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Walt Disney Company

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The Walt Disney Company is a diversified international family entertainment and media enterprise business. They have five business segments which are media network, parks and resorts, studio entertainment, consumer products and interactive media. Disney Media Network consists of broadcast, cable, radio, publishing and digital businesses within the Disney/ABC Television Group and ESPN, Inc. Walt Disney Parks and Resorts is comprised of family oriented parks and resorts all around the world. They are the world’s largest provider for family travel. The Walt Disney Studios is the foundation in which The Walt Disney Company was built. It provides movies and music to consumers. Disney Consumer Products is the business segment in which Disney …show more content…

Having the opportunities to expand in other countries creates and allows more opportunities for sales and an increase in performance. Even though Disney has a solid and successful existence in the entertainment industry, they do have some threats that could negatively impact their profitability in the future. The major threat is competition. There is high competition and growth of other industry giants such as Time Warner which may create a problem for Disney to sustain as the leader in the industry. If Disney was to lose the status of leader, it could negatively affect their sales and performance. While Disney’s has had revenue growth, it appears they have also been taking on more debt. The good news is the increased growth justifies the added leverage of debt. If we look at their liquidity ratios (See Exhibit 1), their current ratio, which measures the ability to pay short-term obligations is 1.06. Because the ratio is more than 1, Disney has enough assets to cover their liabilities. Their quick ratio, which measures the ability to meet short-term obligation with most liquid assets is 0.96. Being that this ratio is less than 1, Disney is not able to cover their liabilities with their most liquid assets. However the ratio is just below 1, so they will be able to pay most of their liabilities. Looking at leverage ratios, the debt to equity ratio, which indicates what portion of

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