Preview

AT T2

Satisfactory Essays
Open Document
Open Document
556 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
AT T2
AT&T Case study

1. Review AT&T’s past financial policies and financing choices. Were these appropriate for the nature of the business? AT&T Corp., one of the largest companies in the United States, has had a long and storied history. Initially, AT&T operated as a monopoly, but in 1982, Justice Department, broke up the company into individual companies. Prior to divesture (in 1981), AT&T was the largest private company in the world and despite many challenges, AT&T remained an archetypical “widow-and-orphans” stock for a long time. The term "widows and orphans" was used to describe stocks with a relatively high degree of safety and dividend income and numbers from exhibit 1speak for themselves. By 1982 the company increased all its key financial indicators. Revenues and operating earnings increased 12% and 6% respectively comparing to year 1981. In ten years, the company raised its revenues, net income, cash and assets more than 2 times. It`s worth to mention that AT&T was able to reduce its total outstanding debt by $ 725 mil and at year-end, the company`s debt ratio stood 42.3% down from 46.7% in 1980. In addition, AT&T neither cancelled nor lowered dividends, and only increased dividend per share by 10% annually. Aforementioned facts suggest that company`s financial policies and financing choices were appropriate for the nature of the business and that AT&T was one stable, reliable and profitable companies in the world by 1982.

2. In what fundamental ways will AT&T’s business change in the near future? Throughout most of the 20th century, AT&T held a monopoly on phone service in the United States. In 1982, through an agreement between AT&T and the U.S. Department of Justice, AT&T agreed to divest itself of its local telephone operations but retain some of its businesses. The principal provision of the antitrust settlement was that the corporation would be split into seven completely independent regional corporations. Each regional company would continue

You May Also Find These Documents Helpful

  • Good Essays

    D. What do you think of CBM's cash position during the budget period? Do you see any concerns for the company in this regard?…

    • 807 Words
    • 4 Pages
    Good Essays
  • Satisfactory Essays

    NT1310 Unit 2 assignment

    • 475 Words
    • 2 Pages

    RBOCS- Regional Bell operating company (RBOC) is a term describing one of the U.S. regional telephone companies (or their successors) that were created as a result of the breakup of American Telephone and Telegraph Company (AT&T, known also as the Bell System or "Ma Bell") by a U.S. Federal Court consent decree on December 31, 1983. The seven original regional Bell operating companies were Ameritech, Bell Atlantic, BellSouth, NYNEX, Pacific Bell, Southwestern Bell, and US WEST. Each of these companies owned at least two Bell operating companies (Bell operating company). The BOCs were given the right to provide local phone service while AT&T was allowed to retain its long-distance service.…

    • 475 Words
    • 2 Pages
    Satisfactory Essays
  • Satisfactory Essays

    Unit 2 Assignment 1

    • 603 Words
    • 3 Pages

    an antitrust suit against AT&T on January 8, 1982. It split the company into seven regional companies…

    • 603 Words
    • 3 Pages
    Satisfactory Essays
  • Better Essays

    The original AT&T was the majority owner of most of the phone lines in the country. AT&T limited competition by expanding and adding their structures to areas in need of phone lines. All competitors had to pay AT&T a fee to connect long- distance…

    • 1175 Words
    • 5 Pages
    Better Essays
  • Good Essays

    4. How well is Costco performing from a fi nancial perspective? Do some number-crunching using the data in…

    • 507 Words
    • 3 Pages
    Good Essays
  • Best Essays

    At&T Strategic Action Plan

    • 2285 Words
    • 10 Pages

    The current emergence of AT&T traces its roots back to 1882 and the Southwestern Bell Telephone Company. Ameritech, Southwestern Bell, Pacific Telesis, and Bellsouth comprised the bulk of the SBC’s consumer base before the AT&T merger. The 1982 breakup of the previously vertically integrated AT&T led to the divestiture of local service companies, resulting in seven regional holding companies, or “Baby Bells.” The result of AT&T’s breakup was increased competition from the likes of Sprint and MCI. Two of the spun off regional holding companies, Bell Atlantic and Nynex, would later become Verizon, and US West would become Qwest.…

    • 2285 Words
    • 10 Pages
    Best Essays
  • Good Essays

    1. Evaluate Chrysler’s financial and operating performance between 1980 and 1992. What financial and investment policies did they pursue and why? How successful were they?…

    • 1021 Words
    • 5 Pages
    Good Essays
  • Powerful Essays

    Financial Statement Analysis

    • 2405 Words
    • 10 Pages

    The process of developing financial statements for a business is to provide supporting documentation to what has been reported as annual or quarterly income. Within the financial statement analysis strengths and weaknesses are identified through the comparison of data from the balance sheet. There are many different ways to interpret the data that is utilized for the analysis; those include but are not limited to comparative statements, schedule of changes in working capital, common size percentages, and ratio analysis. The following paper will be reviewing the financial data from Verizon Communications (VZ). Through the analysis review of the corporations financial and common size statements will be reviewed, as well as financial ratios, a trend analysis and in depth overview of the organization.…

