Scenario: You are a Senior Financial Analyst at Cocco Consultants, a medium-sized financial consulting firm focused on the sport industry. You have been assigned to develop a report on the financial condition of companies involved in the sports betting and gaming industry. You have been provided with the most recent 10-K annual reports for the following sports betting and gaming industry companies:
• Boyd Gaming Corporation (doc will be attached)
• Churchill Downs Incorporated (doc will be attached)
• PENN Entertainment, Inc. (doc will be attached)
Use the information contained in these 10-K documents to produce a professional report that provides the following information:
1) Summarize each company’s revenue and expenses during its last fiscal year. Report on the main categories of revenues and expenses for each company and assess similarities and differences between companies in terms of how they make money and how they spend money.
2) Calculate the following financial ratios for the two most recent fiscal years for each company:
• Current ratio
• Quick ratio
• Cash ratio
• Total asset turnover ratio
• Average collection period
• Debt ratio
• Net profit margin ratio
• Return on assets ratio
• Return on equity ratio
3) Interpret the meaning of all financial ratios calculated above for each company’s most recent fiscal year only.
4) Assess the current financial health of each company based on your financial ratio calculations. Use appropriate evidence to justify and explain each financial health assessment. Assess each company’s financial health in the following areas:
• Liquidity ratios
• Activity ratios
• Leverage ratios
• Profitability ratios
5) Provide a basic budget forecasting each company’s revenue and expenses for its next fiscal year. Use the following template to develop your budgets for each company:
[Company Name]
(Next Fiscal Year)
Year End: MM/DD/YYYY (Most Recent Fiscal Year) Year End: MM/DD/YYYY
Total Revenues
Total Operating Expenses
Operating Income
Income Tax
Net Income
Discuss which budgeting approach you utilized to develop each company’s budget for its next fiscal year. Also, provide justification/rationale for your forecasts of revenues and expenses for each company.