Stock Analysis on Net
Stock Analysis on Net

Walt Disney Co. (NYSE:DIS)

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Economic Value Added (EVA)

Microsoft Excel

EVA is registered trademark of Stern Stewart.

Economic value added or economic profit is the difference between revenues and costs,where costs include not only expenses, but also cost of capital.

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Economic Profit

Walt Disney Co., economic profit calculation

US$ in millions

Microsoft Excel
12 months ended: Oct 1, 2022 Oct 2, 2021 Oct 3, 2020 Sep 28, 2019 Sep 29, 2018 Sep 30, 2017
Net operating profit after taxes (NOPAT)1
Cost of capital2
Invested capital3
 
Economic profit4

Based on: 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), 10-K (reporting date: 2017-09-30).

1 NOPAT. See details »

2 Cost of capital. See details »

3 Invested capital. See details »

4 2022 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= – × =

Item Description The company
Economic profit Economic profit is a measure of corporate performance computed by taking the spread between the return on invested capital and the cost of capital, and multiplying by the invested capital. Walt Disney Co. economic profit increased from 2020 to 2021 and from 2021 to 2022.

Net Operating Profit after Taxes (NOPAT)

Walt Disney Co., NOPAT calculation

US$ in millions

Microsoft Excel
12 months ended: Oct 1, 2022 Oct 2, 2021 Oct 3, 2020 Sep 28, 2019 Sep 29, 2018 Sep 30, 2017
Net income (loss) attributable to The Walt Disney Company (Disney)
Deferred income tax expense (benefit)1
Increase (decrease) in allowance for credit losses2
Increase (decrease) in deferred revenues3
Increase (decrease) in restructuring reserves4
Increase (decrease) in equity equivalents5
Interest expense
Interest expense, operating lease liability6
Adjusted interest expense
Tax benefit of interest expense7
Adjusted interest expense, after taxes8
Interest income, investment income and other
Investment income, before taxes
Tax expense (benefit) of investment income9
Investment income, after taxes10
(Income) loss from discontinued operations, net of tax11
Net income (loss) attributable to noncontrolling interest
Net operating profit after taxes (NOPAT)

Based on: 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), 10-K (reporting date: 2017-09-30).

1 Elimination of deferred tax expense. See details »

2 Addition of increase (decrease) in allowance for credit losses.

3 Addition of increase (decrease) in deferred revenues.

4 Addition of increase (decrease) in restructuring reserves.

5 Addition of increase (decrease) in equity equivalents to net income (loss) attributable to The Walt Disney Company (Disney).

6 2022 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= × =

7 2022 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= × 21.00% =

8 Addition of after taxes interest expense to net income (loss) attributable to The Walt Disney Company (Disney).

9 2022 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= × 21.00% =

10 Elimination of after taxes investment income.

11 Elimination of discontinued operations.

Item Description The company
NOPAT Net operating profit after taxes is income from operations, but after removement of taxes calculated on cash basis that are relevant to operating income. Walt Disney Co. NOPAT increased from 2020 to 2021 and from 2021 to 2022.

Cash Operating Taxes

Walt Disney Co., cash operating taxes calculation

US$ in millions

Microsoft Excel
12 months ended: Oct 1, 2022 Oct 2, 2021 Oct 3, 2020 Sep 28, 2019 Sep 29, 2018 Sep 30, 2017
Income tax expense from continuing operations
Less: Deferred income tax expense (benefit)
Add: Tax savings from interest expense
Less: Tax imposed on investment income
Cash operating taxes

Based on: 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), 10-K (reporting date: 2017-09-30).

Item Description The company
Cash operating taxes Cash operating taxes are estimated by adjusting income tax expense for changes in deferred taxes and tax benefit from the interest deduction. Walt Disney Co. cash operating taxes increased from 2020 to 2021 and from 2021 to 2022.

Invested Capital

Walt Disney Co., invested capital calculation (financing approach)

US$ in millions

Microsoft Excel
Oct 1, 2022 Oct 2, 2021 Oct 3, 2020 Sep 28, 2019 Sep 29, 2018 Sep 30, 2017
Short-term finance lease liabilities
Current portion of borrowings
Borrowings, excluding current portion
Long-term finance lease liabilities
Operating lease liability1
Total reported debt & leases
Total Disney Shareholder’s equity
Net deferred tax (assets) liabilities2
Allowance for credit losses3
Deferred revenues4
Restructuring reserves5
Equity equivalents6
Accumulated other comprehensive (income) loss, net of tax7
Redeemable noncontrolling interests
Noncontrolling interests
Adjusted total Disney Shareholder’s equity
Projects in progress8
Investments recorded at fair value9
Invested capital

Based on: 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), 10-K (reporting date: 2017-09-30).

