The company that I chose to review up was Pelton. They are the largest fitness platform in the world, As of June 30^th 2021 they were comprised of 5.9 Million members. They define members as an individual who has an account though one of their two digital subscription platforms. While as of June 30^th Pelton had 123 showrooms they are primarily known for their digital instructor led classes ranging from cycling and running to strength training, yoga and meditation and their indoor bike and treadmill products.

Pelton appears to report their statement of Cash Flows under the indirect method. This did not surprise me, as we found in the chapter regarding Cash Flows that most companies use the indirect method, as it is a much easier process to calculate. I also feel like most companies run cash flows this way as I would assume they have an accounting software system that will be able to pull these account balances much quicker than adding in all the cash receipts and subtracting out the cash payments.

Liquidity: (in millions, except share and per share amounts)

Current Ratio= Current Assets/Current Labilities

$2,818.1/$1,243.0= 2.27

Acid- Test Ratio = Cash + Short Term investments+ Current Receivables/ Current Labilities

$1,134.8(Cash and Cash Equivalents) + $472 (Marketable securities)+ $71.4 Accounts receivable/ $1243= 1.35

Solvency:

Debt to Equity=Total Labilities/Total Equity

2,731.5/ 1,754.1=1.56

Profitability: (in millions, except share and per share amounts)

Profit Margin=Net Income/Net Sales

(189)/4021.8= -4.70%

Return on Total Assets= Net income/Average total assets

(189)/(4485.6+2981.8/2)=

(189)/3733.7= -5.06%

So when I first started reading the annual report I was thinking that Peloton was a solid company however if I am reading this net loss correctly than my initial thought was incorrect. To me it seems that while the company is not profitable due to the negative Profit Margin and Return on total assets they seem to have the Cash and assets to pay debt. I am wondering if Covid is playing into this and plan on Reading more into their annual report to see if I can find something that I missed as the numbers on the reports have me a little confused.

For your response, focus on the following questions: Do you agree with your classmates' responses concerning the importance of understanding the business as a first step in financial statement analysis? Explain. Compare and contrast the ratios that you calculated for your chosen corporation with those of your peers. Are the ratios similar or dissimilar? Expand on your assessment, explaining the reasons why they may or may not be similar taking into account the industry and market each corporation operates under. Support your responses to classmates with additional research and/or examples of your understanding of ratio analysis, comparison, and interpretation.

Be sure to post at least one reference in support of your explanations and conclusions. At a minimum, your initial post should include a link to your chosen corporation's Annual Report.