Disney's Ratio

International Accounting

1. What industry is Disney in ?
2. Does Disney make money ? (IS)
3. Trend of 3 years
4. Makes Money ? YES : How much ? (IS) – Gross Margin and Net Income Margin – Ratio Analysis
5. Liquidity (Cashflow/BS)
6. How is Disney doing compare to competitors ?
7. ROE and ROA (IS/BS)
8. Future Prospects
9. Pricing Strategy
10. Marketing Strategy

I. Return on Investment

Return on Equity (ROE):

2012
ROE=Net Income/Average Stockholders’ Equity

ROE=6173/(41958+39453):2
ROE=0,1516

Disney’s ROE=15%

Disney generated a profit of 15 cents for every dollar in its average equity throughout the year.

Net income from 2012 Disney’s Income Statement
Average stockholders’ equity from 2012 and 2011 Disney’s Balance Sheet

2011
ROE=0,1335

2010
ROE=0,1153

Return on Assets (ROA):

2012
ROA=Earning without interest expense (EWI)/Average total assets

ROA=Net Income+(interest expense*(1-statutory tax rate))/(Beginning total assets+Ending total assets):2

ROA=6173+((-369*(1-0.35))/(74898+72124):2
ROA=5935,15/73511
ROA=0,0807
Disney’s ROA=8,1%

Disney generated about 8 cents of profit for every dollar in its average assets throughout the year.

Net income from 2012 Disney’s Income Statement
Interest expense from 2012

2011
ROA=0,0713

2010
ROA=0,0612

Return on Financial Leverage (ROFL):

2012
ROFL=ROE-ROA
ROFL=15%-8,1%
ROFL=6,9%

Approximately 6,9% of Disney’s ROE is attributable to financial leverage throughout the current year.

2011
ROFL=6,22%

2010
ROFL=5,35%

Gross Profit Margin:

2012
GPM=(Sales Revenue-Cost of Goods Sold)/Sales Revenue
GPM=(42278-33415)/42278
GPM=0,2096

2012 GPM for Disney=20,96%

Disney has 20,96% of each sales dollar left over after product costs are subtracted.

2011
GPM=0,1903

2010
GPM=0,1767

II. Liquidity Analysis

1. Current Ratio: