Accounting analysis verizon
Inventory turnover Generally, the larger the inventory turnover the more efficient and effective the company is managing inventory. (AT&T)
The accounts receivable turnover measures how frequently during the year the accounts receivable are being converted to cash.
A high ratio implies either that a company operates on a cash basis or that its extension of credit and collection of accounts receivable is efficient.
A low ratio implies the company should re-assess its credit policies in order to ensure the timely collection of imparted credit that is not earning interest for the firm. (VERIZON)
Total Asset Turnover Asset measures a firm's efficiency at using its assets in generating sales or revenue – a low asset turnover can represent sluggish sales, the higher the better. (VERIZON)
Debt to Equity Ratio: the debt-equity ratio provides a vantage point on a company's leverage position. The greater a company's leverage, the higher the ratio. (VERIZON)
Working Capital: The working capital is used to evaluate a company's ability to pay current liabilities. The more working capital, the less financial strain a company experiences. (VERIZON)
(Even though Verizon has more working capital than ATT, both companies don’t need high working capital because they have high inventory turns and do business on a cash basis. These types of businesses raise money every time they open their doors, then turn around and plow that money back into inventory to increase sales. Since cash can be raised so quickly, there is no need to have a large amount of working capital available.)
The accounts receivable turnover measures how frequently during the year the accounts receivable are being converted to cash.
A high ratio implies either that a company operates on a cash basis or that its extension of credit and collection of accounts receivable is efficient.
A low ratio implies the company should re-assess its credit policies in order to ensure the timely collection of imparted credit that is not earning interest for the firm. (VERIZON)
Total Asset Turnover Asset measures a firm's efficiency at using its assets in generating sales or revenue – a low asset turnover can represent sluggish sales, the higher the better. (VERIZON)
Debt to Equity Ratio: the debt-equity ratio provides a vantage point on a company's leverage position. The greater a company's leverage, the higher the ratio. (VERIZON)
Working Capital: The working capital is used to evaluate a company's ability to pay current liabilities. The more working capital, the less financial strain a company experiences. (VERIZON)
(Even though Verizon has more working capital than ATT, both companies don’t need high working capital because they have high inventory turns and do business on a cash basis. These types of businesses raise money every time they open their doors, then turn around and plow that money back into inventory to increase sales. Since cash can be raised so quickly, there is no need to have a large amount of working capital available.)