Disney Financial Report and Financial Analysis: 2016 to 2020
Walt Disney Financial Report and Financial Analysis started with an in-depth review of Disney's 10k Annual report, specifically, Disney's income statement and balance sheet.
Next Paul Borosky, MBA., summarized their financial information and input it into a proprietary financial model, which shows their income statement and balance sheet trends as well as calculations for Disney's financial ratios, and financial ratio trends covering 5 years.
PDF/Downloadable Version
- Free Bonus Downloads: Annual Statements for the Last Five Years (10k reports)!
- **See Terms and Conditions.
Amazon.com Version
*No 10k Annual Statements
Call or Text Paul Now!
321-948-9588
Email: Paulb@Clermont-tutor.com
Tutoring Sessions may be In-Person or online via Skype!
Disney Summary
The Walt Disney Company stock price ended December 2019 at approximately $145. Over the next several months, the company stock price would fluctuate between $145 and $138 until the beginning of March 2020. At this point, the Covid 19 virus had started to wreak havoc on the US economy. Inevitably, Disney's stock price suffered, falling over the next several months to $88 ending March 2020. Fortunately, over the next several months, Disney's stock price would increase substantially, in no small part due to their incredible success with their streaming service. This resulted in a stock price growth to $173 ending December 2020.
Disney Income Statement Summary
SG&A
Disney's SG&A, or fixed costs, ended 2016 at $8.7 billion. In the next year, the organization would slightly reduce its fixed costs ending the year at $8.1 billion. However, in the next three years, the company's fixed costs would balloon substantially, ending 2020 at $12.3 billion. As compared to revenues, Disney's fixed costs were 15.7% in 2016. In 2017, the company's fixed costs would fall to 14.8% as compared to revenues. From this point, the company's SG&A would substantially climb over the next three years ending 2020 at 18.9%.
Operating expenses.
Disney's operating expenses ended 2016 at $11.2 billion. In the next year, the organization's operating costs would fall slightly to $10.9 billion. However, in the next three years, the company's operating expenses would climb substantially, ending 2020 at $17.7 billion. As compared to sales, from 2016 to 2018, the organization's operating costs were about 20% of sales. However, in 2019, the company's operating expenses would climb to 22.6% of sales. Unfortunately, in 2020, the operating expenses as compared to sales would balloon to 27.1%.
Disney 2020: Income Statement Summaries |
|||||
| Column1 |
2020 |
2019 | 2018 | 2017 |
2016 |
| Revenues | 65,388 | 69,570 | 59,434 | 55,137 | 55,632 |
| COGS | 43,880 | 42,018 | 32,726 | 30,306 | 29,993 |
| Gross Profit | 21,508 | 27,552 | 26,708 | 24,831 | 25,639 |
| SG&A | 12,369 | 11,541 | 8,860 | 8,176 | 8,754 |
| Depreciation | 5,345 | 4,160 | 3,011 | 2,782 | 2,527 |
| R & D | - | - | - | - | - |
| Other | - | - | - | - | - |
| Operating Expenses | 17,714 | 15,701 | 11,871 | 10,958 | 11,281 |
| EBIT | 3,234 | 14,459 | 14,837 | 13,873 | 14,358 |
| Other Income | - | - | 601 | 78 | - |
| Interest Expense | 1,491 | 978 | 574 | 385 | 260 |
| EBT | 1,743 | 13,944 | 14,729 | 13,788 | 14,868 |
| Taxes | 699 | 3,026 | 1,663 | 4,422 | 5,078 |
| Net Income | (2,474) | 11,584 | 13,066 | 9,366 | 9,790 |
| Tax Rate | 40.1% | 21.7% | 11.3% | 32.1% | 34.2% |
Disney Balance Sheet Summary
Accounts Payable
Disney's accounts payable ended 2016 at $9.1 billion. In the next two years, the organization would maintain this level. However, in 2019 and 2020, the organization's Accounts Payable would increase substantially, ending 2020 at $16.8 billion.
The substantial increase in Disney's accounts payable indicates that the organization is taking longer and longer to pay its suppliers. This is beneficial for Disney because the company is able to use funds earmarked for suppliers for other purposes like operating costs. However, by taking longer to pay suppliers, the organization may be detrimentally impacting their suppliers' cash flow. This may lead to unintended consequences like higher raw material costs due to slow pay or supplier turnover due to disloyalty or cash flow issues. A better strategy for Disney would be to pay their suppliers on a consistent basis. This consistency will allow suppliers to maintain adequate cash flows. Also, by maintaining a consistent Accounts Payable practice, the organization may be able to negotiate raw material costs at a lower rate. Goodness knows that Disney is doing a dismal job with their cost of goods controls. This may help with the problem.
