able to improve its network performance and meet the higher customer demand for high-speed internet, cloud services and new improved mobile applications (Nichols, 2014). Furthermore, the expenses also increased due to the acquisition and operations of Leap Wireless International, Inc. (Leap). Furthermore, the operating income is also declined due to the loss related to post-employment benefits and pension plans. According to AT&T, the non-cash actuarial loss went up from $7,584 in 2013 to $7,869 in 2014 (SEC Filings, 2015). On the other hand, a comparison of the bottom line reveals that AT&T has earned a good net income 15.98% in the first year. However, there was a sharp decline in the next year, as it went down from 15.98% of sales in 2010 to …show more content…
It is important to assess the AT&T's assets (probable future economic benefits) versus its liabilities (debts or obligations). Therefore, Appendix B contains the balance sheets; whereas, Appendix E holds the common-size balance sheets for the last five years. A close analysis of Appendix E reveals that the current assets of AT&T have increased an average of 8.71% in the last five years. The current liabilities have increased at a greater rate of 12.21%. Appendix E also reveals that the liability financing of AT&T has been increased over time (from 58.42% in 2010 to 70.50% in 2014); whereas, the equity financing has been declined (from 41.58% in 2010 to 29.50% in 2014) in the last five years. This current trend of funding sources indicates that AT&T is now relying more on debts as compared to equity. Both common-size statements indicate steady ratios that are linked to the net sales and assets. Furthermore, the standard deviation was analyzed to see how close AT&T's entire data is to the mean value. The analysis reveals that this firm maintains a small standard deviation from the average value. It shows that this data is specific and tightly