Analysis of Liquidity Ratios
Liquidity ratios measure the company ability to meet its short-term obligations.
Liquidity Ratios (Summary)
AT&T Inc., liquidity ratios
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Current ratio | 0.91 | 0.66 | 0.71 | 0.59 | 0.70 | |
| Quick ratio | 0.50 | 0.28 | 0.33 | 0.27 | 0.45 | |
| Cash ratio | 0.34 | 0.07 | 0.13 | 0.07 | 0.25 |
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
The liquidity position, as indicated by the observed ratios, demonstrates fluctuations over the five-year period. Generally, there is an indication of improving liquidity from 2022 through 2025, though levels remain variable. A review of specific ratios reveals nuanced trends.
- Current Ratio
- The current ratio decreased from 0.70 in 2021 to 0.59 in 2022, suggesting a reduced ability to cover short-term liabilities with short-term assets. It then experienced a slight recovery to 0.71 in 2023, followed by a further decline to 0.66 in 2024. A notable increase to 0.91 is observed in 2025, representing the strongest liquidity position within the observed period based on this metric.
- Quick Ratio
- The quick ratio exhibits a more pronounced decline from 0.45 in 2021 to 0.27 in 2022, indicating a weakening ability to meet short-term obligations with the most liquid assets. A modest improvement to 0.33 occurred in 2023, but this was followed by another decrease to 0.28 in 2024. The ratio shows the most significant improvement in 2025, rising to 0.50, though it remains below the level recorded in 2021.
- Cash Ratio
- The cash ratio experienced a substantial decrease from 0.25 in 2021 to 0.07 in 2022, signifying a considerable reduction in the ability to cover immediate liabilities with cash and cash equivalents. A slight recovery to 0.13 was seen in 2023, but it fell back to 0.07 in 2024. The cash ratio demonstrates the largest percentage increase in 2025, reaching 0.34, indicating a strengthening of the company’s immediate liquidity position.
Overall, the trend suggests a period of liquidity challenges in 2022 and 2024, followed by a recovery and strengthening of the liquidity position in 2025. The increasing trend in all three ratios during 2025 is a positive indicator, but the levels remain sensitive to fluctuations and require continued monitoring.
Current Ratio
AT&T Inc., current ratio calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current assets | 48,732) | 31,168) | 36,458) | 33,108) | 59,997) | |
| Current liabilities | 53,780) | 46,872) | 51,127) | 56,173) | 85,588) | |
| Liquidity Ratio | ||||||
| Current ratio1 | 0.91 | 0.66 | 0.71 | 0.59 | 0.70 | |
| Benchmarks | ||||||
| Current Ratio, Competitors2 | ||||||
| T-Mobile US Inc. | — | 0.91 | 0.91 | 0.77 | 0.89 | |
| Verizon Communications Inc. | — | 0.63 | 0.69 | 0.75 | 0.78 | |
| Current Ratio, Sector | ||||||
| Telecommunication Services | — | 0.68 | 0.74 | 0.69 | 0.75 | |
| Current Ratio, Industry | ||||||
| Communication Services | — | 1.24 | 1.31 | 1.29 | 1.42 | |
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Current ratio = Current assets ÷ Current liabilities
= 48,732 ÷ 53,780 = 0.91
2 Click competitor name to see calculations.
The current ratio exhibited fluctuations over the five-year period. Initially, the ratio decreased before stabilizing and then increasing significantly in the final year examined.
- Current Ratio Trend
- The current ratio began at 0.70 in 2021, declining to 0.59 in 2022. A slight recovery to 0.71 was noted in 2023, followed by a further decrease to 0.66 in 2024. A substantial increase to 0.91 occurred in 2025, representing the highest value within the observed timeframe.
The movement in the current ratio appears to be driven by the interplay between current assets and current liabilities. While current assets experienced a significant decrease between 2021 and 2022, they showed some recovery in subsequent years, culminating in a notable increase by 2025. Current liabilities also decreased from 2021 to 2024, before increasing slightly in 2025. The combined effect of these changes resulted in the observed pattern of the current ratio.
- Implications of the Trend
- The initial decline in the current ratio suggested a potential weakening in the company’s ability to meet its short-term obligations using its current assets. The subsequent increase in 2025 indicates an improved liquidity position. A ratio of 0.91 suggests the company possesses $0.91 of current assets for every $1.00 of current liabilities.
The volatility in the current ratio warrants further investigation into the specific components of current assets and current liabilities to understand the underlying drivers of these changes and their potential impact on the company’s financial health.
