Reuters Editorial. 2018. Walt Disney Co (DIS.N) Company Profile - (Online) Available At: 10 December 2018)
Reuters Editorial. 2018. Walt Disney Co (DIS.N) Company Profile - (Online) Available At: 10 December 2018)
Reuters Editorial. 2018. Walt Disney Co (DIS.N) Company Profile - (Online) Available At: 10 December 2018)
and media company that operates through four segments (Reuters, 2018)
It continues to be one of the most valuable brads globally with its estimated value of
$43,900 millions (Forbes, 2018). The company continues to show financial stability
with its long-term debt to total asset ratio being 0.21 as of FY17 (Stock Analysis on
Net, 2017). Moreover, the ratio increased by 33% from FY16 which could be
attributed to major investments in the acquisitions of Pixar (2006), Marvel Studios
(2009), Lucasfilms and Star Wars Franchise (2013), the most recent one Twenty-First
Century Fox and developments like ESPN direct-to consumer business. The Cash
Flows for the respective years showed an increase in the cash used in Investing
Activities (Appendix, Figure 1). This highlights Disney’s generic strategy for growth
through diversification and acquisition. The company is popular for creating synergies
between its acquired brands and uses it to increase its revenues and profitability.
Disney accounted for highest profits in 2016 due to the global success of the Star
Wars movies (Appendix, Figure 2) and experienced a 1% fall in revenue during 2017
(Appendix, Figure 3 and 4). The Studio Entertainment segment continues to be one
of the weakest business segments along with Consumer Products and Interactive
Media. The two segments were also the lowest contributor to the total income in
FY17 (Appendix, Figure 5) making Disney adopt the strategies of aggressive
marketing and product diversification through innovation. It started releasing new
movies with corresponding merchandise, which has increased its sales in existing
markets. The company generates licenses for the merchandise, which increases its
sales as well as the revenues for company.
Parks and Resorts continue to be its strongest segment and Disney invests heavily in
it. Media Networks show constant changes in revenue due to the stiff competition it
faces in regional markets that leads to reduced viewership and increases in operating
cost due to frequent changes in regulations.
Both ROA and ROE have shown a consistent increase except during FY17
(Appendix, Figure 6). Disney uses Financial Leverage, which is demonstrated
through ROE rising above ROA.
Disney has operated with a good long-term debt to total asset ratio, keeping its
investors happy with higher returns (Appendix, Figure 6). Disney was named the
most reputable company in 2017 (Disney, 2017) as it believes in inclusion and
development of employees from all cultures. It has developed 36 Employee
Resource Groups globally for the same purpose as well as has women employed in
all sectors and at managerial posts. The organizational structure promotes creative,
innovative and freethinking.
Disney has always kept its strategy rather simple but has recently reorganized the
same to consolidate its direct-to-consumer services, technology and international
media operations into a single, global business to profit from growth opportunities.
Thus, 2019 is a year to look forward to for both the company and its investors.