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Financial statement analysis quizlet
Financial statement analysis quizlet
Methods of financial statement analysis: ratio analysis, vertical analysis, and horizontal analysis
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The Walt Disney Company is the largest entertainment company in the world in terms of revenue. It was founded on October 16, 1923 by Walt Disney and his brother, Roy O. Disney. They started the company, The Disney Brothers Cartoon Studio, where they became the leader in the American animation industry and later working in live action film production, television and their world famous theme parks. Through different acquisitions, they have diversified and now do business in theater, radio, publishing, online media, music and own several television channels (Disney History Institute). In reviewing the company’s balance sheet, the current assets and liabilities were reviewed and liquidity ratios were calculated. The capital structure and the fixed and intangible asset accounting of the company were also reviewed. Off-balance sheet items such as leases and contingent liabilities were reported and noted. All of these aspects of the balance sheet were reviewed in order to do a proper analysis of the company’s balance sheet. The Walt Disney Company’s liquidity ratios look like this: The current ratio declined from 2011 to 2012 but then improved from 2012 to 2013. The quick ratio declined from 2011 to 2012, but also improved from 2012 to 2013. The cash ratio improved from 2011 to 2012 and also from 2012 to 2013 (Walt Disney Co. (DIS) | Liquidity). The current assets and current liabilities for The Walt Disney Company are: The Current Ratio shows that as of September 28, 2013, the current assets were higher than any of the previous five years. The current liabilities were lower than they were the previous two years (Walt Disney Co. (DIS) | Liquidity). The Quick Ratio shows that the company’s cash and cash equivalents are the highest t... ... middle of paper ... ... Disney did have a write-off of an intellectual property asset in 2012. Disney does state that if a television show is canceled, it would require an immediate write-off of any unamortized production costs. A significant decline in the advertising market would also negatively impact their estimates, which could require a write-off. The financial statements also discuss write-downs, which could also occur if estimates are incorrect (The Walt Disney Company Financial Statements). In conclusion, Disney appears to be a very strong company financially. They do not have any major red flags. Their liquidity ratios and other information does not seem to be alarming in any way. They have been around for many years and are extremely successful, so any obstacle in their way will not be an issue. They will be able to work through it and bounce back from it without a problem.
Financial Leverage Analysis Regarding financial leverage, the debt percentage ratio increased from 84.95% to 89.92%, indicating an increase in the amount of The Home Depot’s assets that are financed with debt. The debt to equity ratio drastically increased, from 5.65 to 8.92, showing a drastically increased amount of financial leverage in the company. This may not always be good for a company, as it means there is a very large amount of debt. However, the quick ratio had virtually no change (decreased by .01), showing that an increase in debt and financial leverage did not affect cash and cash equivalents. In fact, cash and cash equivalents increased, as stated in the above paragraph citing vertical analysis.
Looking at the individual ratios seen in exhibit 1 and comparing it to the industry average shown in exhibit 2 gives a sense of where this company stands. Current ratio and quick ratio are really low and have been decreasing. For 1995, the current ratio is 1.15:1, which is less than the industry average of 1.60:1, however to give a better sense of where this stands in the industry, as seen in exhibit 3, it is actually less than the average of the bottom 25% of the industry. The quick ratio is 0.61 is less than the industry is 0.90. Both these ratios serve to point out the lack of cash in this company. The cash flow has been decreasing because, it takes longer to get the money from customers, but the company still needs to pay for its purchases. Also, the company couldn’t go over the $400,000 loan limit, so they were forced to stretch their cash.
Analyzing Wal-Mart's annual report provides a positive outlook on Wal-Mart's financial health. Given the specific ratios and its comparison to other companies in the same industry, Wal-Mart is leading and more than likely continue its dominance. Though Wal-Mart did not lead in all numbers, its leadership and strong presence of the market cements the ongoing success. The review of the current ratio, quick ratio, inventory turnover ratio, debt ratio, net profit margin ratio, ROI, ROE, and P/E ratio all indicate an upbeat future for the company. The current ratio, which is defined as current assets divided by current liabilities, is a measure of how much liabilities a company has compared to its assets. Wal-Mart in the year of 2007 had a current ratio of .90, and as of January 2008 it had a current ratio of .81. The quick ratio, which is defined as current assets minus inventory divided by current liabilities, is a measure of a company's ability pay short term obligations. Wal-Mart in the year of 2007 had a quick ratio of .25, and as of January 2008 it had a ratio of .21. Both the current ratio and quick ratio are a measure of liquidity. Wal-Mart is not as liquid as its competitors such as Costco or Family Dollar Stores Inc. I believe the reason why Wal-Mart is not too liquid is because they are heavily investing their profits for expansion and growth. Management claims in their financial report that holding their liquid reserves in other currencies have helped Wal-Mart hedge against inflationary pressures of the US dollar. The next ratio to look at is the inventory ratio which is defined as the cost of sales divided by average inventory. In the year of 2007, Wal-Mart’s inventory ratio was 7.68, and as of January 2008 it was 7.96. Wal-Mart has a lot of sales therefore it doesn’t have too much a problem of holding too much inventory. Its competitors have similar ratios though they don’t have as much sales as Wal-Mart. Wal-Mart’s ability to sell at lower prices for same quality, gives them the edge against its competition. As of the year 2007, Wal-Mart had a debt ratio of .58, and as of January 2008, it had a debt ratio of .59. The debt ratio is calculated by dividing the total debt by its total assets. Wal-Mart has a lot more assets than it does debt so Wal-Mart is not overleveraged.
