Disney's Financial Statements and Financial Ratios Analyzed from 2015 to 2019

"Walt Disney Company 2019 Financial Statements and Financial Ratios: Defined, Discussed, and Analyzed for 5 Years” was written by, Paul Borosky, MBA., doctoral candidate, and owner of Quality Business Plan.  In this summarized book, the author researched Walt Disney Company's 10k, Disney's 2017 10k annual report, Disney's 2016 10k annual report, Disney's 2015 10k annual report, and Disney's 2019 10k annual report as the basis for information gathering.  Once all Walt Disney Company's 10k annual statements were collected, the author then inserted summarized income statement information and Disney's summarized balance sheet information into a customized financial template. 

Walt Disney Company's Company Summary From 2015 to 2019

The Disney Company was start in 1923.  The firm’s specialty is media sales and theme park admission sales. Disney does business on a global scale.  Their headquarters is located at 500 South Buena Vista Street in Burbank, CA. They employ about 200,000 people. 

The current executive team and compensation are as follows.

Executive Team
Executives Title Pay Amount
Robert Iger CEO 22.02 Million
Christine McCarthy CFO 6.91 Million
Alan Braverman Gen. Counsel 6.42 Million
Mary Parker Chief HR Officer 5.66 Million
     

Disney’s Income Statement – Summary Analysis

Revenue Growth:  From 2018 to 2019, Disney’s revenue grew at a pace of 17.1%.  Over the last five years, the company’s growth average was approximately 7.5%.  If their exponential growth from the last year continues, the organization will be in an excellent position to further exploit its many revenue channels.

COGS:  Disney’s cost of goods sold, as a percentage of revenue, has been increasing steadily for the last five years.  In 2015, the cost of goods sold as a percent of revenues was approximately 54%.  This percentage grew to 60.4% in 2019.  This indicates that the company’s operations are becoming more and more expensive.  Further, these expenses are not being passed on to customers in the form of higher prices.

Walt Disney 2019 Income Statement

Column1 2019 2018 2017 2016 2015
Revenues                    69,570                    59,434                    55,137                    55,632                      52,465
COGS                    42,018                    32,726                    30,306                    29,993                      28,364
Gross Profit                    27,552                    26,708                    24,831                    25,639                      24,101
SG&A                    11,541                      8,860                      8,176                      8,754                        8,523
Depreciation                            -                      3,011                      2,782                      2,527                        2,354
R & D                            -                            -                            -                            -                             -
Other                            -                            -                            -                            -                             -
Operating Expenses                    55,111                    11,871                    10,958                    11,281                      10,877
EBIT                    14,459                    14,837                    13,873                    14,358                      13,224
Other Income                            -                         601                           78                            -
Interest Expense                         978                         574                         385                         260                           117
EBT                    13,944                    14,729                    13,788                    14,868                      13,868
Taxes                      3,031                      1,663                      4,422                      5,078                        5,016
Net Income                   11,584                   13,066                     9,366                     9,790                      8,852

Balance Sheet – Summary Analysis

Cash:  Disney’s cash position has remained between $4 billion to $5.4 billion.  The $5.4 billion was registered in 2019.  This shows that the organization is increasing its cash position.  A reason for this may be that their operational expenses require more liquidity.  Also, the company may be storing cash for future acquisitions.

 Accounts Receivable:  The firm’s accounts receivable has ballooned from 15.3% of sales to 22.2% of sales.  This growth may indicate that the company is distributing more of their products to retailers.  Also, this may indicate that the company is loosening their credit policies.  A final reason for the substantial growth in this line item could be that the company is not being as efficient in their accounts receivable department as previous years.

