Lucent Technologies Case

The financial statement for luminous Technologies is for family line 30, 2003 and 2004. After reviewing the balance sheet I could determine Lucent Technologies add up Assets had increased by 1,052 million. This shows Total summations are in an upward trend and the company has steadily built assets the last year and non decreased them. The companys goal is to raise lucre and one way of raising profits is to increase their assets. Total Liabilities defend decreased by 940 million. Total current liabilities have decreased oer the year while long term liabilities have increased.In 2003, Lucent Technologies debt to asset proportion was . 83 and in 2004 the debt to asset ratio was . 92 which means . 92 of Lucent Technologies assets were paid for by get money. What this shows is Lucent Technologies may pay a higher interest on money borrowed because their debt to asset ratio is so high. By reducing their debt load and controlling purchases the company can reduce their total debt to asset ratio. Companies acquiring too such(prenominal) debt may have trouble paying creditors which could force them into bankruptcy. Total shareowners dearth has decreased over the year.While the company is currently looking at a deficit, they are movement in an upward trend where shareholders could start receiving dividend payouts. Investors reviewing Lucent Technologies current balance sheet may have a hard time investing in the company as much of the assets owned by the company were purchased on credit. Creditors may loan Lucent Technologies money for future investments, but it would be at a higher interest rate as the current debt to asset ratio is high. Another difficulty creditors and investors may have with the current balance sheet is that Lucent Technologies is only providing them with information from one year. nevertheless though the balance sheet reflects improvements in company profits over the past year it doesnt provide creditors and investors with enough informat ion to make an informed decision. Creditors and investors would need financial statements for multiple years before investing in the company. By viewing the statement of cash melt downs, investors are able to determine how much cash comes in and goes out of the company during the year. It shows investors how the company is able to pay for its operations and future growth. Lucent Technologies provided a balance sheet for September 30, 2003 and 2004.There is limited value in the data provided by Lucent Technologies, for investors and creditors to make informative decisions before investing in or leading money to this company. another(prenominal) financial statements investors and creditors need to view are the income statement and the statement of cash flows. The income statement provides the revenue pull in minus expenses incurred over a specific period of time. Investors need to view the statement of cash flow to determine the increases and decreases in cash made by Lucent Techn ologies.