A business cannot operate successfully without financial statements, they show businesses how they are making or losing money, and they can help investors decide to invest in a company. Corporations financial statements gives information about its financial condition of the corporation. The statements consist of many things, such as the amount of money coming in or going out of a corporation. The statements also help when it comes to making decisions such as closing, opening or investing in a business (Bethel University, 2017). Walt Disney is a multimillion dollar corporation, and they use all four of the financial statements. The use of the statements I believe have made them the corporation they are today.
To better understand Walt Disney, you must first know how it came to be. Becoming familiar with the founders and the reasons the founders wanted the company. The type of family life and
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The current ratio for Walt Disney which is 0.81 indicates the company has some problems meeting their short term financial responsibilities. This ratio is used to determine if the company can pay back not only the short term, but the long-term debt responsibilities as well. Walt Disney current ratio is relative to their total current assets. This ratio includes all current assets and current liabilities.
Cash Ratio
The Walt Disney cash ratio for the year 2017 was 0.21, this is all that was available at that time to pay back there short- term debt. This ratio determines the company cash and cash equivalent to their current liabilities. This ratio determines the company’s ability to cover their liabilities. When creditors are reviewing this information, they are looking to see will the company be able to repay their debt with just using the cash and cash equivalent that’s on hand. By Walt Disney cash ratio being less than 1, there are more current liabilities than there is cash on hand to pay off the debt.
Debt to