    • 2405 Words
    • 10 Pages
    Powerful Essays
  • Powerful Essays

    AT&T Case depicts the history of 130 years old giant company, which served its customers in telecommunications area. From its foundation by Graham Bell in 1875 to the restructuring decision in 2000, the company had many key events to be studied in terms of several strategic management point of views. This paper mainly focuses on external environment issues and corporate-level strategies.…

    • 1787 Words
    • 8 Pages
    Powerful Essays
  • Powerful Essays

    At&T Case Analysis

    • 3122 Words
    • 13 Pages

    Demographic trends – For a long time, AT & T was virtually monopoly on local and long distance service. After the antitrust threats in 1913, AT & T allows competitors to interconnect with the Bell System. It does not stop AT & T's rapid growth. The penetration of telephone service into American household increased from 50% in 1945 to 90% in 1969. Competition became established in the general long distance service by the mid-1970s when FCC signaled its interest in more competition and allowed competitors to use some of the Bell Lab's technology. AT & T's long distance market share fell from over 90% in 1984 to 50% in 1996. By the late 90s, AT & T realized its technology and service areas are lagging, it starts series of acquisitions. Despite all the acquisitions, AT & T is constantly losing its…

    • 3122 Words
    • 13 Pages
    Powerful Essays
  • Powerful Essays

    Telecommunications providers have been used to living and operating in an industry that for years didn't change - the monopoly environment. What we must come to terms with now is the fact that our industry is changing drastically. We are in the midst of both an Evolution and a Revolution - new rules, new players, new technologies all shaping the way we continue to do what we,ve done so well in the past. Who Moved My Cheese? serves as a catalyst for helping companies assess their current situation, set new plans into action, and learn to deal with, conquer, and even welcome change. In short, what the book brings to light, is this: We need to move forward with change - to adapt, to survive - or run the certain risk of being left behind.…

    • 1837 Words
    • 8 Pages
    Powerful Essays
  • Satisfactory Essays

    At & T Merger Essay

    • 480 Words
    • 2 Pages

    AT&T becoming closer and closer in becoming a monopoly. Those that had contracts with Time Warner, will more than likely abide by those rules until the document has been concluded. Once that document has reached its end, those former customers will be introduced into new rules by AT&T. In the long run, AT&T will be in charge of being the only provider for Television, Cell phone, as well as home phone, and internet provider. I believe there are two winners during this type of merge, AT&T as well as the former competitor. Because AT&T gets to stay in business, and the other gets a payout, or a quick gain in exchange for the company. But we know AT&T will make that money back. I don’t recommend other companies, present or in the future to merge with AT&T as it may cause a monopoly. Even though AT&T is already a well-known company and has already established a reputation within the public and other businesses. It will be an extremely difficult opponent to take down. As a quick result to eliminate this company, none come to mind. I don’t think this company will ever be taken down by another…

    • 480 Words
    • 2 Pages
    Satisfactory Essays
  • Powerful Essays

    Financial Analysis Report

    • 1000 Words
    • 4 Pages

    AT&T is one of the largest provider of long distance and local telephone services in the United States. It became At&t in the year 1857, Alexander Graham Bell and two others agreed on this company. One of their first openings were in New Haven, Ct in 1878. The company starting name was American Bell Telephone Company. The acronyms standing for AT&T mean (American Telephone and Telegraph Company) which was incorporated on March 3, 1885. When this took place they then had to build and operate the long distance telephone network. Until Bell’s second patent expired in 1894, only Bell Telephone and its licensees could legally operate telephone systems in the United States (AT&T INC). Between the years of 1894 to 1904, over six thousand independent telephone companies went into business in the US, and the number of telephones increased from 285,000 to 3,317,000 (AT&T INC).…

    • 1000 Words
    • 4 Pages
    Powerful Essays
  • Good Essays

    AT&T and Verizon are two very big growth industries in the telecommunications field. They have been around for a very long time providing the best equipment along with accessories and cellphone data and services. Also these two industries provide the best cellular tower coverages across the USA. They do compete against each other in a sense with thoughts in the past that have been the talk in the media about these two industries emerging, but instill by themselves they both have adopted some very good strategies on gaining more business each year from proposing many new products and services within the telecommunication industry. They also have many franchises all across the USA earning massive profits, at which has opened the doors for more franchises along with time and more resources that are interested in doing…

    • 712 Words
    • 3 Pages
    Good Essays
  • Good Essays

    connected. This growth, however, has and continues to be at the cost of the Climate, powered…

    • 2046 Words
    • 9 Pages
    Good Essays