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Financial Statement Attached. Also link to article http://www.wsj.com/articles/pension-funds-pile-on-the-risk-just-to-get-a-reasonable-return-1464713013 Assignment #2 Solution should be uploaded in a Word file. Any calculations must be clearly shown. For
Financial Statement Attached. Also link to article http://www.wsj.com/articles/pension-funds-pile-on-the-risk-just-to-get-a-reasonable-return-1464713013
Assignment #2
Solution should be uploaded in a Word file. Any calculations must be clearly shown.
For questions #1 - #4, refer to the Walt Disney financial statements for fiscal year 2015 as used in class.
- (16) Compute operating return on sales for all five segments, and for Disney as a whole (assume that Disney's operating income equals the sum of the segments) for 2015. From a promotional perspective, what units would provide the best return on additional sales dollars?
- (16) Compute debt/equity and debt/ tangible net worth for 2015 and 2014. Is the change from 2014 to 2015 favorable or unfavorable? What do these ratios tell us about the riskiness of Disney as an investment (independent of other factors)?
- (18) Compute working capital, current ratio, and quick ratio (use formula from lecture) for both years. Are the changes from 2014 to 2015 generally favorable or unfavorable? Identify the chief cause of the changes.
- (6) On the balance sheet, the line for commitments and contingencies is blank. Why?
- (12) Summarize in your own words the letter from Dennis Beresford (Case 1-1) in the textbook. Why are the issues discussed in the letter of importance to financial statement users? Limit your answer to about 150 words.
- (12) ABC Corporation's balance sheet shows assets of $10,000,000, liabilities of $5,500,000, and equity of $4,500,000. ABC enters into a capital lease for certain equipment. On the date of signing, the present value of the lease payments is $700,000. Calculate the initial effect of this lease on ABC's debt ratio.
- (6) Distinguish between stock options and restricted stock in terms of their key characteristics. Limit your answer to 100 words or less.
- (14) Discuss the importance of rate of return on pension plan assets, and why this has become an increasingly important issue. Refer to the article "Pensions Pile on Risky Investments " in the June 1, 2016 WSJ in your answer. Limit your answer to 150 words or less.
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