Preview

Walt Disney Financial Analyis

Best Essays
Open Document
Open Document
4477 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Walt Disney Financial Analyis
Executive Summary The Walt Disney Company (DIS) has a long and prestigious history in the entertainment business covering a period of greater than 75 years. The DIS objective is to be the world leader in production of entertainment using their diversified portfolio to differentiate its brands including Walt Disney Parks, ESPN, PIXAR, MARVEL, and ABC. The financial goals are to maximize cash flow, maximize earnings, and capital profits that will drive longer-term shareholder value (The Walt Disney Company, 2012). The DIS conglomeration offers brand recognition although DIS faces high sunk costs including updates of their parks. Although DIS is faced with a number of industry competitors, it remains the industry leader with a solid debt to equity ratio of 38.16 choosing internal trade off financing rather than issuing outside debt. Currently DIS can cover their liabilities with a current liquidity ratio of 1.11 demonstrating their ability to pay debts with short-term assets (Google Finance, 2012). DIS currently maintains an industry low total debt to equity of 38% reducing the overall risk associated with financial growth. DIS demonstrates weak returns with a three-year average of 17% (Table 4) while others in the industry such as Viacom shows a one-to-one ratio DIS shows a two percent increase in 2011 to 19% in Table 4. YET, DIS continues to show a modest three-year return on equity of 17.9%. The DIS bond weight is 11.42% while the stock weight is 88.58%. Using this information and a large number of calculations show DIS as a good investment making smart decisions to remain the industry leader. Investors should invest in DIS as it has a proven, steady, and stable profitability and returns.
The Walt Disney Company The Walt Disney Company (DIS) is a worldwide favorite conjuring up images of theme parks, Mickey Mouse, and the standard for entertainment. Beyond the public image, Walt Disney manages a vast number of assets (Year in Review,


References: eHow Money. (2012). How to calculate equity risk premium. Retrieved from http://www.ehow.com/how_6459247_calculate-equity-risk-premium.html#ixzz1wepPZSE1 Lieberman, D Maarketvestor.com. (2012). U.S. 3 month treasury securities yield forecast percent constant maturity rate. Retrieved from http://www.marketvector.com/interest-rate/90-day-t-bill.htm McBride, E Microsoft Money. (2012). Walt Disney stock rating summary. http://investing.money.msn.com/investments/stock-ratings/?symbol=dis& Moody’s Morningstar. (2012, June 10). Walt Disney Co DIS. Retrieved from Palmeri, C Ross, S. A., Westerfield, R. W., & Jaffe, J. (2010). Corporate Finance (9th ed.). New York: McGraw-Hill Irwin. Seeking Alpha. (2012). Walt Disney: Dividend debt analysis. Retrieved from http://seekingalpha.com/article/560001-walt-disney-dividend-vs-debt-analysis Stock Research Pro The Walt Disney Company. (2012). The Walt Disney Company Notice of 2012 Annual Meeting and Proxy Statement. Retrieved from a.media.global.go.com/investorrelations/proxy/proxy_2012.pdf The Walt Disney Company Ultimate Calculators. (2012). Constant growth (Gordon) model. Retrieved from http://www.ultimatecalculators.com/constant_growth_model_calculator.html Yahoo Finance! (2012) Retrieved from http://finance.yahoo.com/q/co?s=DIS+Competitors YCHARTS. (2012, June 10). The Walt Disney Company. Retrieved from http://ycharts.com/companies/DIS/long_term_debt Table 1
Continue Reading
View Writing Issues

You May Also Find These Documents Helpful

  • Better Essays

    The Walt Disney Company’s Ethics and Compliance
    • 1437 Words
    • 6 Pages

    The Walt Disney Company’s Ethics and Compliance

    The Walt Disney Company is the largest entertainment industry in the world. Many are familiar with Disney, due to its lifelong impact it has left on American society. Since the 1920’s the Walt Disney Company has forever impacted individuals around the world for its entertainment, including film, theme parks, and resorts. With the Walt Disney Company being the leading entertainment company around the world, it shows that its financial performance is one that has been secure since the birth of the company. While every person around the world enjoys entertainment, the Walt Disney Company has brought forth an organization that does just that.…

    • 1437 Words
    • 6 Pages
    Better Essays
    Read More
  • Powerful Essays

    Thomas Edison's Invention Of The Kinetoscope
    • 1263 Words
    • 6 Pages

    Thomas Edison's Invention Of The Kinetoscope

    The Walt Disney Company is the world’s second largest media company, with a revenue of over twenty five billion dollars in the year 2000. 46% of their income comes from films, publishing, and merchandise, 23% of their income comes from theme parks and resorts, and the other 31% comes from broadcasting. The company has many internet, music, recreational, publishing, broadcasting, and (obviously) filming assets, including:…

