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,
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The Walt Disney Company
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