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EXECUTIVE SUMMARYThe objective of this report is to present a comprehensive financial statement analysis of The Walt Disney Company (Disney). Disney is the worlds largest entertainment and media conglomerate with business operations in media networks, parks and resorts, and film studios. This report details Disneys financial standing and operating environment through an in depth analysis of the companys balance sheet, income statement and statement of cash flows. This report also provides a comprehensive overview of the companys industry, management and, finally, competitive environment, through comparative analysis between Disney and Viacom Inc. Ultimately, with the detailed analysis provided, this report serves as a useful tool for investors thinking about investing in Disney.

OBJECTIVE OF THE STUDYThe Objective of the study includes:1] To study the different types of financial ratio.2] To study importance, benefits &uses of financial ratio in the organization.3] To study the company performance (Indian Oil Corporation Ltd.) through financial ratio analysis.DATA COLLECTION METHOD My project is basically depend on the Secondary Data which includes: Various internet websites Textbook Newspapers

INTRODUCTION TO FINANCIAL RATIO ANALYSISMeaning:Ratio analysis is the process of determining and interpreting numerical relationships based on financial statements. A ratio is a statistical yardstick that provides a measure of the relationship between two variables or figures.This relationship can be expressed as a percent or as a quotient. Ratios are simple to calculate and easy to understand. The persons interested in the analysis of financial statements can be grouped under three heads,i) owners or investorsii) creditors andiii) financial executives.Although all these three groups are interested in the financial conditions and operating results, of an enterprise, the primary information that each seeks to obtain from these statements differs materially, reflecting the purpose that the statement is to serve.Investors desire primarily a basis for estimating earning capacity. Creditors are concerned primarily with liquidity and ability to pay interest and redeem loan within a specified period. Management is interested in evolving analytical tools that will measure costs, efficiency, liquidity and profitability with a view to make intelligent decisions.

DEFINITION OF FINANCIAL RATIO ANALYSISAccording to J. Batty, "The term accounting ratios is used to describe significant relationships which exist between figures shown in a balance sheet, in a profit and loss account, in a budgetary control system or in any other part of the accounting organization"As stated by Investopedia, there are numerous ratios that can be estimated from the financial statements pertaining to a business companys activity, performance, liquidity, and financingIn simple words, "Ratio" is the numerical relationship between two variables which are connected with each other in some way or the other. Ratios may be expressed in any one of the following mannersCLASSIFICATION OF FINANCIAL RATIOSGenerally, financial ratios are classified on the basis of function or test, on the basis of financial statements, and on the basis of importance. These three classifications are briefly discussed below:Types of Ratio in Ratio AnalysisYou have learnt in the previous lesson that accounting ratios can be classified into five major groups viz. liquidity ratios, activity ratios, solvency ratios, profitability ratios and leverage ratio. You have already learnt the meaning, computations and significance of liquidity and activity ratios. In this lesson, you will learn about the various solvency ratios, profitability ratios and leverage ratio and their significance.OBJECTIVESAfter studying this lesson you will be able to : explain various types of accounting ratios i.e. solvency, profitability and leverage ratios; calculate the various ratios on the basis of given information; describe the limitations of accounting ratios.SOLVENCY RATIOSThe term solvency refers to the ability of a concern to meet its long term obligations. The long-term liability of a firm is towards debenture holders, financial institutions providing medium and long term loans and other creditors selling goods on credit. These ratios indicate firms ability to meet the fixed interest and its costs and repayment schedules associated with its long term borrowings. The following ratios serve the purpose of determining the solvency of the business firm. Debt equity ratio Proprietary ratioDebt-equity ratioIt is also otherwise known as external to internal equity ratio. It is calculated to know the relative claims of outsiders and the owners against the firms assets. This ratio establishes the relationship between the outsiders funds and the shareholders fund. Thus, Debt-equity ratio = Outsiders' funds/Share holders' funds The two basic components of the ratio are outsiders funds and shareholders funds. The outsiders funds include all debts/liabilities to outsiders i.e. debentures, long term loans from financial institutions, etc. Shareholders funds mean preference share capital, equity share capital, reserves and surplus and fictitious assets like preliminary expenses. This ratio indicates the proportion between shareholders funds and the long-term borrowed funds. In India, this ratio may be taken as acceptable if it is 2 : 1. If the debt-equity ratio is more than that, it shows a rather risky financial position from the long term point of view.Significance

