Walt Disney Company (DIS)
Profitability ratios
Return on sales
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 76.75% | 77.54% | 75.89% | 68.88% | 79.77% |
| Operating profit margin | 14.47% | 14.65% | 11.52% | 12.40% | 21.33% |
| Pretax margin | 4.20% | 5.90% | 3.00% | -3.31% | 20.23% |
| Net profit margin | 2.65% | 3.80% | 2.96% | -4.38% | 15.88% |
Walt Disney Co (The) has shown a decline in its profitability ratios over the past few years. The gross profit margin, which measures the company's ability to generate profit from its revenue after accounting for the cost of goods sold, has fluctuated but has generally decreased from 39.60% in 2019 to 33.41% in 2023. This indicates that Disney's cost of goods sold has been eating into its gross profit.
The operating profit margin, which reflects the proportion of revenue that translates into operating income, has also seen a downward trend, dropping from 16.89% in 2019 to 10.11% in 2023. This suggests that Disney's operating expenses have been consuming a larger portion of its revenue.
The pretax margin, a measure of the company's efficiency in generating profits before taxes, has varied over the years, reaching a low of -2.67% in 2020 before climbing to 6.39% in 2022, and subsequently declining to 5.36% in 2023. This indicates that Disney's ability to generate profits before taxes has been inconsistent.
The net profit margin, which represents the portion of revenue that translates into net income, has also experienced a significant decline, dropping from 15.89% in 2019 to 2.65% in 2023. This indicates that Disney's ability to convert revenue into net income has weakened considerably.
Overall, the profitability ratios show a concerning trend for Walt Disney Co (The), with declining margins across the board, indicating potential challenges in managing costs and generating profits from its revenue streams.
Return on investment
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 6.26% | 5.95% | 3.81% | 4.02% | 7.65% |
| Return on assets (ROA) | 1.15% | 1.54% | 0.98% | -1.42% | 5.70% |
| Return on total capital | 1.24% | 2.37% | 0.35% | -0.38% | 12.07% |
| Return on equity (ROE) | 2.37% | 3.31% | 2.25% | -3.43% | 12.44% |
Based on the provided profitability ratios for Walt Disney Co (The), several key insights can be drawn.
1. Operating Return on Assets (Operating ROA):
The operating return on assets has been gradually increasing over the last five years, reaching 4.37% as of September 30, 2023. This indicates that the company is generating a higher operating profit relative to its total assets. The steady improvement in this ratio suggests that the business has been effectively utilizing its assets to generate operating income.
2. Return on Assets (ROA):
The return on assets showed a fluctuating trend with a positive upturn from -1.42% in 2020 to 1.15% in 2023. It demonstrates that the company is generating positive returns from its total assets. The recent increase in ROA suggests that the company's profitability relative to its total assets has improved.
3. Return on Total Capital:
The return on total capital has also shown an increasing trend, indicating a rise in the efficiency of the company in generating returns from both equity and debt capital. The 6.71% return as of September 30, 2023, reflects a favorable increase in the company's ability to generate profits relative to its total capital employed.
4. Return on Equity (ROE):
The return on equity experienced a dip in 2020 but has since been on an upward trajectory, reaching 2.37% as of September 30, 2023. This indicates a positive trend in the company's ability to generate profits from shareholders' equity, although it still remains below the levels seen in 2019.
In conclusion, the profitability ratios of Walt Disney Co (The) depict a generally improving trend over the years, showcasing the company's ability to generate profits relative to its assets, capital, and equity. The positive shifts in these ratios reflect improved operational efficiency and financial performance.