.Short-term (Operating) Activity Analysis
Difficulty: Beginner
Activity ratios measure how efficiently a company performs day-to-day tasks, such us the collection of receivables and management of inventory.
Ratios (Summary)
AT&T Inc., short-term (operating) activity ratios
| Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | ||
|---|---|---|---|---|---|---|
| Turnover Ratios | ||||||
| | Inventory turnover | |||||
| | Receivables turnover | |||||
| | Payables turnover | |||||
| | Working capital turnover | |||||
| Average No. of Days | ||||||
| | Average inventory processing period | |||||
| | Add: Average receivable collection period | |||||
| | Operating cycle | |||||
| | Less: Average payables payment period | |||||
| | Cash conversion cycle | |||||
Source: Based on data from AT&T Inc. Annual Reports
| Ratio | Description | The company |
|---|---|---|
| Inventory turnover | An activity ratio calculated as cost of goods sold divided by inventory. | AT&T Inc.'s inventory turnover improved from 2015 to 2016 but then slightly deteriorated from 2016 to 2017. |
| Receivables turnover | An activity ratio equal to revenue divided by receivables. | AT&T Inc.'s receivables turnover improved from 2015 to 2016 but then slightly deteriorated from 2016 to 2017. |
| Payables turnover | An activity ratio calculated as cost of goods sold divided by payables. | AT&T Inc.'s payables turnover increased from 2015 to 2016 but then declined significantly from 2016 to 2017. |
| Working capital turnover | An activity ratio calculated as revenue divided by working capital. | |
| Average inventory processing period | An activity ratio equal to the number of days in the period divided by inventory turnover over the period. | |
| Average receivable collection period | An activity ratio equal to the number of days in the period divided by receivables turnover. | AT&T Inc.'s average receivable collection period improved from 2015 to 2016 but then slightly deteriorated from 2016 to 2017. |
| Operating cycle | Equal to average inventory processing period plus average receivables collection period. | AT&T Inc.'s operating cycle improved from 2015 to 2016 but then slightly deteriorated from 2016 to 2017. |
| Average payables payment period | An estimate of the average number of days it takes a company to pay its suppliers; equal to the number of days in the period divided by payables turnover ratio for the period. | |
| Cash conversion cycle | A financial metric that measures the length of time required for a company to convert cash invested in its operations to cash received as a result of its operations; equal to average inventory processing period plus average receivables collection period minus average payables payment period. | AT&T Inc.'s cash conversion cycle improved from 2015 to 2016 and from 2016 to 2017. |
Inventory Turnover
AT&T Inc., inventory turnover calculation, comparison to benchmarks
| Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (USD $ in millions) | ||||||
| | Cost of services and sales | |||||
| | Inventory | |||||
| Ratio | ||||||
| | Inventory turnover1 | |||||
| Benchmarks | ||||||
| Inventory Turnover, Competitors | ||||||
| Verizon Communications Inc. | ||||||
| Inventory Turnover, Sector | ||||||
| Fixed Line Telecommunications | ||||||
Source: Based on data from AT&T Inc. Annual Reports
2017 Calculations
1 Inventory turnover = Cost of services and sales ÷ Inventory
= ÷ =
| Ratio | Description | The company |
|---|---|---|
| Inventory turnover | An activity ratio calculated as cost of goods sold divided by inventory. | AT&T Inc.'s inventory turnover improved from 2015 to 2016 but then slightly deteriorated from 2016 to 2017. |
Receivables Turnover
AT&T Inc., receivables turnover calculation, comparison to benchmarks
| Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (USD $ in millions) | ||||||
| | Operating revenues | |||||
| | Accounts receivable, net of allowances for doubtful accounts | |||||
| Ratio | ||||||
| | Receivables turnover1 | |||||
| Benchmarks | ||||||
| Receivables Turnover, Competitors | ||||||
| Verizon Communications Inc. | ||||||
| Receivables Turnover, Sector | ||||||
| Fixed Line Telecommunications | ||||||
Source: Based on data from AT&T Inc. Annual Reports
2017 Calculations
1 Receivables turnover = Operating revenues ÷ Accounts receivable, net of allowances for doubtful accounts
= ÷ =
| Ratio | Description | The company |
|---|---|---|
| Receivables turnover | An activity ratio equal to revenue divided by receivables. | AT&T Inc.'s receivables turnover improved from 2015 to 2016 but then slightly deteriorated from 2016 to 2017. |
Payables Turnover
AT&T Inc., payables turnover calculation, comparison to benchmarks
| Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (USD $ in millions) | ||||||
| | Cost of services and sales | |||||
| | Accounts payable | |||||
| Ratio | ||||||
| | Payables turnover1 | |||||
| Benchmarks | ||||||
| Payables Turnover, Competitors | ||||||
| Verizon Communications Inc. | ||||||
| Payables Turnover, Sector | ||||||
| Fixed Line Telecommunications | ||||||
Source: Based on data from AT&T Inc. Annual Reports
2017 Calculations
1 Payables turnover = Cost of services and sales ÷ Accounts payable
= ÷ =
| Ratio | Description | The company |
|---|---|---|
| Payables turnover | An activity ratio calculated as cost of goods sold divided by payables. | AT&T Inc.'s payables turnover increased from 2015 to 2016 but then declined significantly from 2016 to 2017. |
Working Capital Turnover
