Lucent Technologies Case
Lucent Technologies Caser
University of Phoenix Axia College
Acc 230
October 3, 2010
Lucent Technologies
After reviewing the Case Review of Lucent Technologies, it was apparent the Lucent Technologies assets suffered a large decline between the years of 2003 and 2004. In 2003 the current assets consisted of 49.4% of their total assets while in 2004 the current asset percentage decreased to 48.5%. After a more close and thorough evaluation, it is apparent that the inventory did increase between the years 2003 and 2004. In 2003 the percentage of inventory was 4.0% and in 2004 the percentage was 4.8%. This can be calculated to be an increase of about 20% in their total inventory holdings. Another quick measure of the company’s cash and cash equivalents, it was clearly seen that their entire assets decreased by 24% in 2003 and almost 20% in 2004. Lucent Technologies total debt structure had an immense amount of decrease between 2003 and 2004. Even though their current liability decreased from 25.6% in 2003 to 24.3% in 2004, their debts could be considered to be more as long term because these debts rose from 23% of total liabilities to 26.4% a year later. On the equity section of Lucent Technologies, it was noted that they had a negative representation of their shareholders equity and total liabilities in 2003 when compare to the numbers of 2004; this would have their company looking more like a deficit; however, improvements can happen and the current situation can improve and be less of an issue as the years progress. After the evaluation of Lucent Technologies balance sheet, creditors and investors would more than likely be concerned about the fact that even if the cash and cash equivalents are decreasing, the assets are accelerating steadily. It is also important that Lucent Technologies is part of a very competitive sector. When the demand is not up to par, the inventory is somehow elevated and the carrying costs for this company
University of Phoenix Axia College
Acc 230
October 3, 2010
Lucent Technologies
After reviewing the Case Review of Lucent Technologies, it was apparent the Lucent Technologies assets suffered a large decline between the years of 2003 and 2004. In 2003 the current assets consisted of 49.4% of their total assets while in 2004 the current asset percentage decreased to 48.5%. After a more close and thorough evaluation, it is apparent that the inventory did increase between the years 2003 and 2004. In 2003 the percentage of inventory was 4.0% and in 2004 the percentage was 4.8%. This can be calculated to be an increase of about 20% in their total inventory holdings. Another quick measure of the company’s cash and cash equivalents, it was clearly seen that their entire assets decreased by 24% in 2003 and almost 20% in 2004. Lucent Technologies total debt structure had an immense amount of decrease between 2003 and 2004. Even though their current liability decreased from 25.6% in 2003 to 24.3% in 2004, their debts could be considered to be more as long term because these debts rose from 23% of total liabilities to 26.4% a year later. On the equity section of Lucent Technologies, it was noted that they had a negative representation of their shareholders equity and total liabilities in 2003 when compare to the numbers of 2004; this would have their company looking more like a deficit; however, improvements can happen and the current situation can improve and be less of an issue as the years progress. After the evaluation of Lucent Technologies balance sheet, creditors and investors would more than likely be concerned about the fact that even if the cash and cash equivalents are decreasing, the assets are accelerating steadily. It is also important that Lucent Technologies is part of a very competitive sector. When the demand is not up to par, the inventory is somehow elevated and the carrying costs for this company
References: Fraser, L. M., & Ormiston, A. (2007). The balance sheet. Retrieved from Acc 230 Course Materials. Chapter 2 pp. 79-80.