12Walt Disney Company Financial Ratios Calculation 201

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Walt Disney Company Financial Ratios Calculation 2019
Walt Disney Company Financial Ratios Calculation 2020
Walt Disney Company Financial Ratios Comparison
DuPont Analysis
In the context of the study of economic and financial
performance, a very useful tool in the specialized literature and
practice is the DuPont model. The analysis by the DuPont model
is realized through the decomposition rate of return ROE
(Return on Equity) according to other rates of return, such as
ROS (Return on Sales), ROA (Return on Assets) or Equity
Multiplier.
Decomposition of Net Profit Margin

Two-component Disaggregation of ROA
Four-component Disaggregation of ROA
Two-component Disaggregation of ROE
ROE = ROA * Financial Leverage
Year
ROE
ROA
Financial Leverage
2020
-3.43%
-1.42%
2.41
2019
12.44%
5.70%
2.18
Three-component Disaggregation of ROE
2019
2020
Debt Ratio
0.46(Stronger)
0.51(Weaker)

Gross Profit margin
39.6%(Stronger)
32.9%(Weaker)
Free cash flow
1.6%(Stronger)
1.5%(Weaker)
Times interest earned
12.19(Less risk)
-0.06(More risk)
Accounts receivable turnover
4.49(Slower)
5.15(Quicker)
Inventory turnover
9.4(Quicker)
8.8(Slower)
Return on Sales
15.89%(Stronger)
-4.38%(Weaker)
Asset Turnover
0.36(Quicker)
0.32(Slower)
Return on Assets
5.7%(Stronger)
-1.42%(Weaker)
Financial Leverage
2.18(Less Risk)
2.41(More risk)
Return on Equity
12.4%(Stronger)
-3.4%(Weaker)
This paper discusses the trends within the financial performance

of Walt Disney, supported the 2 financial years, 2019 and 2020
discussing different aspects of the firm that include
liquidity, efficiency, profitability and solvency.
Profitability
The return on sales of Walt Disney deteriorated in 2020 because
it was at -4.38% compared to 15.89% that was achieved in 2019.
this might be attributed to numerous issues chief among them
increased administration costs and increased.
The ratio of Walt Disney deteriorated in 2020. The profit
margin shows the power of the corporate to hold the prices
related to the sales low. The return on assets of the firm
deteriorated from 5.7% in 2019 to -1.42% in 2020. The return
on assets indicates the management’s ability to form sales using
total assets. The deterioration of the ROA ratio indicates that
there is downswing in efficiency of assets.
Lastly, the Return on Equity also deteriorated because it
reduced from 12.4% to -3.4%. The
return on equity indicated the use of shareholders equity in
creating income. The breakdown of ROE into its three
components, financial leverage, margin of profit, and asset
turnover show us the productive aspects of the Walt Disney.
The return on assets indicates the management’s ability to form
sales using total assets. While there was a rise in financial
leverage and asset turnover in 2020, there was a decrease within
the margin of profit, which decreased the overall ROE. The
profitability of Walt Disney, considering the profit ratios, is
deteriorating, with key factor being the decrease within the
gross margin.
Liquidity
Liquidity is that the ability to use its current assets to meet its
current or short-term liabilities. In our analysis, liquidity is
indicated by the days interest earned. This ratio indicates, the
number of times the earnings of an organization cove the
interest expense. The days interest earned decreased from 12.19