The purpose of debt equity ratio is to derive an idea of the amount of capital supplied to the concern by the proprietors. This ratio is very useful to assess the soundness of long term financial position of the firm. It also indicates the extent to which the firm depends upon outsiders for its existence. A low debt equity ratio implies the use of more equity than debt. It is also known as equity ratio. This ratio establishes the relationship between shareholders funds to total assets of the firm. The shareholders fund is the sum of equity share capital, preference share capital, reserves and surpluses. Out of this amount, accumulated losses should be deducted. On the other hand, the total assets mean total resources of the concern. The ratio can be calculated as under :Proprietory ratio = Shareholders' funds/Total assetsSignificanceProprietary ratio throws light on the general financial position of the enterprise. This ratio is of particular importance to the creditors who can ascertain the proportion of shareholders funds in the total assets employed in the firm. A high ratio shows that there is safety for creditors of all types. Higher the ratio, the better it is for concerned. A ratio below 50% may be alarming for the creditors since they may have to lose heavily in the event of companys liquidation on account of heavy losses.PROFITABILITY RATIOSThe main aim of an enterprise is to earn profit which is necessary for the survival and growth of the business enterprise. It is earned with the help of amount invested in business. It is necessary to know how much profit has been earned with the help of the amount invested in the business. This is possible through profitability ratio. These ratios examine the current operating performance and efficiency of the business concern. These ratios are helpful for the management to take remedial measures if there is a declining trend. The important profitability ratios are :(i) Gross profit ratio(ii) Net profit ratio(iii) Operating profit ratio(iv) Return on investment ratio(i) Gross profit ratioIt expresses the relationship of gross profit to net sales. It is expressed in percentage. It is computed asGross profit ratio = Gross profit/Net sales100SignificanceGross profit ratio shows the margin of profit. A high gross profit ratio is a great satisfaction to the management. It represents the low cost of goods sold. Higher the rate of gross profit, lower the cost of goods sold.(ii) Net profit ratioA ratio of net profit to sales is called Net profit ratio. It indicates sales margin on sales. This is expressed as a percentage. The main objective of calculating this ratio is to determine the overall profitability. The ratio is calculated asNet profit ratio =Net profit/Net sales100SignificanceNet profit ratio determines overall efficiency of the business. It indicates the extent to which management has been effective in reducing the operational expenses. Higher the net profit ratio, better it is for the business.(iii) Operating profit ratioOperating profit is an indicator of operational efficiencies. It reveals only overall efficiency. It establishes relationship between operating profit and net sales. This ratio is expressed as a percentage. It is calculated as :Operating profit =Operating profit /Net sales100Operationg Profit = Gross Profit (Administration expenses + selling expenses)SignificanceIt helps in examining the overall efficiency of the business. It measures profitability and soundness of the business. Higher the ratio, the better is the profitability of the business. This ratio is also helpful in controlling cash.(iv) Return on investment ratio (ROI)ROI is the basic profitability ratio. This ratio establishes relationship between net profit (before interest, tax and dividend) and capital employed. It is expressed as a percentage on investment. The term investment here refers to long-term funds invested in business. This investment is called capital employed.Capital employed = Equity share capital + preference share capital+ Reserve and surplus + long term liabilities fictitious assets Non trading investmentCapital employed = (Fixed asset depreciation) + (Current Asset Current liabilities)Capital employed = (Fixed Assets Depreciation) + (Working capital)This ratio is also known as Return on capital employed ratio. It is calculated as underROI = Net profit before interest, tax and dividend /Capital employed100Note : If net profit after interest, tax and dividend is given, the amount of interest, tax and dividend should be added back to calculate the net profit before interest, tax and dividend.

