Walt Disney Co. (NYSE:DIS)

The financial performance of the company over the analyzed periods exhibits notable fluctuations and gradual improvements.

Return on Assets (ROA)

The return on assets showed a significant decline from 5.7% in 2019 to a negative value of -1.42% in 2020, indicating a period of reduced efficiency in asset utilization. Following this, there was a recovery trend with ROA increasing to 0.98% in 2021, and continuing to improve moderately through to 2.53% in 2024, suggesting better asset management and operational performance over the later years.

Financial Leverage

Financial leverage peaked at 2.41 in 2020, reflecting increased reliance on debt relative to equity. From that peak, financial leverage gradually decreased each year, reaching 1.95 in 2024. This downward trend indicates a strategic reduction in debt levels or an increase in equity, implying a more conservative capital structure over time.

Return on Equity (ROE)

Return on equity followed a similar pattern to ROA, with a sharp decline from 12.44% in 2019 to -3.43% in 2020, reflecting downturns in profitability and shareholder returns. Thereafter, ROE recovered gradually, increasing to 4.94% by 2024. Despite improvement, the ROE remained below pre-2019 levels, indicating that while profitability for equity holders has improved from the low point, full recovery to earlier profitability levels has not yet been achieved.

Overall, the data reveal a challenging period around 2020 with significant decreases in profitability measures and increased leverage. Subsequent years show a recovery trajectory with improving returns and reduced financial risk, though profitability has not fully returned to the levels observed at the beginning of the period.

Net Profit Margin

The net profit margin experienced a significant decline from 15.89% in 2019 to -4.38% in 2020, indicating a period of unprofitability. Following this low point, there was a gradual recovery with the margin improving to 2.96% in 2021 and continuing an upward trend through 3.8% in 2022. However, a slight decrease occurred in 2023 to 2.65%, before rising again to 5.44% in 2024. Overall, the trend shows a period of volatility with recovery and moderate growth in profitability by the end of the period.

Asset Turnover

The asset turnover ratio showed a generally positive trend over the six-year period. Starting at 0.36 in 2019, it decreased slightly to 0.32 in 2020 but then increased steadily each year to reach 0.47 in 2024. This suggests an improving efficiency in using assets to generate revenue, reaching the highest level in the latest year observed.

Financial Leverage

Financial leverage rose from 2.18 in 2019 to a peak of 2.41 in 2020, indicating an increased reliance on debt during that year. Subsequently, leverage decreased incrementally each year to 1.95 by 2024. This decline implies a reduction in financial risk and a shift towards a more conservative capital structure over time.

Return on Equity (ROE)

The return on equity followed a pattern similar to the net profit margin. It started at 12.44% in 2019, dropped substantially to -3.43% in 2020, and then showed gradual improvement in the following years. From 2.25% in 2021, ROE increased to 3.31% in 2022, dipped slightly to 2.37% in 2023, and then rose notably to 4.94% in 2024. The fluctuations suggest challenges to shareholder returns around 2020 with recovery and enhancement thereafter, though ROE remains below the initial 2019 level.

Tax Burden

The tax burden ratio shows variability over the analyzed period. It started at 0.78 in 2019, with a noticeable increase to 0.99 by 2021, indicating a near-complete retention of earnings after tax during that year. Subsequently, the ratio decreased to around 0.63-0.64 in 2022 and 2023, before rising again to 0.73 in 2024. This fluctuation suggests changing tax efficiencies or tax rates affecting net income after taxes.

Interest Burden

Interest burden saw a decline from 0.92 in 2019 to a low of 0.57 in 2021, indicating that interest expenses significantly reduced operating profit retained after interest during that peak period. After 2021, the ratio recovered to 0.76 in 2022 but then declined again to 0.65 in 2023, followed by a rise to 0.77 in 2024. Overall, this pattern reflects changing interest expenses or debt-related costs impacting earnings before taxes.

EBIT Margin

The EBIT margin experienced a sharp downturn in 2020, falling from a healthy 22.04% in 2019 to a negative margin of -0.79%, reflecting operational challenges during that year. From 2021 onwards, there is a gradual recovery with margins improving to 5.29% in 2021, then incrementing to 7.77% in 2022. However, the margin dipped slightly to 6.42% in 2023 before rising again to 9.67% in 2024, indicating a gradual but uneven recovery in operating profitability.

Asset Turnover

Asset turnover demonstrated a steady upward trend throughout the period, starting from 0.36 in 2019 and increasing consistently each year to reach 0.47 in 2024. This improvement suggests enhanced efficiency in utilizing assets to generate revenue.

Financial Leverage

Financial leverage initially increased from 2.18 in 2019 to 2.41 in 2020, indicating an increased use of debt or equity financing relative to equity. Since then, leverage has gradually declined each year, reaching 1.95 by 2024, reflecting a reduction in reliance on financial leverage, possibly pointing to lower debt levels or an increase in equity base.

