A Dream and a Mouse
Throughout its history, the Walt Disney Company has seen both struggle and success. Today the company continues to expand both globally and within its current business segments with new projects and acquisitions. In a struggling economy that has lent to the fall of other major companies, the importance of realistic and useful information is necessary to estimate the current and future financial stability for a company’s investors and creditors. This paper reviews the history of The Walt Disney Company, and summarizes the information provided in the company’s 2011 annual report. Through horizontal, vertical and ratio analysis comparisons are made to determine if the company’s claims provide a true picture of its financial status.
The Walt Disney Company; a Dream and a Mouse
“If you can dream it, you can do it. Always remember that this whole thing was started with a dream and a mouse.” – Walt Disney
The name “Disney” is one that is commonly recognized in households the world over, even by their youngest members. The Walt Disney Company is well known for their animated movies, theme park and resort destinations, and internationally recognized brands. The company now encompasses “…five business segments: Media Networks, Parks and Resorts, Studio Entertainment, Consumer Products and Interactive Media” which include cruise lines, radio and even publishing branches (“Fiscal Year 2011,” 2012, p.1). With increasing affiliates and subsidiaries and expansion into new markets, people across the globe interact with The Walt Disney Company and its products and services every day. From humble beginnings to ranking as “Fortune 500”, The Walt Disney Company has seen both struggle and success. Today, after almost 90 years, the company continues to grow from acquisitions and new projects on a regular basis. With worldwide recognition (beginning with Mickey Mouse) and continuous development (including a new park in China), many wonder;
1. What events led the company to become such a global icon?
2. What are the company’s claims about its current financial situation?
3. Does the picture portrayed by the annual report compare to the information gained through the company’s financial statements?
Amidst the current struggling economy, the Walt Disney Company not only remains stable, it continues to expand and has become increasingly profitable.
What events led the company to become such a global icon?
The Walt Disney Company came into existence as The Disney Brothers Studio in 1923 (“Disney History,” (n.d.)). Walt Disney was an artistic creative man, while his brother Roy was known for his financial practicality and business sense. It has been said that “Walt may have dreamed castles but it was Roy who got them built (Korkis, 2011). Walt Disney himself was quoted, saying “My brother Roy runs this company. I just piddle around” (Korkis, 2011). Whatever the truth, it was this combination of personalities and pooled resources that brought the current Walt Disney Company into existence. By October 1923, Walt Disney already had a failed company and bankruptcy under his belt (“Walter Elias Disney,” 2012). With the help and financial support of his brother Roy, Walt, and a fellow cartoonist named Ubbe Iwerks started the Disney Brothers Studio, which was later renamed in 1926 to Walt Disney Studio (Grade5s, 2011).
Mickey Mouse was said to have been “Born of necessity…” (Disney, 1999). Walt claimed “…the little fellow literally freed us of immediate worry. He provided the means for expanding our organization to its present dimensions and for extending the medium cartoon animation towards new entertainment levels. He spelled production liberation for us. (Disney, 1999).” With the creation and immediate popularity of Mickey Mouse, The Walt Disney Studio expanded its success with merchandising (“A History,” 2000)....