What is experience with this project - The merger between T-Mobile and Sprint (the positive and negative aspects of working on the project).

The amount of intangible assets and goodwill recognized:

Business combinations, such as mergers and acquisitions, significantly impact the financial statements of the entities involved, notably through the recognition of intangible assets and goodwill. In the case of the merger between Sprint and T-Mobile, we can analyze the financial implications by examining pre- and post-merger figures. Prior to the merger in 2019, the combined goodwill from both companies amounted to $6,528 million, and their intangible assets were valued at $86,342 million. After the merger, T-Mobile's 2020 consolidated financials showed substantial increases, with goodwill rising to $11,117 million and intangible assets hitting $88,126 million. This analysis unravels the calculative journey from pre-merger figures to the consolidated recognition post-merger, providing insights into the material effect of this business combination. To calculate the amount of intangible assets and goodwill recognized from the merger between Sprint and T-Mobile, we need to analyze the balance sheets provided and understand the purchase price allocation typically involved in such mergers. The process will include determining the difference in the reported values of these assets before and after the merger.

1. Identify Pre-Merger Intangible Assets and Goodwill:

Category	Sprint (2019)	T-Mobile (2019)	Total
Goodwill	$4,598 million	$1,930 million	$6,528 million
FCC licenses and other intangible assets/ Spectrum licenses	$41,465 million	$36,465 million	$77,930 million
Definite-lived intangible assets, net or Others intangible assets	$1,769 million	$115 million	$1,884 million
Total intangible assets	$47,832 million	$38,510 million	$86,342 million

1. Identify Post-Merger Intangible Assets and Goodwill:
   • From T-Mobile (2020):Consolidated values after acquiring Sprint
     • Goodwill: $11,117 million
     • Spectrum licenses: $82,828 million
     • Other intangible assets, net: $5,298 million
2. Calculate the Increase in Intangible Assets:
   • Goodwill Increase Calculation:
     • Post-Merger Goodwill (T-Mobile 2020) - Pre-Merger Goodwill (T-Mobile 2019 + Sprint 2019)
     • $11,117 million - ($1,930 million + $4,598 million) = $4,589 million increase in goodwill
   • Intangible Assets Increase (Spectrum & Other Intangibles):
     • Post-Merger Spectrum and Other: $82,828 million + $5,298 million = $88,126 million
     • Pre-Merger Spectrum and Other (T-Mobile 2019): $36,465 + $115 million = $36, 580 million.
     • Pre-Merger FCC licenses and other + definite lived (Sprint 2019): $41,465 million + $1,769 million = $43,234 million
     • Total Pre-Merger: $79,814 million
     • Increase: $88,126 million - $79,814 million = $8,312 million increase in Spectrum and Other Intangibles
3. Consolidated Goodwill and Intangibles Post-Merger:
   • Goodwill recognized from the merger = Increase in goodwill + Pre-Merger Goodwill (existing)
   • $4,589 million new goodwill recognized
   • Intangibles recognized from the merger = Increase in intangible assets
   • $8,312 million new intangible assets recognized

The T-Mobile and Sprint mergerunderscores the complex financial interplay involved in business combinations, especially in terms of intangible assets and goodwill. Post-merger, there was a notable increase of $4,589 million in goodwill and $8,312 million in intangible assets, leading to substantial new values recognized in the consolidated accounts. These increases illustrate not only the scale of the merger but also the strategic evaluation and recognition of intangible assets that play a pivotal role in shaping the balance sheets of merged entities. Understanding these changes is crucial for stakeholders analyzing the merger's impact on financial health and strategic positioning in the telecommunications sector. Through mergers, companies can often achieve synergies that provide greater intangible asset value and goodwill, reflecting the premium paid over the identifiable net assets and demonstrating the anticipated economic benefits beyond what is immediately quantifiable.

Effects of the Merger on Key Financial Ratios:

Business combinations, particularly through mergers, can significantly influence a company's financial health. This effect is often observed in key financial ratios, which serve as vital indicators of a company's performance post-merger. This analysis delves into the impact of a recent merger on key financial ratios such as liquidity, profitability, leverage, and efficiency, focusing on a comparative study from 2018 to 2023. By examining liquidity ratiosspecifically the current and quick ratiosthe analysis highlights a post-merger challenge of rising liabilities against the company's current assets. Moreover, profitability metrics, including profit margins, return on assets (ROA), and return on equity (ROE), suggest enhanced revenue synergies and cost efficiencies post-merger. Meanwhile, the leverage ratio remained stable, indicating sustained control over debt levels. Furthermore, efficiency improvements are evident through increased inventory and receivable turnover ratios. A combination of horizontal and vertical analyses has been utilized to provide a comprehensive view of these financial dynamics.

