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Walt Disney Co. (DIS)


Analysis of Investments

Advanced level


Accounting Policy on Investments

Investments in equity securities with a readily determinable fair value, not accounted for under the equity method, are recorded at that value with unrealized gains and losses included in earnings. For equity securities without a readily determinable fair value, the investment is recorded at cost, less any impairment, plus or minus adjustments related to observable transactions for the same or similar securities, with unrealized gains and losses included in earnings.

For equity method investments, Disney regularly reviews its investments to determine whether there is a decline in fair value below book value. If there is a decline that is other-than-temporary, the investment is written down to fair value.

Source: 10-K (filing date: 2019-11-20).


Adjustment to Net Income (Loss): Mark to Market Available-for-sale Securities

Walt Disney Co., adjustment to net income attributable to The Walt Disney Company (Disney)

US$ in millions

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12 months ended Sep 28, 2019 Sep 29, 2018 Sep 30, 2017 Oct 1, 2016 Oct 3, 2015 Sep 27, 2014
Net income attributable to The Walt Disney Company (Disney) (as reported) 11,054  12,598  8,980  9,391  8,382  7,501 
Add: Market value adjustments for investments (2) (18) 13  (87)
Net income attributable to The Walt Disney Company (Disney) (adjusted) 11,052  12,605  8,962  9,404  8,295  7,506 

Based on: 10-K (filing date: 2019-11-20), 10-K (filing date: 2018-11-21), 10-K (filing date: 2017-11-22), 10-K (filing date: 2016-11-23), 10-K (filing date: 2015-11-25), 10-K (filing date: 2014-11-19).


Adjusted Profitability Ratios: Mark to Market Available-for-sale Securities (Summary)

Walt Disney Co., adjusted profitability ratios

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Sep 28, 2019 Sep 29, 2018 Sep 30, 2017 Oct 1, 2016 Oct 3, 2015 Sep 27, 2014
Net Profit Margin
Reported net profit margin 15.89% 21.20% 16.29% 16.88% 15.98% 15.37%
Adjusted net profit margin 15.89% 21.21% 16.25% 16.90% 15.81% 15.38%
Return on Equity (ROE)
Reported ROE 12.44% 25.83% 21.74% 21.71% 18.83% 16.68%
Adjusted ROE 12.44% 25.84% 21.69% 21.74% 18.63% 16.70%
Return on Assets (ROA)
Reported ROA 5.70% 12.78% 9.37% 10.20% 9.51% 8.91%
Adjusted ROA 5.70% 12.78% 9.36% 10.22% 9.41% 8.92%

Based on: 10-K (filing date: 2019-11-20), 10-K (filing date: 2018-11-21), 10-K (filing date: 2017-11-22), 10-K (filing date: 2016-11-23), 10-K (filing date: 2015-11-25), 10-K (filing date: 2014-11-19).

Profitability ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by revenue. Walt Disney Co.’s adjusted net profit margin ratio improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019.
Adjusted ROE A profitability ratio calculated as adjusted net income divided by shareholders’ equity. Walt Disney Co.’s adjusted ROE improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019.
Adjusted ROA A profitability ratio calculated as adjusted net income divided by total assets. Walt Disney Co.’s adjusted ROA improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019.

Walt Disney Co., Profitability Ratios: Reported vs. Adjusted


Adjusted Net Profit Margin

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Sep 28, 2019 Sep 29, 2018 Sep 30, 2017 Oct 1, 2016 Oct 3, 2015 Sep 27, 2014
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to The Walt Disney Company (Disney) 11,054  12,598  8,980  9,391  8,382  7,501 
Revenues 69,570  59,434  55,137  55,632  52,465  48,813 
Profitability Ratio
Net profit margin1 15.89% 21.20% 16.29% 16.88% 15.98% 15.37%
Adjusted: Mark to Market Available-for-sale Securities
Selected Financial Data (US$ in millions)
Adjusted net income attributable to The Walt Disney Company (Disney) 11,052  12,605  8,962  9,404  8,295  7,506 
Revenues 69,570  59,434  55,137  55,632  52,465  48,813 
Profitability Ratio
Adjusted net profit margin2 15.89% 21.21% 16.25% 16.90% 15.81% 15.38%

Based on: 10-K (filing date: 2019-11-20), 10-K (filing date: 2018-11-21), 10-K (filing date: 2017-11-22), 10-K (filing date: 2016-11-23), 10-K (filing date: 2015-11-25), 10-K (filing date: 2014-11-19).

