70.2K

Verified Solution

Link Copied!

You were recently hired as a financial analyst at Warner Bros., in the entertainment industry. You are asked by your Senior Financial manager to undertake financial analysis and assess the leverage and profitability of the company and facilitate its comparison with Prime Video $($Amazon$).$ Use your critical thinking skills and answer the following questions:Assess the long$-$term solvency of the two companies from the income statement and the abstract of the balance sheet given below. Which company is more solvent?From the income statement and the abstract of the balance sheet given below, which company is managing the capital that shareholders have invested in it in a better manner?As a financial analyst, which factors will you consider for forecasting profitability of a corporate?Identify the ratio that measures the operating efficiency of a business and the company that has higher profitability.If a company does not want to dilute its control, which type of financing should be emphasized and how is shareholders" equity determined?You may use tables, graphs, or pie charts to support your summary.Your individual response should be submitted through Brightspace $($one file per person$)$ to this submission folder.Add submission time and full date. Warner Bros. Income Statement FY $2022$ Revenue $69,570,000$ Cost of Revenue $42,018,000$ Gross Profit $27,552,000$ Operating Expense $15,701,000$ Operating Income $11,851,000$ Interest Expense $978,000$ Taxes $6,102,000$ Net Income $11,054,000$ From the Balance Sheet Common Stock $93,000,000$ Retained Earnings $889,000$ Prime Video $($Amazon$)$ Income Statement FY $2022$ Revenue $20,156,447$ Cost of Revenue $12,440,213$ Gross profit $7,716,234$ Operating Expense $5,111,980$ Operating Income $2,604,254$ Interest Expense $488,878$ Taxes $195,315$ Net Income $2,115,760$ From the Balance sheet Shareholders" Equity $5,000,000$ Retained Earnings $149,419$

Answer & Explanation Solved by verified expert

See Answer