Question

Q1. Review the following accounts, subtotals, and totals; (1) describe your observations; and then (2) identify what your observations indicate. A response is given for PPE, net to help with understanding.
a. Property, plant, and equipment, net. increased from $10,116 million in Year 2 to $21,312 million in Year 5, an increase of 111%, indicating purchases of additional cruise ships for expansion. The greatest increase was in Year 3, when PPE increased by more than 50%.
b. Goodwill and other intangibles. ________________________________________________
____________________________________________________________________________________________________________________________________________________________
c. Long-term debt. _____________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
d. Contributed capital totals _______ million at the end of Year 5. _______________________
______________________________________________________________________________
______________________________________________________________________________
e. Retained earnings... ___________________________________________________________
______________________________________________________________________________
Q2. Compute the ratios requested in the chart below. For ratio formulas and explanation refer to Appendix B—Ratios.
* Industry: Resorts and Casinos—Industry and S&P 500 ratio averages from money.msn.com
For each ratio, (a) compare the two years of ratios and circle the ratio indicating lower financial risk, (b) cross out any ratio indicating greater financial risk than the industry norm, and (c) comment on the results.
Q3. Overall, the balance sheet and related ratios indicate a (___________ / steady / weakening) financial position. Why? List observations that support your conclusion and explain why.
Q4. Revenues were ___________ million for the earliest year reported and ___________million for the most recent year reported. Since the earliest year reported, this account has changed by ___________million, which is a(n) ___________(___________/ decrease). During the same time period, COGS (___________/ decreased) by ___________, operating expenses (other than COGS) (___________/ decreased) by ___________and net income (___________/ decreased) by ___________.
Q5. Compute the ratios requested in the chart below. For ratio formulas and explanation refer to Appendix B—Ratios.
* Industry: Resorts and Casinos—Industry and S&P 500 ratio averages from money.msn.com
For each ratio, (a) circle the stronger company ratio, (b) cross out any company ratio that is weaker than the industry norm, and (c) comment on the results.
Q6. The income statement and related ratios indicate (___________ / steady / weakening) earnings potential. Why? List observations that support your conclusion and explain why.
Q7. The primary source of cash was (___________/ investing / financing), which is a(n) (___________/ unfavorable) sign.
For property, plant, and equipment a net cash (inflow / ___________) was reported in the (operating / ___________/ financing) activity section so PPE was (___________/ sold), which is a(n) (___________/ unfavorable) sign indicating.
A net cash inflow for debt occurred during Year (5 / ___________/ ___________/ ___________), indicating more debt was (___________/ repaid). These amounts appear to have primarily financed (operations / ___________ / the repurchase of common stock).
A net cash inflow for capital stock occurred during Year (5 / ___________/ ___________/ ___________), indicating more capital stock was (___________/ repurchased). This is a(n) (___________/ unfavorable) sign indicating.
Q8. Net cash from operating activities (___________/ decreased) by ___________ million or ___________. During the same time period, dividends paid (___________/ decreased) by ___________
Q9. Compute the ratios requested in the chart below. For ratio formulas and explanation refer to Appendix B—Ratios.
For each ratio, (a) circle the company ratio with the least amount of risk and (b) comment on the results.
Q10. Complete the common-size Statement of Cash Flows for Year 5. Only select accounts are reported below.
* Only select amounts are listed above and will not necessarily sum to the total.
In Year 3, the primary use of cash was (___________ / repaying debt / paying dividends) using ___________of NCOA, whereas in Year 5, the primary use of cash was (___________ / repaying debt / paying dividends) using ___________of NCOA.
Q11. The statement of cash flows indicates a (_________ / steady / weakening) cash position. Why? Comment on your observations.
Q12. Complete the statement of retained earnings below.
Net income is initially reported on the (balance sheet / _______________ / statement of cash flows) and dividends paid are initially reported on the (balance sheet / income statement / _______________).
Q13. Based on the financial statements presented for Carnival Corporation, would you invest in this company? (_____ / _____) Why? Support your response by listing at least five significant observations.


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  • CreatedSeptember 17, 2015
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