Once the ratio analysis is completed answer the following questions.

1. Does the firm have any problem areas that you would investigate further if you were a manager?

2. Are there any other specific pieces of information that you would request from your management team with regards to this firm? If so, why? 3. Would you invest money in this firm based on your analysis?

Here is my analysis….

Disney Profitability Ratios

Year 2012

Return on equity = Net income after tax ÷ Common stockholders’ equity

6,173,000 ÷ 39,759,000 = .16

Return on assets = Net income after tax ÷ total assets

6,173,000 ÷ 74,898,000 = .08

Gross profit margin = Sales – Cost of goods sold ÷ Sales

42,278,000 – 23,468,000 = 18,810,000

18,810,000 ÷ 42,278,000 = .44

Operating profit margin = Operating profits ÷ sales

Operating profit is total sales – total expenses

42,278,000- (33,415,000) = 8,863,000

8863 ÷ 42,278,000 = .21

Net profit margin = Net income after tax ÷ sales

6,173,000 ÷ 42,278,000 = .15

Year 2013

Return on equity = Net income after tax ÷ Common stockholders’ equity

6,636,000 ÷ 45,429,000 = .15

Return on assets = Net income after tax ÷ total assets

6,636,000 ÷ 81,241,000 = .08

Gross profit margin = Sales – Cost of goods sold ÷ Sales

45,041,000 – 25,034,000 = 20,007,000

20,007,000 ÷ 45,041,000 = .44

Operating profit margin = Operating profits ÷ sales

Operating profit is total sales – total expenses

45,041,000 – (35,591,000) = 9,450,000

9,450,000 ÷ 45,041,000 = .21

Net profit margin = Net income after tax ÷ sales

6,636,000 ÷ 45,041,000 = .15

Year 2014

Return on equity = Net income after tax ÷ Common stockholders’ equity

8,004,000 ÷ 44,958,000 = .18

Return on assets = Net income after tax ÷ total assets

8,004,000 ÷ 84,186,000 = .10

Gross profit margin = Sales – Cost of goods sold ÷ Sales

48,813,000 – 26,420,000 = 22,393,000

22,393,000 ÷ 48,813,000 = .46

Operating profit margin = Operating profits ÷ sales

Operating profit is total sales – total expenses

48,813,000 – (37,273,000) = 11,540,000

11,540,000 ÷ 48,813,000 = .24

Net profit margin = Net income after tax ÷ sales

8,004,000 ÷ 48,813,000 = .16

Disney Liquidity Ratios

Year 2012

Current ratio = current assets ÷ current liabilities

13,709,000 ÷ 12,813,000 = 1.07

Quick Ratio = Current assets – Inventory ÷ Current liabilities

13,709,000 – 1,537,000 = 12,172,000

12,172,000 ÷ 12,813,000 = .95

Year 2013

Current ratio = current assets ÷ current liabilities

14,109,000 ÷ 11,704,000 = 1.21

Quick Ratio = Current assets – Inventory ÷ Current liabilities

14,109,000 – 1,487,000 = 12,622,000

12,622,000÷ 11,704,000 = 1.08

Year 2014

Current ratio = current assets ÷ current liabilities

15,176,000 ÷ 13,292,000 = 1.14

Quick Ratio = Current assets – Inventory ÷ Current liabilities

15,176,000 – 1,574,000 = 13,602,000

13,602,000 ÷ 13,292,000 = 1.02

Disney Activity Ratios

Year 2012

Inventory Turnover: Cost of Goods sold= $23,347 (million) Inventory=$2,213 (million)

23347/.6

Inventory Turnover: Cost of Goods sold=$23,468 (million)/Inventory $1,537 (million) .3

Accounts Receivables Turnover: Sales= $ 42,278(million) Accounts Receivable = $6,540(million)

42278/.5

Total Asset Turnover: Sales=$42,278(million) Total Assets= $74,898 (million)

42,278/74,898=.6

Average Collection Period: Receivables Turnover= 6.5

365/6. days

Year 2013

Inventory Turnover: Cost of Goods sold= $23,347(million) Inventory= $2,121(million)

23347/.0

25,034/.8

Accounts Receivables Turnover: Turnover: Sales= $45,041(million) Accounts Receivable =$ 6,967(million)

45041/.5

Total Asset Turnover: Sales=$45,041(million) Total Assets=$81,241 (million)

45041/.6

Average Collection Period: Receivables .5

365/6. days

Year 2014

Inventory Turnover: Cost of Goods sold= $26,420 (million) Inventory=$2,635(million)

$1,574(million)

26420/2,.0

26420/1,.8

Accounts Receivables Turnover: Turnover: Sales= $48,813(million) Accounts Receivable =$9,043(million)

$7,822(million)

48813/.4

48813/.2

Total Asset Turnover: Sales= $48,813 (million) Total Assets= $84,186 (million)

48813/.6

Average Collection Period: Receivables .4

365/5. days

Disney Market Ratios

Year 2012

EPS: Net income Available to common stockholders= $5,682,000 number of shares outstanding .839 (million)

5682000/.1

PS: Market price of common .6 Earnings per .1

PE VS PS 52.6/3..0

Market to Book: Market Value per share= $49.15 Book Value per Share=$22.09

49.15/22..22

Year 2013

EPS: Net income Available to common stockholders= $6,136,000 number of shares outstanding .8 (million)

6136000/.4

PS: Market price of common .7 Earnings per .4

PE VS PS 64.7/3..0

Market to Book: Market Value per share= 74.35 Book Value per .24

74.35/25..95

Year 2014

EPS: Net income Available to common stockholders=$7,501,000 number of shares outstanding .7 (million)

7501000/.4

PS: Market price of common stock= 89.7 Earnings per .4

PE VS PS 89.7/4..4

Market to Book: Market Value per share=$92.89 Book Value per Share=$26.45

92.89/26..51