Microsoft Excel LibreOffice Calc

Short-term (Operating) Activity Analysis

Difficulty: Beginner


Ratios (Summary)

AT&T Inc., short-term (operating) activity ratios

Microsoft Excel LibreOffice Calc
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Turnover Ratios
Inventory turnover 34.78 37.71 16.62 31.36 44.83
Receivables turnover 9.72 9.75 8.88 9.12 9.97
Payables turnover 3.17 3.49 3.19 4.05 4.45
Working capital turnover
Average No. of Days
Average inventory processing period 10 10 22 12 8
Add: Average receivable collection period 38 37 41 40 37
Operating cycle 48 47 63 52 45
Less: Average payables payment period 115 105 115 90 82
Cash conversion cycle -67 -58 -52 -38 -37

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

Microsoft Excel LibreOffice Calc
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 77,379  76,884  67,046  60,611  51,464 
Inventory 2,225  2,039  4,033  1,933  1,148 
Ratio
Inventory turnover1 34.78 37.71 16.62 31.36 44.83
Benchmarks
Inventory Turnover, Competitors
Verizon Communications Inc. 49.86 42.78 41.98 43.31 44.01
Inventory Turnover, Sector
Fixed Line Telecommunications 39.56 39.59 22.63 35.82 44.44

Source: Based on data from AT&T Inc. Annual Reports

2017 Calculations

1 Inventory turnover = Cost of services and sales ÷ Inventory
= 77,379 ÷ 2,225 = 34.78

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

Microsoft Excel LibreOffice Calc
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Selected Financial Data (USD $ in millions)
Operating revenues 160,546  163,786  146,801  132,447  128,752 
Accounts receivable, net of allowances for doubtful accounts 16,522  16,794  16,532  14,527  12,918 
Ratio
Receivables turnover1 9.72 9.75 8.88 9.12 9.97
Benchmarks
Receivables Turnover, Competitors
Verizon Communications Inc. 5.36 7.19 9.78 9.08 9.69
Receivables Turnover, Sector
Fixed Line Telecommunications 7.16 8.45 9.28 9.10 9.83

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
= 160,546 ÷ 16,522 = 9.72

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

Microsoft Excel LibreOffice Calc
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 77,379  76,884  67,046  60,611  51,464 
Accounts payable 24,439  22,027  21,047  14,984  11,561 
Ratio
Payables turnover1 3.17 3.49 3.19 4.05 4.45
Benchmarks
Payables Turnover, Competitors
Verizon Communications Inc. 7.30 7.26 8.22 8.92 9.06
Payables Turnover, Sector
Fixed Line Telecommunications 4.09 4.41 4.36 5.37 5.83

Source: Based on data from AT&T Inc. Annual Reports

2017 Calculations

1 Payables turnover = Cost of services and sales ÷ Accounts payable
= 77,379 ÷ 24,439 = 3.17

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

Microsoft Excel LibreOffice Calc
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Selected Financial Data (USD $ in millions)
Current assets 79,146  38,369  35,992  32,028  23,196 
Less: Current liabilities 81,389  50,576  47,816  37,282  34,995 
Working capital (2,243) (12,207) (11,824) (5,254) (11,799)
Operating revenues 160,546  163,786  146,801  132,447  128,752 
Ratio
Working capital turnover1
Benchmarks
Working Capital Turnover, Competitors
Verizon Communications Inc. 81.51 2.74
Working Capital Turnover, Sector
Fixed Line Telecommunications 7.76

Source: Based on data from AT&T Inc. Annual Reports

2017 Calculations

1 Working capital turnover = Operating revenues ÷ Working capital
= 160,546 ÷ -2,243 =

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

Microsoft Excel LibreOffice Calc
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Selected Financial Data
Inventory turnover 34.78 37.71 16.62 31.36 44.83
Ratio (no. of days)
Average inventory processing period1 10 10 22 12 8
Benchmarks (no. of days)
Average Inventory Processing Period, Competitors
Verizon Communications Inc. 7 9 9 8 8
Average Inventory Processing Period, Sector
Fixed Line Telecommunications 9 9 16 10 8

Source: Based on data from AT&T Inc. Annual Reports

2017 Calculations

1 Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ 34.78 = 10

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

Microsoft Excel LibreOffice Calc
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Selected Financial Data
Receivables turnover 9.72 9.75 8.88 9.12 9.97
Ratio (no. of days)
Average receivable collection period1 38 37 41 40 37
Benchmarks (no. of days)
Average Receivable Collection Period, Competitors
Verizon Communications Inc. 68 51 37 40 38
Average Receivable Collection Period, Sector
Fixed Line Telecommunications 51 43 39 40 37

Source: Based on data from AT&T Inc. Annual Reports

2017 Calculations

1 Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ 9.72 = 38

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

Microsoft Excel LibreOffice Calc
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Selected Financial Data
Average inventory processing period 10 10 22 12 8
Average receivable collection period 38 37 41 40 37
Ratio
Operating cycle1 48 47 63 52 45
Benchmarks
Operating Cycle, Competitors
Verizon Communications Inc. 75 60 46 48 46
Operating Cycle, Sector
Fixed Line Telecommunications 60 52 55 50 45

Source: Based on data from AT&T Inc. Annual Reports

2017 Calculations

1 Operating cycle = Average inventory processing period + Average receivable collection period
= 10 + 38 = 48

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

Microsoft Excel LibreOffice Calc
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Selected Financial Data
Payables turnover 3.17 3.49 3.19 4.05 4.45
Ratio (no. of days)
Average payables payment period1 115 105 115 90 82
Benchmarks (no. of days)
Average Payables Payment Period, Competitors
Verizon Communications Inc. 50 50 44 41 40
Average Payables Payment Period, Sector
Fixed Line Telecommunications 89 83 84 68 63

Source: Based on data from AT&T Inc. Annual Reports

2017 Calculations

1 Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ 3.17 = 115

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

Microsoft Excel LibreOffice Calc
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Selected Financial Data
Average inventory processing period 10 10 22 12 8
Average receivable collection period 38 37 41 40 37
Average payables payment period 115 105 115 90 82
Ratio
Cash conversion cycle1 -67 -58 -52 -38 -37
Benchmarks
Cash Conversion Cycle, Competitors
Verizon Communications Inc. 25 10 2 7 6
Cash Conversion Cycle, Sector
Fixed Line Telecommunications -29 -31 -29 -18 -18

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
= 10 + 38115 = -67

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.