in 2019 to -0.06 in 2020, which indicates the reduced ability of
earnings to compensate for interest. The liquidity of Disney
decreased.
Free cash flows also indicate the flexibility of the firm to stay
in business and help meet it’s daily and long-term cash needs.
The cash flows of Walt Disney deteriorated in 2020 compared to
the previous year 2019.
Solvency
Solvency of a company is the ability to meet its long-term debts
when they fall due. In our analysis, solvency is represented as
debt ratio. The debt ratio of this firm improved from 0.46 in
2019 to 0.51 in 2020. The flexibility of organization to satisfy
its long-term obligations thus deteriorated.
Efficiency
Efficiency is that the measure of how well an organization is
ready to perform its processes and
how well it utilizes its resources. In our analysis, it's indicated
by the assets turnover, inventory turnover and also the total
asset turnover. The assets turnover of the firm improved from
4.49 to 5.15 times, which indicates the improved ability of the
firm to gather accounts receivables from sales.
The inventory turnover ratio of Walt Disney deteriorated from
9.4 in 2019 to 8.8 times in
2020. this means decreased sales compared to the inventory that
the firm maintains. Lastly, the overall assets turnover for Walt
Disney increased from 0.36 times to 0.32 times. Asset turnover
indicates the quantity of times assets create sales in a very year.
Increase indicated the increased ability to come up with sales
from these assets.
Conclusion
The financial performance of Walt Disney supported the ratios
deteriorated in 2020 compared
to the previous year.

References
Vintilă et al., 2012 Vintilă G., Gheorghe I., Pocan I. M., M.G.
Anghel (2012) Factorial analysis of profitability,
RevistaRomână de Statistică- SuplimentTrimestrul II/2012, pp.
256-259.
Chang Amy. (2020). Form 10-K Walt Disney Co. Retrieved
from https://sec.report/Document/0001744489-20-
00197/#i6261866521954ef19f64de03269f40a7_157
Barati, A. A., & Forouz, A. (2017). Cash Flow and Profit Effect
on the Value of the Companies during Different Stages of their
Life Cycle. International Journal of Scientific Study, 5(4), 223–
231. https://doi.org/10.17354/ijss/2017/32
Financial Ratio 2019 Ratio 2020 Ratio Comparison
Inventory Turnover 9.4 8.8 ↓

Receivables Turnover 4.49 5.15 ↑
Debt Ratio 0.46 0.51 ↑
Gross Profit Margin 39.60% 32.90% ↓
Interest Coverage Ratio 12.19 -0.06 ↓
Free Cash Flow Yield 1.60% 1.50% ↓
Financial Ratio 2019 Ratio 2020 RatioComparison
Inventory Turnover 9.4 8.8
↓
Receivables Turnover 4.49 5.15
↑
Debt Ratio 0.46 0.51
↑
Gross Profit Margin 39.60% 32.90%
↓
Interest Coverage Ratio 12.19 -0.06
↓
Free Cash Flow Yield 1.60% 1.50%
↓
Year Net Profit Margin Tax Burden Interest Burden EBIT
Margin
2020 -4.38% — — -0.79%
2019 15.89% 0.78 0.92 22.04%
Net Profit Margin=Tax Burden*Interest Burden*Ebit Margin
YearNet Profit MarginTax BurdenInterest BurdenEBIT Margin
2020-4.38%——-0.79%
201915.89%0.780.9222.04%
Net Profit Margin=Tax Burden*Interest Burden*Ebit Margin

Year ROA Net Profit Margin Asset Turnover
2020 -1.42% -4.38% 0.32
2019 5.70% 15.89% 0.36
ROA = Net Profit Margin * Asset Turnover
YearROANet Profit MarginAsset Turnover
2020-1.42%-4.38%0.32
20195.70%15.89%0.36
ROA = Net Profit Margin * Asset Turnover
Year ROA Tax Burden Interest Burden EBIT Margin Asset
Turnover
2020 -1.42% — — -0.79% 0.32
2019 5.70% 0.78 0.92 22.04% 0.36
ROA = Tax Burden * Interest Burden * EBIT Margin * Asset
Turnover
YearROATax BurdenInterest BurdenEBIT MarginAsset
Turnover
2020-1.42%— —-0.79%0.32
20195.70%0.780.9222.04%0.36
ROA = Tax Burden * Interest Burden * EBIT Margin * Asset
Turnover
Year ROE Net Profit Margin Asset Turnover Financial Leverage
2020 -3.43% -4.38% 0.32 2.41
2019 12.44% 15.89% 0.36 2.18

