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Evaluation of Lucent Technologies

Please see the attachment.

2. Evaluate the asset, debt, and equity structure of Lucent Technologies, as
well as trends and changes found on the common-size balance sheet.

3. What concerns would investors and creditors have based on only this
information?

4. What additional financial and non-financial information would investors
and creditors need to make investing and lending decisions for Lucent Technologies?

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2. The asset structure of Lucent deteriorated between 2003 and 2004. The current assets of the company during 2003 constituted 49.4% of all assets. During 2004, this position declined to 48.5%. Inventories climbed from 4.0% in 2003 to 4.8% in 2004 (a twenty percent increase in inventory holdings). Cash and cash equivalents declined from 24% of all assets in 2003 to 19.9% during 2004.

The debt structure of the company declined as well between the two years as well. Although current liability position decreased from 25.6% in 2003 to 24.3% during 2004, the debt seems to have shifted to long term as this category increased from 23% of all ...

Solution Summary

The solution evaluates the financial statements of Lucent Technologies.

$2.19