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AT&T (T) Altman Z-Score : 0.81 (As of Oct. 31, 2024)


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What is AT&T Altman Z-Score?

The Altman Z-Score is a model designed to predict the likelihood of a company going bankrupt within the next two years. Created by American finance professor Edward Altman in 1968, the model is specifically designed for publicly traded manufacturing companies with assets greater than $1 million.

Warning Sign:

Altman Z-score of 0.8 is in distress zone. This implies bankruptcy possibility in the next two years.

AT&T has a Altman Z-Score of 0.81, indicating it is in Distress Zones. This implies bankrupcy possibility in the next two years.

The zones of discrimination were as such:

When Altman Z-Score <= 1.8, it is in Distress Zones.
When Altman Z-Score >= 3, it is in Safe Zones.
When Altman Z-Score is between 1.8 and 3, it is in Grey Zones.

The historical rank and industry rank for AT&T's Altman Z-Score or its related term are showing as below:

T' s Altman Z-Score Range Over the Past 10 Years
Min: 0.45   Med: 0.89   Max: 1.15
Current: 0.8

During the past 13 years, AT&T's highest Altman Z-Score was 1.15. The lowest was 0.45. And the median was 0.89.


AT&T Altman Z-Score Historical Data

The historical data trend for AT&T's Altman Z-Score can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

AT&T Altman Z-Score Chart

AT&T Annual Data
Trend Dec14 Dec15 Dec16 Dec17 Dec18 Dec19 Dec20 Dec21 Dec22 Dec23
Altman Z-Score
Get a 7-Day Free Trial Premium Member Only Premium Member Only 0.97 0.70 0.94 0.45 0.71

AT&T Quarterly Data
Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22 Dec22 Mar23 Jun23 Sep23 Dec23 Mar24 Jun24 Sep24
Altman Z-Score Get a 7-Day Free Trial Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 0.45 0.71 0.74 0.77 0.80

Competitive Comparison of AT&T's Altman Z-Score

For the Telecom Services subindustry, AT&T's Altman Z-Score, along with its competitors' market caps and Altman Z-Score data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.


AT&T's Altman Z-Score Distribution in the Telecommunication Services Industry

For the Telecommunication Services industry and Communication Services sector, AT&T's Altman Z-Score distribution charts can be found below:

* The bar in red indicates where AT&T's Altman Z-Score falls into.



AT&T Altman Z-Score Calculation

Altman Z-Score model is an accurate forecaster of failure up to two years prior to distress. It can be considered the assessment of the distress of industrial corporations.

AT&T's Altman Z-Score for today is calculated with this formula:

Z=1.2*X1+1.4*X2+3.3*X3+0.6*X4+1.0*X5
=1.2*-0.0276+1.4*-0.0005+3.3*0.0537+0.6*0.5871+1.0*0.31
=0.81

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency. GuruFocus does not calculate Altman Z-Score when X4 or X5 value is 0.

Trailing Twelve Months (TTM) ended in Sep. 2024:
Total Assets was $393,719 Mil.
Total Current Assets was $29,799 Mil.
Total Current Liabilities was $40,658 Mil.
Retained Earnings was $-185 Mil.
Pre-Tax Income was 1430 + 5091 + 4869 + 2936 = $14,326 Mil.
Interest Expense was -1675 + -1699 + -1724 + -1726 = $-6,824 Mil.
Revenue was 30213 + 29797 + 30028 + 32022 = $122,060 Mil.
Market Cap (Today) was $161,731 Mil.
Total Liabilities was $275,459 Mil.

* Note that for stock reported semi-annually or annually, GuruFocus uses latest annual data as the TTM data.

X1=Working Capital/Total Assets
=(Total Current Assets - Total Current Liabilities)/Total Assets
=(29799 - 40658)/393719
=-0.0276

X2=Retained Earnings/Total Assets
=-185/393719
=-0.0005

X3=Earnings Before Interest and Taxes/Total Assets
=(Pre-Tax Income - Interest Expense)/Total Assets
=(14326 - -6824)/393719
=0.0537

X4=Market Value Equity/Book Value of Total Liabilities
=Market Cap/Total Liabilities
=161731.015/275459
=0.5871

X5=Revenue/Total Assets
=122060/393719
=0.31

The zones of discrimination were as such:

Distress Zones - 1.81 < Grey Zones < 2.99 - Safe Zones

AT&T has a Altman Z-Score of 0.81 indicating it is in Distress Zones.

Study by Altman found that companies that are in Distress Zone have more than 80% of chances of bankruptcy in two years.