ROE = Net Profit Margin * Asset Turnover * Financial
Leverage
YearROENet Profit MarginAsset TurnoverFinancial Leverage
2020-3.43%-4.38%0.32 2.41
201912.44%15.89%0.36 2.18
ROE = Net Profit Margin * Asset Turnover * Financial
Leverage
Financial Ratio Formula Calculation 2019 Ratio
Inventory Turnover Cost of Sales / Avg. Inventories 42.061 /
4.476 9.4
Receivables Turnover Net Revenue / Accounts Receivable
69,570 / 15,481 4.49
Debt Ratio Total Liabilities / Total Assets 91,132 / 193.98 0.46
Gross Profit Margin Gross Profit / Net Revenue 27.546 B /
69.607 B 39.60%
Interest Coverage Ratio EBIT / Interest Expense 15,190 / 1246
12.19
Free Cash Flow Yield Levered Free Cash Flow / Market
Capitalization 3.671 B / 234.8 B 1.60%
Financial Ratio Formula Calculation2019 Ratio
Inventory Turnover Cost of Sales / Avg. Inventories 42.061 /
4.476 9.4
69,570 / 15,4814.49
Debt Ratio Total Liabilities / Total Assets 91,132 / 193.980.46

69.607 B 39.60%
Interest Coverage Ratio EBIT / Interest Expense 15,190 /
124612.19
Free Cash Flow YieldLevered Free Cash Flow / Market
Capitalization3.671 B / 234.8 B1.60%
Financial Ratio Formula Calculation 2020 Ratio
Inventory Turnover Cost of Sales/ Avg. Inventories 43.88 / 5
8.8
65,388 / 12,708 5.15
Debt Ratio Total Liabilities / Total Assets 104,037 / 201.55
0.51
65.388 B 32.90%
Interest Coverage Ratio EBIT/ Interest Expense 96 / 1647 -0.06
Free Cash Flow Yield Levered Free Cash Flow / Market
Capitalization 3.369 B / 224.2 B 1.50%
Financial Ratio Formula Calculation2020 Ratio
Inventory Turnover Cost of Sales/ Avg. Inventories 43.88 / 5
8.8
65,388 / 12,7085.15
Debt Ratio Total Liabilities / Total Assets 104,037 / 201.550.51
65.388 B32.90%
Interest Coverage Ratio EBIT/ Interest Expense 96 / 1647 -0.06
Free Cash Flow YieldLevered Free Cash Flow / Market

Capitalization3.369 B / 224.2 B1.50%
1
Running Head: GROUP PROJECT PART 1 – WALT DISNEY
COMPANY
2
GROUP PROJECT PART 1 – WALT DISNEY COMPANY
Walt Disney Company
Walt Disney Company is an American multinational mass media
and entertainment company with its headquarters in Burbank,
California. Walt Disney company multiple theme parks
internationally, an animation studio, live-action film
production, and many business franchises. It also has the
biggest movie studios in the world, and it is one of the largest
media companies in the world. The other main business units
include television and streaming services. The cartoon character
Mickey mouse created by Disney is the official mascot of the
company. Walt Disney Company includes Marvel
Entertainment, Lucasfilm, ABC, ESPN, and Pixar Animation
Studios. It also includes streaming services Hulu, Disney+, and
Hotstar. Disney also has a presence in the travel industry with
its Disney cruise line.
History
Walt Disney Company originally called the Disney
brothers cartoon studio was founded in 1923 by Walt Disney
and Roy O. Disney. The company initially started as a cartoon
studio. Alice’s wonderland was the first cartoon made by Walt
Disney. Within few years the company had produced two
movies and they also purchased their movie studio in
Hollywood. But later the company almost collapsed due to
downsides in its distribution rights. The creation of Mickey
mouse in 1928 saved the company and it completely changed
the position of the company in the industry. In the 1930s the

