The document discusses working capital management for the Disney corporation. It explains that financial statements are needed to calculate a business's working capital, including the balance sheet, income statement, and statement of cash flows. It then calculates Disney's current ratio to determine its financial health and liquidity position. The summary evaluates Disney's working capital management and direction based on its current ratio and past financial statements.

1. 1
5
Financial Statements and Cash Flow Management
Principles of Finance
SNHU
Terrell McGhee
9/12/2021
Business Selection
The business I have chosen for this project is Disney. I
chose Disney because it is the most diversified corporation of
the options with interests in parks experiences, media networks,
studio entertainment, consumer products, and vacation and
travel. Disney company was founded by brothers Roy Disney
and Walt Disney in 1923 under the name Walt Disney
Productions (Carillo et al., 2015). The company's diverse
offerings make the company an interesting case study since each
part can help reinforce another part of business when things go
astray. A good instance was during the Covid-19 epidemic when
Disney theme park faced challenges due to low turnout; Hulu

2. paired with ESPN+ and Disney+ to keep the company's outlook
stable when one business was experiencing a difficult period.
Disney's diversification necessitates shareholder value and
aptitude.
Financial Statements
Balance sheet
Income Statement
Cash flow statement
Financial Health of Disney
To determine the financial health of Disney, this paper will use
the Current Ratio. This is a liquidity ratio that helps determine
the company's ability to pay short-term obligations. A current
ratio that is below 1.00 signifies bad or poor financial health.
Current Ratio = Current assets/current liabilities
Current assets = 202,221,000
Current liabilities = 111,099,000
Current ratio = 202,221,000/111,099,000 = 1.82
Based on the above calculation, it is evident that Disney has
sound or good financial health since the ratio is more than 1.00.
Financial Statement Role
A financial statement is a crucial item for any business because
it provides a visual representation of the company to investors
and other interested parties. Financial statements include the
balance sheet, income statement, statement of shareholders'
equity, and cash flow statement. Financial statements allow the
top management to see the financial implications of the
decisions they made and how to make changes that will make
the business more profitable (Abukari, Jog & McConomy,
2000). A company's financial statement is also significant as it

3. contains important information that investors can use to make
decisions. Financial statements are also used to dictate a
company's financial health, an important consideration to
investors.
Cash flow Management
Cash flow management is crucial as it allows organizations to
regulate their spending habits in that they do not spend more
than they are earning (Morar, 2015). Cash flow is an important
area that management should monitor constantly. Cash flow
management is an area that I can relate to, having worked as an
executive assistant in a local winery. At one time, our chief
financial officer noted that the company was facing a major
cash flow problem; this was because of excessive-high debt
repayments. This was not the first time the company was
experiencing this problem, given that the CEO has a high
affinity for Merchant Cash Advances. Luckily, the shareholders
were able to raise enough money to finance the daily operations
of the business. The CEO was later let go from the position.
References
Abukari, K., Jog, V. M., & McConomy, B. J. (2000). The role
and the relative importance of financial statements in equity
valuation. Available at SSRN 254972.
Carillo, C., Crumley, J., Thieringer, K., & Harrison, J. S.

4. (2012). The Walt Disney Company: A Corporate Strategy
Analysis.
Morar, A. (2015). THE IMPORTANCE OF CASH FLOW IN
UNDERLINING COMPANIES FINANCIAL
POSITION. Annals Constantin Brancusi'University of Targu-
Jiu. Economy Series, (6).
1
Financial Statements and Cash Flow Management
Principles of Finance
SNHU
Terrell McGhee
9/12/2021
1

5. Financial Statements and Cash Flow Management
Principles of Finance
SNHU
Terrell McGhee
9/12/2021
9/26/21, 9:26 AM Module Five Activity Guidelines and Rubric -
FIN-320-T1991 Principles of Finance 21EW1
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Module Five Activity Guidelines and Rubric
Overview
Working capital management is cri�cal to an organiza�on’s
ability to meet its short-term obliga�ons. When proposing new
projects

6. or investment ideas for corpora�ons, it is cri�cal to consider
working capital red flags such as excess credit use by the
business or a
low cash balance. Managing such issues early on can help
corpora�ons acquire a compe��ve advantage in the
marketplace.
Prompt
Using the business you selected for Project Two, complete the
calcula�ons for determining working capital, and describe their
relevance in assessing financial health.
Specifically, you must address the following rubric criteria:
Financial Statement(s): Explain the various financial
statement(s) needed to calculate a business’s working capital
and how
each financial statement is used. Provide examples to support
your claims.
Working Capital’s Role: Discuss how effec�ve working capital
management supports a healthy business.
Working Capital Interpreta�on: Use the appropriate formula to
calculate working capital, then discuss the business’s current
financial liquidity posi�on.
For example, does the business have sufficient working capital
on hand to address bills to suppliers? Will there be
poten�al cash inflow at the end of the year?

7. Working Capital Management Direc�on: Discuss the current
direc�on of the business regarding working capital
management.
Keep in mind that financial statements reflect a specific moment
or period of �me and the value of the business’s
working capital during that period. To get a be�er
understanding of the direc�on in which a business is going, use
the business’s balance sheets from Mergent Online to compare
the business’s value today against its value from one
year ago.
Guidelines for Submission
Your submission should be a 2 to 3-page Word document with
12-point Times New Roman font, double spacing, and one-inch
margins. Any sources should be cited according to APA style.
Module Five Ac�vity Rubric
Criteria Proficient (100%) Needs Improvement (70%) Not
Complete (0%) Value
Financial
Statement
Explains the various financial
statement(s) needed to

8. calculate a business’s
working capital and how
each statement is used
Shows progress toward
proficiency, but with errors
or omissions; areas for
improvement may include
explaining in more detail the
various financial statement(s)
needed to calculate a
business’s working capital
and how each statement is
Does not a�empt criterion 15
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used
Working Capital’s
Role
Discusses how effec�ve
working capital management
supports a healthy business
Shows progress toward
proficiency, but with errors
or omissions; areas for
improvement may include
discussing in more detail

10. how effec�ve working
capital management
supports a healthy business
Does not a�empt criterion 20
Working Capital
Interpreta�on
Uses the appropriate formula
to calculate working capital
and discusses the business’s
current financial liquidity
posi�on
Shows progress toward
proficiency, but with errors
or omissions; areas for
improvement may include
discussing in more detail the
business’s current financial
liquidity posi�on or using the

11. appropriate formula to
calculate the working capital
Does not a�empt criterion 20
Working Capital
Management
Direc�on
Discusses the current
direc�on of the business
regarding working capital
management
Shows progress toward
proficiency, but with errors
or omissions; areas for
improvement may include
discussing in more detail the
current direc�on of the
business regarding working
capital management

12. Does not a�empt criterion 25
Ar�cula�on of
Response
Clearly conveys meaning
with correct grammar,
sentence structure, and
spelling, demonstra�ng an
understanding of audience
and purpose
Shows progress toward
proficiency, but with errors
in grammar, sentence
structure, and spelling,
nega�vely impac�ng
readability
Submission has cri�cal errors
in grammar, sentence
structure, and spelling,

13. preven�ng understanding of
ideas
20
Total: 100%
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