    • 1263 Words
    • 6 Pages
    Powerful Essays
    Read More
  • Powerful Essays

    Ethics and Compliance for Disney
    • 1543 Words
    • 7 Pages

    Ethics and Compliance for Disney

    The Walt Disney Company is known far and wide as a major source of entertainment and the embodiment of family values. Throughout the years, Walt Disney studios have supplied millions with wholesome, child oriented entertainment with iconic characters such as Mickey Mouse, Snow White, and of course Alice in Wonderland. From humble beginnings, the Disney Company grew with leaps and bounds throughout the years to include numerous theme and amusement parks, movies, and production studios and the Disney stores. While the general management of the company has changes over the years; the core values of the company have remained the same, as Disney’s website says; “providing innovative, quality entertainment for all members of the family, across America and around the world.” A closer look at the Walt Disney Company will offer insight to the financial processes that have assisted the company to grow into the world renowned company that is known, loved, and respected.…

    • 1543 Words
    • 7 Pages
    Powerful Essays
    Read More
  • Good Essays

    Deciphering Financial Statements - the Walt Disney Co.
    • 874 Words
    • 4 Pages

    Deciphering Financial Statements - the Walt Disney Co.

    In this case they show you that it is important to disclose information in a company’s financial statments that assist in the explanation of specific changes in accounting methods, stock prices, etc. The financial statements are one of a large number of vehicles used by the managers of a company to communicate information about the company to the public. Financial reporting is a key part of a company’s general public relations effort.…

    • 874 Words
    • 4 Pages
    Good Essays
    Read More
  • Good Essays

    Disney Cost of Capital
    • 1074 Words
    • 5 Pages

    Disney Cost of Capital

    The purpose of this project is to determine the weighted-average cost of capital (WACC) for The Walt Disney Company. According to The Walt Disney Company’s Form 10-K filing for the fiscal year ended September 29, 2012, “The Walt Disney Company, together with its subsidiaries, is a diversified worldwide entertainment company with operations in five business segments: Media Networks, Parks and Resorts, Studio Entertainment, Consumer Products and Interactive.” Specifically the comparison between debt and equity will be summarized using the WACC for The Walt Disney Company as a whole rather than an individual focus on a vertical segment. The analyses of individual segments while interesting, do not provide the overarching inspection of the company’s management of equity and debt levels.…

    • 1074 Words
    • 5 Pages
    Good Essays
    Read More
  • Better Essays

    Economics of Disney
    • 885 Words
    • 4 Pages

    Economics of Disney

    The Walt Disney Company. (2012). Disney News This Week: Disney English Expands. Retrieved on November 7th, 2013 from https://thewaltdisneycompany.com/blog/disney-news-oz-great-powerful-poster-disney-english-lion-king-dublin-abc-news…

    • 885 Words
    • 4 Pages
    Better Essays
    Read More
  • Powerful Essays

    S & S Air Case Study
    • 1495 Words
    • 6 Pages

    S & S Air Case Study

    Ross, S. A., Westerfield, R. W., & Jordan, B. D. (Eds.). (2011). Essentials of corporate finance (7th ed., Rev.). New York, NY: McGraw-Hill Irwin.…

    • 1495 Words
    • 6 Pages
    Powerful Essays
    Read More
  • Good Essays

    Walt Disney Controversy
    • 613 Words
    • 3 Pages

    Walt Disney Controversy

    The Walt Disney Company has the mission to be one of the world’s leading producers and…

    • 613 Words
    • 3 Pages
    Good Essays
    Read More
  • Powerful Essays

    Internal Analysis of the Disney Company
    • 1600 Words
    • 5 Pages

    Internal Analysis of the Disney Company

    The financial ratio analysis of a company is a useful indicator to measure the success of a company. By comparing financial ratios between companies in the same industry (competitors) it is a useful way for investors and shareholders to determine the financial health and/or the sustainability of a company. Disney’s main competitors within the industry include Time Warner and 21st Century Fox. There are five key areas of comparison that provide excellent financial analysis of a company. They are short-term solvency, long-term solvency, asset management, profitability, and market value.…

    • 1600 Words
    • 5 Pages
    Powerful Essays
    Read More
  • Better Essays

    Strtegic Initiative
    • 1423 Words
    • 6 Pages

    Strtegic Initiative

    The Walt Disney Company (Disney) continues to seek tools that will attain future capital by implementing strategic initiatives that complement their well-diversified portfolio. As with any strategic initiative, an organization must evaluate the pros and cons of an opportunity as well as determine sufficient capital to fund the initiative. An organization must also forecast its projected returns to determine if the strategic initiative in question is a prosperous investment. Therefore, the planning of a strategic initiative leads to financial planning. The following will address a strategic planning initiative for Disney, which includes an initiative discussed in Disney’s 2012 annual report. The affects on cost, sales, as well as risks that the organization may encounter during strategic and financial planning will also be included.…

