Stock Analysis on Net
Stock Analysis on Net
Microsoft Excel LibreOffice Calc

Walt Disney Co. (NYSE:DIS)

Financial Reporting Quality: Aggregate Accruals

Advanced level

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 LibreOffice Calc
Oct 3, 2020 Sep 28, 2019 Sep 29, 2018 Sep 30, 2017 Oct 1, 2016 Oct 3, 2015
Operating Assets
Total assets 201,549  193,984  98,598  95,789  92,033  88,182 
Less: Cash and cash equivalents 17,914  5,418  4,150  4,017  4,610  4,269 
Operating assets 183,635  188,566  94,448  91,772  87,423  83,913 
Operating Liabilities
Total liabilities 104,037  91,132  44,643  49,637  44,710  39,527 
Less: Current portion of borrowings 5,711  8,857  3,790  6,172  3,687  4,563 
Less: Borrowings, excluding current portion 52,917  38,129  17,084  19,119  16,483  12,773 
Operating liabilities 45,409  44,146  23,769  24,346  24,540  22,191 
 
Net operating assets1 138,226  144,420  70,679  67,426  62,883  61,722 
Balance-sheet-based aggregate accruals2 (6,194) 73,741  3,253  4,543  1,161  — 
Financial Ratio
Balance-sheet-based accruals ratio3 -4.38% 68.56% 4.71% 6.97% 1.86%
Benchmarks
Balance-Sheet-Based Accruals Ratio, Competitors4
Activision Blizzard Inc. 3.14% -1.20% 7.01% -16.30%
Alphabet Inc. 15.42% 17.54% 28.17% -3.66%
Charter Communications Inc. -2.09% -1.85% -0.51% 5.76%
Comcast Corp. 1.68% 0.12% 31.76% 13.40%
Facebook Inc. 35.79% 7.14% 27.43% 9.27%
Netflix Inc. 10.12% 37.89% 47.69% 50.97%
Balance-Sheet-Based Accruals Ratio, Sector
Media & Entertainment 5.07% 17.05% 18.56% 7.37% 200.00%
Balance-Sheet-Based Accruals Ratio, Industry
Communication Services 6.84% 8.14% 20.48% 9.90% 200.00%

Based on: 10-K (filing date: 2020-11-25), 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).

1 2020 Calculation
Net operating assets = Operating assets – Operating liabilities
= 183,63545,409 = 138,226

2 2020 Calculation
Balance-sheet-based aggregate accruals = Net operating assets2020 – Net operating assets2019
= 138,226144,420 = -6,194

3 2020 Calculation
Balance-sheet-based accruals ratio = 100 × Balance-sheet-based aggregate accruals ÷ Avg. net operating assets
= 100 × -6,194 ÷ [(138,226 + 144,420) ÷ 2] = -4.38%

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 2019 to 2020.

Cash-Flow-Statement-Based Accruals Ratio

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

US$ in millions

Microsoft Excel LibreOffice Calc
Oct 3, 2020 Sep 28, 2019 Sep 29, 2018 Sep 30, 2017 Oct 1, 2016 Oct 3, 2015
Net income (loss) attributable to The Walt Disney Company (Disney) (2,864) 11,054  12,598  8,980  9,391  8,382 
Less: Cash provided by operations 7,616  5,984  14,295  12,343  13,213  10,909 
Less: Cash used in investing activities (3,850) (15,096) (5,336) (4,111) (5,758) (4,245)
Cash-flow-statement-based aggregate accruals (6,630) 20,166  3,639  748  1,936  1,718 
Financial Ratio
Cash-flow-statement-based accruals ratio1 -4.69% 18.75% 5.27% 1.15% 3.11%
Benchmarks
Cash-Flow-Statement-Based Accruals Ratio, Competitors2
Activision Blizzard Inc. 1.25% -3.14% 2.67% -17.52%
Alphabet Inc. 8.45% 11.72% 17.73% 12.54%
Charter Communications Inc. -2.81% -2.38% -0.69% 5.30%
Comcast Corp. -1.17% 1.21% 24.41% 12.14%
Facebook Inc. 36.36% 4.56% 11.74% 37.69%
Netflix Inc. 4.60% 35.30% 44.39% 39.94%
Cash-Flow-Statement-Based Accruals Ratio, Sector
Media & Entertainment 2.82% 6.47% 13.24% 10.14% 19.78%
Cash-Flow-Statement-Based Accruals Ratio, Industry
Communication Services -0.88% 1.73% 10.03% 9.91% 9.69%

Based on: 10-K (filing date: 2020-11-25), 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).

1 2020 Calculation
Cash-flow-statement-based accruals ratio = 100 × Cash-flow-statement-based aggregate accruals ÷ Avg. net operating assets
= 100 × -6,630 ÷ [(138,226 + 144,420) ÷ 2] = -4.69%

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. improved earnings quality from 2019 to 2020.