SignificanceROI ratio judges the overall performance of the concern. It measures how efficiently the sources of the business are being used. In other words, it tells what is the earning capacity of the net assets of the business. Higher the ratio the more efficient is the management and utilisation of capital employed. LEVERAGE RATIOLeverage ratio is otherwise known as capital structure ratio. The term capital structure refers to the relationship between various long term forms of financing such as debentures (long term), preference share capital and equity share capital including reserves and surpluses. Financing the firms assets is a very crucial problem in every business and as a rule there should be a proper mix of debt and equity capital in financing the firms assets. Leverage or capital structure ratios are calculated to test the long term financial position of a firm. Generally capital gearing ratio is mainly calculated to analyse the leverage or capital structure of the firmCapital gearing ratioThe capital gearing ratio is described as the relationship between equity share capital including reserves and surpluses to preference share capital and other fixed interest bearing loans. If preference share capital and other fixed interest bearing loans exceed the equity share capital including reserves, the firm is said to be highly geared. The firm is said to be low geared if preference share capital and other fixed interest bearing loans are less than equity capital and reserves.Capital gearing ratio = Equity share capital reserves and surpluses/Preference share capital + long term debt bearing fixed interestSignificanceCapital gearing ratio is very important ratio. Gearing should be kept in such a way that the company is able to maintain a steady rate of dividend. High gearing ratio is not good for a new company or a company of which future learnings are uncertain.LIMITATION OF ACCOUNTING RATIOSAccounting ratios are very significant in analysing the financial statements. Through accounting ratios, it will be easy to know the true financial position and financial soundness of a business concern. However, despite the advantages of ratio analysis, it suffers from a number of disadvantages. The following are the main limitations of accounting ratios.Ignorance of qualitative aspectThe ratio analysis is based on quantitative aspect. It totally ignores qualitative aspect which is sometimes more important than quantitative aspect.Ignorance of price level changesPrice level changes make the comparison of figures difficult over a period of time. Before any comparison is made, proper adjustments for price level changes must be made.No single conceptIn order to calculate any ratio, different firms may take different concepts for different purposes. Some firms take profit before charging interest and tax or profit before tax but after interest tax. This may lead to different results.

Misleading results if based on incorrect accounting dataRatios are based on accounting data. They can be useful only when they are based on reliable data. If the data are not reliable, the ratio will be unreliable.No single standard ratio for comparisonThere is no single standard ratio which is universally accepted and against which a comparison can be made. Standards may differ from Industry to industry.Difficulties in forecastingRatios are worked out on the basis of past results. As such they do not reflect the present and future position. It smay not be desirable to use them for forecasting future events.

PURPOSE OF FINANCIAL RATIOS ANALYSISFinancial ratios have two primary users, investors and management. Management uses financial ratios to determine how well their firm is performing in order to evaluate where the firm can improve. For example, if a firm has a low gross margin, a manager can evaluate how to increase their gross margin. Investors use financial ratios to see if the firm is a good investment. By comparing financial ratios between companies and between industries, investors can better determine the best investment.1. Liquidity RatiosLiquidity ratios deal with a firm's short-term financing and debt. By being liquid, a firm is quickly able to convert assets to cash, and pay off interest. The main liquidity ratios are the current ratio and quick ratio.

2. Leverage RatiosLeverage ratios involve the amount of debt used to finance a firm's assets. A firm can finance through debt or equity. The firm must eventually pay back debt, while equity is an investment in the company. The main leverage ratios are debt to equity ratio and long-term debt to capitalization ratio.

3. Operational RatiosOperational ratios show a firm's performance. For example, accounts receivable turnover ratio shows the firm's performance in collecting accounts receivable. Inventory turnover ratio shows a firm's performance in converting inventory into cost of goods sold.

4. Profitability RatiosProfitability ratios show the return on sales and the profitability of the firm. The main profitability ratios are return on assets, return on equity and return on capital employed.

5. Solvency RatiosSolvency ratios show the firm's ability to pay off debt through cash flows. The main solvency ratio is the solvency ratio. The solvency ratio divides net tax profit plus depreciation by short-term liabilities plus long-term liabilities. A general rule of thumb is that a solvency ratio of about 20 percent is healthy.

BENEFITS OF FINANCIAL RATIOS ANALYSISFinancial ratios are a comparison of financial statement numbers to each other. They help a business owner to analyses current operations and predict the future performance of the company. Various financial ratios can present measures of liquidity in the business, speed of sales, and debt levels, amongst other benchmarks. Ratios tell the financial story of a business and are helpful tools for any business.

1. Yearly ComparisonsOne of the most useful benefits of using financial ratios in a company is that it allows comparison of the company's performance to that of previous periods or years. For example, if the company's inventory turnover ratio of 1 to 4 this year when it was 1 to 3 last year, this means that inventory levels are building in the current year. The increase in the ratio is an indication that sales are slowing or that inventory levels (which are expensive to maintain) are growing. The ratio change alerts the business manager to a pending cash crunch in time to avert it.

2. Helps Predict Financial Distress EarlyA company can burn through its cash reserves quickly during tough economic times or industry contraction. Financial ratios can operate as an early warning system for businesses that are heading into financial distress. Ratios such as the quick ratio (how much money will there be to pay current debts?), gross margin (how much is the company making on every widget it sells?), and accounts receivable ratio (how quickly are sales being paid for?) tell the company's owners if the money is going to run out and how quickly. The sooner the cash flow problem is identified, the sooner it can be corrected.

