Fin 571 Week 3 Interpreting Financial Results

Higher profitability margins, consistent efficiency ratios and sound debt position make AT&T a good stock to invest in; however, liquidity needs to improve furtherAT&T has been doing very well from profitability perspective. The company's EBITDA and net margins have increased to 37.96% in 2013 and 14.41% in 2013 from 21.78% and 3.30% respectively in 2011. Moreover, the company's return on assets also increased to 6.68% in 2013 from 1.55% in 2011. Focus on growth prospects and accretive acquisitions led to improved operating conditions thereby resulting in higher margins and returns. On one hand, the company focuses on adding new customers and providing them services at faster speed. On the other hand, AT&T also focuses on improving operating efficiencies by launching Project Agile. The company also targets growth through acquisitions by recently acquiring Leap Wireless that added $2.8 billion towards overall revenues. The management has also been very successful in managing working capital efficiently. In a highly competitive market, it is difficult to keep altering its receivables and inventory management tactics. Doing so might result in customers seeking other service providers and thereby putting pressure on inventory. Continued focus on increasing revenues and stable working capital management terms led to marginally