Stock Analysis on Net

AT&T Inc. (NYSE:T)

Financial Reporting Quality: Aggregate Accruals 

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Earnings can be decomposed into cash and accrual components. The accrual component (aggregate accruals) has been found to have less persistence than the cash component, and therefore (1) earnings with higher accrual component are less persistent than earnings with smaller accrual component, all else equal; and (2) the cash component of earnings should receive a higher weighting evaluating company performance.


Balance-Sheet-Based Accruals Ratio

AT&T Inc., balance sheet computation of aggregate accruals

US$ in millions

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Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Operating Assets
Total assets 407,060 402,853 551,622 525,761 551,669
Less: Cash and cash equivalents 6,722 3,701 21,169 9,740 12,130
Operating assets 400,338 399,152 530,453 516,021 539,539
Operating Liabilities
Total liabilities 287,645 296,396 367,767 346,521 349,735
Less: Debt maturing within one year 9,477 7,467 24,630 3,470 11,838
Less: Long-term debt, excluding maturing within one year 127,854 128,423 152,724 153,775 151,309
Operating liabilities 150,314 160,506 190,413 189,276 186,588
 
Net operating assets1 250,024 238,646 340,040 326,745 352,951
Balance-sheet-based aggregate accruals2 11,378 (101,394) 13,295 (26,206)
Financial Ratio
Balance-sheet-based accruals ratio3 4.66% -35.04% 3.99% -7.71%
Benchmarks
Balance-Sheet-Based Accruals Ratio, Competitors4
T-Mobile US Inc. -1.84% 0.29% 7.95% 80.88%
Verizon Communications Inc. 0.79% 3.96% 27.00% 2.55%
Balance-Sheet-Based Accruals Ratio, Sector
Telecommunication Services 1.72% -13.79% 11.76% 8.64%
Balance-Sheet-Based Accruals Ratio, Industry
Communication Services 4.26% -3.77% 10.23% 7.81%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

1 2023 Calculation
Net operating assets = Operating assets – Operating liabilities
= 400,338150,314 = 250,024

2 2023 Calculation
Balance-sheet-based aggregate accruals = Net operating assets2023 – Net operating assets2022
= 250,024238,646 = 11,378

3 2023 Calculation
Balance-sheet-based accruals ratio = 100 × Balance-sheet-based aggregate accruals ÷ Avg. net operating assets
= 100 × 11,378 ÷ [(250,024 + 238,646) ÷ 2] = 4.66%

4 Click competitor name to see calculations.

Financial ratio Description The company
Balance-sheet-based accruals ratio Ratio is found by dividing balance-sheet-based aggregate accruals by average net operating assets. Using the balance-sheet-based accruals ratio, AT&T Inc. improved earnings quality from 2022 to 2023.

Cash-Flow-Statement-Based Accruals Ratio

AT&T Inc., cash flow statement computation of aggregate accruals

US$ in millions

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Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Net income (loss) attributable to AT&T 14,400 (8,524) 20,081 (5,176) 13,903
Less: Net cash provided by operating activities 38,314 35,812 41,957 43,130 48,668
Less: Net cash used in investing activities (19,660) (26,899) (32,089) (13,548) (16,690)
Cash-flow-statement-based aggregate accruals (4,254) (17,437) 10,213 (34,758) (18,075)
Financial Ratio
Cash-flow-statement-based accruals ratio1 -1.74% -6.03% 3.06% -10.23%
Benchmarks
Cash-Flow-Statement-Based Accruals Ratio, Competitors2
T-Mobile US Inc. -3.19% -1.31% 6.34% 7.80%
Verizon Communications Inc. -1.01% 5.42% 24.39% -0.26%
Cash-Flow-Statement-Based Accruals Ratio, Sector
Telecommunication Services -1.78% -0.98% 10.19% -4.64%
Cash-Flow-Statement-Based Accruals Ratio, Industry
Communication Services -2.47% -1.31% 6.79% -0.70%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

1 2023 Calculation
Cash-flow-statement-based accruals ratio = 100 × Cash-flow-statement-based aggregate accruals ÷ Avg. net operating assets
= 100 × -4,254 ÷ [(250,024 + 238,646) ÷ 2] = -1.74%

2 Click competitor name to see calculations.

Financial ratio Description The company
Cash-flow-statement-based accruals ratio Ratio is found by dividing cash-flow-statement-based aggregate accruals by average net operating assets. Using the cash-flow-statement-based accruals ratio, AT&T Inc. improved earnings quality from 2022 to 2023.