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This post addresses the losses at AT&T.

A decrease in stockholder equity is not necessarily a bad thing. It really depends on the cause of it. According to my text cumulative effect of the declaration and payment of a cash dividend on a company's financial statements is to decrease both stockholders' equity and total assets" (p. 549). If this is the cause then it could be a good sign that company is still paying dividends in a recession. However, I do not believe AT&T is in trouble considering the success of their 4G network. While I am not super familiar with the company's finances I do not believe they are losing money because there have been no major announcements about it, like when someone such as Best Buy posts a loss. Since you are a little more familiar was it clear what caused the loss? (dated 02/04/2012)

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Changes in stockholder equity are not always a bad thing. Your textbook is correct. When trying to determine why there is a decrease in stockholder equity with a large company, many things have to be taken into consideration. The company's income rose slightly, and they were able to declare a slightly larger amount in dividends than in the previous year. The company's revenue affects stockholder ...

Solution Summary

The solution provides a detailed explanation addressing the AT&T financial statement reported loss.