Stock Analysis on Net

Walt Disney Co. (NYSE:DIS)

Financial Reporting Quality: Aggregate Accruals

Microsoft Excel

Earnings can be decomposed into cash and accrual components. The accrual component (aggregate accruals) has been found to have less persistence than the cash component, and therefore (1) earnings with higher accrual component are less persistent than earnings with smaller accrual component, all else equal; and (2) the cash component of earnings should receive a higher weighting evaluating company performance.


Balance-Sheet-Based Accruals Ratio

Walt Disney Co., balance sheet computation of aggregate accruals

US$ in millions

Microsoft Excel
Sep 30, 2023 Oct 1, 2022 Oct 2, 2021 Oct 3, 2020 Sep 28, 2019 Sep 29, 2018
Operating Assets
Total assets 205,579 203,631 203,609 201,549 193,984 98,598
Less: Cash and cash equivalents 14,182 11,615 15,959 17,914 5,418 4,150
Operating assets 191,397 192,016 187,650 183,635 188,566 94,448
Operating Liabilities
Total liabilities 92,567 95,253 101,385 104,037 91,132 44,643
Less: Short-term finance lease liabilities 37 37 41 37 5 12
Less: Current portion of borrowings 4,330 3,070 5,866 5,711 8,857 3,790
Less: Borrowings, excluding current portion 42,101 45,299 48,540 52,917 38,129 17,084
Less: Long-term finance lease liabilities 206 219 246 271 146 142
Operating liabilities 45,893 46,628 46,692 45,101 43,995 23,615
 
Net operating assets1 145,504 145,388 140,958 138,534 144,571 70,833
Balance-sheet-based aggregate accruals2 116 4,430 2,424 (6,037) 73,738
Financial Ratio
Balance-sheet-based accruals ratio3 0.08% 3.09% 1.73% -4.26% 68.46%
Benchmarks
Balance-Sheet-Based Accruals Ratio, Competitors4
Alphabet Inc. 17.24% 21.43% 22.86% 15.42%
Charter Communications Inc. 2.06% 0.36% -2.64% -2.09%
Comcast Corp. 1.29% -6.76% -0.48% 1.68%
Meta Platforms Inc. 11.12% 20.95% 14.69% 35.56%
Netflix Inc. -3.78% 14.21% 27.24% 10.12%
Balance-Sheet-Based Accruals Ratio, Sector
Media & Entertainment 6.09% 6.59% 6.42% 5.13% 200.00%
Balance-Sheet-Based Accruals Ratio, Industry
Communication Services 4.08% -3.44% 9.15% 6.88% 200.00%

Based on: 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-10-01), 10-K (reporting date: 2021-10-02), 10-K (reporting date: 2020-10-03), 10-K (reporting date: 2019-09-28), 10-K (reporting date: 2018-09-29).

1 2023 Calculation
Net operating assets = Operating assets – Operating liabilities
= 191,39745,893 = 145,504

2 2023 Calculation
Balance-sheet-based aggregate accruals = Net operating assets2023 – Net operating assets2022
= 145,504145,388 = 116

3 2023 Calculation
Balance-sheet-based accruals ratio = 100 × Balance-sheet-based aggregate accruals ÷ Avg. net operating assets
= 100 × 116 ÷ [(145,504 + 145,388) ÷ 2] = 0.08%

4 Click competitor name to see calculations.

Financial ratio Description The company
Balance-sheet-based accruals ratio Ratio is found by dividing balance-sheet-based aggregate accruals by average net operating assets. Using the balance-sheet-based accruals ratio, Walt Disney Co. improved earnings quality from 2022 to 2023.

Cash-Flow-Statement-Based Accruals Ratio

Walt Disney Co., cash flow statement computation of aggregate accruals

US$ in millions

Microsoft Excel
Sep 30, 2023 Oct 1, 2022 Oct 2, 2021 Oct 3, 2020 Sep 28, 2019 Sep 29, 2018
Net income (loss) attributable to The Walt Disney Company (Disney) 2,354 3,145 1,995 (2,864) 11,054 12,598
Less: Cash provided by operations 9,866 6,002 5,566 7,616 5,984 14,295
Less: Cash used in investing activities (4,641) (5,008) (3,171) (3,850) (15,096) (5,336)
Cash-flow-statement-based aggregate accruals (2,871) 2,151 (400) (6,630) 20,166 3,639
Financial Ratio
Cash-flow-statement-based accruals ratio1 -1.97% 1.50% -0.29% -4.68% 18.72%
Benchmarks
Cash-Flow-Statement-Based Accruals Ratio, Competitors2
Alphabet Inc. -0.52% -7.90% 17.48% 8.45%
Charter Communications Inc. 1.13% -0.69% -3.46% -2.81%
Comcast Corp. -3.44% -3.88% -0.83% -1.17%
Meta Platforms Inc. -7.43% 1.96% -14.89% 36.04%
Netflix Inc. -8.44% 16.73% 27.32% 4.60%
Cash-Flow-Statement-Based Accruals Ratio, Sector
Media & Entertainment -2.51% -1.53% 1.47% 2.84% 12.21%
Cash-Flow-Statement-Based Accruals Ratio, Industry
Communication Services -2.18% -1.26% 5.92% -0.89% 3.40%

Based on: 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-10-01), 10-K (reporting date: 2021-10-02), 10-K (reporting date: 2020-10-03), 10-K (reporting date: 2019-09-28), 10-K (reporting date: 2018-09-29).

1 2023 Calculation
Cash-flow-statement-based accruals ratio = 100 × Cash-flow-statement-based aggregate accruals ÷ Avg. net operating assets
= 100 × -2,871 ÷ [(145,504 + 145,388) ÷ 2] = -1.97%

2 Click competitor name to see calculations.

Financial ratio Description The company
Cash-flow-statement-based accruals ratio Ratio is found by dividing cash-flow-statement-based aggregate accruals by average net operating assets. Using the cash-flow-statement-based accruals ratio, Walt Disney Co. deteriorated earnings quality from 2022 to 2023.