The Walt Disney Company’s Capital Structure

Running head: THE WALT DISNEY COMPANY’S CAPITAL STRUCTURE

The Walt Disney Company’s Capital Structure

Thomas N. Bailey

Kaplan University

GB550

Professor Ana Machuca

Aug 23, 2011

Table of Contents

Abstract 6

Background 7

Financial Statement Analysis 8

Balance Sheet 8

Income Statement 12

Cash Flow Statement 15

Ratio Analysis 17

Liquidity Ratios 17

Profitability Ratios 19

Activity Ratios 19

Valuation Ratios 20

Capital Structure Analysis 21

Risk Assessment 25

Economic Conditions 25

Changes in Consumer Demand and Preferences 26

Interest Rates 26

Foreign Exchange Rates 26

Credit Risk 26

Business Risk 27

Conclusion and Recommendation 27

References 29

Appendix A – Selected Financial Graphs 30

Appendix B - Growth Profitability and Financial Ratios for The Walt Disney Company 32

List of Tables

Table 1: Consolidated Balance Sheets of The Walt Disney Company 9

Table 2: Balance Sheet of The Walt Disney Company 10

Table 3: Consolidated Income Statement of The Walt Disney Company 14

Table 4: Income Statement of The Walt Disney Company 15

Table 5: Consolidated Statement of Cash Flows of The Walt Disney Company 16

Table 6: Cash Flow Statement of The Walt Disney Company 17

Table 7: Ratios Comparison of The Walt Disney Company 18

Table 8: Important Statistics of The Walt Disney Company 21

Table 9: Selected Financial Statistics of The Walt Disney Company 21

Table 10: Multiple Statistics of The Walt Disney Company 22

Table 11: Debt Ratios of The Walt Disney Company 24

List of Figures

Figure 1: Walt Disney Debt-to-Equity Ratio 12

Figure 2: Walt Disney ROE and ROA 13

Figure 3: Projected Revenues of The Walt Disney Company 23

Figure 4: Linear Regression Analysis Trend of The Walt Disney Company 24

Abstract

The purpose of this paper is to examine and analyze the capital structure of the Walt Disney Company and to show how the company’s capital structure choices affect its return on equity (ROE) and its...