Using All Financial Statements

Hard Test

Hard Test

There are no multiple choice questions. This section focuses on reading real companies’ financial statements.
1. Answer the following questions using the 4 financial statements below for Intel Company for the most current year, 2010
A. How much does the Company owe for operating costs?
Answer

Balance Sheet: “Owe”

Accounts Payable 2,290 for inventory and repeat expenses (to suppliers)

Accrued Comp. & Benefits 2,888 related to employees

Accrued Advertising 1,007 for advertising expenses

Other Accrued Liabilities 2,482 for other operating expenses

Total 8,667

B. How much is owed banks and financing institutions that is payable within the next year?

Answer

Balance Sheet: “Owe”
Short-term Debt 38

C. What is the amount of cash dividends declared to owners during the current year?

Answer

Statement of Stockholders’ Equity, to owners, reduces retained earnings

Cash Dividends Declared 3,503

Dividends declared is reported on the statement of stockholder’s equity
Cash paid for dividends is reported on the cash flow statement.

D. How much cash did the company spend to acquire its own stock during the year?

Answer

Cash Flow Statement: “How much cash..” Financing section
Repurchase of common stock 1,736

E. How much do customers owe the company, that is expected to be collected, to date?

Answer

Balance Sheet: “To Date”
Accounts receivable, net… 2,867

F. How much cash does the company have in the bank or invested for less than 90 days with no interest rate risk?
Answer

Balance sheet: “Have”

Cash and cash equivalents 5,498

Do not include short-term investments;
Short-term investments have risk.

G. How much was incurred to run the day to day operations of the business during the current year?

Answer

Income Statement: “Incurred”; expense

Total Operating Expenses 12,903

H. How much has been contributed by stockholders to date?

Answer

Balance Sheet: “To Date”

Common Stock
and Capital in Excess of Par: 16,178

I. How much total cash was paid to stockholders for dividends during the current year?

Answer

Cash Flow Statement: “How much cash..”
Financing section

Payment of Dividends to Stockholder 3,503

J. How much does the company have in assets that are held for sale to customers?

Answer

Balance Sheet: “Have”

Inventories 3,757

K. What is the company’s profit or loss less dividends paid cumulative to date?

Answer

Balance Sheet: “To Date”

Retained Earnings 32,919

L. How much must be paid to the federal government for earnings during the current year?

Answer

Income Statement: Earnings; current year

Provision for taxes 4,581

M. What was the total price of goods provided to customers during the current year?

Answer

Income statement: Sold, Current Year; price is what customers pay

Net Revenue 43,623

N. What is the cost of the products that were sold to customers during the current year?

Answer

Income statement:
Cost during the current year is an expense

Cost of sales 15,132

O. How much has been paid for services not yet provided to the company, to date?

Answer

Balance Sheet: To Date; future benefit is an asset

Not specified: no line item for prepaid expenses
(included in other current assets and the amount cannot be determined)

P. How much cash was paid to repay long-term debt during the current year?

Answer

Cash Flow statement: “How much cash…”
Financing section

Repayment of debt 157

Q. How much cash was used to buy and sell total long term assets, net, during the current year?

Answer

Cash Flow statement: “How much cash”
Investing section

Net cash used for investing activities 10,539

R. How much did the company earn for each share of common stock outstanding during the current year?

Answer

Income Statement: “Earn”

Basic earnings per share $2.06
Diluted earnings per share $2.01

INTEL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME

Open to View Financial Statement







Three Years Ended
December 25, 2010

(In Millions, Except
Per Share Amounts)

2010

2009

2008

Net revenue

$

43,623

$

35,127

$

37,586

Cost of sales

15,132

15,566

16,742

Gross margin

28,491

19,561

20,844

Research and development

6,576

5,653

5,722

Marketing, general and administrative

6,309

7,931

5,452

Restructuring and asset impairment charges

231

710

Amortization of acquisition-related intangibles

18

35

6

Operating expenses

12,903

13,850

11,890

Operating income

15,588

5,711

8,954

Gains (losses) on equity method investments, net

117

(147

)

(1,380

)

Gains (losses) on other equity investments, net

231

(23

)

(376

)

In Interest and other, net

109

163

488

In Income before taxes

16,045

5,704

7,686

Provision for taxes

4,581

1,335

2,394

Net income

$

11,464

$

4,369

$

5,292

Basic earnings per common share

$

2.06

$

0.79

$

0.93

Diluted earnings per common share

$

2.01

$

0.77

$

0.92

See accompanying notes.

