Walt Disney Co. (NYSE:DIS)

The analysis of the financial data reveals consistent trends in the intangible assets and goodwill over the examined period.

Character/franchise intangibles, copyrights and trademarks

The value remained stable at 10,572 million USD from 2020 to 2023 before declining to 9,507 million USD in 2024, indicating a reduction in this category.

MVPD agreements

This category showed a notable decreasing trend from 9,900 million USD in 2019 down to 7,213 million USD in 2024, reflecting a continuous write-down or impairment of these agreements over the years.

Other amortizable intangible assets

Values were relatively stable around 4,300 million USD during 2019-2021 but declined to 3,493 million USD by 2024, suggesting accelerated amortization or asset disposals.

Intangible assets subject to amortization, gross

The gross amount decreased steadily from 24,768 million USD in 2019 to 20,213 million USD in 2024, marking a consistent reduction likely due to amortization and impairments.

Accumulated amortization

There was a continuous increase in the magnitude of accumulated amortization, moving from -3,393 million USD in 2019 to -11,266 million USD in 2024, closely correlating with the reduction in net intangible assets subject to amortization.

Intangible assets subject to amortization, net

The net value declined prominently from 21,375 million USD in 2019 down to 8,947 million USD in 2024, reflecting the impact of ongoing amortization expenses and potential impairments.

Indefinite lived intangible assets

This category remained steady at 1,792 million USD from 2020 onwards with a slight initial decrease from 1,840 million USD in 2019, indicating no significant changes in indefinite-lived assets.

Intangible assets total

The total intangible assets showed a marked decline from 23,215 million USD in 2019 to 10,739 million USD in 2024, illustrating a general downward trend over the period.

Goodwill

Goodwill exhibited a decreasing trend over the years, starting at 80,293 million USD in 2019 and falling to 73,326 million USD by 2024. This reduction may be indicative of impairments or disposals of acquired businesses.

Goodwill and other intangible assets combined

The combined value declined from 103,508 million USD in 2019 to 84,065 million USD in 2024, reflecting the overall decrease in both goodwill and intangible assets categories throughout the timeframe.

Overall, the data indicates a consistent pattern of decreasing intangible asset values, driven primarily by accumulated amortization and reductions in MVPD agreements and other amortizable assets. Goodwill also declined steadily, suggesting potential write-downs or restructuring. Indefinite-lived intangible assets remained stable, providing some consistency within the intangible asset portfolio.

The data reveals several notable trends in the reported and goodwill adjusted financial figures over the six-year period.

Total Assets

Reported total assets exhibited a generally stable pattern, increasing from approximately 194 billion US dollars in 2019 to a peak of about 206 billion in 2023 before declining to around 196 billion in 2024. The fluctuations are relatively moderate, suggesting steady asset base management with slight contraction noted in the latest year.

In contrast, adjusted total assets, which exclude goodwill, followed a similar stable trend but at significantly lower absolute values. Starting from roughly 114 billion in 2019, adjusted assets increased consistently through 2023, reaching about 129 billion, then decreased to approximately 123 billion in 2024. This reflects a more conservative asset valuation that shows growth yet also a recent reduction.

Shareholder’s Equity

Reported Disney shareholder’s equity showed an overall upward trajectory. From about 89 billion in 2019, it dipped in 2020 to around 84 billion, likely reflecting pandemic-related impacts, then steadily grew to nearly 101 billion by 2024. This suggests recovery and strengthening of equity value over time.

Adjusted shareholder’s equity, representing equity excluding goodwill, displays a sharper upward trend despite lower absolute amounts. Starting at just under 9 billion in 2019, adjusted equity decreased to around 6 billion in 2020 but then experienced strong growth each year, reaching nearly 27 billion in 2024. This impressive rise indicates an improving core equity position when goodwill is excluded, signifying enhanced underlying financial stability or asset quality.

Overall, the pattern reveals that while reported figures depict general stability with moderate growth, the adjusted data excluding goodwill show more pronounced improvements in equity and asset base over the period. The decline observed in both asset measures in the latest year might warrant further investigation to understand underlying causes. The divergence between reported and adjusted equity growth underlines the importance of evaluating goodwill’s impact on the company’s financial health.

Total Asset Turnover

The reported total asset turnover ratio shows a general upward trend over the analyzed period, increasing from 0.36 in 2019 to 0.47 in 2024. This indicates improving efficiency in utilizing assets to generate revenue. Similarly, the adjusted total asset turnover, which accounts for goodwill adjustments, also rises from 0.61 in 2019 to 0.74 in 2024, reflecting even stronger asset utilization when goodwill is excluded.