company won the first Academy Award for the best cartoon for
an animated short film series and later the company started
producing full-length feature films. World war II halted the
company’s movie production and instead they started producing
war propaganda movies for the US government. In the 1950s
again the company started producing live-action films and also
launched various television series. In 1955 Disney launched
Disney theme park in California and later additional theme
parks opened around the globe. In the 1980s the company
expanded its business in cable TV and established several
studios which helped the company make its mark in the
entertainment industry. In 2006 Disney purchased Pixar studios
and started focusing on digital animation. Bob Iger became the
chairman of Disney in 2009 and he shifted the company’s focus
to family-oriented products. In 2009, the company also acquired
Marvel studios and in 2012 it had acquired Lucasfilm which
gave full rights to the Star Wars franchise. In February 2020,
Bob Chapek was announced as the CEO of the Walt Disney
Company (Adrien-Luc, 2019)
Disney in the Digital age
With the advancements in digital media, consumers
started showing interest in online streaming services. This has
forced all media content producers to adapt to the new digital
methods of broadcasting the content. To remain competitive in
the industry and to adapt to the interests of the consumers, the
media industries started switching from cable programming to
over-the-top (OTT) streaming services. In 2012, Disney agreed
with Netflix to bring all its movies to the Netflix platform. This
partnership has brought approximately $325 million in cash
stream for Disney. In 2017, Disney invested in BAMTech a
streaming-video company, and decided to introduce two
subscription services with one focused on sports through the
ESPN app and the other focused on television show s and
movies. In 2018, Iger announced that Disney would be
introducing a subscription service named Disney+, and the
service was later launched in 2019 (Matt, 2017).

Disney’s organizational position and its competitors
Since its foundation in the 1920s, Walt Disney has built
a diverse empire in the field of mass media and entertainment,
and it has proven to be the leader in the media industry.
Because of its involvement in different sectors of the
entertainment industry, Disney has many competitors. The main
competitors are Sony, Comcast, Charter Communications,
Viacom CBS, Warner Media, Amazon Prime Video, Netflix, Six
Flags which compete mainly through TV cable services, online
streaming services, and theme parks. Theme parks are the main
source of income for Walt Disney company which generated a
revenue of $26.2 billion in 2019. The second-largest source of
income for the Walt Disney Company is media networks which
generated $24.8 billion in 2019. The total revenue made by the
Walt Disney company in 2019 was 31.82% of the revenue made
by all of its competitors combined. The company also makes
profits from its online streaming services and its affiliation with
ABC networks. Warner media is the biggest competitor of Walt
Disney company. Warner media company includes HBO,
Warner Bros. Pictures, and Turner broadcasting system. Along
with Comcast and Viacom CBS, Warner media is the biggest
competitor for Disney in terms of media and entertainment
corporation. Comcast is the competitor of Disney in TV, cable,
and filmed entertainment. Walt Disney company’s online
subscription service Disney+ competes with major
entertainment companies like Netflix, Apple TV+ and Amazon
Prime Video. Cedar Fair and Six flags compete with Walt
Disney company in the amusement parks industry. The
exclusive content of Disney gives it a competitive advantage as
the content cannot be licensed or distributed to other media
networks (Troy, 2019).
Recent developments in the company
In October 2020, the company announced its strategy to
reorganize its business to accelerate the growth of the Direct-to-
Consumer (DTC) strategy. DTC services are offered directly to
consumers on a subscription basis through mobile and

connected devices. Under the new structure the company will
focus on creating content for the streaming services and the
legacy platforms. In April 2020, Hotstar service in India was
converted to Disney+Hotstar. By the end of 2020, Disney+
services were made available in Europe, Latin America, Japan,
Indonesia, and various other Asian-pacific territories. By
October 2020, there were approximately 74 million subscribers
to the streaming service. Outside of the US, the company is
planning to launch a streaming service under the Star brand. In
its annual meeting with the shareholders, the company discussed
the success of the disney+ app in its first year. Three content
groups of the company will be responsible for providing
content. Studios – This will focus on creating theatrical and
disney+ content. General Entertainment – This will focus on
creating content for the streaming platform, cable, and
broadcast networks. Sports – This group will focus on the sports
programs for ESPN+ and ABC (“The Walt Disney Company
Announces Strategic Reorganization of Its Media And
Entertainment Businesses”, 2020)
Covid 19 Impact and recovery
In the form 10-K filed with SEC for the year 2020,
Disney mentioned the impact of the COVID-19 Pandemic. The
measures to prevent the spread of the COVID-19 have impacted
different segments of the Walt Disney Company, especially the
theme parks. The theme parks were closed for a certain period
and also operated with reduced capacity for most of 2020.
Cruise ships and guided tours were also suspended for a
significant portion of 2020 and the retail stores were also closed
for a significant portion of the year. Due to the closure of the
theme parks, there was approximately a $7.4 billion revenue
loss. The company was also impacted in the entertainment
segment by the suspension, delays, or cancellations of theatrical
releases and stage performances. Reopening the businesses also
incurred additional costs to address the regulations set by the
government and to ensure the safety of the employees and the
customers. Covid 19 impact may continue for an unknown