3. Facilitates Fair Comparison amongst Potential PurchasesWhen a company is looking to expand by purchasing another company, it is critical to be able to compare companies that are potential purchases. The most objective way to compare companies is through ratios so that the financial results of each business can be compared regardless of its size. Ratios will tell the investing company which potential purchase is more profitable, which is more efficient at using its assets and which is more harnessed by debt.

4. Makes it Possible to Compare Company to Others in the IndustryOn-going industry analysis is important to all businesses. Understanding what the company's performance is in relation to its competitors allows business managers to adjust business strategies and learn from the best practices in the industry. Financial ratios can show how a company is doing compared to other companies in the same field. This tells managers what they are doing right and what they can improve on. Reviewing industry ratios can also alert managers to potential industry-wide slowdowns so that the company can set up a more defensive business strategy.5. ForecastingAt present, many companies use ratio analysis to reveal the trends in production. This provides them an opportunity for estimation of future trends and thus the foundation for budget planning so as to determine the course of action for the growth and development of the business.

6. Determines ProfitabilityFinancial Ratio analysis assists managers to work out the production of the company by figuring the profitability ratios. Also, the management can evaluate their revenues to check if their productivity. Thus, probability ratios are helpful to the company in appraising its performance based on current earning.

7. Helpful in Evaluating SolvencyBy computing the solvency ratio, the companies are able to keep an eye on the correlation between the assets and the liabilities. If, in any case, the liabilities exceed the assets, the company is able to know its financial position. This is helpful in case they wish to set up a plan for loan repayment.

8. Better Financial AnalysisFinancial Ratio analysis is also helpful to recluses, in addition to shareholders, debenture holders, and creditors. Besides, bankers are also able to know the profitability of the company to find out whether they are able to pay the dividend and interests under a specific period.

Objectives of Ratio Analysis

Financial ratios are true test of the profitability, efficiency and financial soundness of the firm. These ratios have following objectives:(1) Measuring the profitability: Profitability is the profit earning capacity of the business. This can be measured by Gross Profit, Net Profit, Expenses and Other Ratios. If these ratios fall we can take corrective measures.(2) Determining operational efficiency: Operational efficiency of the business can be determined by calculating operating / activity ratios.(3) Measuring financial position: Short-term and long-term financial position of the business can be measured by calculating liquidity and solvency ratios. In case of unhealthy short or long-term position, corrective measures can be taken.(4) Facilitating comparative analysis: Present performance can be compared with past performance to discover the plus and minus points. Comparison with the performance of other competitive firms can also be made.(5) Indicating overall efficiency: Profit and Loss Account shows the amount of net profit and Balance Sheet shows the amount of various assets, liabilities and capital. But the profitability can be known by calculating the financial ratios.(6) Budgeting and forecasting: Ratio analysis is of much help in financial forecasting and planning. Ratios calculated for a number of years work as a guide for the future. Meaningful conclusions can be drawn for future from these ratios.

Uses of Financial Ratios Benchmarking Financial RatiosFinancial ratios are not very useful on a stand-alone basis; they must be benchmarked against something. Analysts compare ratios against the following:1.The Industry norm - This is the most common type of comparison. Analysts will typically look for companies within the same industry and develop an industry average, which they will compare to the company they are evaluating. Ratios per industry are also provided by Bloomberg and the S&P. These are good sources of general industry information. Unfortunately, there are several companies included in an index that can distort certain ratios. If we look at the food and beverage ratio index, it will include companies that make prepared foods and some that are distributors. The ratios in this case would be distorted because one is a capital-intensive business and the other is not. As a result, it is better to use a cross-sectional analysis, i.e. individually select the companies that best fit the company being analyzed.

2.Aggregate economy - It is sometimes important to analyze a company's ratio over a full economic cycle. This will help the analyst understand and estimate a company's performance in changing economic conditions, such as a recession.

3.The company's past performance - This is a very common analysis. It is similar to a time-series analysis, which looks mostly for trends in ratios.

