The only almost certainly troubling solution is the $17.4 billion in debt maturing within 1 year as of September 30. In the contemporary credit rating marketplace refinancing that debt might pose a challenge. Though AT&T will probably be somewhat less exposed to the modern-day economic problems, it will be hard to grow revenues or earnings in this environment. The offset to this problem is the nature of the company's businesses. It is most likely its information services will continue to grow, and the Apple iPhone will continue to enhance its client base for wireless voice and data.
(C) Outcomes of the company's response to the issue.
As there was no similar issue, AT&T had no must respond. Indeed its ongoing capital expenditure program in conjunction with its stock acquisition program could possibly be considered a response to the lack of a similar issue. (AT&T, 2008)
2. Prepare 350 term synopses on Ford concerning the following:
(A) Difficulties known in the scenario that is also facing the company
The quantity of news coverage the financial problems of the American auto firms have been making has made very clear the problems of the industry. It is also clear that Ford, although far from a healthy or financially powerful business is the most effective positioned financially of the peer group to survive. The difficulties of Ford are a lot more serious that easy working capital management almost $11 billion in cash and equivalent reserves. The only other significant change is inventories, which rose to $12 billion from $10.1 billion or roughly 20%. The contemporary ratio for the auto operation fell to 101% from 120%. It is reasonable to suppose that this improve largely represented unshipped vehicle inventory as production was maintained in the face of slowing sales. It is worth noting that payables and accrued liabilities really declined marginally. It will be intriguing to see that the company responds to the present earnings collapse of the auto industry. The other 2 major US auto businesses have already received loans from the US government. It looks probably that Ford will have to seek similar assistance. (Ford Motor Company2, 2008)
A brief inspection of the consolidated statement of funds for the periods ending September 30, 2008 and 2007 reveal the underlying problem. In the third quarter of 2008 ahead of taxes and other adjustments, the company lost a total of $540 million compared to a loss of only $156 million in the third quarter of 2007. For your 9-month period operating loss totaled $9.3 billion compared to a profit of $726 million in the exact same period a year earlier. It is reasonably clear that as soon as a company looses more than $9 billion in nine months it will have some deterioration in its working capital position. This is more serious that the case in the scenario that is also traced to issues in collecting receivables.
So far the only genuine trouble has been erosion of the funds account. The more serious trouble is the finance arm that depends heavily on the commercial paper market.
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