length of time which could impact the key sources of revenue.
The company also continued to pay for certain sports rights
despite the cancellation of those events. COVID-19 has also
impacted the reservations at the hotels and cruises. The
company has also experienced an increase in returns and
refunds. The economic turndown resulted in a decrease in the
purchase of goods. To mitigate the impact the company decided
to delay certain projects, suspending capital spending and
implementing furloughs in the workforce. Overall COVID-19
harmed the financial performance of the company which
reduced its credit ratings. With the decline of the covid cases in
2021 and also with people getting vaccinated the company
reopened its businesses in April 2021 and hired most of the
furloughed employees. The stock price of the company has
increased to $200 in March 2021 from a COVID low of $79
(Chang, 2020)
Social Responsibility
Walt Disney Company believes that being socially
responsible will strengthen its operations and give a competitive
advantage. In 2020, the Disney conservation fund contributed
more than $100 million to support nonprofit organizations
around the globe to help protect wildlife and forests. The
company is also committed to reducing greenhouse gas
emissions, conserving resources, and protecting the planet. The
company also continues to monitor and reduce the
environmental effects of its supply chain. Every year the
company provides a report on their performance in
environmental, governance, and social issues.
Future of the company
Reflecting on the massive disruptions in the year 2020, the
company has evolved and reinvented itself. The events of 2020
have tested the responsiveness and the ability of the company to
adapt to the changes. With the expansion in DTC services, the
company continues to find innovative ways to provide
exceptional content. Streaming services are considered to be the
future of the Walt Disney Company. However, film production

is important for Walt Disney Company to maintain its trademark
brand.
Conclusion
Over the decades the Walt Disney Company has gone through
different changes in its organizational structure and culture.
These reforms were brought to improve the performance of the
business and to adjust to the changes in the global markets. The
organizational culture of the Walt Disney company gave the
company a competitive advantage and helped them in gaining
loyal fans that help the business to have stability in financial
performance. Implementing organization-wide innovation
strategies helped Walt Disney Company to grow internationally.
The company was also successful in establishing their identity
in new markets. Innovation and efficient operation would help
the company gain success in global markets. Walt Disney
Company also needs to continuously evolve to meet the
expectations of the customers in the Over-the-top (OTT)
platforms and to be competitive and distinguished in the eyes of
the customers.
References
Adrien-Luc Sanders. (2019). A Brief History of the Walt Disney

Company. Retrieved from https://www.lifewire.com/the-walt-
disney-company-140911
Chang Amy. (2020). Form 10-K Walt Disney Co. Retrieved
from https://sec.report/Document/0001744489-20-
000197/#i6261866521954ef19f64de03269f40a7_157
Matt. (2017). A Whole New World: The Digital Evolution of
Disney. Retrieved from https://digital.hbs.edu/platform-
rctom/submission/a-whole-new-world-the-digital-evolution-of-
disney/
The Walt Disney Company Announces Strategic Reorganization
of Its Media And Entertainment Businesses. (2020). Retrieved
from https://thewaltdisneycompany.com/the-walt-disney-
company-announces-strategic-reorganization-of-its-media-and-
entertainment-businesses/
Troy Segal. (2019). Who are Walt Disney’s main competitors?
Retrieved from
https://www.investopedia.com/ask/answers/052115/who-are-
disneys-dis-main-competitors.asp
1
Running Head: GROUP PROJECT PART 3 – WALT DISNEY
COMPANY
8
GROUP PROJECT PART 3 – WALT DISNEY COMPANY
a)

