Question
The comparative financial statements for Disney Corporation for the years ended December 31, 2023, 2022, and 2021 are provided below. Disney Corporation Comparative Income Statements
The comparative financial statements for Disney Corporation for the years ended December 31, 2023, 2022, and 2021 are provided below.
Disney Corporation Comparative Income Statements | 2023 | 2022 | 2021 |
Sales | $550,000,000 | $500,000,000 | $450,000,000 |
Cost of goods sold | $330,000,000 | $300,000,000 | $270,000,000 |
Gross profit | $220,000,000 | $200,000,000 | $180,000,000 |
Operating expenses | $110,000,000 | $100,000,000 | $90,000,000 |
Income from operations | $110,000,000 | $100,000,000 | $90,000,000 |
Interest expense | $11,000,000 | $10,000,000 | $9,000,000 |
Income before taxes | $99,000,000 | $90,000,000 | $81,000,000 |
Income tax expense | $29,700,000 | $27,000,000 | $24,300,000 |
Net income | $69,300,000 | $63,000,000 | $56,700,000 |
Disney Corporation Comparative Balance Sheets | 2023 | 2022 | 2021 |
Assets | |||
Current assets | $110,000,000 | $100,000,000 | $90,000,000 |
Long-term investments | $130,000,000 | $120,000,000 | $110,000,000 |
Property and equipment, net | $260,000,000 | $240,000,000 | $220,000,000 |
Total assets | $500,000,000 | $460,000,000 | $420,000,000 |
Liabilities and Equity | |||
Current liabilities | $90,000,000 | $80,000,000 | $70,000,000 |
Long-term debt | $200,000,000 | $190,000,000 | $180,000,000 |
Common stock | $100,000,000 | $100,000,000 | $100,000,000 |
Retained earnings | $110,000,000 | $90,000,000 | $70,000,000 |
Total liabilities and equity | $500,000,000 | $460,000,000 | $420,000,000 |
Requirements:
- Prepare common-size income statements for 2023, 2022, and 2021.
- Prepare common-size balance sheets for 2023, 2022, and 2021.
- Calculate Disney’s return on assets (ROA) and return on equity (ROE) for the three years.
- Discuss the trend in Disney’s operating expenses as a percentage of sales.
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