Walt Disney Summary Balance Sheet 2019

Column1 2019 2018 2017 2016 2015
Cash                        5,418                    4,150                    4,017                    4,610                    4,269
Short Term Investment                              -                         -                         -                         -                         -
Account Receivable                      15,418                    9,334                    8,633                    9,065                    8,019
Inventory                        1,649                    1,392                    1,373                    1,390                    1,571
Other                           979                    1,949                    1,866                    1,901                    2,132
Current Assets                    28,124                16,825                15,889                16,966                16,758
Net PPE                      31,603                  29,540                  28,406                  27,349                  25,179
Goodwill                      80,293                  31,269                  31,426                  27,810                  27,826
Other                        4,715                  14,152                  13,073                  12,959                  11,247
Total Assets                  193,984                98,598                95,789                92,033                88,182
Accounts Payable                      17,942                    9,479                    8,855                    9,130                    7,844
Accrued Expense                              -                         -                         -                         -                         -
Accrued Taxes                              -                         -                         -                         -                         -
Notes Payable                              -                         -                         -                         -                         -
LT Debt - Current                        8,857                    3,790                    6,172                    3,687                    4,563
Other                        4,722                    4,591                    4,568                    4,025                    3,927
Total Current Liabilities                      31,521                  17,860                  19,595                  16,842                  16,334
LT Debt                      31,521                  17,084                  19,119                  16,483                  12,773
Other                      13,580                    6,590                    6,443                    7,730                  10,420
Total Liabilities                  100,095                45,766                50,785                44,710                39,527
Common Stock                      53,907                  36,779                  36,248                  35,859                  35,122
Treasury                           907                  67,588                  64,011                  54,703                  47,204
Retained Earnings                      42,494                  82,679                  72,606                  66,088                  59,028
Other                        5,012                    4,059                    3,689                    3,979                    2,421
Total Equity                    93,889                52,832                45,004                47,323                48,655
Total Equity & Liability                  193,984                98,598                95,789                92,033                88,182

Disney's Financial Ratio Summary From 2015 to 2019

Current Ratio:  Disney’s current ratio started in 2016 at 1.03.  In the last five years, this ratio has declined to .89.  Financial analysts often consider any current ratio below 1.0 as an indicator of possible financial difficulties within the next 12 months.  However, over the last several years, more industries and competitors have been reducing their current asset positions as compared to current liabilities.  This has led to more and more organizations having a current ratio below 1.0.

By doing this, organizations, such as Disney, can use their substantial daily cash flows to support operations.  This enables the firm to use other current resources for growth or operational expenses.

Total Asset Turnover:  Disney’s total asset turnover was .59 in 2015.  This ratio steadily declined to .36 in 2019.  This shows that the firm is underutilizing its assets as an organization.  Usually, to improve total asset turnover, companies may choose to liquidate assets.  For Disney, this may include selling unused land.

Return on Assets:    Disney’s return on assets has fallen from 10% in 2015 to 6% in 2019.  This indicates that the company is using more assets to generate fewer sales.  Also, this may indicate that the organization is offering more amenities at its theme parks and not covering or recuperating the cost through ticket sales.

Debt to Equity Ratio:  Disney’s debt to equity ratio is 33.6%.  This is up moderately from 26.3% in 2015.  However, this further indicates that Disney is not exploiting historically low-interest rates at an optimal level.

Walt Disney Liquidity Ratios 2019

Ratios 2019 2018 2017 2016 2015
Current Ratio                           0.89                    0.94                    0.81                    1.01                    1.03
Cash Ratio                           0.17                    0.23                    0.21                    0.27                    0.26
Quick Ratio                           0.84                    0.86                    0.74                    0.92                    0.93
Net Working Capital                         4,543                  5,397                  5,168                  5,935                  6,015

Walt Disney Asset Utilization 2019

Ratios 2019 2018 2017 2016 2015
Total Asset Turnover                           0.36                    0.60                    0.58                    0.60                    0.59
Fixed Asset Turnover                           2.20                    2.01                    1.94                    2.03                    2.08
Days Sales Outstanding                         80.89                  57.32                  57.15                  59.48                  55.79
Inventory Turnover                         42.19                  42.70                  40.16                  40.02                  33.40
Accounts Receivable Turnover                           4.51                    6.37                    6.39                    6.14                    6.54
Working Capital Turnover                         15.31                  11.01                  10.67                    9.37                    8.72
AP Turnover                           3.88                    6.27                    6.23                    6.09                    6.69
Average Days Inventory                           0.12                    0.12                    0.11                    0.11                    0.09
Average Days Payable                           0.01                    0.02                    0.02                    0.02                    0.02

Walt Disney Profitability Ratios 2019

Ratios 2019 2018 2017 2016 2015
Return on Assets 5.97% 13.25% 9.78% 10.64% 10.04%
Return on Equity 12.34% 24.73% 20.81% 20.69% 18.19%
Net Profit Margin 16.65% 21.98% 16.99% 17.60% 16.87%
Gross Profit Margin 39.60% 44.94% 45.04% 46.09% 45.94%
Operating Profit Margin 20.78% 24.96% 25.16% 25.81% 25.21%
Basic Earning Power 7.45% 15.05% 14.48% 15.60% 15.00%
ROCE 8.90% 18.38% 18.21% 19.10% 18.41%
Capital Employed                     162,463                80,738                76,194                75,191                71,848
ROIC 31.31% 37.67% 28.07% 28.40% 27.06%

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