A Look at At&t's Annual Reports for 2011and 2012

A Look at AT&T's Annual Reports for 2011and 2012

AT&T's fourth quarterly 2012 Investor Briefing report has financial information for the years 2012, 2011, and 2010. It is easy to compare these years because the numbers are listed side-by-side. The differences in profit and losses are explained in the report as well as predictions for future growth. That is why financial statements are important to investors, creditors, and customers. It is important to see where the company is heading in the future to make decisions about lending money, investing in, or buying products from AT&T. It is important to see if the financial statements are in order and have correct and current information.

The company's current assets are listed on the financial statement in the proper order. "Companies list current assets in the order in which they expect to convert them into cash" (Kimmel, Weygandt, & Kieso, p. 50). Cash and cash equivalents would always be listed first. Next would come items that can be converted to cash within one year of the date of the balance sheet (Kimmel, Weygandt, & Kieso). Accounts receivable would be in this category. Short-term investments would also be included as well as repaid expenses. Supplies would be considered a current asset because they are expected to be used up within one year. AT&T does not list supplies because they are a service provider. Their current assets include cash and cash equivalents, accounts receivable, prepaid expenses, deferred income taxes, and other current assets (Annual Report, 2013) that include inventories.

All the assets that are considered current are listed under the current assets. Long-term assets are listed next, which include property, plant and equipment, goodwill, licenses, customer lists and relationships, other intangible assets, and investments in and advances to equity affiliates (Annual Report, 2013). These assets are not easily converted into cash. Thus, a user of a financial statement, such as a balance sheet, can see by the current assets if the company can pay creditors and expenses. This information is useful to determine if the company is doing well and is worth investing in. Also creditors want to know if they loan money to AT&T if the company can pay the loan back in a timely manner. The current and long-term assets are included in the total of all assets. AT&T's assets are listed as follows from the most recent balance sheet (Annual Report, 2013):

Dollars in millions

Assets December 31

Current Assets 2012 2011

Cash and cash equivalents $4,868 $3,045

Accounts receivable 12,657 13,231

Prepaid expenses 1,035 1,102

Deferred income taxes 1,036 1,470

Other current assets 3,110 4,137

Total current assets 22,706 22,985

Property, Plant, and Equipment 109,767 107,087

Goodwill 69,773 70,842

Licenses 52,352 51,374

Customer Lists and Relationships 1,391 2,757

Other Intangible Assets 5,032 5,212

Investments in and Advances to Equity Affiliates 4,581 3,718

Other Assets 6,713

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