INTEL CORPORATION
CONSOLIDATED BALANCE SHEETS

Open to View Financial Statement





December 25, 2010 and December 26, 2009

(In Millions, Except Par Value)

2010

2009

Assets

Current assets:

Cash and cash equivalents

5,498

$

3,987

Short-term investments

11,294

5,285

Trading assets

5,093

4,648

Accounts receivable, net of allowance for doubtful accounts of $28 ($19 in 2009)

2,867

2,273

Inventories

3,757

2,935

Deferred tax assets

1,488

1,216

Other current assets

1,614

813

Total current assets

31,611

21,157

Property, plant and equipment, net

17,899

17,225

Marketable equity securities

1,008

773

Other long-term investments

3,026

4,179

Goodwill

4,531

4,421

Other long-term assets

5,111

5,340

Total assets

$

63,186

$

53,095

Liabilities and stockholders’ equity

Current liabilities:

Short-term debt

$

38

$

172

Accounts payable

2,290

1,883

Accrued compensation and benefits

2,888

2,448

Accrued
advertising

1,007

773

Deferred income on shipments to distributors

622

593

Other accrued liabilities

2,482

1,722

Total current liabilities

9,327

7,591

Long-term income taxes payable

190

193

Long-term debt

2,077

2,049

Long-term deferred tax liabilities

926

555

Other long-term liabilities

1,236

1,003

Commitments and contingencies (Notes 23 and 29)

Stockholders’ equity:

Deferred stock, $0.001 par value, 50 shares authorized; none issued

Common stock, $0.001 par value, 10,000 shares authorized; 5,581 issued and 5,511
outstanding (5,523 issued and outstanding in 2009) and capital in excess of par value

16,178

14,993

Accumulated other comprehensive income (loss)

333

393

Retained earnings

32,919

26,318

Total stockholders’ equity

49,430

41,704

Total liabilities and stockholders’ equity

$

63,186

$

53,095

See accompanying notes.

INTEL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS

Open to View Financial Statement

Three Years Ended December 25, 2010

(In Millions)

2010

2009

2008

Cash and cash equivalents, beginning of year

$

3,987

$

3,350

$

7,307

Cash flows provided by (used for) operating activities:

Net income

11,464

4,369

5,292

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation

4,398

4,744

4,360

Share-based compensation

917

889

851

Restructuring, asset impairment, and net loss on retirement of assets

67

368

795

Excess tax benefit from share-based payment arrangements

(65

)

(9

)

(30

)

Amortization of intangibles

240

308

256

( (Gains) losses on equity method investments, net

(117

)

147

1,380

(Gains) losses on other equity investments, net

(231

)

23

376

(Gains) losses on divestitures

(59

)

Deferred taxes

(46

)

271

(790

)

Changes in assets and liabilities:

Trading assets

299

193

Accounts receivable

(584

)

(535

)

260

Inventories

(806

)

796

(395

)

Accounts payable

407

(506

)

29

Accrued compensation and benefits

161

247

(569

)

Income taxes payable and receivable

53

110

(834

)

Other assets and liabilities

834

(351

)

(189

)

Total adjustments

5,228

6,801

5,634

Net cash provided by operating activities

16,692

11,170

10,926

Cash flows provided by (used for) investing activities:

Additions to property, plant and equipment

(5,207

)

(4,515

)

(5,197

)

Acquisitions, net of cash acquired

(218

)

(853

)

(16

)

Purchases of available-for-sale investments

(17,675

)

(8,655

)

(6,479

)

Maturities and sales of available-for-sale investments

13,133

7,756

7,993

Purchases of trading assets

(8,944

)

(4,186

)

(2,676

)

Maturities and sales of trading assets

8,846

2,543

1,766

rigination of loans receivable

(498

)

(343

)

Investments in non-marketable equity investments

(393

)

(250

)

(1,691

)

Return of equity method investments

199

449

316

Proceeds from divestitures

85

Other investing

218

89

34

Net cash used for investing activities

(10,539

)

(7,965

)

(5,865

)

Cash flows provided by (used for) financing activities:

Increase ort-term debt, net

23

(87

)

(40

)

Proceeds from government grants

79

182

Excess tax benefit from share-based payment arrangements

65

9

30

Is Issuance of long-term debt

1,980

Repayment of debt

(157

)

Proceeds from sales of shares through employee equity incentive plans

587

400

1,105

Repurchase of common stock

(1,736

)

(1,762

)

(7,195

)

Payment of dividends to stockholders

(3,503

)

(3,108

)

(3,100

)

Net cash used for financing activities

(4,642

)

(2,568

)

(9,018

)

Net increase (decrease) in cash and cash equivalents

1,511

637

(3,957

)

Cash and cash equivalents, end of year

$

5,498

$

3,987

$

3,350

INTEL CORPORATION
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

Open to View Financial Statement

Common Stock

and Capital

Accumulated

in Excess of Par Value

Other

Years Ended December 25, 2010

Number of

Comprehensive

Retained

(In Millions, Except Per Share Amounts)

Shares

Amount

Income (Loss)