Disney 2020: Summary Balance Sheet |
|||||
| Column1 |
2020 |
2019 | 2018 | 2017 |
2016 |
| Cash |
17,914 |
5,418 | 4,150 | 4,017 |
4,610 |
| Short Term Investment | - | - | - | - | |
| Account Receivable |
12,708 |
15,418 | 9,334 | 8,633 |
9,065 |
| Inventory |
1,583 |
1,649 | 1,392 | 1,373 |
1,390 |
| Other | - | - | - | - | - |
| Current Assets |
35,251 |
28,124 | 16,825 | 15,889 |
16,966 |
| Net PPE |
32,078 |
31,603 | 29,540 | 28,406 |
27,349 |
| Goodwill |
77,689 |
80,293 | 31,269 | 31,426 |
27,810 |
| Other | - | - | - | - | - |
| Total Assets |
201,549 |
193,984 | 98,598 | 95,789 |
92,033 |
| Accounts Payable |
16,801 |
17,942 | 9,479 | 8,855 |
9,130 |
| Accrued Expense | - | - | - | - | - |
| Accrued Taxes | - | - | - | - | - |
| Notes Payable | - | - | - | - | - |
| LT Debt - Current |
5,711 |
8,857 | 3,790 | 6,172 |
3,687 |
| Other | - | - | - | - | - |
| Total Current Liabilities |
26,628 |
31,521 | 17,860 | 19,595 |
16,842 |
| LT Debt |
52,917 |
31,521 | 17,084 | 19,119 |
16,483 |
| Other | - | - | - | - | |
| Total Liabilities |
113,286 |
100,095 | 45,766 | 50,785 |
44,710 |
| Common Stock |
54,497 |
53,907 | 36,779 | 36,248 |
35,859 |
| Treasury |
907 |
907 | 67,588 | 64,011 |
54,703 |
| Retained Earnings |
38,315 |
42,494 | 82,679 | 72,606 |
66,088 |
| Other | - | - | - | - | |
| Total Equity |
88,263 |
93,889 | 52,832 | 45,004 |
47,323 |
| Total Equity & Liability |
201,549 |
193,984 | 98,598 | 95,789 |
92,033 |
Disney Financial Ratio Summary and Analysis
Cash Ratio
The company's cash ratio ended 2016 at .27. In the next three years, the organization would continually reduce its cash ratio ending 2019 at .17. However, in 2020, the firm would shift its cash strategy to include elevated liquid assets. This resulted in the company's cash ratio being .67 in 2020.
Inventory Turnover
The Walt Disney Company's inventory turnover in 2016 was 40.0. In the next three years, the company would improve its inventory turnover ending 2019 at 42.1. However, in 2020, the company's inventory turnover would fall slightly, ending the year at 41.3.
Net Profit Margin
Disney's net profit margin ended 2016 at 17.6%. In the next two years, the company would moderately increase their net profit margin ended 2018 at 21.9%. However, in the next two years, again, Disney would substantially fall in its net profit margin ending 2020 at -3.7%. Once the Covid 19 issue subsides, investors should anticipate substantial growth in net profits. However, if these expectations are not reached in the moderate term, then Disney needs to take significant actions to optimize operations through lower operating costs and selling off underutilized fixed assets.
Disney 2020 Liquidity Ratios |
|||||
| Ratios |
2020 |
2019 | 2018 | 2017 |
2016 |
| Current Ratio |
1.32 |
0.89 | 0.94 | 0.81 |
1.01 |
| Cash Ratio |
0.67 |
0.17 | 0.23 | 0.21 |
0.27 |
| Quick Ratio |
1.26 |
0.84 | 0.86 | 0.74 |
0.92 |
| Net Working Capital |
15,404 |
4,543 | 5,397 | 5,168 |
5,935 |
Disney 2020 Asset Utilization |
|||||
| Ratios |
2020 |
2019 | 2018 | 2017 |
2016 |
| Total Asset Turnover |
0.32 |
0.36 | 0.60 | 0.58 |
0.60 |
| Fixed Asset Turnover |
2.04 |
2.20 | 2.01 | 1.94 |
2.03 |
| Days Sales Outstanding |
70.94 |
80.89 | 57.32 | 57.15 |
59.48 |
| Inventory Turnover |
41.31 |
42.19 | 42.70 | 40.16 |
40.02 |
| Accounts Receivable Turnover |
5.15 |
4.51 | 6.37 | 6.39 |
6.14 |
| Working Capital Turnover |
4.24 |
15.31 | 11.01 | 10.67 |
9.37 |
| AP Turnover |
3.89 |
3.88 | 6.27 | 6.23 |
6.09 |
| Average Days Inventory |
13.17 |
14.32 | 15.53 | 16.54 |
16.92 |
| Average Days Payable |
139.75 |
155.86 | 105.72 | 106.65 |
111.11 |
Disney 2020 Profitability Ratios |
|||||
| Ratios |
2020 |
2019 | 2018 | 2017 |
2016 |
| Return on Assets |
-1.23% |
5.97% | 13.25% | 9.78% |
10.64% |
| Return on Equity |
-2.80% |
12.34% | 24.73% | 20.81% |
20.69% |
| Net Profit Margin |
-3.78% |
16.65% | 21.98% | 16.99% |
17.60% |
| Gross Profit Margin |
32.89% |
39.60% | 44.94% | 45.04% |
46.09% |
| Operating Profit Margin |
4.95% |
20.78% | 24.96% | 25.16% |
25.81% |
| Basic Earning Power |
1.60% |
7.45% | 15.05% | 14.48% |
15.60% |
| ROCE |
1.85% |
8.90% | 18.38% | 18.21% |
19.10% |
| Capital Employed |
174,921 |
162,463 | 80,738 | 76,194 |
75,191 |
| ROIC |
4.08% |
31.32% | 37.67% | 28.07% |
28.40% |
Disney 2020: Long-term Debt |
|||||
| Ratios |
2020 |
2019 | 2018 | 2017 |
2016 |
| Debt Ratio |
26.26% |
16.25% | 17.33% | 19.96% |
17.91% |
| Debt/Equity |
59.95% |
33.57% | 32.34% | 42.48% |
34.83% |
| Times Interest Earned |
2.17 |
14.78 | 25.85 | 36.03 |
55.22 |