    • 1423 Words
    • 6 Pages
    Better Essays
    Read More
  • Good Essays

    Walt Disney Annual Report 2011
    • 60491 Words
    • 242 Pages

    Walt Disney Annual Report 2011

    January 2012 Dear Shareholders, Fiscal 2011 was a year of great accomplishment for The Walt Disney Company, marked by creativity and innovation across our businesses globally, record financial results and numerous important steps to position the Company for the future. While 2011 brought us so much to cheer about, it was also marked by profound loss, with the passing of Steve Jobs. Steve’s incredible stewardship of Pixar, and his decision to sell Pixar to Disney in 2006, brought Steve into the Disney family, as a board member, a shareholder, a mentor, and a friend, and we were so lucky for all that he represented and all that he contributed. Disney, ESPN, ABC, Pixar, and Marvel are an amazing collection of brands that grow stronger every day as new platforms and new markets provide enormous new opportunities for high quality content and experiences. To that end, we are fortunate to have a talented group of employees who are committed day in and day out to building our brands around the world. Since becoming President and CEO in 2005, I have focused on three strategic priorities: creating high-quality family content, making experiences more memorable and accessible through innovative technology, and growing internationally. In fiscal 2011, net income attributable to Disney was a record $4.8 billion, an increase of 21% over last year, and revenue was a record $40.9 billion, up 7% from last year. Diluted earnings per share increased by 24% to a record $2.52. I’m particularly gratified by our outstanding performance in fiscal 2011, given the challenging global economic environment. Our financial and capital strength has allowed us to make important near and long term investments, two of the most significant being Pixar and Marvel. Animation is the heart and soul of Disney, and since becoming part of the Company nearly six years ago, Pixar has greatly advanced Disney’s animation studio with incredible…

    • 60491 Words
    • 242 Pages
    Good Essays
    Read More
  • Powerful Essays

    FIN 370's Strategic Initiative: The Walt Disney Company
    • 1754 Words
    • 8 Pages

    FIN 370's Strategic Initiative: The Walt Disney Company

    The Walt Disney Company is a global brand recognized throughout the world. As part of an Oligopoly market structure the Walt Disney Company works tirelessly to maintain its reputation, integrity, and social responsibility to the communities of the world through quality entertainment and communication tools for the entire family. According to Disney, “Disney’s performance in fiscal 2013 reflects the impact of the company’s acquisitions and capital investments and long-term strategy focused on exceptional creativity, innovative use of technology and global growth.” The Walt Disney Company’s plans are a part of the company’s goals which is to be the world’s leader in entertainment and communication. In order for the Walt Disney Company to keep its influence in the world of entertainment and communication, the Disney Company has continually used its revenues and profits to grow its brand name and products around the world by introducing the different cultures of the world in one location.…

    • 1754 Words
    • 8 Pages
    Powerful Essays
    Read More
  • Powerful Essays

    Disney Case Study
    • 3459 Words
    • 14 Pages

    Disney Case Study

    Table of Contents Introduction................................................................................................................................3 Disney’s Current Published Mission Statement ........................................................................3 Proposed Mission & Vision .......................................................................................................4 Disney’s External Threats and Opportunities ............................................................................5 Competitive Profile Matrix ........................................................................................................5 External Factor Evaluation ........................................................................................................6 Disney’s Internal Strengths and Weaknesses ............................................................................8 Internal Factor Evaluation..........................................................................................................9 SWOT Analysis .........................................................................................................................9 Strengths:................................................................................................................................9 Weaknesses: .........................................................................................................................10 Opportunities:.......................................................................................................................10 Threats:.................................................................................................................................10 Recommended Strategies and Objectives ................................................................................10 Strategy…

    • 3459 Words
    • 14 Pages
    Powerful Essays
    Read More
  • Powerful Essays

    Disney Case Study
    • 1834 Words
    • 8 Pages

    Disney Case Study

    Disney’s corporate strategy till 1994 was rooted on Walt Disney’s vision to “create universal timeless family entertainment.” Disney’s synergistic and coherent strategies supported the enterprise expansions and market growths during this period with stellar financial results as well as the timeless brand image. The strategies and the successful effects can be described into four categories (see Exhibit 1 for Disney’s strategic activities)…

    • 1834 Words
    • 8 Pages
    Powerful Essays
    Read More
  • Powerful Essays

    Valuation
    • 1028 Words
    • 5 Pages

    Valuation

    Ross, S.A., Westerfield, R.W., & Jaffe, J. (2010). Corporate Finance (9th Ed). New York, NY: McGraw-Hill/Irwin…

    • 1028 Words
    • 5 Pages
    Powerful Essays
    Read More

Related Topics