HISTORY: AT&T Inc. (AT&T) is a well known American multinational telecommunication company. It is largest provider of landline telephones and second largest provider of the mobile telephones in the United States. It also provides broadband subscription television service which emerged as a strong competitor of Time Warner Cable and other satellite TV companies. The company's headquarter is in the Whitacre Tower in Dallas, Texas. In May 2104, AT & T was declared 23rd- largest company in the world based on its revenues, market values and profits (AT&T, n.d.). It was ranked 20th largest telecom operator in the world in 2014 with over 120.6 million customers ("AT&T Financial", 2015). The history of the AT&T is as old as invention of the telephone. …show more content…
is gathered by using its financial statements such as Income statement, and Balance Sheets, and Statement of Cash Flows. These financial statements of AT&T can be found in appendixes A, B, and C correspondingly. The financial analysis of this firm is performed for a period of five years from 2010 to 2014. Every financial statement indicates consistency in data; however, there are few exceptions which would be discussed later. The income statement (profit and loss statement) indicates a firm's revenue, and expenses during a relatively short period of time (i.e., one year, months, etc.). Appendix A indicates that the revenue of this firm has increased every single year in the last five years. The firms' consistently increasing revenue implies that their sales numbers are also increasing every single year. This good sign reveals that the firm's financial position is strong in the industry. The second part of this statement indicates the expenses, both cash and noncash that incurs during the firm's covered …show more content…
These methods are very useful to make comparisons between different periods. Thus, the common-size income statement of AT&T is given in Appendix D to easily compare the last five years. As this appendix indicates that AT&T's total operating expenses went up in the first two years (2010 and 2011) from 42.20% of sales to 47.45% of sales, and then there was a sharp decline in the next two years (2012 - 2013), as they went down from 47.45% of sales in 2011 to 36.36% of sales in 2013. However, the total operating expenses went up again in the last year, from 36.36% in 2013 to 45.37% in 2014. The increase in operating expenses and decrease in operating income (from 23.67% in 2013 to 8.87% in 2014) is a result of the increase in promotional activates and investments in new improved services. AT&T had focused more on U verse (fiber optic technology to provide better services) and strategic business services in 2014 with the ultimate goal of growth (Mobilizing Your World, 2015). Due to this aggressive investment, AT&T