Annual Report The Walt Disney Company Charlie Boyd ACG2021-002
Executive Summary After reviewing the 2008 Annual Report for The Walt Disney Company, I believe the company will continue to grow. With the opening of new Disney Vacation properties, the acquisition of new corporations and the continuous growing cruise line fleet, I feel the company is moving in a positive direction. 2008 Annual Report: Disney Investor Relations - Annual Report 2008
Part A: Introduction CEO: Robert A Iger Location: The Walt Disney Studios Burbank, California Ending Date of Latest Fiscal Year: September 27, 2008 Disney is involved in just about everything. They provide movies, t.v. shows, music, radio channel, and even video games. The main thing they are known for though are the theme parks they have around the world. Along with everything else there is also Disney cruises that go all over the world along with resorts too. Disney also provides sporting entertainment at their Wide World of Sports venue in Orlando, FL. Disney can be seen world wide seeing as they have theme parks in California, Florida, Hong Kong, Tokyo, and most recently opened one in Paris. Disney provides Worldwide global kids TV. There is a Disney Cruise Line that travels all over the world and have various resorts throughout the country.
Part A: Audit Report The independent auditor for The Walt Disney Company s 2008 Annual Report was Pircewaterhouse Coopers. According to Pricewaterhouse Coopers, The Walt Disney Company presented all of their information fairly and followed accounting principles generally accepted in the United States of America.
Part A: Stock Market Information The most current price of 1 share of stock for The Walt Disney Company is $28.44. The twelve month range of the stock has seen a high of $34.39 a share and a low of $15.83 a share. The dividend is $0.35 a share. All of this information is as of September 20, 2009. My opinion would be to buy because of the economy right now. Disney always seems to bounce back with new ventures and innovations and if you can get the share while they are low then it would be beneficial in the long run.
Part B: Industry Situation and Company Plans As of right now Disney seems to be headed in the right direction with the acquisition of Marvel Entertainment Inc. Also Disney is the parent company for the subsidiary ESPN who is projected to be the main source of media revenue (Forbes.com). Disney will soon be opening a new Disney Vacation property called the Ko Olina in Hawaii. In addition to the Disney Vacation property they plan on having two new cruise ships set sail, one in 2011 and one in 2012. *All of this information is found on Forbes.com and the Disney Letter To The Stockholders
Part C: Income Statement The Income Statement most resembles a single step Income Statement. From 2007 to 2008 the net income and income from operations both declined while the gross profit rose. Income from Operations 2008 2007 7,402,000 7,725,000 Gross Profit 8,986,000 8,272,000 Net Income 4,427,000 4,687,000
Part C: Balance Sheet Liabilities SHE Assets 29,760,000 33,272,000 63,032,000 28,288,000 34,296,000 62,584,000 From 2007 to 2008 the total assets decreased by $448,000. The liabilities also decreased by $1,472,000. The total stockholders equity rose by $1,024,000. The account with the biggest change was the decrease of liabilities from 2007 to 2008.
Part C: Statement of Cash Flows The cash flows from operations for the past two years have been MORE than the net income for the past two years. Disney is growing due to the fact they bought Marvel Entertainment Inc. and by opening a new Disney Vacation property in Hawaii. They also plan on having two new cruises set sail in 2011 and 2012. The company s primary source of financing is from stock sales. The cash increased from 2006 to 2007 and decreased from 2007 to 2008. The cash in 2008 was still an increase from 2006 though.
Part D: Accounting Policies The accounting policies and estimates include revenue recognition, goodwill, intangible assets and investments, pension and postretirement medical plan, film and television revenues and costs, income tax audits, stock option compensation expense, contingencies and litigation.
Part E: Financial Analysis Liquidity Ratios 2007 2008 Working Capital (77,000) 75,000 Current Ratio.99 1.01 Receivable Turnover Average Days Sales Uncollected Inventory Turnover Average Days Inventory on Hand 7.06 7.3 51.7 50 44.82 32.7 8.1 11.1 The average days inventory on hand rose from 2007 to 2008 which means there is less people buying products.
Part E: Financial Analysis Profitability Ratios 2007 2008 Profit Margin 13% 12% Asset Turnover.59.61 Return on Assets 7% 7% Return on Equity 15% 14% From 2007 to 2008 the profit margin and the return on equity both dropped while return on assets stayed the same. The only ratio that rose was the asset turnover.
Part E: Financial Analysis Solvency Ratio The debt to equity ratio decreased from 2007 to 2008. This means the stockholders are gaining more control of the company away from the creditors. 2007 2008 Debt to Equity.98.93
Part E: Financial Analysis Market Strength Ratios For 2008 the dividend yield is 1.56 and the price/earnings per share is 10.91.