Question

Chapter 8, Problem 2C. There are two NOA figures for both year 13 and year 9. What data from the financial statements were used to calculate the NOA figures?

	Business Segment Data
	Year 13		Year 9
($ millions) Business Segments	Revenue	Operating Income	Revenue	Operating Income
Theme Parks and Resorts	$3,441	$747	$2,595	$785
Film Entertainment	$3,673	$622	$1,588	$256
Consumer Products	$1,415	$355	$411	$188
	$8,529	$1,724	$4,594	$1,229
	Walt Disney Company - Selected Financial Statement and Other Data
($ millions except per share data)	Year 13		Year 9
Income Statement
Revenue	$8,529		$4,594
Operating Expenses	-$6,968		-$3,484
Interest Expense	-$158		-$24
Investment and Interest Income	$186		$67
Income (loss) from Euro Disney	-$515		$0
Pretax Income	$1,074		$1,153
Taxes	-$403		-$450
Net Income	$671		$703
Earnings per Share	$1.23		$1.27
Dividends per Share	$0.23		$0.11
Balance Sheet
Cash	$363		$381
Receivables	$1,390		$224
Inventories	$609		$909
Other	$1,889		$662
Current Assets	$4,251		$2,176
Property, Plant, and Equipment, Net	$5,228		$3,397
Other Assets	$2,272		$1,084
Total Assets	$11,751		$6,657
Current Liabilities	$2,821		$1,262
Borrowings	$2,386		$861
Other Liabilities	$1,514		$1,490
Stockholder's Equity	$5,030		$3,044
Total Liabilities and Stockholder's Equity	$11,751		$6,657
Cash Flow from Operations	$2,145		$1,275
Other Data
Common Shares Outstanding (millions)	544		552
Closing Price, Common Stock per Share	$37.75		$30.22

Answer 1

Statement showing net operating assets(NOA)
Cash	$363
Receivables	$1,390
Inventories	$609
Other	$1,889
Current Assets	$4,251
Property, Plant, and Equipment, Net	$5,228
Other Assets	$2,272
Total Operating Assets(a)	$15,639
Current Liabilities	$2,821
Other Liabilities	$1,514
Total operating liabilities(b)	$4,335
Net Operating Assets	$11304
Net Operating Assets =Total Operating Assets-Total Operating Liabilities =$11304
Note:
a.
Operating activities are anything that involves the day-to-day running of the business such as accounts receivable, inventory, etc.; and financing activities are any accounts that are "interest-bearing" or have financial characteristics and are not related to the regular operations such as debt and equity investments.
b.Cash and cash equivalent or marketable securities are not included in operating assets but working cash which   need to operating activities then such cash shall be included in operating assets . The working cash shall not exceed 2 or 3 percent of sales revenue .
c.
Financial assets are excluded, as they could be sold without disrupting the company's operations. However, controlling stakes and investments in affiliates on which the company exercises a significant influence (typically over 20% ownership) are considered as operating assets due to their strategic importance in the operation of the company.
d.
short term borrowing or long term borrowing which generate interest shall also not included in operating liabilities and here it is assumed that borrowing is interest generated borrowing .