Disney Financial Report and Financial Analysis: 2015 to 2019
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.
*No 10k Annual Statements
Call or Text Paul Now!
Tutoring Sessions may be In-Person or online via Skype!
Disney stock price started 2019 at $107.94. It ended the year with a stock price of $146.40. This is a growth rate annually of 35.63%. From an investor’s perspective, this growth rate well exceeds overall market returns.
Disney has been consistently paying dividends over the last five years. Further, their dividend payments have been growing continuously as well. However, the actual growth rate for dividends has been declining. In 2016, the growth rate for dividends was 8.76%. However, in 2019, this growth rate slowed to 2.33%. Investors should expect this growth rate declined to continue for your seeable future.
Disney Income Statement Summary
Cost of Goods Sold
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||-||-||-||-||-|
Disney Balance Sheet Summary
Disney’s accounts payable has grown from 7.8 billion to 17.9 billion within a five-year time frame. Also, as a percentage of sales, this increase is from 15% to 25.8%. The substantial increase in accounts payable shows that the firm is taking longer to pay their suppliers for raw material.
A benefit for the delayed payments is that the firm can utilize the funds for operations. This may lower the need for additional outside financing. An issue with delayed accounts payable is the company misses out on discounts on early payment opportunities. Further, slow pay with accounts payable often leads to vendor animosity. This animosity could result in disloyalty from the vendors.
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 Financial Ratio Summary and Analysis
Disney’s cash ratio had fallen from .26 in 2015 to .17 in 2019. The steady decline indicates that the company is trying to find the optimal cash position to support operations. From an investor’s perspective, they may assume this ratio will continue to fall until optimization is achieved.
Disney’s inventory turnover had increased from 33.4 in 2015 to 42.2 in 2019. This indicates that the company is holding less inventory. As long as inventory sellouts are not an issue, this practice is well received by financial analysts. Not only does this allow for organizations to use less space for storage but it also helps the company avoid product obsolescence.
Net Profit Margin
The company’s net profit margin is currently at 16.7% for 2019. This is down substantially from 22% in 2018. The main reason for this decline could be increased interest expenses for the company. In some situations, when an organization takes on debt, return on the investments may take several years. However, interest expenses often impact the organization’s bottom line within 12 months.
Walt Disney Liquidity Ratios 2019
|Net Working Capital||4,543||5,397|
Walt Disney Asset Utilization 2019
|Total Asset Turnover||0.36||0.60|
|Fixed Asset Turnover||2.20||2.01|
|Days Sales Outstanding||80.89||57.32|
|Accounts Receivable Turnover||4.51||6.37|
|Working Capital Turnover||15.31||11.01|
|Average Days Inventory||0.12||0.12|
|Average Days Payable||0.01||0.02|
Walt Disney Profitability Ratios 2019
|Return on Assets||5.97%||13.25%|
|Return on Equity||12.34%||24.73%|
|Net Profit Margin||16.65%||21.98%|
|Gross Profit Margin||39.60%||44.94%|
|Operating Profit Margin||20.78%||24.96%|
|Basic Earning Power||7.45%||15.05%|