AT T2

Satisfactory Essays
AT&T Case study

1. Review AT&T’s past financial policies and financing choices. Were these appropriate for the nature of the business? AT&T Corp., one of the largest companies in the United States, has had a long and storied history. Initially, AT&T operated as a monopoly, but in 1982, Justice Department, broke up the company into individual companies. Prior to divesture (in 1981), AT&T was the largest private company in the world and despite many challenges, AT&T remained an archetypical “widow-and-orphans” stock for a long time. The term "widows and orphans" was used to describe stocks with a relatively high degree of safety and dividend income and numbers from exhibit 1speak for themselves. By 1982 the company increased all its key financial indicators. Revenues and operating earnings increased 12% and 6% respectively comparing to year 1981. In ten years, the company raised its revenues, net income, cash and assets more than 2 times. It`s worth to mention that AT&T was able to reduce its total outstanding debt by $ 725 mil and at year-end, the company`s debt ratio stood 42.3% down from 46.7% in 1980. In addition, AT&T neither cancelled nor lowered dividends, and only increased dividend per share by 10% annually. Aforementioned facts suggest that company`s financial policies and financing choices were appropriate for the nature of the business and that AT&T was one stable, reliable and profitable companies in the world by 1982.

2. In what fundamental ways will AT&T’s business change in the near future? Throughout most of the 20th century, AT&T held a monopoly on phone service in the United States. In 1982, through an agreement between AT&T and the U.S. Department of Justice, AT&T agreed to divest itself of its local telephone operations but retain some of its businesses. The principal provision of the antitrust settlement was that the corporation would be split into seven completely independent regional corporations. Each regional company would continue

You May Also Find These Documents Helpful

  • Satisfactory Essays

    Unit 2 Assignment 1

    • 603 Words
    • 3 Pages

    an antitrust suit against AT&T on January 8, 1982. It split the company into seven regional companies…

    • 603 Words
    • 3 Pages
    Satisfactory Essays
  • Satisfactory Essays

    3. Has the company’s financial condition strengthened or weakened since 1993? Why or why not?…

    • 398 Words
    • 2 Pages
    Satisfactory Essays
  • Satisfactory Essays

    Book

    • 538 Words
    • 3 Pages

    2-How has Mr. Clarkson met the financing needs of the company during the period 1993-1995? Has the financial strength of the company improved or deteriorated?…

    • 538 Words
    • 3 Pages
    Satisfactory Essays
  • Powerful Essays

    At&T Case - 1

    • 1865 Words
    • 8 Pages

    Until January 1984, AT&T had been the largest employer in US employing one million people and representing 2% of the US GNP with annual revenue of $70 billion. AT&T was having a kind of monopoly on telephone equipment business until the Carterfone ruling went into effect in 1980. AT&T was charged with monopolizing the market for telephone equipment and long-distance services. Following a divestiture in January 1, 1984, AT&T was divided into two major sectors - AT&T Communications and AT&T Technologies. AT&T Consumer Products belonged to AT&T Technologies.…

    • 1865 Words
    • 8 Pages
    Powerful Essays
  • Powerful Essays

    Verizon vs Att

    • 1488 Words
    • 6 Pages

    You would not buy a home, car or other large purchases without researching what product offered you the most for your money. The same is true when investing in a company. Investors do avid research on multiple companies to find what company matches the investors' criteria. In this paper Team C will research both AT&T and Verizon's financial documents. Team C will compare selected ratios, cash flow and make recommendations how both companies can manage cash flow for the future.…

    • 1488 Words
    • 6 Pages
    Powerful Essays
  • Good Essays

    The majority of the questions in this assignment can be answered by referring to the financial statements (Item 1) and Notes to Financial Statements in these Form 10-Qs.…

    • 1106 Words
    • 5 Pages
    Good Essays
  • Good Essays

    D. What do you think of CBM's cash position during the budget period? Do you see any concerns for the company in this regard?…

    • 807 Words
    • 4 Pages
    Good Essays
  • Powerful Essays

    Financial Statement Analysis

    • 2405 Words
    • 10 Pages

    The process of developing financial statements for a business is to provide supporting documentation to what has been reported as annual or quarterly income. Within the financial statement analysis strengths and weaknesses are identified through the comparison of data from the balance sheet. There are many different ways to interpret the data that is utilized for the analysis; those include but are not limited to comparative statements, schedule of changes in working capital, common size percentages, and ratio analysis. The following paper will be reviewing the financial data from Verizon Communications (VZ). Through the analysis review of the corporations financial and common size statements will be reviewed, as well as financial ratios, a trend analysis and in depth overview of the organization.…

    • 2405 Words
    • 10 Pages
    Powerful Essays
  • Good Essays

    DQ 2

    • 353 Words
    • 1 Page

    From the scenario, determine two (2) strategies that TFC could utilize to reach its expansion goals. You may, for example, consider your analysis of TFC’s financial statements, as well as your knowledge of TFC’s excessive cash position. Provide a rationale for your response.…

    • 353 Words
    • 1 Page
    Good Essays
  • Powerful Essays

    Q5) “Tough times demand tough decisions.” As the CEO of Williams, would you recommend accepting the proposed $900 million financing offer? If not, what alternatives would you pursue?…

    • 2088 Words
    • 7 Pages
    Powerful Essays
  • Powerful Essays

    Chipotle

    • 8563 Words
    • 26 Pages

    -Discuss in detail the firm’s financial (ROA, ROS, sales growth, etc.) and nonfinancial (employment stability/growth, innovation, customer relations, etc) performance over the last three to five years as compared to its industry.…

    • 8563 Words
    • 26 Pages
    Powerful Essays
  • Powerful Essays

    MKTG 311 HW#2

    • 647 Words
    • 3 Pages

    1. Over the five year period, how has the company done in sales and in profits? Why have these changes occurred?…

    • 647 Words
    • 3 Pages
    Powerful Essays
  • Satisfactory Essays

    Identify any sources of risk or uncertainty in its operations. Do the financial reports indicate risky or uncertain activities or changes to the economic environment that ultimately appear to have affected the company’s financial outcomes? Be specific.…

    • 2784 Words
    • 12 Pages
    Satisfactory Essays
  • Good Essays

    4. How well is Costco performing from a fi nancial perspective? Do some number-crunching using the data in…

    • 507 Words
    • 3 Pages
    Good Essays
  • Better Essays

    The original AT&T was the majority owner of most of the phone lines in the country. AT&T limited competition by expanding and adding their structures to areas in need of phone lines. All competitors had to pay AT&T a fee to connect long- distance…

    • 1175 Words
    • 5 Pages
    Better Essays