AT&T Inc., working capital turnover calculation, comparison to benchmarks
| Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (USD $ in millions) | ||||||
| | Current assets | |||||
| | Less: Current liabilities | |||||
| | Working capital | |||||
| | Operating revenues | |||||
| Ratio | ||||||
| | Working capital turnover1 | |||||
| Benchmarks | ||||||
| Working Capital Turnover, Competitors | ||||||
| Verizon Communications Inc. | ||||||
| Working Capital Turnover, Sector | ||||||
| Fixed Line Telecommunications | ||||||
Source: Based on data from AT&T Inc. Annual Reports
2017 Calculations
1 Working capital turnover = Operating revenues ÷ Working capital
= ÷ =
| Ratio | Description | The company |
|---|---|---|
| Working capital turnover | An activity ratio calculated as revenue divided by working capital. |
Average Inventory Processing Period
AT&T Inc., average inventory processing period calculation, comparison to benchmarks
| Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| | Inventory turnover | |||||
| Ratio (no. of days) | ||||||
| | Average inventory processing period1 | |||||
| Benchmarks (no. of days) | ||||||
| Average Inventory Processing Period, Competitors | ||||||
| Verizon Communications Inc. | ||||||
| Average Inventory Processing Period, Sector | ||||||
| Fixed Line Telecommunications | ||||||
Source: Based on data from AT&T Inc. Annual Reports
2017 Calculations
1 Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ =
| Ratio | Description | The company |
|---|---|---|
| Average inventory processing period | An activity ratio equal to the number of days in the period divided by inventory turnover over the period. |
Average Receivable Collection Period
AT&T Inc., average receivable collection period calculation, comparison to benchmarks
| Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| | Receivables turnover | |||||
| Ratio (no. of days) | ||||||
| | Average receivable collection period1 | |||||
| Benchmarks (no. of days) | ||||||
| Average Receivable Collection Period, Competitors | ||||||
| Verizon Communications Inc. | ||||||
| Average Receivable Collection Period, Sector | ||||||
| Fixed Line Telecommunications | ||||||
Source: Based on data from AT&T Inc. Annual Reports
2017 Calculations
1 Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ =
| Ratio | Description | The company |
|---|---|---|
| Average receivable collection period | An activity ratio equal to the number of days in the period divided by receivables turnover. | AT&T Inc.'s average receivable collection period improved from 2015 to 2016 but then slightly deteriorated from 2016 to 2017. |
Operating Cycle
AT&T Inc., operating cycle calculation, comparison to benchmarks
No. of days
| Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| | Average inventory processing period | |||||
| | Average receivable collection period | |||||
| Ratio | ||||||
| | Operating cycle1 | |||||
| Benchmarks | ||||||
| Operating Cycle, Competitors | ||||||
| Verizon Communications Inc. | ||||||
| Operating Cycle, Sector | ||||||
| Fixed Line Telecommunications | ||||||
Source: Based on data from AT&T Inc. Annual Reports
2017 Calculations
1 Operating cycle = Average inventory processing period + Average receivable collection period
= + =
| Ratio | Description | The company |
|---|---|---|
| Operating cycle | Equal to average inventory processing period plus average receivables collection period. | AT&T Inc.'s operating cycle improved from 2015 to 2016 but then slightly deteriorated from 2016 to 2017. |
Average Payables Payment Period
AT&T Inc., average payables payment period calculation, comparison to benchmarks
| Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| | Payables turnover | |||||
| Ratio (no. of days) | ||||||
| | Average payables payment period1 | |||||
| Benchmarks (no. of days) | ||||||
| Average Payables Payment Period, Competitors | ||||||
| Verizon Communications Inc. | ||||||
| Average Payables Payment Period, Sector | ||||||
| Fixed Line Telecommunications | ||||||
Source: Based on data from AT&T Inc. Annual Reports
2017 Calculations
1 Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ =
| Ratio | Description | The company |
|---|---|---|
| Average payables payment period | An estimate of the average number of days it takes a company to pay its suppliers; equal to the number of days in the period divided by payables turnover ratio for the period. |
Cash Conversion Cycle
AT&T Inc., cash conversion cycle calculation, comparison to benchmarks
No. of days
| Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| | Average inventory processing period | |||||
| | Average receivable collection period | |||||
| | Average payables payment period | |||||
| Ratio | ||||||
| | Cash conversion cycle1 | |||||
| Benchmarks | ||||||
| Cash Conversion Cycle, Competitors | ||||||
| Verizon Communications Inc. | ||||||
| Cash Conversion Cycle, Sector | ||||||
| Fixed Line Telecommunications | ||||||
Source: Based on data from AT&T Inc. Annual Reports
2017 Calculations
1 Cash conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= + – =
| Ratio | Description | The company |
|---|---|---|
| Cash conversion cycle | A financial metric that measures the length of time required for a company to convert cash invested in its operations to cash received as a result of its operations; equal to average inventory processing period plus average receivables collection period minus average payables payment period. | AT&T Inc.'s cash conversion cycle improved from 2015 to 2016 and from 2016 to 2017. |
