Week 2 Discussion Post 21 Document

Netflix is among the renowned internet entertainment. In particular, the company was

founded in 1997 and has more than 139 million paid subscribers. Besides, the company has

operations in more than 190 countries. Therefore, this allows its customers to enjoy films, TV

series, and documentaries based on the language and genre of their preference. The company

is currently listed in NASDAQ as NFLX. Long term liabilities are growing every year almost

The company I selected is Microsoft Corporation. Microsoft’s stock ticker is MSFT, and their

industry is technology. The company’s products include operating systems; cross-device

productivity applications; server applications; business solution applications; desktop and

AMZN. Amazon.com, Inc. is a multinational technology company that specializes in online

retail shopping. Jeffrey P. Bezos, a former Wall Street hedge fund executive founded the

company in July 1994, and it is headquartered in Seattle, WA. At first, Bezos reasoned that

books would be the most logical product to sell online, but Amazon.com is now about much

more than books.

Unearned Revenue is a balance-sheet item on Amazon.com that is recorded when payments

are received or due in advance of performing service obligations and is recognized over the

service period (Securities and Exchange Commission, 2021). It primarily relates to AWS

service prepayments and Amazon Prime memberships, and it is critical to monitor because it

can indicate whether subscription levels are increasing or decreasing. I believe it is

appropriate because, as Prime membership and AWS users have grown, so has the portion of

unearned revenue as a percentage of Amazon's overall revenue, making it a more important

measure of Amazon's true revenue over time (SIC Investment Research Inc., 2017).

Company name – The Walt Disney Company

Company. The company has been identified as the pioneer in the American animation

industry before it started diversifying into other business areas such as theme parks,

production, and television.

An item from the balance sheet – An item that has been selected from the balance sheet of the

company is goodwill. The value of the company’s goodwill as of October 02, 2021, has been

valued at USD 78,071 and the value of the intangible asset in the prior year was USD 77,689

(Fiscal Year 2021 Annual Financial Report. Walt Disney company, 2022, p. 29). The increase

in the goodwill or reputation of the company in the past year indicates a surge in the value of

the company.

Valuation policies – The valuation policies that are adopted by the company help in

determining the fair value of a firm or its assets. In the context of The Walt Disney Company,

the goodwill and other intangible assets of the firm are tested for impairment on a yearly

basis. In case there is a necessity, then they could be tested on an interim basis (Fiscal Year

2021 Annual Financial Report. walt disney company, 2022, p. 85). In order to arrive at the

value of the goodwill, the company initially carries out a qualitative assessment of the

goodwill to identify whether it is more likely than not that the carrying amount of goodwill in

disney company, 2022, p.85).

Appropriateness of the option – The valuation policy that is adopted by the company to

evaluate the goodwill and the associated impairment is justified. This is because it takes into

account both qualitative as well as quantitative approaches to get a comprehensive insight

into the valuation of the goodwill (Lange et al., 2014).

The company I chose for our milestone projects is The Walt Disney Company, stock ticker ID

(NYSE: DIS), and they are in the Media and Entertainment industry. I chose Disney based on

my family’s love of going to the theme parks each year, as my parents bought into the Disney

Vacation Club a little over 10 years ago, so this choice felt appropriate to dive in a little

deeper into the financial workings of the company. Disney is one of the top leaders (if not the

number 1 leader) in the media and entertainment industry, with their hands in Television,

Movies and now digital streaming markets, theme parks and recreation including its own

cruise line, and widely successful in retail products being sold all over the world.

The item that jumped out the most to me on the balance sheet was Cash & Short-Term

investments. You can see below on the snippet of their numbers from 2017 through 2021

(WSJ), Cash jumped up over 200% in 2020, came back down a little in 2021 but this has

created a huge jump in the cash to assets ratio which more than doubled from 2019. This is a

The company I chose was Microsoft. Its' stock ticker is MSFT, and they are in the technology

headquartered at the Microsoft Redmond campus located in Redmond, Washington, United

for similar instruments in active markets, quoted prices for identical or similar instruments in

markets that are not active, and model-based valuation techniques (e.g. the Black-Scholes

model) for which all significant inputs are observable in the market or can be corroborated by

observable market data for substantially the full term of the assets or liabilities." (Microsoft,

2013). Their valuation policies seem like the most appropriate given the size of the company

and its' product line, and there is no need for an alternative approach in that regard.

References:

Financial Review. Accounting Policies. (n.d.). Retrieved July 7, 2022, from

https://www.microsoft.com/investor/reports/ar13/financial-review/notes/index.html

Microsoft. (n.d.). Retrieved July 7, 2022, from https://www.microsoft.com/en-

us/Investor/earnings/FY-2022-Q1/balance-sheets

2022-07-07 (2).png

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Collective, C. (2022, July 7). Cash to Current Assets Ratio | Formula, Example, Analysis,

Reports, Financial Information, Shareholder Information. The Walt Disney Company.

https://thewaltdisneycompany.com/investor-relations/#reports

image_61045875921657218125176.png

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Fiscal Year 2021 Annual Financial Report. walt disney company. (2022). Retrieved July 6,

2022, from https://thewaltdisneycompany.com/app/uploads/2022/01/2021-Annual-Report.pdf

Google. (2021). Walt Disney Co (DIS) stock price & news. Google Finance. Retrieved July 6,

2022, from

https://www.google.com/finance/quote/DIS:NYSE?sa=X&ved=2ahUKEwjN_NeAteP4AhX5

Lange, C. D., Fornaro, J. M., & Buttermilch, R. J. (2014). Qualitative assessment of

impairment for goodwill and other indefinite-lived intangibles. The CPA Journal, 2014, 22-

image_75792878221657177416843.png

(45.23 KB)

Securities and Exchange Commission. (2021). Commission File No. 000-22513

Statista. (2019). Media & Advertising. Radio, TV, & Film. Netflix – Statistics & Facts.

Retrieved from www.statista.com/topics/842/netflix/.