T — AT&T Inc.

Will it survive?

• Can it pay its interest? 3.6×
  Adequate
  Operating income $24.2B ÷ interest expense $6.7B

  Comfortable in a normal year, but below the margin of safety Graham looked for. Worth checking how stable the coverage has been across a full cycle.

• How heavy is the debt? 2.7×
  Moderate
  Total debt $64.8B ÷ operating income $24.2B

  Years of operating profit it would take to repay all debt. A first read, not a credit rating: it's gross debt (not netted against cash) over EBIT (not EBITDA), and a cyclical year distorts it.

• How long is cash tied up? -133d
  Negative — funded by others
  DSO 26 + DIO 22 − DPO 180 days

  Days cash is tied up between paying suppliers and collecting from customers. A negative cycle is a quiet moat: suppliers and customers fund the operation (Buffett's “float”) — the company grows on other people's money.

Is it a good business?

• Return on invested capital —
  Not enough data

  The filing data didn't include the inputs for this check.

• Owner Earnings (free cash) margin 16%
  Cash machine
  Owner Earnings $19.6B = operating cash $40.3B − capex $20.6B

  What an owner could take out without starving the business. That's 16% of revenue. Honest caveat: capex here blends maintenance and growth, so steady-state Owner Earnings may run higher (see capex vs. depreciation).

• Are earnings backed by cash? 1.84×
  Cash-backed
  Cash from ops $40.3B ÷ net income $22.0B

  How much of reported profit showed up as operating cash. Above 1× is reassuring; well below suggests earnings lean on accruals. One year is noisy — growth and working-capital swings distort it, and this is operating cash, not free cash. Watch the multi-year trend.

How is the cash used?

• Where do the earnings go? 65%
  Returns about half
  Dividends + buybacks $12.7B ÷ Owner Earnings $19.6B

  Of $19.6B Owner Earnings, $12.7B (65%) went back to shareholders — $8.2B dividends, $4.5B buybacks. Returning most of it signals a mature cash machine; reinvesting most could mean a long runway — or empire-building. The split doesn't say which; the return earned on it (see ROIC) does.

• Investing or harvesting? 0.99×
  Maintaining
  Capex $20.6B ÷ depreciation $20.9B

  Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth — or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency — or a melting asset base). The ratio won't tell you which; the filings will.

Durability — 2016–2025

A moat is high return that doesn’t fade. Here are the quality metrics across a full cycle — judge the consistency, not the latest dot.

• Return on invested capital
  history pending —
• Operating margin
  19%
• Owner Earnings margin
  12%