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.
|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|
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
|R & D||-||-||-||-||-|
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
|Short Term Investment||-||-||-||-||-|
|LT Debt - Current||8,857||3,790||6,172||3,687||4,563|
|Total Current Liabilities||31,521||17,860||19,595||16,842||16,334|
|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
|Net Working Capital||4,543||5,397||5,168||5,935||6,015|
Walt Disney Asset Utilization 2019
|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|
|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|
|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
|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%|
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