Limitations of Financial RatiosThere are some important limitations of financial ratios that analysts should be conscious of: Many large firms operate different divisions in different industries. For these companies it is difficult to find a meaningful set of industry-average ratios. Inflation may have badly distorted a company's balance sheet. In this case, profits will also be affected. Thus a ratio analysis of one company over time or a comparative analysis of companies of different ages must be interpreted with judgment. Seasonal factors can also distort ratio analysis. Understanding seasonal factors that affect a business can reduce the chance of misinterpretation. For example, a retailer's inventory may be high in the summer in preparation for the back-to-school season. As a result, the company's accounts payable will be high and its ROA low. Different accounting practices can distort comparisons even within the same company (leasing versus buying equipment, LIFO versus FIFO, etc.). It is difficult to generalize about whether a ratio is good or not. A high cash ratio in a historically classified growth company may be interpreted as a good sign, but could also be seen as a sign that the company is no longer a growth company and should command lower valuations. A company may have some good and some bad ratios, making it difficult to tell if it's a good or weak company.In general, ratio analysis conducted in a mechanical, unthinking manner is dangerous. On the other hand, if used intelligently, ratio analysis can provide insightful information.

FINANCIAL ACCOUNTING RATIOS & FORMULASAnalysis of Profitability:General profitability: Gross profit ratio = (Gross profit / Net sales) 100 Operating ratio = (Operating cost / Net sales) 100 Expense ratio = (Particular expense / Net sales) 100 Operating profit ratio = (Operating profit / Net sales) 100Overall profitability: Return on shareholders investment or net worth = Net profit after interest and tax / Shareholders funds Return on equity capital = (Net profit after tax Preference dividend) / Paid up equity capital Earnings per share (EPS) ratio = (Net profit after tax Preference dividend) / Number of equity shares Return on gross capital employed = (Adjusted net profit / Gross capital employed) 100 Return on net capital employed = (Adjusted net profit / Net capital employed) 100 Dividend yield ratio = Dividend per share / Market value per share Dividend payout ratio or pay-out ratio = Dividend per equity share / Earnings per shareShort Term Financial Position or Test of Solvency: Current ratio = Current assets / Current liabilities Quick or acid test of liquid ratio (for immediate solvency) = Liquid assets / Current liabilities Absolute liquid ratio = Absolute liquid assets / Current liabilitiesCurrent Assets Movement, Efficiency or Activity Ratios: Inventory / Stock turnover ratio = Cost of goods sold / Average inventory at cost Debtors of receivables turnover ratios = Net credit sales / Average trade debtors Average collection period = (Trade debtors No. of working days) / Net credit sales Creditors or payables turnover ratio = Net credit purchase / Average trade creditors Average payment period = (Trade creditors No. of working days) / Net credit purchase Working capital turnover ratio = Cost of sales / Net working capitalAnalysis of Long Term Solvency: Debt to equity ratio = Outsiders funds / Shareholders funds or External funds / Internal funds Ratio of long term debt to shareholders funds (Debt equity) = Long term debt / Shareholders funds Proprietary of equity ratio = Shareholders funds / Total assets Fixed assets to net worth = Fixed assets after depreciation / Shareholders funds Fixed assets ratio or fixed assets to long term funds = Fixed assets after depreciation / Total long term funds Ratio of current assets proprietors funds = Current assets / Shareholders funds Debt service or interest coverage ratio = Net profit before interest and tax / Fixed interest charges Capital gearing ratio = Equity share capital / Fixed interest bearing funds Nature Of Ratio Analysis In financial analysis, ratio is used as an index of yardstick for evaluating the financial position and performance of the firm. It is a technique of analysis and interpretation of financial statements. Ratio analysis helps in making decisions as it helps establishing relationship between various ratios and interpret thereon. Ratio analysis helps analysts to make quantitative judgement about the financial position and performance of the firm. Ratio analysis involves following steps:

1. Relevant data selection from the financial statements related to the objectives of the analysis.

2. Calculation of required ratios from the data and presenting them either in pure ratio form or in percentage.

3. Comparison of derived different ratios with:i. The ratio of the same concern over a period of years to know upward or downward trend or static position to help in estimating the future, orii. The ratios of another firm in same line, oriii. The ratios of projected financial statements, oriv. The ratios of industry average, orv. The predetermined standards, orvi. The ratios between the departments of the same concern assessing either the financial position or the profitability or both.