Earnings

Total

Balance as of December 26, 2009

5,523

14,993

393

26,318

41,704

Components of comprehensive income, net of tax:

Net income

11,464

11,464

Otther comprehensive income (loss)

(60

)

(60

)

Total comprehensive income

11,404

Proceeds from sales of shares through employee equity incentive plans, net excess tax benefit,
and other

68

644

644

Share-based compensation

917

917

Repurchase of common stock

(80

)

(376

)

(1,360

)

(1,736

)

Cash dividends declared ($0.63 per common share)

(3,503

)

(3,503

)

Balance as of December 25, 2010

5,511

$

16,178

$

333

$

32,919

$

49,430

2. Answer the following questions using the 4 financial statements below for Walt Disney Company for the most current year, 2010

A. How much cash was paid for dividends during the current year?

Answer

Cash Flow Statement:
“How much cash…” Financing section

Dividends 653

B. How much has the company collected from customers prior to providing the service, to date?

Answer

Balance Sheet: “To Date” (owe the customer)
Unearned royalties and other advances 2,541

C. How much has been paid to acquire other companies, over and above the net cost of the assets purchased, to date?

Answer

Balance Sheet: To Date
Goodwill 24,100

D. How much cash has been prepaid (or invested in) for film and television costs to date?

Answer

Balance Sheet: “To Date”

Current: Television Costs 678
(prepaid)

Noncurrent: Film and Television Costs 4,773
(invested long-term to generate revenues)

Total 5,451

E. How much cash did the company spend to acquire its own stock during the year?

Answer

Cash Flow Statement: “How much cash..”
Financing section

Repurchases of common stock 2,669

F. How much was incurred to run the normal day to day operations of the business during the current year?

Answer

Income Statement: “Incurred”
Costs and Expenses 31,337

Restructuring and impairment are not expected costs of operating the day to day business.

G. How much is owed for debt that is payable within the next year?

Answer

Balance Sheet: “Owe”
Current portion of borrowings 2,350

H. How much has been contributed by stockholders to date?

Answer

Balance Sheet: “To Date”
Common Stock 28,736

I. How much cash does the company have in the bank or invested for less than 90 days with no interest rate risk, to date?
Answer

Balance sheet: “Have”
Cash and cash equivalents 2,722

J. How much does the company have in assets that are held for sale to customers, to date?

Answer

Balance Sheet: “Have”
Inventories 1,442

K. How much must be paid to the federal government for earnings during the current year?

Answer

Income Statement: Earnings; current year
Income Taxes 2,314

L. What was the total price of goods provided to customers during the current year?

Answer

Income Statement: current year; price to customers is revenue
Revenues 38,063

M. How much cash was paid to repay long term debt during the current year?

Answer

Cash Flow Statement: “How much cash..”
Financing section

Reduction of borrowings 1,371

N. How much do customers owe the company that is expected to be collected, to date?

Answer

Balance Sheet: “To Date”

Receivables 5,784

O. How much cash was used to acquire other companies in the current year?

Answer

Cash Flow statement: “How much cash…” Investing section

Acquisitions 2,493

P. How much does the Company owe for inventory and operating expenses, to date?

Answer

Balance Sheet: “Owe”

Accounts payable and other accrued liabilities 6,109

Q. How much did the company earn in total for the current year?

Answer

Income Statement: “Earn”; current year
Net Income, attributable to Walt Disney Company 3,963

R. What is the company’s profit or loss less dividends paid cumulative to date?

Open to View Financial Statement

Balance Sheet: “To Date”
Retained Earnings 34,327

S. How much does the company have in physical assets, net of the cost to use the assets, used long-term to produce revenues, to date?
Answer
Balance Sheet:  “Have” 

Parks, resorts and other property                    32,875
 - Accumulated Depreciation                           (18,373)
      Net depreciable assets                              14,502
Projects in Progress                                         2,180
Land                                                                 1,124
            Total, net                                              17,806 

Note:  Some of the film & television costs could be physical assets

T. How much does the company own of its own stock, to date (in dollars)?

Answer

Balance Sheet: “To Date”
Treasury Stock 23,663

U. What is the cost of the products that were sold to customers during the current year?

Answer

Income Statement: Cost to the company is an expense; current year
No line item, not specifically stated. Disney views themselves as a service company.