Financial Leverage

The reported financial leverage ratio decreases gradually from 2.18 in 2019 to 1.95 in 2024, suggesting a modest reduction in reliance on debt financing over time. The adjusted financial leverage, which excludes goodwill, follows a more pronounced downward trend, falling sharply from 13.24 in 2019 to 4.49 in 2024. This substantial decline highlights a significant deleveraging process after adjusting for intangible assets.

Return on Equity (ROE)

Reported ROE experiences fluctuations with a notable dip into negative territory at -3.43% in 2020, followed by a recovery and moderate growth to 4.94% by 2024. Adjusted ROE, accounting for goodwill, shows greater volatility, plunging dramatically to -48.59% in 2020, then recovering to a peak of 128.77% in 2019 and stabilizing to 18.17% by 2024. The adjusted figures underline a higher sensitivity to operational performance excluding goodwill impacts, and a generally higher profitability scale once fully recovered.

Return on Assets (ROA)

Reported ROA decreases to negative values in 2020 (-1.42%), but rebounds steadily afterward, reaching 2.53% by 2024. Adjusted ROA follows a parallel pattern with deeper initial decline to -2.31% in 2020 and a subsequent increase to 4.05% in 2024. The adjusted ROA values indicate relatively better asset profitability when goodwill is excluded, with improvements aligning closely with overall operational recovery.

The financial data indicates changes in both reported and adjusted total assets over the six-year period. Reported total assets showed a gradual increase from 193,984 million US dollars in 2019 to a peak of 205,579 million US dollars in 2023, followed by a decline to 196,219 million US dollars in 2024. In contrast, adjusted total assets, which exclude goodwill, exhibited a similar increasing trend but with lower absolute values. They rose from 113,691 million US dollars in 2019 to 128,512 million US dollars in 2023 before decreasing to 122,893 million US dollars in 2024.

Regarding asset turnover ratios, reported total asset turnover started at 0.36 in 2019, saw a decline to 0.32 in 2020, followed by a moderate increase reaching 0.47 by 2024. Adjusted total asset turnover, on the other hand, consistently remained higher than the reported counterpart throughout the period. It began at 0.61 in 2019, declined to 0.53 in 2020, then steadily increased to reach 0.74 in 2024.

Total Assets Trends

The reported total assets increased modestly from 2019 to 2023 and then decreased in 2024. The adjusted total assets mirrored this pattern but at significantly lower values, reflecting the exclusion of goodwill and suggesting substantial goodwill as part of total assets.

Asset Turnover Trends

Both reported and adjusted total asset turnover ratios demonstrate a dip in 2020, likely reflecting operational impacts during that period, followed by a consistent recovery and improvement through 2024. Adjusted asset turnover ratios were notably higher than reported ratios, indicating that the company's core asset base (excluding goodwill) is utilized more efficiently in generating revenue.

Insights

The divergence between reported and adjusted asset values highlights the material impact of goodwill on the balance sheet. The stronger performance of adjusted asset turnover suggests that goodwill-containing assets do not contribute proportionally to revenue generation. The overall improvement in turnover ratios from 2021 onwards points to enhanced operational efficiency or better asset management post-2020 challenges.

The analysis of the annual financial data over the six-year period reveals several discernible trends concerning the reported and goodwill-adjusted figures for total assets, shareholders' equity, and financial leverage ratios.

Total Assets

Reported total assets show a generally stable trend with a modest increase from 193,984 million US dollars in 2019 to a peak of 205,579 million in 2023, before declining to 196,219 million in 2024. In contrast, the adjusted total assets, which exclude goodwill, exhibit a steady growth from 113,691 million in 2019 to a high of 128,512 million in 2023, then slightly retract to 122,893 million in 2024. This indicates consistent asset growth when goodwill is excluded, although a slight contraction is observed in the most recent year.

Shareholders’ Equity

Reported total Disney Shareholder’s equity demonstrates a generally upward trajectory, rising from 88,877 million in 2019 to 100,696 million in 2024. Intermediate fluctuations include a decrease in 2020 to 83,583 million, followed by steady increases each subsequent year. The goodwill-adjusted shareholders’ equity shows a markedly different scale and pattern, beginning at a relatively low 8,584 million in 2019, dipping to 5,894 million in 2020, and then increasing continuously to reach 27,370 million in 2024. This adjustment suggests a significant impact of goodwill on the reported equity and reflects improving underlying equity value over time after removing goodwill effects.