Industry Title:
Walt Disney Company
Primary Industry Codes:
SIC CODE: 7812 - Motion Picture and Video Tape Production
NAICS CODE: 512110 - Motion Picture and Video Production
b)
Industry averages information for SIC CODE: 7812
Ratio
Year
Year
Description and Formulae
2020
2019
Solvency Ratios
Debt ratio
0.85
0.78
This indicates the ratio of debt to total assets.
Formula: Liabilities / Assets.
Debt-to-equity ratio
0.48
0.69
It indicates the ratio of equity and debt
Formula: Liabilities / Equity
Interest coverage ratio
-6.36
-0.99
It is a measure of a firm's ability to pay back its interest
payments.

Formula: EBIT / Interest expenses.
Liquidity Ratios
Current Ratio
0.74
0.5
This ratio incates the firm's progress on short-term debt
obligations.
Formula: Current Assets / Current Liabilities.
Quick Ratio
0.75
0.49
This ratio incates the firm's progress on short-term debt
obligations using its most liquid assets.
Formula: (Current Assets - Inventories) / Current Liabilities.
Cash Ratio
0.37
0.12
This ratio incates the firm's readily available funds to pay off
current liabilities.
Formula: Cash and cash equivalents / Current Liabilities.
Profitability Ratios
Profit margin
-89.10%
-35.80%
This is the money available after all expenses have been paid.
Formula: Profit (after tax) / Revenue
ROE (Return on equity), after tax
-121.70%
-32.90%
It is net income returned as shareholders equity.

Formula: Net income after tax / Shareholder's equity
ROA (Return on assets)
-29.80%
-16.70%
It is portion of profit that a company earns on overall resources.
Formula: Net Income after tax / Total assets (or Average Total
assets).
Gross margin
22.50%
31.70%
It is the ratio of gross profit to revenue.
Formula: Gross profit margin = Gross profit / Revenue
Operating margin (Return on sales)
-116.20%
-10.50%
This shows the amount of profit after variable costs of
production
Formula: EBIT / Revenue.
Activity Ratios
Asset turnover (days)
1365
778
It shows how management is using the assets to promote sales.
Formula: Revenue / Average total assets, or in days = 365 /
Asset turnover
Receivables turnover (days)
51
22
It determines how early the firm collects outstanding cash
balances
Formula: Net receivable sales/ Average accounts receivables, or
in days: 365 / Receivables Turnover Ratio
Inventory turnover (days)

7
3
It is a measure of the number of times inventory is sold
Formula: Cost of goods sold / Average Inventory, or in days:
365 / Inventory turnover.
Price Ratios
Dividend Payout Ratio
-0.07
0.82
Dividends that are paid by a firm
Formula: Total Dividends / Total Net Earnings x 100%.
C)
Industry average ratio of Walt Disney Company
Financial Ratio
Industry Average Ratio
For the Year 2020
Current ratio
1.64%
Debt ratio
60.38%
Gross profit margin
24.49%
Times interest earned
32.18%
Accounts receivable turnover
5.15%
Inventory turnover
27.72%
Return on sales
15.98%
Asset turnover

0.32%
Return on assets
-1.21%
Financial leverage
1.27%
Return on equity
-3.28%
This report covers the Walt Disney company revenue and
financial results. The company is delighted to see more
encouraging signs of recovery across the businesses, and the
company is focused on gaining the financial advantage from the
operations while planning the long term growth for the
company, mainly the company evaluates the performance of its
operating segments which is based on the segment of operating
income and the organization management will use the total
segment operating income to measure the performance of the
business that operates from non operating factors. Here the
investors will evaluate the changes
that happens while calculating the operating results of the
company’s portfolio of businesses which is separate from the
non operational factors of business which affects the net income
of the business (Disney, 2021).
The average industry ratio of Walt Disney declined in the year
2020. The business profit margin will show it has the control of
the company to hold the stock prices related to the less sales.
The return on assets of the firm declined from 5.7% in 2019 to -
1.42% in 2020. Over all the decline of the ROA ratio shows
that there is decreasing in efficiency of assets.
The above images show how the company had negatively

