The Walt Disney Company
Essay by Ganesh App • May 29, 2016 • Coursework • 445 Words (2 Pages) • 1,164 Views
The Walt Disney Company (DIS)
- Financial Accounting (Data source Annual Report and not Yahoo Finance).
1.Cash Flow from Assets = Cash Flow to Creditors + Cash Flow to Stockholders
*All numbers in millions
Cash Flow from Assets 2015($) | Cash Flow to Investors 2015($) | ||
Operating Cash Flow | 11,089 | Cash Flow Paid to Creditors | -25 |
EBIT | 13,751 | Interest | 117 |
Depreciation | 2,354 | Net new borrowing | 142 |
Tax | 5,016 | ||
Capital Spending | 4,806 | Cash Flow to Stockholders | 8,337 |
Ending Net Fixed asset | 71,424 | Dividends Paid | 3,063 |
Begging Net Fixed asset | 68,972 | Repurchase of stock | 6,095 |
Depreciation | 2,354 | Common stock | 821 |
Additions to NWC | -1,453 | ||
Total | 7,736 | Total | 8,312 |
*CFFA = Operating cash flow – net capital spending – changes in net working capital
- Net capital spending = ending fixed assets – beginning fixed assets +depreciation
- Changes in NWC = ending NWC – beginning NWC
*Cash flow to creditors = interest paid – net new borrowing = interest paid – (ending long-term debt – beginning long-term debt)
- Du Pont Identity
ROE = Profit Margin (Profit/Sales) * Total Asset Turnover (Sales/Assets) * Equity Multiplier (Assets/Equity)
Year | 2015 | 2014 | 2013 |
Profit Margin | 0.16 | 0.15 | 0.14 |
Profit | 8,382 | 7,501 | 6,136 |
Sales | 52,465 | 48,813 | 45,041 |
Total Asset Turnover | 0.59 | 0.58 | 0.55 |
Sales | 52,465 | 48,813 | 45,041 |
Assets | 88,182 | 84,141 | 81,241 |
Equity Multiplier | 1.81 | 1.75 | 1.69 |
Assets | 88,182 | 84,141 | 81,241 |
Equity | 48,655 | 48,178 | 48,150 |
ROE | 0.17 | 0.16 | 0.13 |
Comment on the changes in each DuPont identity:
The increase in ROE each year can be seen from the increase in all three of the DuPont identity (Profit margin, Asset turnover, equity multiplier) over the years, implying the operational efficiency, asset utilization and financial leverage has increased over the years.
- External Financing Need
Increase in Asset | 88,182,000 *5% | 4,409,100 |
Increase in Account Payable | 7,844,000*5% | 392,200 |
Increase in NI | 8,382,000*1.05*RR | 5,544,693 |
Retained Ratio | (8,382,000-3,063,000)/8,382,000 | 0.63 |
EFN | (1,527,793) |
*5% Growth
- Internal Growth Rate
Internal growth rate = (ROA x b) / [1 – ROA x b]
Year | 2015 | 2014 | 2013 |
Profit | 8,382 | 7,501 | 6,136 |
Assets | 88,182 | 84,141 | 81,241 |
ROA | 0.10 | 0.09 | 0.08 |
Dividend Paid | 3,063 | 1,508 | 1,324 |
b | 0.63 | 0.80 | 0.78 |
Internal Growth Rate | 6.42% | 7.67% | 6.30% |
- Sustainable Growth Rate
Sustainable growth rate = (ROE x b) / [1 – ROE x b]=12.0%
*ROE=0.17, b=0.63
Year | 2015 | 2014 | 2013 |
ROE | 0.17 | 0.16 | 0.13 |
b | 0.63 | 0.80 | 0.78 |
Sus. Growth Rate | 12.09% | 14.66% | 11.35% |
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