4. Interpretation of the ratio

Ratio analysis uses financial report and data and summarizes the key relationship in order to appraise financial performance. The effectiveness will be greatly improved when trends are identified, comparative ratios are available and inter-related ratios are prepared.Ways to Express Accounting RatiosAccounting ratios can give financial statement users the opportunity to make quick judgments about the health of your company. While these ratios only provide a short glimpse under the hood of your company, they offer generally understood inferences. When you're speaking with creditors or potential investors and they want to know some of your company's financial ratios, you should be able to show them. Understanding the way these ratios are expressed is the first step in making sure that you look like you know what you are talking about.PercentageMany financial ratios are expressed as a percentage of another financial figure. For example, the gross profit margin, a measure of the amount of profit earned when making sales, is calculated as sales less cost of goods sold all divided by sales. If this ratio is determined to be 0.17, it is spoken of as a 17 percent gross profit margin. Other common financial ratios that are expressed in this manner include profit margin, contribution margin ratio and variable expense ratio.DecimalFinancial ratios that do not have percentage meanings are often just expressed as a unitless decimal number. For example, the current ratio, a measure of a company's liquidity, is calculated as current assets divided by current liabilities. While this may sometimes be expressed as a ratio, such as 4.2:1, most often this will be shown only in numbers. Many of the most common liquidity and solvency ratios are expressed in this manner; they include quick ratio, debt ratio, turnover ratios, return on assets, return on equity and the price to earnings ratio.Times Interest EarnedSome financial ratios use a denominator of interest to express financial meaning. For example, a common measure of a company's ability to service debt payments is the times interest earned ratio. This figure is calculated by dividing earnings before interest, taxes, depreciation and amortization -- known as EBITDA -- by interest expense. This gives a measure of how many multiples of the company's interest expense the company earns. These types of ratios are also known as coverage ratios, as they tell financial statement users how well the company can cover a certain expense.PeriodFinancial statement ratios related to inventory, accounts payable and accounts receivable are often expressed as a time period, such as days outstanding. For example, days sales outstanding, which measures how well a company is managing accounts receivable, is calculated as average accounts receivable divided by average sales per day. This ratio is then expressed as X number of days sales outstanding. Other financial ratios expressed in number of days or a time period include days payable outstanding, inventory conversion period, cash conversion cycle and payback period.

The walt Disney Company Description

For almost a century Disney has been distinguished in the field of family entertainment. Headquartered in Burbank, California, Disney began as a cartoon studio in the 1920s. Since then, it has become a global corporation that continues to proudly provide quality entertainment for every member of the family across America and around the world.1 Disney, together with its subsidiaries, has operations in five business segments including media networks, parks and resorts, studio entertainment, consumer products, and interactivemedia. Disney is a leading diversified international family entertainment and media enterprise.Originally a cartoon studio founded by brothers Walt and Roy Disney, Disney has grown exponentially since its inception. Disney currently has 166,000 full time employees working in the companys five business segments3 and is involved in multiple sectors of the entertainment industry ranging from television broadcasts to theme parks. It currently ranks66 on the 2012 Fortune 500 list,4 and 226 on the 2011 Global Fortune 500 list. In addition,it can be seen that Disney is taking the right steps towards innovation by recently receivingthe prestigious 2012 Huntington Award,6 and the company maintains a global presence asthe Worlds Most Admired Entertainment Company for both years of 2011 and 2012.7Disney's growth strategy has focused on expansion to provide an all-encompassing entertainment company. This reduces risks and also allows exploitation of brands across multiple channels to maximize gains. Disney's strategy relies heavily on branded creative content that the company can monetize. Recently, Disney paid over $4 billion for Lucasfilm. Other notable purchases by the company include Pixar Animation for $7.4 billion in 2006 and Marvel Entertainment for $4 billion in 2009. These purchases are an asset to the company, and have produced iconic franchises ranging from Toy Story to Iron Mancapitalizing on a market of parent consumers and their children. Disneys revenues in 2012 were $42.3 billion, and the largest segment was Media Networks, which was responsible for 46% of revenues.Despite the companys multitude of successes, there has been controversy and failure within recent times. In January 2013, Disney announced the closure of Junction Point, the Austin, Texas game development studio responsible for the Epic Mickey series. Disney acquired Junction Point in 2007, before it had any released titles. While the first game in the series was deemed a success, its successor failed miserably. Although sales data has not been made public, the Los Angeles Times reported that the multi-platform game only sold a total of 270,000 copies in 2012.In addition, towards the end of last year, Disney released information regarding its new Disney princess, Princess Sofia. Disney's first Latina princess, featured in the movie "Sofia the First: Once Upon A Princess," has received backlash as well as support from media outlets, especially the Latino community. However, this is not the first time there has been controversy surrounding one of Disney's princesses. In 2009, "The Princess and the Frog" received criticism from parents and the media for being set in New Orleans after Hurricane Katrina, its voodoo references, and Disneys first African-American princess, Tiana, falling in love with a Caucasian prince.10 While both princesses showcase Disneys support for diversity and innovation, the company has received heavy criticism in its portrayal of these new princesses. Disney has had a long and illustrious history filled with childhood memories and commercial successes, to controversies surrounding stereotypes and joint-business failures. Despite its history and what it has accomplished, the company strives to achieve more through its core commitments: to act in an ethical manner, to champion the happiness and well being of kids and families, and to inspire positive change in the world.11 These corevalues are the main driving forces in the company and set a high standard to achieve successin the future.