Financial Leverage

The reported financial leverage ratio decreases progressively from 2.18 in 2019 to 1.95 in 2024, indicating a gradual reduction in the company's reliance on debt relative to equity. Conversely, the adjusted financial leverage ratio, which removes goodwill from the equity base, starts at a very high 13.24 in 2019, spikes to 21.01 in 2020, then declines sharply and steadily to 4.49 by 2024. The dramatic decrease in adjusted financial leverage over these years suggests a strengthening of the company's financial structure when goodwill is excluded, primarily driven by increases in adjusted equity and relatively stable adjusted assets.

Overall, the data displays a stabilization in reported assets and shareholder equity with a steady reduction in financial leverage, indicating a conservative financial management approach. The adjusted figures reinforce this narrative but highlight the previously overstated impact of goodwill on equity and leverage, which appears to have been mitigated significantly over time. These trends imply improving financial health and reduced financial risk when the intangible goodwill component is removed from the analysis.

Shareholder’s Equity Trends

The reported total Disney Shareholder’s equity demonstrates a general upward trajectory from 2019 through 2024. Starting at approximately $88.9 billion in 2019, there is a dip in 2020 to around $83.6 billion, likely reflecting adverse impacts during that period. Following this decline, equity increases steadily year-over-year, reaching about $100.7 billion by 2024.

Adjusted total Disney Shareholder’s equity, which accounts for goodwill adjustments, exhibits more pronounced fluctuations. Beginning at a much lower base of roughly $8.6 billion in 2019, it decreases to $5.9 billion in 2020, then escalates significantly from 2021 onward, increasing to $10.5 billion in 2021 and continuing to nearly $27.4 billion by 2024. This progression suggests changes in goodwill valuations and possible impairments or adjustments in earlier years, followed by recovery and growth.

Return on Equity (ROE) Analysis

Reported ROE shows considerable volatility over the examined periods. It begins at a healthy 12.44% in 2019, falls sharply to a negative 3.43% in 2020, indicating a loss or reduced profitability that year, before improving gradually through 2021 to 4.94% by 2024. This pattern implies operational disruptions during 2020, followed by a recovery but slower profitability growth relative to shareholder equity.

Adjusted ROE, which is based on goodwill-adjusted equity, is highly variable and markedly higher on average compared to the reported ROE. It starts at an extremely elevated 128.77% in 2019, plunges to a negative 48.59% in 2020, then rebounds to positive figures in subsequent years, settling around 18.17% in 2024. The large swings reflect the impact of goodwill adjustments on the equity base, causing higher sensitivity in ROE computations and highlighting underlying profitability when excluding goodwill effects.

Overall Observations

The financial data reveal that Walt Disney Co. experienced a significant impact around the year 2020, as evidenced by declines in both reported and adjusted equity and negative ROE values during that period. Subsequent years display a recovery trend with growing shareholder equity and improving, though moderate, profitability levels. Adjusted metrics emphasize the influence of goodwill valuation changes on financial performance, suggesting careful consideration when evaluating profitability and equity strength. The consistent increase in reported equity alongside stabilizing ROE percentages implies a strengthening capital base and more controlled profit generation in the later periods.

Total Assets

The reported total assets showed a general increasing trend from 2019 to 2023, rising from approximately $193.98 billion to $205.58 billion. However, in 2024, there was a notable decline to about $196.22 billion. Adjusted total assets, which exclude goodwill, followed a similar pattern but at lower absolute values, increasing from roughly $113.69 billion in 2019 to $128.51 billion in 2023 before decreasing to $122.89 billion in 2024.

Return on Assets (ROA)

The reported ROA exhibited significant volatility over the period. It started at a positive 5.7% in 2019, sharply declined to negative territory at -1.42% in 2020, then recovered gradually to reach 2.53% by 2024. The adjusted ROA, which accounts for assets after excluding goodwill, showed a similar trend but with consistently higher percentages. It decreased from 9.72% in 2019 to -2.31% in 2020, then improved to 4.05% by 2024, indicating a stronger profitability when goodwill adjustments are considered.

Insights

The period from 2019 to 2020 reveals a substantial negative impact on asset profitability, possibly reflecting external challenges affecting earnings. The recovery in both reported and adjusted ROA from 2021 onwards suggests an improvement in asset utilization and profitability. The divergence between reported and adjusted values illustrates the impact of goodwill on financial measures, with adjusted figures presenting a more favorable profitability profile. The decline in total assets in 2024 for both reported and adjusted figures may reflect asset disposals or write-downs.