Quick Ratio
AT&T Inc., quick ratio calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Cash and cash equivalents | 18,234) | 3,298) | 6,722) | 3,701) | 21,169) | |
| Accounts receivable, net of related allowance for credit loss | 8,843) | 9,638) | 10,289) | 11,466) | 17,571) | |
| Total quick assets | 27,077) | 12,936) | 17,011) | 15,167) | 38,740) | |
| Current liabilities | 53,780) | 46,872) | 51,127) | 56,173) | 85,588) | |
| Liquidity Ratio | ||||||
| Quick ratio1 | 0.50 | 0.28 | 0.33 | 0.27 | 0.45 | |
| Benchmarks | ||||||
| Quick Ratio, Competitors2 | ||||||
| T-Mobile US Inc. | — | 0.70 | 0.68 | 0.57 | 0.66 | |
| Verizon Communications Inc. | — | 0.47 | 0.51 | 0.54 | 0.57 | |
| Quick Ratio, Sector | ||||||
| Telecommunication Services | — | 0.43 | 0.47 | 0.43 | 0.52 | |
| Quick Ratio, Industry | ||||||
| Communication Services | — | 1.04 | 1.12 | 1.08 | 1.23 | |
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Quick ratio = Total quick assets ÷ Current liabilities
= 27,077 ÷ 53,780 = 0.50
2 Click competitor name to see calculations.
The quick ratio exhibited considerable fluctuation over the five-year period. Initially, the ratio decreased significantly before showing signs of recovery in the most recent year presented.
- Overall Trend
- The quick ratio began at 0.45 in 2021, declined to a low of 0.27 in 2022, experienced a partial recovery to 0.33 in 2023, decreased again to 0.28 in 2024, and then increased substantially to 0.50 in 2025. This indicates a volatile liquidity position.
- Quick Asset Movement
- Total quick assets decreased markedly from US$38,740 million in 2021 to US$15,167 million in 2022. A modest increase to US$17,011 million occurred in 2023, followed by a further decrease to US$12,936 million in 2024. The most recent year, 2025, saw a significant rise to US$27,077 million.
- Current Liability Movement
- Current liabilities decreased from US$85,588 million in 2021 to US$56,173 million in 2022, and continued to decline to US$51,127 million in 2023 and US$46,872 million in 2024. However, current liabilities increased to US$53,780 million in 2025.
- Ratio Interpretation
- The initial decline in the quick ratio from 2021 to 2022 was driven by a larger percentage decrease in quick assets compared to the decrease in current liabilities. The subsequent fluctuations reflect changes in both quick assets and current liabilities. The increase to 0.50 in 2025 suggests an improved ability to meet short-term obligations with the most liquid assets.
The substantial increase in the quick ratio in 2025, coupled with the rise in quick assets, warrants further investigation to understand the underlying drivers of this change and its sustainability.
Cash Ratio
AT&T Inc., cash ratio calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Cash and cash equivalents | 18,234) | 3,298) | 6,722) | 3,701) | 21,169) | |
| Total cash assets | 18,234) | 3,298) | 6,722) | 3,701) | 21,169) | |
| Current liabilities | 53,780) | 46,872) | 51,127) | 56,173) | 85,588) | |
| Liquidity Ratio | ||||||
| Cash ratio1 | 0.34 | 0.07 | 0.13 | 0.07 | 0.25 | |
| Benchmarks | ||||||
| Cash Ratio, Competitors2 | ||||||
| T-Mobile US Inc. | — | 0.27 | 0.25 | 0.18 | 0.28 | |
| Verizon Communications Inc. | — | 0.06 | 0.04 | 0.05 | 0.06 | |
| Cash Ratio, Sector | ||||||
| Telecommunication Services | — | 0.10 | 0.11 | 0.08 | 0.20 | |
| Cash Ratio, Industry | ||||||
| Communication Services | — | 0.62 | 0.68 | 0.64 | 0.80 | |
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Cash ratio = Total cash assets ÷ Current liabilities
= 18,234 ÷ 53,780 = 0.34
2 Click competitor name to see calculations.
The cash ratio exhibited significant fluctuations over the five-year period. Initially, the ratio demonstrated a substantial decline followed by a recovery towards the end of the observed timeframe. This analysis details the observed trends and potential implications.
- Cash Ratio Trend
- The cash ratio began at 0.25 in 2021, indicating that the entity held 25 cents of cash and cash equivalents for every dollar of current liabilities. A sharp decrease was observed in 2022, with the ratio falling to 0.07. This suggests a considerably weakened immediate liquidity position. The ratio experienced a modest recovery to 0.13 in 2023, but then declined again to 0.07 in 2024, mirroring the 2022 level. Finally, a substantial increase occurred in 2025, with the cash ratio rising to 0.34, representing the highest value within the analyzed period.
- Total Cash Assets
- Total cash assets mirrored the fluctuations observed in the cash ratio. A significant reduction occurred between 2021 and 2022, decreasing from US$21,169 million to US$3,701 million. Cash assets then increased to US$6,722 million in 2023, decreased to US$3,298 million in 2024, and experienced a substantial increase to US$18,234 million in 2025. These movements directly influenced the cash ratio calculations.
- Current Liabilities
- Current liabilities decreased from US$85,588 million in 2021 to US$56,173 million in 2022. Further reductions were seen in 2023 and 2024, reaching US$51,127 million and US$46,872 million respectively. However, current liabilities increased to US$53,780 million in 2025. While generally decreasing, the changes in current liabilities also contributed to the observed cash ratio variations, though the primary driver appears to be the volatility in cash assets.
The substantial increase in the cash ratio in 2025 suggests an improved ability to meet short-term obligations with readily available cash. However, the prior fluctuations, particularly the low ratios in 2022 and 2024, indicate periods of potentially constrained liquidity. The significant swings in total cash assets warrant further investigation to understand the underlying reasons for these changes.