Business Analysis Assignment Solution - Finance Analysis

This document presents a comprehensive solution to a business analysis assignment focused on financial statement analysis and accounting principles. The assignment explores the financial performance of Walt Disney, examining its net income, cost of goods sold, and gross profit. It delves into corporate tax rates, including the impact of the 2017 tax law changes in the United States, and analyzes the statement of comprehensive income, including accumulated losses and other comprehensive income items. The solution also addresses bond investments, including the preparation of adjusting general journal entries for bond amortization using the straight-line method. Furthermore, it covers significant influence share investments, requiring the preparation of journal entries related to net income and cash dividends of an investee company. The solution incorporates relevant financial data and accounting concepts to provide a detailed analysis of the given scenarios.

Running Head: BUSINESS ANALYSIS 0
Business Analysis
(Student Name)

BUSINESS ANALYSIS 1
Table of Contents
Question 1........................................................................................................................................2
Question 2........................................................................................................................................2
Question 3........................................................................................................................................2
Question 4........................................................................................................................................2
Question 5........................................................................................................................................2
References........................................................................................................................................4

BUSINESS ANALYSIS 2
Question 1
In the year 2019, the net income of Walt Disney was 11,584 million which is quite less
than while comparing to the previous year which was 12,598 million. The cost of goods sold
from the company was 57719 million which was increased by approximately 13000 million
while comparing to the previous year. The company earned a gross profit of 11851 million in the
year 2019.
Question 2
A corporate tax is one of the direct taxes that is imposed by the jurisdiction on the income
or capital of the company or analogous legal entities (Dyreng, Hoopes & Wilde, 2016). The
corporate tax rate in United States was fallen down from 35% to 21% in a flat tax system from
the year 2017 to 2019. Therefore, the corporate tax rate for the company was 21% as per
assumption based on data. Therefore, due to the reason of the fiscal year-end, the company’s
fiscal 2018 statutory federal tax rate was 24.5% as well as in the year 2019, it was 21% and in
the year 2017, the corporate tax rate was 35%.
Question 3
The statement of Comprehensive Income provides a summary of the net assets of the
company over a period of time. Therefore, the accumulated loss of Walt Disney was 3097
million in the year 2018 that was increased by 6617 million until the year 2019. It showcases that
the profit margin of the company decreases in the year 2019 while comparing to the previous
year (Lin, Martinez, Wang & Yang, 2018).
Question 4
Other comprehensive income includes such kind of revenues, gains, expenses as well as
losses under both Generally Accepting Accounting Principles and International Financial
Reporting Standards which are excluded from net income in the income statement. Therefore,
the items that are covered in the other comprehensive income or loss are:
 Market Value that is an adjustment for hedges

BUSINESS ANALYSIS 3
 Pension and postretirement medical plan adjustments
 Market value adjustment for investments
 Foreign Currency translation and other
Question 5
The bottom line of the comprehensive income consolidated statement showcases the total
comprehensive income attribute Walt Disney that occurs from excluding external expenses and
including external income. Therefore, the comprehensive income attributes of the company as
9431 million in the year 2017 that was increased to 13029 million in the year 2018. However, in
the year 2019, it was decreased to 8240 million that showcase that the overall comprehensive
income of the company is highly affected to a certain extent.

BUSINESS ANALYSIS 4
References
Dyreng, S. D., Hoopes, J. L., & Wilde, J. H. (2016). Public pressure and corporate tax
behavior. Journal of Accounting Research, 54(1), 147-186.
Lin, S., Martinez, D., Wang, C., & Yang, Y. W. (2018). Is other comprehensive income reported
in the income statement more value relevant? The role of financial statement
presentation. Journal of Accounting, Auditing & Finance, 33(4), 624-646.