Balancesheet: Quarterly DataPeriod EndingJun 27, 2015Mar 28, 2015Dec 27, 2014Sep 27, 2014

Assets

Current Assets

Cash And Cash Equivalents4,475,0003,745,0005,077,0003,421,000

Short Term Investments- - - -

Net Receivables8,631,0008,657,0009,043,0008,319,000

Inventory1,513,0001,432,0001,476,0001,574,000

Other Current Assets1,893,0001,812,0001,644,0001,862,000

Total Current Assets 16,512,000 15,646,000 17,240,000 15,176,000

Long Term Investments2,694,0002,575,0002,642,0002,696,000

Property Plant and Equipment24,436,00023,762,00023,660,00023,332,000

Goodwill27,848,00027,855,00027,849,00027,881,000

Intangible Assets7,237,0007,302,0007,369,0007,434,000

Accumulated Amortization- - - -

Other Assets8,640,0008,575,0008,275,0007,667,000

Deferred Long Term Asset Charges- - - -

Total Assets 87,367,000 85,715,000 87,035,000 84,186,000

Liabilities

Current Liabilities

Accounts Payable7,794,0006,823,0009,069,0007,595,000

Short/Current Long Term Debt3,119,0002,771,0004,376,0002,164,000

Other Current Liabilities3,913,0003,816,0003,359,0003,533,000

Total Current Liabilities 14,826,000 13,410,000 16,804,000 13,292,000

Long Term Debt12,154,00012,186,00012,167,00012,676,000

Other Liabilities5,767,0005,994,0005,857,0005,942,000

Deferred Long Term Liability Charges4,113,0004,388,0004,414,0004,098,000

Minority Interest3,988,0003,699,0003,628,0003,220,000

Negative Goodwill- - - -

Total Liabilities 40,848,000 39,677,000 42,870,000 39,228,000

Stockholders' Equity

Misc Stocks Options Warrants- - - -

Redeemable Preferred Stock- - - -

Preferred Stock- - - -

Common Stock34,930,00034,720,00034,488,00034,301,000

Retained Earnings57,425,00056,058,00053,969,00053,734,000

Treasury Stock(43,932,000)(42,897,000)(42,412,000)(41,109,000)

Capital Surplus- - - -

Other Stockholder Equity(1,904,000)(1,843,000)(1,880,000)(1,968,000)