impacted during the outbreak of the corona virus pandemic
In the year 2020 the company reported the earnings of 32% per
share in the month of January, and less of $1.53 from the
previous year due to this Walt Disney company suffered huge
losses when compared to the results of 2019 and 2020 which
shows the decline in the financial results but not the losses
which the company expected to receive in the year as the
company has experienced the limited number of performances in
Disney parks due to COVID-19 and the company have taken the
preventive measure to reduce the impact of risks but still this
has impacted the company segments in numerous ways such as
the theme parks were closed or operated at significantly with
reduced capacity, due to this the business has experienced the
disruptions and loss in the production of its business
performance (Disney, 2021).
The increase in the interest, investment and other income was
due to the higher investment gains and the decrease in the
effective of income tax rate was due to the reduced tax on
foreign income and other higher excess tax benefits even on
employee share based awards. The financial statements are
made on the basis of management views and assumptions that
focuses the future events and business performance where the
business see the changes in every level and department of the
company and these changes can be both positive and negative
which also includes the risk of current and future impacts of the
business (Disney, 2021).
The earnings of the company will discharge the present free
cash flow which is important for taking the financial measures
for the company, but these measures are not defined by the
GAAP. It is important to review the financial measures which
are conjunction with the relevant GAAP because the measures
are not presented as alternative measures for operati ng the cash
flow.
The Walt Disney Company is using the free cash flow along
with other measures to evaluate the ability of its operation to
generate the cash which can be used for capital expenditures.

Even in the time of pandemic the business has continued to
incur the additional costs which are used to address the
government regulations and the safety of the employees
(Disney, 2021).
Parks, experiences and other products were the main reason why
the segment operating income was declined dramatically, as this
reduced the revenue down for 85% and the income of the
company significantly went to negative stage and this impacted
the income by $4.953 billion impairment charge for the
international channels. The future of Walt Disney company is
depended on when the whole economic shutdown begins to end
as this makes able to return the levels that are approaching
normal to make it stable even in the time of risk (Aughinbaugh,
2020).
The financial statements of Disney results that the company has
entered into the stabilized state which allows the company to
keep its expenses less to reduce any future losses, and now Walt
Disney is positively contributing to the firm and as long as the
company can remain open the company can focus more towards
increasing the demand that occurs in the future but still the
company had the stabilized operations in its tough quarter. The
company was also able to reduce the costs which have put in
more constant ground and this has helped the media
significantly to reduce its costs (Aughinbaugh, 2020).
Conclusion
To remain competitive in the industry the company has to
continuously adapt itself to the consumers taste in both content
and distribution as the viewers are moving from television to
OTT (over the top) platform. The actual results of the company
might differ materially from the expressed calculations and the
differences can result making the company to take the required
action or other business decisions which are beyond the
company control, and even the company suffered the setbacks in
huge but still the company’s stock continued to rise in the
record levels. The financial performance of Walt Disney
Company has supported the ratios that were declined in the year

2020 when compared to the previous year, which clearly shows
how this has negatively impacted the top line growth.
References
Aughinbaugh, D. (2020) Retrieved from,
https://www.navfile.com/center/the-walt-disney-company-
financial-analysis-q3-2020
Disney. (2021) Retrieved from,
https://thewaltdisneycompany.com/the-walt-disney-company-
reports-second-quarter-and-six-months-earnings-for-fiscal-
2021/
BA 620 Managerial Finance
Group Project Guidelines
Group/Company Project. One of the goals BA 620 Managerial
Finance is to introduce you to
various concepts, theories, and methods of evaluating the
financial strength of a company. This
paper is opportunities to put into practice these concepts,
theories, etc. that apply to a company.
Select a publicly traded company and record your selection with
me. During the course, it will be
your responsibility to use the class concepts to research the
company and apply the class learning
to the information obtained about the company.
Important:
The professor will assign you to groups at the beginning of this

