Question

Retrieve the Annual Report for a firm and analyze financial ratios for two consecutive years. Analyze the ratios and describe the change of the financial condition over two years. Additionally, the student should examine the IFRS standards on U. S. financial accounting and compare and contrast its position with that of U.S. GAAP. Disney 2016 and 2017

Cost of Goods Sold Ratio 2016 58.62% 2017 59.99%

Gross Profit 2016 22.94 billion 2017 21.98 billion

Operating Ratio 2016 15.8% 2017 14.89%

Operating Income Ratio 2016 25.18% 2017 24.72%

Profit Margin 2016 16.96% 2017 16.35%

Working Capital 2016 $-1.08 2017 -$4.99

Current Ratio 2016 93.59% 2017 74.54%

Receivable turnover 2016 6.14% 2017 6.39%

Inventory turnover 2016 21.58% 2017 22.07%

Profit Margin 2016 16.96% 2017 16.35%

debt equity ratio 2016 1.033% 2017 1.20%

shareholder equity ratio 2016 47.08% 2017 43.14%

Return on equity 2016 21.7% 2017 21.73%

Return on assets 2016 10.42% 2017 9.56%

P/E ratio 2016 17.43 2017 18.43%

Answer 1

		2016	2017
	Cost of good sold	58.62%	59.99%
	Gross Profit	22.94	21.98
	Operating Ratio	15.80%	14.89%
	Operating Income ratio	25.18%	24.72%
	Profit Margin	16.96%	16.35%
	Working Capital	$ 1.08	$ 4.99
	Current Ratio	93.59%	74.54%
	Receivable Turnover	6.14%	6.39%
	Inventory Turnover	21.58%	22.07%
	Debt-Equity Ratio	1.03%	1.20%
	Shareholder Equity Ratio	47.08%	43.14%
	Return on Equity	21.70%	21.73%
	Return On Asset	10.42%	9.56%
	P/E Ratio	17.43%	18.43%
1	Gross Profit	22.94	21.98
	Gross Profit=	Sales - COGS	Sales - COGS
		=100% - 58.62%	=100% - 59.99%
		41.38%	40.01%
2	Sales	Gross Profit/Gross Profit Ratio	Gross Profit/Gross Profit Ratio
		=22.94/41.38%	=21.98/40.01%
	Sales	55.44	54.94
3	Cost of Goos Sold	58.62%	59.99%
		=sales*58.62%	=sales*59.99%
		32.50	32.96
4	Operating Ratio	Operating Expense/Sales	Operating Expense/Sales
	Operating Expense=	Sales*Operating Ratio	Sales*Operating Ratio
		=55.44*15.8%	=54.94*14.89%
		8.75952	8.180566
5	Operating Income Ratio	Operating Profit/Sales	Operating Profit/Sales
	Operating Profit	Sales*Operating Income ratio	Sales*Operating Income ratio
		=55.44*25.18%	=54.94*24.72%
		13.959792	13.581168
6	Profit Margin	16.96%	16.35%
		Profit/Sales	Profit/Sales
	Profit	=Sales*Profit Margin	=Sales*Profit Margin
		=55.44*16.96%	=54.94*16.35%
		9.402624	8.98269
7	Receivable Turnover	6.14%	6.39%
		Receivables/Sales	Receivables/Sales
	Receivable	Sales*Receivable TO	Sales*Receivable TO
		=55.44*6.14%	=54.94*6.39%
		3.404016	3.510666
8	Inventory Turnover	21.58%	22.07%
		Inventory/Sales	Inventory/Sales
	Inventory	Sales*Inventory TO	Sales*Inventory TO
		=55.44*21.56%	=54.94*22.07%
		11.952864	12.125258
9	Working Capital	-1.08	$-4.99
		CA-CL	CA-CL
	Current Assets	Inventory+Receivable	Inventory+Receivable
		15.35688	15.635924
	Current Liability	Current Assets-Working Capital	Current Assets-Working Capital
		16.43688	20.625924
10	Return On Asset	10.42%	9.56%
		Net Income/Total Assets	Net Income/Total Assets
	Total Asssets	Net Income/Return on Assets	Net Income/Return on Assets
		=9.402624/10.42%	=8.98269/9.56%
		90.23631478	93.96119247
11	Return on Equity	21.70%	21.73%
		Net Income/Total Equity	Net Income/Total Equity
	Total Equity	Net Income/Return on Equity	Net Income/Return on Equity
		=9.402624/21.70%	=8.98269/21.73%
		43.33006452	41.33773585
12	Debt-Equity Ratio	1.03%	1.20%
		Debt/Equity	Debt/Equity
	Debt	Equity*Debt-Equity Ratio	Equity*Debt-Equity Ratio
		=43.33*1.03%	=41.34*1.2%
		0.446299	0.49608
	Balance Sheet
		2016	2017
	Particulars	Amount $	Amount $
	Current Assets
	Account Receivable	3.40	3.51
	Inventory	11.95	12.13
	Total Current Assets	15.36	15.64
	Other Assets	74.88	78.33
	Total Assets	90.24	93.96
	Current Liabilities	16.44	20.63
	Debt	0.45	0.50
	Other Long Term Debt	20.62	22.52
	Equity	43.33	41.34
	Retained Earning	9.40	8.98
	Total Liabilities	90.23	93.96
	Note-
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