Total Stockholder Equity 46,519,000 46,038,000 44,165,000 44,958,000

Net Tangible Assets 11,434,000 10,881,000 8,947,000 9,643,000

Profit and loss statement

Fiscal year is Oct - Sep.2015-Q32015-Q22015-Q12014-Q42014-Q32014-Q2

Walt Disney Net Sales or Revenues13.1B12.46B13.39B12.39B12.47B11.65B

Cost Of Goods Sold (COGS)6.66B6.69B7.66B-860M8.97B8.67B

Walt Disney Gross Profit6.44B5.77B5.74B13.25B3.5B2.98B

Research & Development Expense------

Selling General & Admin Expense2.1B2.08B1.94B8.64B-48M

Income Before Depreciation Depletion Amortization4.34B3.69B3.8B4.61B3.5B2.93B

Depreciation Depletion Amortization575M584M592M2.29B--

Non Operating Income212M206M212M176M222M180M

Interest Expense12M-8M58M38M50M-62M

Walt Disney Pretax Income3.96B3.32B3.36B2.46B3.67B3.18B

Provision for Income Taxes1.32B1.09B1.12B836M1.25B1.12B

Minority Interest156M120M62M126M174M139M

Investment Gains Losses------

Other Income------

Income Before Extraordinaries & Disc Operations2.48B2.11B2.18B1.5B2.25B1.92B

Extraordinary Items & Discontinued Operations------

Walt Disney Net Income (Profit/Loss)2.48B2.11B2.18B1.5B2.25B1.92B

Average Shares used to compute Diluted EPS1.71B1.72B1.72B1.73B1.75B1.77B

Average Shares used to compute Basic EPS1.7B1.7B1.7B1.72B1.73B1.75B

Income Before Nonrecurring Items2.48B2.11B2.18B1.55B2.25B1.97B

Income from Nonrecurring Items----52.02M--52M

Walt Disney Earnings Per Share Basic Net1.461.241.280.871.301.10

Walt Disney Earnings Per Share Diluted Net1.451.231.270.861.281.08

EPS Diluted Before Nonrecurring Items1.451.231.270.891.281.11

Preferred Dividends Acc Pd------

Dividends Common------

Dividend Per Share Common--1.15---

Quick ratio = Total quick assets Current liabilities= 12,487 14,826 = 0.84Current ratio = Current assets Current liabilities= 16,512 14,826 = 1.11Cash ratio = Total cash assets Current liabilities= 4,475 14,826 = 0.30Debt to Equity ratio=debt/equity =156458000/487555000 =0.3Asset Turnover ratio=net sale/total sale =247929941/(298331837+337617580)/2 =247929941/317974699 =0.78Inventory turnover ration=cost of goods sold / average inventory = 370296000/(182232000+166082000)/2 = 370296000/174157000 = 2.13Interest coverage ration= earning before intrest and taxes(EBIT)/interest expenses =76925000/850000 = 90.50Net profit margin = net income/ sale or revenue = 38229000/725244000 =5.27%Return on equity = net income/ shareholders or owners fund = 38229000/331097000 = 11.55%Market value = price per share of common stock* no.of outstanding shares = 36808750shares * 23.84 = 877520600Price to earning ratio = price per share of common stock/ earning per share = 23.84/ ( 38229000/ 36808750) = 23.84/1.04 = 22.95 Goodwill to assets = goodwill / total assets =27848/87367 = 0.32Earning yield = earning per share / share price = 4.814/ 100.21 = 0.04 Working Capital = Current assets Current liabilities = 16,512+14,826 = 31338P/E ( price earning) ratio = share price/ earning per share = 100.04 / 4.814 = 20.78 Gross profit= revenue cost of goods sold = 13101 6663 = 6438Dividend payout ratio = dividend per share/ earning per share = 0.86/ 4.26 = 0.20 Debt service coverage ration= operating income / total debt service costs =150000/115000 =1.3Working Capital Turnover= sale / working capital = 12000000/ 2000000 = 6.0Inventory turnover = COGS/average inventory= 12,000 / 4,100 = 2.93Accounts receivable turnover = Sales/ average receivables= 19,000 / 3,250 = 5.85Fixed asset turnover = sales/average fixed assets= 19,000 / 13,400 = 1.42Total asset turnover = sales/average assets= 19,000 / 22,850= .83

ConclusionAn analysis of Disneys financial statements reinforces that Disney in the king in the media and entertainment industry. Disneys increasing sales over the past three years coupled with their increasing operating profit, net income and CFFO indicate that Disney is financially stable and growing every year. It is especially impressive that Disney was able to increase operating profit despite two of their five business segments reporting a decrease in revenue from 2011-2012. Disneys ability to cut expenses in order to maintain increasing net profit margins and CFFO speaks volumes to the managements business acumen and understanding of how to generate growth. This also displays one of Disneys large competitive advantages, that they can generate revenue from any one of there five business segments. Given Disneys competent management team they are poised to keep this growth trajectory in the future through strategic cost cutting, expansions and acquisitions. Currently, Disneys shares are trading at an all time high, increasing about 73% over the past year. This, along with Disneys large repurchases of treasury stock indicate that Disneys management as well as the market see a profitable future for the company. These record results should come as no surprise given Disneys recent 2011-2012 performance. With a staggering $7.9 billion in CFFO Disney is able to efficiently pay off its liabilities while still reinvesting in the company through expansions and acquisitions. Given our financial analysis, our team strongly believes thats Disney is a safe and lucrative investment.We keep moving forward, opening new doors, and doing new things, because were curious and curiosity keeps leading us down new paths. Walt Disney122

BIBLIOGRAPHYhttp://www.investopedia.com/terms/r/ratioanalysis.asphttp://www.crfonline.org/orc/cro/cro-16.htmlhttp://en.wikipedia.org/wiki/Ratio#Financial_ratioshttp://www.gurufocus.com/term/payout/DIS/Dividend%2BPayout%2BRatio/Walt%2BDisney%2BCohttp://www.accounting4management.com/financial_ratios_formulas.htm#Ratios%20Analysishttps://www.stock-analysis-on.net/NYSE/Company/Walt-Disney-Co/Ratios/Liquidity/Quarterly-Data