Walt Disney Company (DIS)
Solvency ratios
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.20 | 0.22 | 0.24 | 0.26 | 0.20 |
| Debt-to-capital ratio | 0.30 | 0.32 | 0.35 | 0.39 | 0.30 |
| Debt-to-equity ratio | 0.42 | 0.48 | 0.55 | 0.63 | 0.43 |
| Financial leverage ratio | 2.07 | 2.14 | 2.30 | 2.41 | 2.18 |
The solvency ratios of Walt Disney Co (The) provide insight into the company's ability to meet its long-term financial obligations and the extent to which it relies on debt to finance its operations.
The debt-to-assets ratio, which measures the proportion of the company's assets financed by debt, has shown a decreasing trend over the past five years, decreasing from 0.29 in 2020 to 0.23 in 2023. This indicates that the company has been able to reduce its reliance on debt to fund its assets, potentially signaling improved financial stability.
Similarly, the debt-to-capital ratio, which reflects the proportion of the company's capital structure financed by debt, has also exhibited a downward trend, declining from 0.41 in 2020 to 0.32 in 2023. This suggests that the company has managed to decrease its reliance on debt in its overall capital structure.
The debt-to-equity ratio, which indicates the extent to which a company is financed by debt relative to shareholders' equity, has followed a fluctuating pattern, falling from 0.70 in 2020 to 0.47 in 2023. Despite fluctuations, the decreasing trend indicates that the company has been reducing its dependency on debt in relation to equity.
Finally, the financial leverage ratio, which measures the proportion of the company's assets that are financed by debt relative to its equity, has also shown a declining trend, decreasing from 2.41 in 2020 to 2.07 in 2023. This decrease indicates that the company has decreased its financial risk associated with debt financing, potentially enhancing its long-term solvency.
In summary, the solvency ratios of Walt Disney Co (The) demonstrate a positive trend, indicating a reduction in the company's reliance on debt for financing its assets and capital structure, which may lead to improved long-term financial stability and solvency.
Coverage ratios
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | — | — | — | -0.31 | 12.30 |
The interest coverage ratio reflects Walt Disney Co's ability to meet its interest payment obligations with its operating income. A higher ratio indicates a stronger capability to cover interest expenses.
Analyzing the trend in Walt Disney Co's interest coverage ratio reveals some fluctuations. In 2019, the interest coverage ratio stood at a robust 9.43, indicative of a very comfortable ability to cover interest expenses. However, this ratio decreased to 2.98 in 2020 and further to 2.86 in 2021. This decline suggests a lessened capacity to meet interest payments with operating income during these years.
The most recent data shows a slight improvement in the interest coverage ratio for 2022 and 2023, reaching 4.90 and 4.95 respectively. This upward trend indicates a strengthening ability to cover interest expenses with operating income.
Overall, the fluctuations in Walt Disney Co's interest coverage ratio warrant attention, but the recent improvement shows a positive development in its ability to cover interest expenses. However, further monitoring of this ratio is advisable to assess the company's ongoing ability to meet its interest payment obligations.