Return on Equity (ROE)

ROE followed a notable decline from 12.44% in 2019 to a negative -3.43% in 2020, mirroring the operational setbacks experienced in that year. From 2021 onward, ROE has shown modest recovery, moving from 2.25% to 4.94% in 2024, yet remaining significantly below pre-2020 levels. This pattern underscores the ongoing impact of external or operational challenges on shareholder returns despite gradual improvement.

Net Profit Margin

The net profit margin exhibited significant volatility over the periods analyzed. Initially, it was relatively strong at 15.89% in 2019, followed by a sharp decline into negative territory at -4.38% in 2020. After this downturn, the margin gradually recovered, returning to positive values with moderate gains from 2.96% in 2021 to 3.8% in 2022. Subsequently, it experienced a slight decrease to 2.65% in 2023 but showed a notable improvement reaching 5.44% by 2024. This pattern suggests a period of financial stress followed by progressive recovery and strengthening profitability.

Asset Turnover

Asset turnover demonstrated an overall upward trend across the reported periods, indicating improved efficiency in using assets to generate revenue. Starting at 0.36 in 2019, there was a decline to 0.32 in 2020. From that point forward, asset turnover increased steadily each year, reaching 0.33 in 2021, 0.41 in 2022, 0.43 in 2023, and culminating at 0.47 in 2024. The consistent increase since 2020 reflects enhancements in operational management or asset utilization.

Return on Assets (ROA)

ROA followed a trajectory similar to net profit margin but at lower absolute levels. The ratio dropped from 5.7% in 2019 to a negative -1.42% in 2020, indicating a loss in asset profitability during that period. From 2021 onward, ROA recovered gradually with values of 0.98%, 1.54%, and 1.15% in the subsequent three years. In 2024, it attained 2.53%, representing a positive rebound in the company’s ability to generate returns from its asset base. The improvement signals gradually restored asset efficiency aligned with profitability recovery trends.

The analyzed financial indicators reveal fluctuating performance trends over the six-year period ending in September 2024.

Tax Burden

There is an irregular pattern observed in the tax burden ratio, with values oscillating between 0.63 and 0.99. The ratio peaked in October 2021 at 0.99, indicating nearly full tax retention before declining and then rising again, reaching 0.73 by September 2024. This suggests variability in effective tax rates impacting net profitability.

Interest Burden

The interest burden shows notable volatility, starting at 0.92 in September 2019, dropping dramatically to 0.57 in October 2021, then partially recovering to 0.77 by September 2024. The lower values represent higher interest expenses relative to EBIT during these middle years, with a trend toward recovery in the latest year.

EBIT Margin

The EBIT margin experienced substantial fluctuations. From a strong margin of 22.04% in September 2019, it plunged to a negative margin of -0.79% in October 2020, reflecting a period of operational challenges likely linked to extraordinary circumstances. Subsequent years show partial recovery, with a gradual increase to 9.67% by September 2024, though still below the pre-2020 level.

Asset Turnover

Asset turnover exhibits a generally upward trajectory, increasing from 0.36 to 0.47 over the period. This indicates improving efficiency in utilizing assets to generate revenue, suggesting operational enhancements despite other financial difficulties.

Return on Assets (ROA)

ROA mirrors the EBIT margin and interest burden trends, showing a decline from 5.7% in 2019 to a negative -1.42% in 2020. It then climbs steadily, reaching 2.53% by September 2024. Although the positive trend represents improving profitability on asset investments, the figure remains below the initial 2019 performance, signaling ongoing recovery from prior setbacks.

The financial data indicates variable trends in tax burden, interest burden, EBIT margin, and net profit margin over the analyzed periods.

Tax Burden

The tax burden ratio fluctuated considerably, beginning at 0.78 in 2019, increasing close to unity at 0.99 in 2021, before declining to 0.64 in 2022 and 0.63 in 2023. It then rose moderately to 0.73 in 2024. This pattern suggests periods of changing effective tax rates or tax-related adjustments affecting profitability.

Interest Burden

The interest burden ratio showed a notable decline from 0.92 in 2019 to 0.57 in 2021, indicating increased interest expenses relative to earnings before interest and taxes or other operational factors reducing EBITDA coverage. Following this trough, the ratio improved to 0.76 in 2022, dipped to 0.65 in 2023, and rose again to 0.77 in 2024, reflecting some volatility but an overall partial recovery.

EBIT Margin

The EBIT margin experienced a sharp drop from 22.04% in 2019 to a negative value of -0.79% in 2020, suggesting significant operational challenges or extraordinary items affecting operating profitability. Thereafter, it improved steadily to 5.29% in 2021, 7.77% in 2022, and showed some fluctuation with 6.42% in 2023 before rising again to 9.67% in 2024. This indicates a gradual recovery and improvement in operating efficiency over the medium term.

Net Profit Margin

Net profit margin mirrored the operational difficulties seen in EBIT margin, falling from 15.89% in 2019 to -4.38% in 2020, signaling a net loss year. Subsequently, the margin returned to positive territory with 2.96% in 2021, gradually improving to 3.8% in 2022. There was a decline to 2.65% in 2023 before rebounding to 5.44% in 2024. The rebound suggests recovery in profitability, though the net margin remains below pre-2020 levels.