The Walt Disney Company is a multi-billion dollar enterprise that controls and maintains vast interests in various multimedia companies in the United States and around the world. What started as a simple love for children’s entertainment of a sample cartoonist soon became a revolutionary icon in the world of entertainment and business.
Quick Ratio – Constant grow for the last three years. From 3.56 in 2001 to 3.76 in 2002 to 4.17 in 2003. The reason of grow is constant increase in Current Assets.
They released the “Alice Comedies”. Later that year they formed Disney Brothers Cartoon Studio. In 1926, they became Walt Disney Studio. On December 16, 1929 the Walt Disney Studios partnership was reorganized as a corporation with the name of Walt Disney Productions, Limited. On April 2, 1940 Walt Disney Productions had its first public offering and became a publicly traded company. Today, the company operates has four business units. The first is still the Walt Disney Studios. This unit contains all the film, music, and theatre offerings of the company. The second is the Walt Disney Parks and Resorts segment which includes the parks, resorts, and cruise line. The third is the Networks which is all the television properties. The last is the Consumer Products and Interactive Media unit. This unit handles all of the merchandise associated with Disney owned
Executive Summary: The entertainment industry holds the immense potential for growth and development. The industry is constantly evolving and Walt Disney emerge as a global leader and recognized as the world’s second largest media conglomerate in the terms of revenue after Comcast. The Walt Disney Company is a multinational entertainment conglomerate headquartered at California, United States. The company integrated its products into five target segments are as follows: (1) Media Networks (2) Parks and Resorts (3) Walt Disney Studios (4) Disney Consumer Products (5) Disney Interactive.
The Walt Disney Company has been one of the highest producing conglomerates in the media since the 1920’s. The business all started when Walt Disney created the first character Mickey Mouse along with other characters. Since then, it’s been a growing business worldwide becoming one of the top media conglomerate. Disney has created cartoons, movies, radio shows, tv shows, theme parks and broadway shows. The company has evolved over many years even after the death of Walt Disney, it still continued to be a world wide phenomenon in the media. After Walt Disney’s death, Michael Eisner took over the The Walt Disney Company by starting to partner with other companies such as Pixar Animation in the mid 1980’s. Shortly after partnering with Pixar,
What’s more, Disney also needs to recognize which businesses have long-term growth potential and which have not. Hence, Disney also has to divest in businesses which are unprofitable or have no long-term growth potential.
Disney was founded in October 16th 1923, by the brothers Walt and Roy Disney who were recognised as the Disney Brothers Cartoon Studio and have recognised themselves as a leader in the American industry before changing into live-action film production, television and travel. Today we see Walt Disney Company with an assortment of brands related to different forms of entertainment, within these brands there is the main character a mouse better known to the public as Mickey Mouse. Through the years Walt Disney struggled for success with a number of unpopular characters but his fluke changed course with the introduction of Mickey Mouse. A trademark on Mickey mouse was quickly done so to protect the brand. Mickey was described in his creations as a friendly carefree approach that caught the hearts of people of all ages.
I believe Disney has not diversified to far in the recent years. Due to its history of success and current beloved credibility there’s no reason for Disney not to take on new ventures and experiment. Society and technology are constantly changing and with Disney doing the same it gives them a competitive advantage and the ability to constantly differentiate themselves from any competition. As of now Disney’s ability to diversify themselves provides multiple revenue streams and national recognition. Disney diversity includes media networks, theme parks and resorts, Walt Disney studios, Disney store and products, and interactive games and
They say it is where dreams happen. The Walt Disney Company has been nothing, but a growing success. Has grown from something, so little to a growing successes. Disney is known worldwide and by all age groups. Everyone when young can have some type of connection. It could be movies, TV, or even playing with Mickey Mouse. But is it worth investing in and will you gain profit? How will it be in ten years…wouldn’t everyone like a glimpse into the future. Will it help create new jobs or only hurt us in the economy? I picked this investment not from my team but because its brand that many people know about. I regret not investing in the Disney stock because I believe that it could have helped us a lot. Disney in my eyes should be a top investment when it comes to the stock market.
The Walt Disney Company, commonly known as Disney, is an American entertainment and mass media company headquartered in Burbank, California. The company was founded in 1923 and has business in every country all over the world. The company is best known for the products of its film studio, Walt Disney Studios, which is today one of the largest and best-known studios in American cinema. In 2016, Disney was the leading company in licensed merchandise worldwide. Ranked as the 3rd most respectable company in the world behind LEGO, the company is not only a strong and well-recognized brand, but it is also a quite profitable one. Disney is currently worth more than $55 billion so far in 2017. Disney owns and operates many studios and companies such
The Walt Disney Company is one of the premier entertainment companies in this world. It is named after its founder Walt Disney and was founded in the early parts of the 20th century. The company owns several assets, including but not limited to; theme parks across the globe, television networks, movie studios, and consumer products (The Walt Disney Company, 2016). The mission statement of the Walt Disney Company is, “to be one of the world's leading producers and providers of entertainment and information. Using our portfolio of brands to differentiate our content, services and consumer products, we seek to develop the most creative, innovative and profitable entertainment experiences and related products in the world (The Walt Disney Company, 2016).”
The Walt Disney Company, or more commonly known as Disney, is an American corporation headquartered in the Walt Disney Studios, Burbank, California. Disney (DIS) is the largest operator of theme parks and resorts and largest media conglomerate, reported total revenue of $11.58 billion, a 4% raise from the previous year in its third-quarter results. Most of its revenue is generated from the media network segment and the park and resort segment. Disney's strategies mainly focus on generating the best creative content possible along with innovation and utilizing the latest technology. (Seekingalpha.com, 2014)