Walt Disney Co. (NYSE:DIS)

Net Operating Profit After Taxes (NOPAT)

The net operating profit after taxes experienced a significant decline from 16,211 million USD in 2019 to a negative value of -2,053 million USD in 2020. Subsequently, there was a recovery trend, with NOPAT rising to 2,215 million USD in 2021 and continuing to improve to 6,699 million USD in 2022. However, the figure decreased again to 3,406 million USD in 2023 before increasing to 6,260 million USD in 2024. This pattern indicates volatility with a notable recovery after the sharp downturn in 2020.

Invested Capital

The invested capital displayed a relatively stable trend over the period, fluctuating slightly around 170,000 million USD. It began at 169,178 million USD in 2019, increased gradually to a peak of 174,594 million USD in 2020, then slightly declined with minor fluctuations to 166,066 million USD by 2024. The overall change indicates modest adjustments in invested capital but no significant growth or contraction.

Return on Invested Capital (ROIC)

The return on invested capital shows a sharp decline in 2020, dropping from 9.58% in 2019 to -1.18%. Following this decrease, ROIC demonstrated gradual improvement, rising to 1.28% in 2021 and 3.85% in 2022. A decline occurred again in 2023 to 1.96%, but the ratio increased again to 3.77% in 2024. The fluctuations suggest that the company faced profitability challenges in 2020, with partial recovery over the following years, though ROIC has not returned to the pre-2020 level.

The financial indicators exhibit notable fluctuations over the analyzed periods. The operating profit margin (OPM) demonstrates a sharp decline from a high of 24.76% in 2019 to a negative margin of -1.1% in 2020, followed by a recovery trend reaching 10.13% in 2024. Despite volatility, the margin does not return to its initial peak, indicating ongoing challenges in maintaining previous profitability levels.

The turnover of capital (TO) shows a gradual improvement, starting at 0.42 in 2019 and increasing steadily each year to 0.55 in 2024. This upward trend suggests enhanced efficiency in using capital to generate sales, which is a positive operational development.

The metric representing (1 – Effective cash tax rate) (CTR) fluctuates significantly, starting at 92.59% in 2019, peaking at 100% in 2020, and then decreasing to 52.36% by 2023 before slightly rising again to 67.73% in 2024. This variability indicates changes in the effective tax burden over the years, implying alterations in taxable income, tax planning, or regulatory environment affecting cash tax payments.

Return on invested capital (ROIC) mirrors the pattern seen in operating profit margin but on a smaller scale, declining sharply into negative territory (-1.18%) in 2020 before gradually recovering to 3.77% in 2024. Although the recovery is consistent, the ROIC remains well below the initial 2019 level of 9.58%, suggesting that returns on capital investments have not yet fully rebounded.

Summary of Trends

The data reflects a period of considerable challenged profitability and returns in 2020, potentially linked to external or internal disruptions. Operational efficiency, as indicated by capital turnover, improves steadily, which may contribute to enhanced performance metrics going forward. The variability in the effective cash tax rate points to underlying fluctuations in tax-related factors influencing net profitability.

Overall, while there are signs of recovery since the troughs observed around 2020, key profitability metrics such as OPM and ROIC have not reverted to their pre-2020 levels by 2024, highlighting the need for ongoing attention to operational and financial strategies to restore historic financial strength.

Net Operating Profit Before Taxes (NOPBT)

The net operating profit before taxes experienced significant volatility over the reported periods. Starting at a high of 17,507 million USD in 2019, it dropped drastically to a loss of 715 million USD in 2020. This negative position was partly recovered in 2021 with a profit of 3,771 million USD, followed by a steady increase to 8,590 million USD in 2022. However, there was a decline to 6,506 million USD in 2023 before improving again to 9,241 million USD in 2024.

Adjusted Revenues

Adjusted revenues showed fluctuating growth patterns. From 70,704 million USD in 2019, revenues declined to 64,920 million USD in 2020. They then rebounded to 67,865 million USD in 2021 and rose sharply to 84,532 million USD in 2022. Revenue growth continued in 2023 and 2024, reaching 88,985 million USD and 91,261 million USD respectively, indicating a strong recovery and expansion trend after the initial decline.

Operating Profit Margin (OPM)

The operating profit margin mirrored the volatility in profitability. It started at a substantial margin of 24.76% in 2019, falling to a negative margin of -1.10% in 2020, reflecting operational challenges or extraordinary expenses. The margin recovered partially to 5.56% in 2021 and improved further to 10.16% in 2022. A decline was observed to 7.31% in 2023, but the margin improved again to 10.13% in 2024, demonstrating resilience and a return towards more normalized profitability levels.

Revenues

The adjusted revenues demonstrate an overall increasing trend from 2019 to 2024. After a decline from US$70,704 million in 2019 to US$64,920 million in 2020, revenues recovered to US$67,865 million in 2021. Subsequently, there is a significant upward shift in 2022 to US$84,532 million, continuing to rise through 2023 at US$88,985 million and reaching US$91,261 million in 2024. This indicates consistent revenue growth post-2020, suggesting improved business performance or expansion efforts.

Invested Capital

The invested capital shows relative stability over the six-year period, starting at US$169,178 million in 2019 and peaking slightly at US$174,594 million in 2020. It remains fairly constant around the US$173 billion mark for 2021 through 2023, before decreasing to US$166,066 million in 2024. The reduction in invested capital in the latest period could imply divestitures, asset optimization, or capital efficiency measures undertaken by the company.

Turnover of Capital (TO)

The turnover of capital ratio, measuring how efficiently invested capital is generating revenues, initially declines from 0.42 in 2019 to 0.37 in 2020. Thereafter, it shows steady improvement, increasing gradually to 0.39 in 2021, then rising sharply to 0.49 in 2022 and further to 0.51 in 2023. The 2024 figure reaches 0.55, the highest in the observed period. This upward trend reflects enhanced efficiency in the utilization of the company’s capital to generate revenues, aligning with the observed revenue growth amidst relatively stable or reduced invested capital.

Cash Operating Taxes

The cash operating taxes have shown a steady increase over the period from 2019 to 2023, rising from $1,297 million in 2019 to $3,100 million in 2023. However, there is a slight decrease in 2024 to $2,982 million, indicating a marginal tax reduction or a change in taxable income or tax strategy in the latest year.

Net Operating Profit Before Taxes (NOPBT)

The NOPBT exhibited high volatility across the years. In 2019, NOPBT stood at $17,507 million, but it dropped significantly to a negative figure of -$715 million in 2020, reflecting operational challenges likely linked to external factors. Subsequently, it recovered to $3,771 million in 2021 and continued to improve, reaching $8,590 million in 2022. A decrease is noted in 2023 to $6,506 million, followed by a rise again to $9,241 million in 2024. This suggests a period of instability with gradual improvement after 2020 but fluctuating profitability in recent years.

Effective Cash Tax Rate (CTR)

The effective cash tax rate shows considerable fluctuation throughout the period. The rate was relatively low at 7.41% in 2019, then data is missing for 2020. It surged dramatically to 41.25% in 2021, indicating a much higher tax burden relative to operating profit that year. The rate then declined to 22.01% in 2022, rose sharply again to 47.64% in 2023, before falling back to 32.27% in 2024. These variations suggest changes in tax planning, profitability, or tax regulations impacting the actual tax paid relative to profit before tax.