Question

1. Using Walt Disney Inc. Annual Report income statement, prepare a horizontal and vertical analysis on years 2017 and 2016. 2. Perform the following ratios, Current, Debt, Return on Equity on years 2017 and 2016

https://www.thewaltdisneycompany.com/wp-content/uploads/2017-Annual-Report.pdf

Return on common stockholders’ equity ratio.

Return on asset ratio.

Profit margin rate.

Earnings per share.

Debt to total asset ratio.

Current ratio

Average collection period.

Receivables turnover ratio.

Asset turnover ratio.

Answer 1

1 . Return on common stake holders equity ratio

for 2016 = Net income available for common stakeholders/ Average common stake holders

= $ 9391/(43,265+44,525)/2

= 0.21

for 2017 = $ 8980/ (43265+41315)/2

= 0.21

2. Return on asset ratio

for 2016 = Net income/Total Assets

= $ 9391/$92033

= 0.10

for 2017 = $8980/$41315

= 0.22

Profit margin rate

for 2016= Net income/ Net sales

= $ 9790/ $ 55632

= 0.18

for 2017 = $ 9366/ $ 55,137

= 0.17

Earnings per share

for 2016= Total earnings available to stake holders/ Outstanding shares

Basic = 5.67

for 2017 = 5.73

Debt to total asset ratio

for 2016 = Total outside liabilities/ Total assets

=$ 24,189/$92,033

= 0.26

for 2017 = $ 26,710/ $ 95,789

= 0.28

Current Ratio

for 2016 = Current assets/ Current liabilities

= $ 16,966/$ 16,842

= 1.01

for 2017 = 15889/$ 19,595

= 0.81

Receivables turnover ratio

for 2016 = Net value of credit sales/ Average accounts receivable

= 9790/9065 (assuming all sales are credit sales)

= 1.08

for 2017 = 9366/8633

= 1.08

Asset turnover ratio = Sales/assets

2016= 55632/92033 = 0.60

2017 = 55137/95789 = 0.58