AT&T  (NYSE:T) Altman Z-Score Explanation

X1: The Working Capital/Total Assets (WC/TA) ratio is a measure of the net liquid assets of the firm relative to the total capitalization. Working capital is defined as the difference between current assets and current liabilities. Ordinarily, a firm experiencing consistent operating losses will have shrinking current assets in relation to total assets. Altman found this one proved to be the most valuable liquidity ratio comparing with the current ratio and the quick ratio. This is however the least significant of the five factors.

X2: Retained Earnings/Total Assets: the RE/TA ratio measures the leverage of a firm. Retained earnings is the account which reports the total amount of reinvested earnings and/or losses of a firm over its entire life. Those firms with high RE, relative to TA, have financed their assets through retention of profits and have not utilized as much debt.

X3, Earnings Before Interest and Taxes/Total Assets (EBIT/TA): This ratio is a measure of the true productivity of the firm's assets, independent of any tax or leverage factors. Since a firm's ultimate existence is based on the earning power of its assets, this ratio appears to be particularly appropriate for studies dealing with corporate failure. This ratio continually outperforms other profitability measures, including cash flow.

X4, Market Value of Equity/Book Value of Total Liabilities (MVE/TL): The measure shows how much the firm's assets can decline in value (measured by market value of equity plus debt) before the liabilities exceed the assets and the firm becomes insolvent.

X5, Revenue/Total Assets (S/TA): The capital-turnover ratio is a standard financial ratio illustrating the sales generating ability of the firm's assets.

Read more about Altman Z-Score and the original research.


Be Aware

Altman Z-Score does not apply to financial companies.


AT&T Altman Z-Score Related Terms

Thank you for viewing the detailed overview of AT&T's Altman Z-Score provided by GuruFocus.com. Please click on the following links to see related term pages.


AT&T Business Description

Address
208 S. Akard Street, Dallas, TX, USA, 75202
The wireless business contributes nearly 70% of AT&T's revenue. The firm is the third-largest US wireless carrier, connecting 72 million postpaid and 17 million prepaid phone customers. Fixed-line enterprise services, which account for about 16% of revenue, include internet access, private networking, security, voice, and wholesale network capacity. Residential fixed-line services, about 11% of revenue, primarily consist of broadband internet access, serving 14 million customers. AT&T also has a sizable presence in Mexico, with 23 million customers, but this business only accounts for 4% of revenue. The firm still holds a 70% equity stake in satellite television provider DirecTV but does not consolidate this business in its financial statements.
Executives
Sanders S Sabrina officer: SVP-ChiefActngOfcr&Controller 208 S. AKARD ST., 29TH FLOOR, DALLAS TX 75202
Debra L. Dial officer: SVP-ChiefActngOfcr&Controller 208 S. AKARD, 29TH FLOOR, DALLAS TX 75202
Jeremy Alan Legg officer: Chief Technology Officer 208 S. AKARD STREET, DALLAS TX 75202
Kenny Kellyn Smith officer: Chief Marketing & Growth Ofcr 208 S. AKARD ST, 29TH FLOOR, DALLAS TX 75202
Edward W Gillespie officer: SrEVP-Ext & Legal Affairs 208 S. AKARD, DALLAS TX 75202
Angela Santone officer: Sr. Exec VP-Human Resources 208 S. AKARD ST, DALLAS TX 75202
Jeffery S. Mcelfresh officer: CEO, AT&T Communications, LLC 208 S. AKARD, 29TH FLOOR, DALLAS TX 75202
Mcatee David R Ii officer: Sr. Exec. VP and Gen. Counsel 208 S. AKARD, 29TH FLOOR, DALLAS TX 75202
David S. Huntley officer: SEVP&Chief Compliance Officer 208 S. AKARD, ROOM 2900;07, DALLAS TX 75202
Lori M Lee officer: CEO-AT&T LatAm&GlobalMktgOfcr 208 S. AKARD ST., 29TH FLOOR, DALLAS TX 75202
Pascal Desroches officer: Sr. Exec VP and CFO AT&T INC., 208 S AKARD STREET, DALLAS TX 75202
Stephen J Luczo director
Luis A Ubinas director 209 REDWOOD SHORES PARKWAY, REDWOOD CITY CA 94065-1175
John T Stankey officer: Sr. Exec. VP and CIO 208 S. AKARD ST., 29TH FLOOR, DALLAS TX 75202
Jason Kilar officer: CEO, Warner Media, LLC 208 S. AKARD ST, DALLAS TX 75202