class.
Each group will be assigned one or more companies to analyze.
Please note that the professor reserves the right to modify the
requirements of the group project.
Guide to Group Company Analysis
Part I (40 points)
A. Research and then describe your company's primary business
activities. Include:
1. A brief historical summary,
2. A list of competitors,
3. The company's position within the industry,
4. Recent developments within the company/industry,
5. Future direction, and
6. Other items of significance to your corporation.
B. Include information from a variety of resources. For
example:
1. Consult the Form 10-K filed with the SEC.
2. Review the Annual Report and especially the Letter to
Shareholders
3. Explore the corporate website.
4. Select at least two significant news items from recent
business periodicals
C. Submit a written report that is 5-7 pages long. The report
should be well written with cover
page, introduction, body of paper (with appropriate
subheadings), conclusion, and
reference page. References must be appropriately cited. Be sure
to address all of the
points in Section A above, using all of the resources listed in
Section B. Format: Double-

spaced, one-inch margins, using a 12-point Times New Roman
font.
D. Due Date: Last day of Week/Module 2
Part II (60 points):
The purpose of the second part of the comprehensive project is
to compute financial statement
ratios. Based on the company you selected in Part I, complete
the following:
A. Compute the following ratios for two years. You may use
Excel to compute your ratios.
1. Debt ratio
2. Gross profit margin
3. Free cash flow
4. Times interest earned
5. Accounts receivable turnover
6. Inventory turnover
B. Prepare a DuPont Analysis of ROE for two years, includi ng
computations of
1. Return on Sales
2. Asset Turnover
3. Return on Assets
4. Financial Leverage
5. Return on Equity
C. Briefly evaluate the ratio trends. Indicate on your worksheet
whether each ratio is:

1. stronger / weaker
2. quicker /slower
3. more / less liquid
4. more / less risk
Write a 3-6 page report evaluating trends in all of the above
ratios. Discuss whether your
company's profitability, efficiency, liquidity, and solvency are
improving or deteriorating. Suggest
ways the company can improve the ratios that show problems.
The report should be well written
with cover page, introduction, body of paper (with appropriate
reference page. References must be appropriately cited. Use
APA throughout.
Format: Double-spaced, one-inch margins, using a 12-point
Times New Roman font.
D. Due: Last day of Module 4
Part III (60 points):
The purpose of the third part of the comprehensive project is to
use resources available to
obtain industry averages for commonly used ratios.
Additionally, you will compare company
ratio results to industry averages.
A. Obtain the four-digit primary SIC (Standard Industrial
Classification) Code and industry title
for your company. Record the primary SIC code and industry
title at the top of the Ratio
Analysis Worksheet.
B. Obtain industry averages for commonly used ratios in the
current period. Industry average

information is reported by industry title or SIC code.
C. Look up the following industry-average ratios:
1. Current ratio
2. Debt ratio
3. Gross profit margin
4. Times interest earned
5. Accounts receivable turnover
6. Inventory turnover
7. Return on Sales
8. Asset Turnover
9. Return on Assets
10. Financial Leverage
11. Return on Equity
Note that some industry averages may not apply to your
company.
Write a 4-6 page report comparing the above ratios to industry
averages. Discuss whether your
company's profitability, efficiency, liquidity, and solvency are
better than, or worse then, its
peers. The report should be well written with cover page,
introduction, body of paper (with
appropriate subheadings), conclusion, and reference page.
References must be appropriately
cited. Format: Double-spaced, one-inch margins, using a 12-
point Times New Roman font. Use
APA throughout.
E. Due: Last day of Module 6
Part IV: Final Written Paper (40 points)

The final written paper requires you to prepare a well -written
titled "Would You Advise a Friend
to Invest in This Company?" based upon your research and
analysis of this company's financial
information. You should identify at 5-7 significant points that
justify your conclusion. Support
your points with a comprehensive explanation incorporating
sound reasoning. The significant
points you identified should be consistent with what you said in
Parts I, II, and III.
A. Your final written paper should be 4-5 pages long. The
report should be well written with
cover page, introduction, body of paper (with appropriate
reference page. References must be appropriately cited. Format:
Double-spaced, one-
inch margins, using a 12-point Times New Roman font. Use
APA throughout.
B. Due: Last day of Module 8

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