Walt Disney Co. (NYSE:DIS)

Net Operating Profit After Taxes (NOPAT)

The net operating profit after taxes shows a notable improvement over the analyzed period. Starting from a negative value in the initial year, it increased significantly to positive territory by the following year. The upward trend continued with some fluctuations, reaching the highest value in the final year. This indicates strengthened operational profitability and effective management of operating expenses relative to revenues.

Cost of Capital

The cost of capital percentage exhibits a gradual and slight increase across the years. It rose from 16.41% to 16.98%, suggesting a modest increase in the company's required rate of return. This incremental rise could be attributed to changes in market conditions or the company’s risk profile, impacting its financing costs.

Invested Capital

Invested capital remains relatively stable with minor year-to-year decreases. The values hover close to 170 billion US dollars, with a slight downward trend noted particularly in the later years. This stability implies consistent levels of capital employed in operations, pointing to steady investment strategies without significant expansions or contractions.

Economic Profit

Economic profit, calculated by subtracting the cost of capital charge from the net operating profit, remains negative throughout the period but shows a gradual reduction in its negative magnitude. Although still below zero, this improving trend indicates that the company is moving closer to covering its cost of capital, reflecting enhanced value creation efforts. The persistent negative values may signal ongoing challenges in generating returns that exceed the capital costs.

Net Income

The net income attributable has demonstrated robust positive growth in the analyzed periods. Initially, a significant loss of -2864 million USD was recorded, followed by a turnaround to a profit of 1995 million USD in the subsequent period. Thereafter, a consistent upward trajectory is observed, culminating in a substantial net income of 12404 million USD by the latest period. This suggests a strong recovery and improving profitability.

Net Operating Profit After Taxes (NOPAT)

NOPAT follows a similar pattern to net income, with an initial negative value of -2176 million USD. A major improvement is noted in the following period, progressing to positive values and showing an overall upward trend. Despite some fluctuations, NOPAT generally increases with peaks reaching 12192 million USD in the last reported period, indicating enhanced operational efficiency and profitability after tax considerations.

Overall Trends and Insights

The data reveals a significant financial turnaround from losses to strong profits over the annual periods. Both net income and NOPAT have shown marked improvements, reflecting successful operational and financial strategies. The consistent increase, especially noticeable in the most recent years, highlights improved business performance and effective management in generating shareholder value.

The financial data reveals notable fluctuations in both income tax expense related to continuing operations and cash operating taxes over the observed periods.

Income Tax Expense (Benefit) on Income from Continuing Operations

This metric displays significant variability. It started at 699 million US dollars in 2020, sharply declined to 25 million in 2021, and then surged to 1,732 million in 2022. In the subsequent years, the value remained elevated at 1,379 million in 2023 and increased further to 1,796 million in 2024, followed by a substantial reversal to a negative figure of -1,428 million in 2025. The pronounced negative value in the final year suggests a tax benefit or credit, marking a distinct departure from previous years’ expenses.

Cash Operating Taxes

Cash operating taxes have generally increased over the years with some volatility. The amount rose from 1,305 million US dollars in 2020 to a peak of 3,100 million in 2023. Although there was a slight decline to 2,982 million in 2024, the value decreased more sharply to 1,546 million in 2025. This trend indicates a build-up of tax payments until 2023, with a marked reduction thereafter.

In summary, both income tax expense and cash operating taxes have seen considerable fluctuations, with the income tax expense showing a notable reversal into a benefit in the last recorded year and cash operating taxes peaking in 2023 before declining significantly. These trends may reflect changes in tax regulations, profitability, or tax strategies implemented in the latest periods.

Total reported debt & leases

The total reported debt and leases demonstrate a clear downward trend over the analyzed periods. Starting from approximately 62.3 billion USD, the figure consistently decreases each year, reaching around 45.4 billion USD by the latest period. This steady reduction in liabilities suggests a strategic effort towards deleveraging and improving the company’s financial stability by lowering its debt burden.

Total Disney Shareholder’s equity

Shareholders' equity shows a consistent upward trajectory throughout the timeline. Beginning at about 83.6 billion USD, it rises continuously to nearly 110 billion USD in the most recent period. This growth in equity indicates strengthening net asset values, which could result from retained earnings, profitable operations, or potentially favorable revaluation adjustments. The increasing equity base enhances the company’s capacity to finance operations through internal sources.

Invested capital

Invested capital remains relatively stable across the periods, fluctuating slightly between approximately 165.3 billion USD and 174.6 billion USD. However, a slight decline is observable in the latter part of the timeline, dropping from the peak near 174.6 billion to around 165.3 billion USD. This suggests a modest reduction in the total capital invested in the company's operations, possibly reflecting asset disposals, operational efficiencies, or capital allocation adjustments.

The analysis of the financial indicators over the examined periods reveals several notable trends concerning economic profit, invested capital, and economic spread ratio.

Economic Profit

The economic profit, measured in millions of US dollars, shows a persistent negative value throughout the timeline, indicating that the company has not generated surplus returns above its cost of capital in any of the periods. However, there is a discernible improvement trend: from a loss of -30,823 million in 2020, the economic loss decreases progressively to -15,880 million by 2025. This improvement suggests efforts toward enhanced profitability or cost efficiency, although economic profit remains negative, indicating the company continues to destroy economic value.

Invested Capital

The invested capital remains relatively stable over the periods analyzed, hovering around 170,000 million US dollars with slight fluctuations. Beginning at 174,594 million in 2020, it marginally fluctuates with a general downward adjustment noticeable from 2021 onwards, settling at 165,308 million in 2025. This reduction may reflect divestments, asset sales, or efficient capital management reducing the asset base required to operate the business.

Economic Spread Ratio

The economic spread ratio, expressed as a negative percentage throughout, shows a gradual improvement. Starting from -17.65% in 2020, it improves each year, reaching -9.61% in 2025. Although remaining negative, the narrowing negative spread indicates that the company is reducing the gap between its returns and its cost of capital, an encouraging sign toward potentially achieving positive economic profits in the future.

Overall, the data depict a company in the process of improving its economic profitability and more efficient use of capital. Despite persistent economic losses, the trends suggest positive momentum in reducing these losses and optimizing invested capital, reflecting possible strategic and operational adjustments aimed at enhancing long-term shareholder value.

Adjusted Revenues

Adjusted revenues have shown a consistent upward trend over the analyzed periods. Starting from 64,920 million US dollars, revenues increased steadily each year, reaching 94,454 million US dollars by the latest period. This growth indicates a positive sales or operational performance contributing to higher top-line figures.

Economic Profit

Economic profit, however, remains negative throughout the periods, signaling that the company has not yet generated value above its cost of capital. Despite fluctuations, there is a noticeable improvement: the economic loss decreased from -30,823 million to -15,880 million US dollars. This reduction indicates progress toward profitability and suggests improved efficiency or better cost management.

Economic Profit Margin

The economic profit margin, expressed as a percentage, shows a consistent trend toward reduction in negative magnitude. Initially at -47.48%, the margin improves annually to reach -16.81% in the most recent year. This pattern suggests the company is moving closer to breaking even on an economic profit basis, reflecting enhanced operational leverage or better returns relative to invested capital.

Overall Analysis

The financial data reflects a company experiencing solid revenue growth accompanied by a gradual improvement in economic profitability metrics. While economic profit remains negative, both the absolute values and margins suggest the company is on a trajectory toward financial sustainability. Continued monitoring of these trends will be critical to assess the achievement of positive economic profit in the future.