2019 Calculations

1 Net profit margin = 100 × Net income attributable to The Walt Disney Company (Disney) ÷ Revenues
= 100 × 11,054 ÷ 69,570 = 15.89%

2 Adjusted net profit margin = 100 × Adjusted net income attributable to The Walt Disney Company (Disney) ÷ Revenues
= 100 × 11,052 ÷ 69,570 = 15.89%

Profitability ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by revenue. Walt Disney Co.’s adjusted net profit margin ratio improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019.

Adjusted Return on Equity (ROE)

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Sep 28, 2019 Sep 29, 2018 Sep 30, 2017 Oct 1, 2016 Oct 3, 2015 Sep 27, 2014
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to The Walt Disney Company (Disney) 11,054  12,598  8,980  9,391  8,382  7,501 
Total Disney Shareholder’s equity 88,877  48,773  41,315  43,265  44,525  44,958 
Profitability Ratio
ROE1 12.44% 25.83% 21.74% 21.71% 18.83% 16.68%
Adjusted: Mark to Market Available-for-sale Securities
Selected Financial Data (US$ in millions)
Adjusted net income attributable to The Walt Disney Company (Disney) 11,052  12,605  8,962  9,404  8,295  7,506 
Total Disney Shareholder’s equity 88,877  48,773  41,315  43,265  44,525  44,958 
Profitability Ratio
Adjusted ROE2 12.44% 25.84% 21.69% 21.74% 18.63% 16.70%

Based on: 10-K (filing date: 2019-11-20), 10-K (filing date: 2018-11-21), 10-K (filing date: 2017-11-22), 10-K (filing date: 2016-11-23), 10-K (filing date: 2015-11-25), 10-K (filing date: 2014-11-19).

2019 Calculations

1 ROE = 100 × Net income attributable to The Walt Disney Company (Disney) ÷ Total Disney Shareholder’s equity
= 100 × 11,054 ÷ 88,877 = 12.44%

2 Adjusted ROE = 100 × Adjusted net income attributable to The Walt Disney Company (Disney) ÷ Total Disney Shareholder’s equity
= 100 × 11,052 ÷ 88,877 = 12.44%

Profitability ratio Description The company
Adjusted ROE A profitability ratio calculated as adjusted net income divided by shareholders’ equity. Walt Disney Co.’s adjusted ROE improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019.

Adjusted Return on Assets (ROA)

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Sep 28, 2019 Sep 29, 2018 Sep 30, 2017 Oct 1, 2016 Oct 3, 2015 Sep 27, 2014
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to The Walt Disney Company (Disney) 11,054  12,598  8,980  9,391  8,382  7,501 
Total assets 193,984  98,598  95,789  92,033  88,182  84,186 
Profitability Ratio
ROA1 5.70% 12.78% 9.37% 10.20% 9.51% 8.91%
Adjusted: Mark to Market Available-for-sale Securities
Selected Financial Data (US$ in millions)
Adjusted net income attributable to The Walt Disney Company (Disney) 11,052  12,605  8,962  9,404  8,295  7,506 
Total assets 193,984  98,598  95,789  92,033  88,182  84,186 
Profitability Ratio
Adjusted ROA2 5.70% 12.78% 9.36% 10.22% 9.41% 8.92%

Based on: 10-K (filing date: 2019-11-20), 10-K (filing date: 2018-11-21), 10-K (filing date: 2017-11-22), 10-K (filing date: 2016-11-23), 10-K (filing date: 2015-11-25), 10-K (filing date: 2014-11-19).

2019 Calculations

1 ROA = 100 × Net income attributable to The Walt Disney Company (Disney) ÷ Total assets
= 100 × 11,054 ÷ 193,984 = 5.70%

2 Adjusted ROA = 100 × Adjusted net income attributable to The Walt Disney Company (Disney) ÷ Total assets
= 100 × 11,052 ÷ 193,984 = 5.70%

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as adjusted net income divided by total assets. Walt Disney Co.’s adjusted ROA improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019.