Liquidity:

(in millions, except share and per share amounts)	December 31,	December 31,	December 31,	December 31,	December 31,	December 31,
2023	2022	2021	2020	2019	2018
Total current assets		19015	19067	20891	23885	9305	8281
Total current liabilities	20928	24742	23499	21703	12506	10267
Current Ratio		90.86%	77.06%	88.90%	10.05%	74.40%	80.66%
Total current assets		19015	19067	20891	23885	9305	8281
Inventory			1678	1884	2567	2527	964	1084
Total current liabilities	20928	24742	23499	21703	12506	10267
Quick Ratio		82.84%	69.45%	77.98%	98.41%	66.70%	70.10%

• Current Ratio: Dropped from 110.05% (2020) to 90.86% (2023), indicating reduced liquidity due to an increase in current liabilities.
• Quick Ratio: Fell from 98.41% (2020) to 82.84% (2023), showing short-term financial pressure even after excluding inventory.

Profitability:

(in millions, except share and per share amounts)	December 31,	December 31,	December 31,	December 31,	December 31,	December 31,
2023	2022	2021	2020	2019	2018
Net income		8317	2590	3024	3064	3468	2888
Total revenues		78558	79571	80118	68397	44998	43310
Profit Margins:		10.59%	3.25%	3.77%	4.48%	7.71%	6.67%
Net income		8317	2590	3024	3064	3468	2888
Total assets		207682	211338	206563	200162	86921	72468
Return on asset (ROA):	4.00%	1.23%	1.46%	1.53%	3.99%	3.99%
Net income		8317	2590	3024	3064	3468	2888
Total stockholders' equity	64715	69656	69102	65344	28789	24718
Return of Common Equity (ROE):	12.85%	3.72%	4.38%	4.69%	12.05%	11.68%

• Profit Margin: Improved from 4.48% (2020) to 10.59% (2023), signaling better cost control and revenue synergies.
• Return on Assets (ROA): Increased from 1.53% (2020) to 4.00% (2023), reflecting improved efficiency in using assets to generate profits.
• Return on Equity (ROE): Jumped from 4.69% (2020) to 12.85% (2023), indicating significantly higher returns for shareholders.

Leverage:

(in millions, except share and per share amounts)	December 31,	December 31,	December 31,	December 31,	December 31,	December 31,
2023	2022	2021	2020	2019	2018
Total current liabilities	20928	24742	23499	21703	12506	10267
Total long-term liabilities	122039	116940	113962	113115	45626	37483
Total assets		207682	211338	206563	200162	86921	72468
Debt to Asset Ratio:		68.84%	67.04%	66.55%	67.35%	66.88%	65.89%

• Debt-to-Asset Ratio: Remained relatively stable, around 67%-69%, reflecting effective management of the company's debt levels despite the merger.

Efficiency:

(in millions, except share and per share amounts)	December 31,	December 31,	December 31,	December 31,	December 31,	December 31,
2023	2022	2021	2020	2019	2018
Total revenues		78558	79571	80118	68397	44998	43310
Accounts receivable,	4692	4445	4167	4254	1888	1769
Accounts receivable from affiliates	0	0	27	22	20	11
Receivable Turnover:		16.74	17.90	19.10	16.00	23.58	24.33
Cost of services,		11655	14666	13934	11878	6622	6307
Cost of equipment sales,	18533	21540	22671	16388	11899	12047
Inventory			1678	1884	2567	2527	964	1084
Inventory Turnover:		17.99	19.22	14.26	11.19	19.21	16.93

• Receivable Turnover: Improved slightly from 16.00 (2020) to 16.74 (2023), suggesting better credit collection and management.
• Inventory Turnover: Increased substantially from 11.19 (2020) to 17.99 (2023), indicating faster inventory turnover and better inventory management.

Horizontal and Vertical Analysis:

Horizontal Analysis:

This technique evaluates changes over time:

• Revenue Growth: Revenue rose from $68.4 billion (2020) to $78.6 billion (2023), fueled by a larger customer base and operational synergies.
• Net Income: Increased from $3.1 billion (2020) to $8.3 billion (2023), showing strong profitability improvements from merger efficiencies.
• Liabilities: Total liabilities have remained steady post-merger, ensuring manageable financial risks despite significant operational changes.

Vertical Analysis:

This method compares line items relative to a base figure:

• Revenue-to-Asset Ratio: Increased slightly from 0.34 (2020) to 0.38 (2023), showing improved utilization of the expanded asset base.
• Net Income-to-Revenue Ratio: Rose from 4.48% (2020) to 10.59% (2023), reflecting higher profitability due to better cost control and integration.

In conclusion, The Sprint-T-Mobile merger has had mixed effects on the company's financial ratios, reflecting both opportunities and challenges. On one side, profitability and efficiency improvements suggest successful operational integration and strategic synergies. Enhanced profit margins, alongside higher ROA and ROE, reveal strong value creation and effective resource utilization. However, liquidity ratios indicate potential short-term financial pressures due to rising current liabilities, which may pose risks if not effectively managed. The stable debt-to-asset ratio shows that the company has managed to maintain its leverage at a comfortable level, mitigating long-term financial risks. These insights provide a dual perspective for stakeholders: investors are encouraged by improved profitability metrics and operational efficiencies, whereas creditors need to cautiously monitor liquidity trends. Overall, while the merger has set a solid foundation for future growth and market positioning, attention to liquidity management will be crucial in navigating short-term financial obligations and ensuring sustained success.