1 Addition of capitalized operating leases.

2 Elimination of deferred taxes from assets and liabilities. See details »

3 Addition of allowance for doubtful accounts receivable.

4 Addition of deferred revenues.

5 Addition of restructuring reserves.

6 Addition of equity equivalents to total Disney Shareholder’s equity.

7 Removal of accumulated other comprehensive income.

8 Subtraction of projects in progress.

9 Subtraction of investments recorded at fair value.

Item Description The company
Invested capital Capital is an approximation of the economic book value of all cash invested in going-concern business activities. Walt Disney Co. invested capital decreased from 2020 to 2021 but then increased from 2021 to 2022 not reaching 2020 level.

Cost of Capital

Walt Disney Co., cost of capital calculations

Capital (fair value)1 Weights Cost of capital
Equity2 ÷ = × =
Borrowings and finance lease liabilities3 ÷ = × × (1 – 21.00%) =
Operating lease liability4 ÷ = × × (1 – 21.00%) =
Total:

Based on: 10-K (reporting date: 2022-10-01).

1 US$ in millions

2 Equity. See details »

3 Borrowings and finance lease liabilities. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 ÷ = × =
Borrowings and finance lease liabilities3 ÷ = × × (1 – 21.00%) =
Operating lease liability4 ÷ = × × (1 – 21.00%) =
Total:

Based on: 10-K (reporting date: 2021-10-02).

1 US$ in millions

2 Equity. See details »

3 Borrowings and finance lease liabilities. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 ÷ = × =
Borrowings and finance lease liabilities3 ÷ = × × (1 – 21.00%) =
Operating lease liability4 ÷ = × × (1 – 21.00%) =
Total:

Based on: 10-K (reporting date: 2020-10-03).

1 US$ in millions

2 Equity. See details »

3 Borrowings and finance lease liabilities. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 ÷ = × =
Borrowings and finance lease liabilities3 ÷ = × × (1 – 21.00%) =
Operating lease liability4 ÷ = × × (1 – 21.00%) =
Total:

Based on: 10-K (reporting date: 2019-09-28).

1 US$ in millions

2 Equity. See details »

3 Borrowings and finance lease liabilities. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 ÷ = × =
Borrowings and finance lease liabilities3 ÷ = × × (1 – 24.50%) =
Operating lease liability4 ÷ = × × (1 – 24.50%) =
Total:

Based on: 10-K (reporting date: 2018-09-29).

1 US$ in millions

2 Equity. See details »

3 Borrowings and finance lease liabilities. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 ÷ = × =
Borrowings and finance lease liabilities3 ÷ = × × (1 – 35.00%) =
Operating lease liability4 ÷ = × × (1 – 35.00%) =
Total:

Based on: 10-K (reporting date: 2017-09-30).

1 US$ in millions

2 Equity. See details »

3 Borrowings and finance lease liabilities. See details »

4 Operating lease liability. See details »

Economic Spread Ratio

Walt Disney Co., economic spread ratio calculation, comparison to benchmarks

Microsoft Excel
Oct 1, 2022 Oct 2, 2021 Oct 3, 2020 Sep 28, 2019 Sep 29, 2018 Sep 30, 2017
Selected Financial Data (US$ in millions)
Economic profit1
Invested capital2
Performance Ratio
Economic spread ratio3
Benchmarks
Economic Spread Ratio, Competitors4
Alphabet Inc.
Charter Communications Inc.
Comcast Corp.
Meta Platforms Inc.
Netflix Inc.

Based on: 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), 10-K (reporting date: 2017-09-30).

1 Economic profit. See details »

2 Invested capital. See details »

3 2022 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × ÷ =

4 Click competitor name to see calculations.

Performance ratio Description The company
Economic spread ratio The ratio of economic profit to invested capital, also equal to the difference between return on invested capital (ROIC) and cost of capital. Walt Disney Co. economic spread ratio improved from 2020 to 2021 and from 2021 to 2022.

Economic Profit Margin

Walt Disney Co., economic profit margin calculation, comparison to benchmarks

Microsoft Excel
Oct 1, 2022 Oct 2, 2021 Oct 3, 2020 Sep 28, 2019 Sep 29, 2018 Sep 30, 2017
Selected Financial Data (US$ in millions)
Economic profit1
 
Revenues
Add: Increase (decrease) in deferred revenues
Adjusted revenues
Performance Ratio
Economic profit margin2
Benchmarks
Economic Profit Margin, Competitors3
Alphabet Inc.
Charter Communications Inc.
Comcast Corp.
Meta Platforms Inc.
Netflix Inc.

Based on: 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), 10-K (reporting date: 2017-09-30).

1 Economic profit. See details »

2 2022 Calculation
Economic profit margin = 100 × Economic profit ÷ Adjusted revenues
= 100 × ÷ =

3 Click competitor name to see calculations.

Performance ratio Description The company
Economic profit margin The ratio of economic profit to sales. It is the company profit margin covering income efficiency and asset management. Economic profit margin is not biased in favor of capital-intensive business models, because any added capital is a cost to the economic profit margin. Walt Disney Co. economic profit margin improved from 2020 to 2021 and from 2021 to 2022.