This is included in operating expenses; costs and expenses

V. How much cash was used to purchase parks, resorts, and other property during the current year?

Answer

Cash Flow Statement:
“How much cash…”
Investing section

Investments in parks, resorts,
and other property 2,110

Walt Disney Company

CONSOLIDATED STATEMENTS OF INCOME

(in millions, except per share data)
Open to View Financial Statement

2010

2009

2008

Revenues

$

38,063

$

36,149

$

37,843

Costs and expenses

(31,337

)

(30,452

)

(30,400

)

Restructuring and impairment charges

(270

)

(492

)

(39

)

Other income (expense)

140

342

(59

)

Net interest expense

(409

)

(466

)

(524

)

Equity in the income of investees

440

577

581

Income before income taxes

6,627

5,658

7,402

Income taxes

(2,314

)

(2,049

)

(2,673

)

Net Income

4,313

3,609

4,729

Less: Net Income attributable to noncontrolling interests

(350

)

(302

)

(302

)

Net Income attributable to The Walt Disney Company (Disney)

$

3,963

$

3,307

$

4,427

Earnings per share attributable to Disney:

Diluted

$

2.03

$

1.76

$

2.28

Basic

$

2.07

$

1.78

$

2.34

Weighted average number of common and common equivalent shares outstanding:

Diluted

1,948

1,875

1,948

Basic

1,915

1,856

1,890

Walt Disney Company

CONSOLIDATED BALANCE SHEETS

(in millions, except per share data)
Open to View Financial Statement

October 2,

2010

October 3,

2009

ASSETS

Current assets

Cash and cash equivalents

$

2,722

$

3,417

Receivables

5,784

4,854

Inventories

1,442

1,271

Television costs

678

631

Deferred income taxes

1,018

1,140

Other current assets

581

576

Total current assets

12,225

11,889

Film and television costs

4,773

5,125

Investments

2,513

2,554

Parks, resorts and other property, at cost Attractions, buildings and equipment

32,875

32,475

Accumulated depreciation

(18,373

)

(17,395

)

14,502

15,080

Projects in progress

2,180

1,350

Land

1,124

1,167

17,806

17,597

Intangible assets, net

5,081

2,247

Goodwill

24,100

21,683

Other assets

2,708

2,022

$

69,206

$

63,117

LIABILITIES AND EQUITY

Current liabilities

Accounts payable and other accrued liabilities

$

6,109

$

5,616

Current portion of borrowings

2,350

1,206

Unearned royalties and other advances

2,541

2,112

Total current liabilities

11,000

8,934

Borrowings

10,130

11,495

Deferred income taxes

2,630

1,819

Other long-term liabilities

6,104

5,444

Commitments and contingencies (Note 15)

Equity

Preferred stock, $.01 par value
Authorized — 100 million shares, Issued — none

Common stock, $.01 par value
Authorized — 4.6 billion shares at October 2, 2010 and 3.6 billion
shares at October 3, 2009 Issued — 2.7 billion shares at October 2, 2010 and 2.6 billion shares at October 3, 2009

28,736

27,038

Retained earnings

34,327

31,033

Accumulated other comprehensive loss

(1,881

)

(1,644

)

61,182

56,427

Treasury stock, at cost, 803.1 million shares at October 2, 2010 and 781.7 million shares at October 3, 2009

(23,663

)

(22,693

)

Total Disney Shareholder’s equity

37,519

33,734

Noncontrolling interests

1,823

1,691

Total Equity

39,342

35,425

Total liabilities and equity

$

69,206

$

63,117

Walt Disney Company

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions)
Open to View Financial Statement

2010

2009

2008

OPERATING ACTIVITIES

Net income

$

4,313

$

3,609

$

4,729

Depreciation and amortization

1,713

1,631

1,582

Gains on dispositions

(118

)

(342

)

(14

)

Deferred income taxes

133

323

(128

)

Equity in the income of investees

(440

)

(577

)

(581

)

Cash distributions received from equity investees

473

505

476

Net change in film and television costs

238

(43

)

(301

)

Equity-based compensation

522

457

402

Impairment charges

132

279

39

Other

(122

)

(67

)

(36

)

Changes in operating assets and liabilities

Receivables

(686

)

468

(594

)

Inventories

(127

)

(117

)

(329

)

Other assets

42

(565

)

(64

)

Accounts payable and other accrued liabilities

649

(250

)

570

Income taxes

(144

)

8

(50

)

Cash provided by operations

6,578

5,319

5,701

INVESTING ACTIVITIES

Investments in parks, resorts and other property

(2,110

)

(1,753

)

(1,578

)

Sales of investments

46

70

Proceeds from dispositions

170

185

14

Acquisitions

(2,493

)

(176

)

(660

)

Other

(90

)

(57

)

(8

)

Cash used in investing activities

(4,523

)

(1,755

)

(2,162

)

FINANCING ACTIVITIES

Commercial paper borrowings, net

1,190

(1,985

)

(701

)

Borrowings

1,750

1,706

Reduction of borrowings

(1,371

)

(1,617

)

(477

)

Dividends

(653

)

(648

)

(664

)

Repurchases of common stock

(2,669

)

(138

)

(4,453

)

Exercise of stock options and other

753

(510

)

381

Cash used in financing activities

(2,750

)

(3,148

)

(4,208

)