Peloton Business Analysis

• Use your own words [If plagiarism (copying the words exactly from the company’s annual report) is suspected, you will receive a grade of 0.]
• Answer the following questions in complete sentences by retrieving information from the company’s 2020 annual report
  • Tip – You can search for information in a PDF more quickly by typing “Ctrl+F” (on a PC) or “Command+F” (on a Mac), a word search bar will appear on your screen

Business Analysis

1. How has the COVID-19 pandemic affected Peloton? What is one way that the company has reacted to the pandemic?
2. What are two highlights from the company’s “Item 1. Business” section that stand out to you? Why do these highlights stand out to you?
3. In your opinion, what are the two riskiest risk factors that affect the company’s business?
4. How many bikes and threads did the company deliver in fiscal year 2020? How many members did Peloton have as of June 30, 2020?

Financial Statement Analysis

• What is the title of the company’s income statement? What amount did Peloton report as net income (loss) for 2020?
• Did Peloton have comprehensive income in 2020? If yes, what are the company’s comprehensive income items?
• Is net income (loss) or net cash provided by (used in) operating activities higher in 2020 (provide the amounts)? How might knowing which amount is higher contribute to the decision-making process of an investor?

Financial Statement Disclosures

• Which public accounting firm audits Peloton? How long has this firm been the company’s auditor?
• According to the company’s revenue recognition policy, when does Peloton record revenue related to product sales and subscription revenue?

Ratio Analysis

1. Calculate the company’s debt to equity ratio (total liabilities/total stockholders’ equity) for 2020 and 2021. For 2021, the company’s total liabilities were $2,731.5 (in millions) and its total stockholders’ equity was $1,754.1 (in millions). During which year did Peloton rely more on its creditors than its owners to provide resources?