 51.14 | 64.93 | -81.12 | 62.64 | 55.69 | 59.04 | -63.06 | 102.96 | 104.06 | 40.56 |
The cash conversion cycle is a measure of how efficiently a company is able to convert its resources into cash flow. For AT&T Inc, the cash conversion cycle fluctuated over the period from March 31, 2020, to December 31, 2024.
The cash conversion cycle started at 40.56 days on March 31, 2020, increased to over 100 days by June 30, 2020, and September 30, 2020, indicating a longer time taken by AT&T to convert its investments in inventory and accounts receivable into cash. However, by December 31, 2020, the cash conversion cycle improved significantly to -63.06 days, which could suggest a more efficient cash conversion process with faster inflows compared to outflows during the period.
Subsequently, the cash conversion cycle saw fluctuations reaching a peak of 64.93 days on March 31, 2022, before declining to 36.86 days on June 30, 2024. Notably, the cycle turned negative on several occasions, such as December 31, 2021, and December 31, 2022, indicating that AT&T was able to convert its investments into cash at a faster rate than it acquired them.
Overall, analyzing the cash conversion cycle can provide insights into AT&T's working capital management efficiency, cash flow generation, and operational effectiveness in converting its resources into liquid assets.