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In: Finance

What has been the average level, trend, and volatility of profitability for Disney (DIS)?

What has been the average level, trend, and volatility of profitability for Disney (DIS)?

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Expert Solution

Please see the table below:

All financials are in $ mn

Source for the base financial data: https://www.stock-analysis-on.net/NYSE/Company/Walt-Disney-Co/Ratios/Profitability#Net-Profit-Margin

In the last column i have also calculated the average over last 5 years. The column titled "Linkage" helps you understand the mathematics behind each of the three profitability ratios: Gross profit margin, operating income margin and net profit margin.

Year ending Linkage 29-Sep-18 30-Sep-17 1-Oct-16 3-Oct-15 27-Sep-14 28-Sep-13 Average
Revenues A              59,434              55,137            55,632                   52,465              48,813              45,041
Gross profit B              26,708              24,831            25,639                   24,101              22,392              20,007
Operating income C              14,804              13,775            14,202                   13,171              11,400                9,236
Net income attributable to The Walt Disney Company (Disney) D              12,598                8,980              9,391                     8,382                7,501                6,136
Profitability Ratios
Gross Profit Margin B / A 44.94% 45.04% 46.09% 45.94% 45.87% 44.42% 45.38%
Operating income margin C / A 24.91% 24.98% 25.53% 25.10% 23.35% 20.51% 24.06%
Net profit margin D / A 21.20% 16.29% 16.88% 15.98% 15.37% 13.62% 16.56%

Average Level: Has been shown in the last column of the table above.

Trend: Can be seen in the graphs below:

Volatility:

  1. The ratios have been very stable and range bound.
  2. This shows the profitability has kind of stabilized and matured.
  3. There is very minor volatility or variation over years.
  4. The graphs are nearly flat showing high levels of stability and very low levels of volatility.

jeff jeffy answered 1 year ago
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