DirecTV FAP - DirecTV Financial Analysis Project 1 DirecTV...

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DirecTV Financial Analysis Project 1
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DirecTV Notes and Supporting Schedules to the Financial Statements Cash and Cash Equivalents Cash and Equivalents consist of highly liquid investments purchased with original matur- ities of three months or less. Accounts Receivable Percent Uncollectible 2008 Percent Uncollectible = 50/1,423= 3.5 % 2007 Percent Uncollectible = 56/1,535= 3.6% Accounts Receivable 2008 Receivable turnover= 1,423/1,479= .96 2007 Receivable turnover=1,535/1,570= .97 No significant changes between the two previous years Inventories · Finished equipment for Directv · Finished conditional access cards Directv does not incorporate any inventory flow methods. They do not sell their inventory. Also, their inventory turnover rates are unapplicable to their performance because they lease out all equipment. Property and Depreciation Fixed Asset group Depreciation Method Property Straight-Line Method Satellites Straight-Line Method Equipment Straight-Line Method · 2008 Percentage of Fixed Asset Depreciation = 5,315/11,180= 47.5% · 2007 Percentage of Fixed Asset Depreciation = 4,056/9,278= 43.7% How did the percentage of fixed asset depreciation change? The percentage increased by 3.8%. · 2008 Fixed Asset Turnover = $19,693/13,100= 1.5 Financial Analysis Project 2
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DirecTV · 2007 Fixed Asset Turnover = $17,246/12,500= 1.38 Capitalized Leases Total obligation for property = 23 million Total obligation for satellites= 513 million Interest = 27 million 584 million 83 million due in 2009 Operating Leases · Total obligation = $291 million · Rent expense = $95 million · Next year (2008) = $80 million Long-term Debt Senior note due 2013 8.375% 910 Senior note due 2015 6.375% 1,000 Senior note due 2016 7.625% 1,500 In 3 to 5 years the most long-term debt will be due, totaling to 3,393 million. Pension Plans · Defined benefit pension expense = 179 million · Benefit obligation (2008)= 452 million · Fair value of the retirement plan assets (2008) = 283 million Are the pension plans adequately funded? The plans adequately funded. Although the Fair value of the assets are below the obligations. Directv can still manage to pay the expense. There was no mention of pension expenses on the balance sheet. In the notes to the financial statements it was listed as 165 million ( Liabilty). There was also no mention of pension expense on the statement of cash flows · 51 million was paid to retirees Equity securities, debt securities, and real estate are defined in the pension fund. Financial Analysis Project 3
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DirecTV The non-pension benefit expense is grouped with pension and total 179 million Non-pension post-retirement obligation= 22 million Fair market value = (22) The plan is not adequately funded, funds will have to come from another source. Income Taxes
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DirecTV FAP - DirecTV Financial Analysis Project 1 DirecTV...

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