DHX Media Inc is a Halifax based developer producer and distributor
DHX Media Inc. is a Halifax-based developer, producer, and distributor of films and television programs. Excerpts from the company’s financial statements for the year ended June 30, 2013, are in Exhibits 2-18A to C.
a. How much cash did DHX have available to use at the end of fiscal 2013?
b. What percentage of DHX’s assets were financed by shareholders in 2013? Did this represent an increase or decrease relative to 2012? What does this change mean?
c. How much did DHX’s accounts receivable increase from 2012 to 2013? How did this compare with the change in revenues during the same period? What does this tell you?
d. Determine direct production costs and expense of film and television programs produced as a percentage of DHX’s revenues in 2013. How did this compare with 2012? Do the same analysis for selling, general, and administrative expenses. Comment on what these trends tell you about the company.
e. Did the company pay dividends during fiscal 2013? How did you determine this?
f. How much property and equipment did DHX acquire in 2013? How did this compare with the proceeds it received from the sale of property and equipment during the year?
g. Calculate the following ratios for fiscal 2013 and 2012. (Note that, in order to be able to calculate these ratios for each of the years, you will have to use the total assets for each year and the total shareholders’ equity for each year in your ratios, rather than average total assets and average shareholders’ equity.)
i. Profit margin ratio
ii. Return on assets
iii. Return on equity
h. Comment on your results in part “g.”
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