Explanation of Financial Statements and Cash Flow Management

December 9, 2022

Explanation of Financial Statements and Cash Flow Management

Order Number	636738393092
Type of Project	ESSAY
Writer Level	PHD VERIFIED
Format	APA
Academic Sources	10
Page Count	3-12 PAGES

Instructions/Descriptions

Explanation of Financial Statements and Cash Flow Management

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Business Selection

The business I have chosen for this project is Disney. I chose Disney because it is the most diversified corporation of the options with interests in parks experiences, media networks, studio entertainment, consumer products, and vacation and travel. Disney company was founded by brothers Roy Disney and Walt Disney in 1923 under the name Walt Disney Productions (Carillo et al., 2015).

The company’s diverse offerings make the company an interesting case study since each part can help reinforce another part of business when things go astray. A good instance was during the Covid-19 epidemic when Disney theme park faced challenges due to low turnout; Hulu paired with ESPN+ and Disney+ to keep the company’s outlook stable when one business was experiencing a difficult period. Disney’s diversification necessitates shareholder value and aptitude.

Financial Statements

Balance sheet

Income Statement

Cash flow statement

Financial Health of Disney

To determine the financial health of Disney, this paper will use the Current Ratio. This is a liquidity ratio that helps determine the company’s ability to pay short-term obligations. A current ratio that is below 1.00 signifies bad or poor financial health.

Current Ratio = Current assets/current liabilities

Current assets = 202,221,000

Current liabilities = 111,099,000

Current ratio = 202,221,000/111,099,000 = 1.82

Based on the above calculation, it is evident that Disney has sound or good financial health since the ratio is more than 1.00.

Financial Statement Role

A financial statement is a crucial item for any business because it provides a visual representation of the company to investors and other interested parties. Financial statements include the balance sheet, income statement, statement of shareholders’ equity, and cash flow statement. Financial statements allow the top management to see the financial implications of the decisions they made and how to make changes that will make the business more profitable (Abukari, Jog & McConomy, 2000).

A company’s financial statement is also significant as it contains important information that investors can use to make decisions. Financial statements are also used to dictate a company’s financial health, an important consideration to investors.

Cash flow Management

Cash flow management is crucial as it allows organizations to regulate their spending habits in that they do not spend more than they are earning (Morar, 2015). Cash flow is an important area that management should monitor constantly. Cash flow management is an area that I can relate to, having worked as an executive assistant in a local winery.

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At one time, our chief financial officer noted that the company was facing a major cash flow problem; this was because of excessive-high debt repayments. This was not the first time the company was experiencing this problem, given that the CEO has a high affinity for Merchant Cash Advances. Luckily, the shareholders were able to raise enough money to finance the daily operations of the business. The CEO was later let go from the position.

References

Abukari, K., Jog, V. M., & McConomy, B. J. (2000). The role and the relative importance of financial statements in equity valuation. Available at SSRN 254972.

Carillo, C., Crumley, J., Thieringer, K., & Harrison, J. S. (2012). The Walt Disney Company: A Corporate Strategy Analysis.

Morar, A. (2015). THE IMPORTANCE OF CASH FLOW IN UNDERLINING COMPANIES FINANCIAL POSITION. Annals Constantin Brancusi’University of Targu-Jiu. Economy Series, (6).

Explanation of Financial Statements and Cash Flow Management

RUBRIC

Excellent Quality

95-100%

Introduction

45-41 points

The context and relevance of the issue, as well as a clear description of the study aim, are presented. The history of searches is discussed.

Literature Support

91-84 points

The context and relevance of the issue, as well as a clear description of the study aim, are presented. The history of searches is discussed.

Methodology

58-53 points

With titles for each slide as well as bulleted sections to group relevant information as required, the content is well-organized. Excellent use of typeface, color, images, effects, and so on to improve readability and presenting content. The minimum length criterion of 10 slides/pages is reached.

Average Score

50-85%

40-38 points

More depth/information is required for the context and importance, otherwise the study detail will be unclear. There is no search history information supplied.

83-76 points

There is a review of important theoretical literature, however there is limited integration of research into problem-related ideas. The review is just partly focused and arranged. There is research that both supports and opposes. A summary of the material given is provided. The conclusion may or may not include a biblical integration.

52-49 points

The content is somewhat ordered, but there is no discernible organization. The use of typeface, color, graphics, effects, and so on may sometimes distract from the presenting substance. It is possible that the length criteria will not be reached.

Poor Quality

0-45%

37-1 points

The context and/or importance are lacking. There is no search history information supplied.

75-1 points

There has been an examination of relevant theoretical literature, but still no research concerning problem-related concepts has been synthesized. The review is just somewhat focused and organized. The provided overview of content does not include any supporting or opposing research. The conclusion has no scriptural references.

48-1 points

There is no logical or apparent organizational structure. There is no discernible logical sequence. The use of typeface, color, graphics, effects, and so on often detracts from the presenting substance. It is possible that the length criteria will not be reached.