Financial Analysis of Verizon versus AT&T

Introduction You can not buy a house, a car, or any other large items unless you examine the goods that you offer the most. The same is true when investing in companies. Investors have conducted intensive investigations on many companies to find out which companies have met the investor's standards. In this article, Team C considers the financial documents of AT & T and Verizon. Team C compares the selected ratio and cash flow, and proposes how the two companies manage future cash flows. Financial Ratio Analysis Ratio analysis is a useful tool for judging the performance of a company by evaluating and evaluating operational performance (Block-Hirt).

At December 31, 2008, AT & T's D / E ratio was 75 (total debt / equity) and Verizon's D / E ratio was 85. AT & T and Verizon's total debt levels are almost the same ($ 169 and $ 16.1 billion, respectively). AT & T holds more shareholders' equity (96.3 dollars and 41.7 billion dollars, respectively) AT & T's larger shareholder gains offer greater financial flexibility and debt repayment capacity compared to Verizon . If AT & T's D / E ratio is low, there is a possibility that the trust of shareholders may increase because the investment is protected when sluggish. A low debt-equity ratio means that we do not use sufficient financial leverage to increase profit.

In 1999, AT & T Wireless received $ 7.6 billion in revenue from 12 million users, while Verizon earned $ 4.6 billion in revenue from 12 million wireless users. However, compared to AT & T, Verizon pursues profit before the cost strategy and merged GTE and Airtouch. On the other hand, AT & T was divided into a listed section and a stock tracking section. By 2000, Verizon sales reached $ 65 billion, roughly comparable to AT & T's $ 66 billion. Verizon, meanwhile, created a large wireless business with 27.5 million users and a revenue of $ 14.2 billion. $ 15.2 million, revenue is $ 10.5 billion 24.

By comparing the history of AT & T with the history of Verizon at the turn of the 21st century, you can see the wisdom of income before cost. As of the end of 1999, AT & T was much larger than Verizon (then Bell Atlantic) before being acquired by SBC, with income of $ 62.4 billion, but Verizon's revenue was $ 33.2 billion. However, AT & T adopted a cost reduction strategy and promoted the company to multiple business divisions for efficiency. In the 1999 Annual Report, "In order to be truly competitive, efforts are continuing to reduce the cost structure as it must become a low-cost supplier in the industry." 23