Disneyland Company

Subject

Students Name

Institution of Affiliation

Date

Disneyland Company

Question 1. Company profile and philosophy

Disneyland presently known as Disneyland Park is the first of the two theme parks that were built at the Disneyland Resort located in Anaheim, California. The company was opened in the year 1955 on July 17th and happens to be the only theme park that was designed and built to completion under the direct supervision of Walt Disney, the founder of the company. Disneyland was the only attraction on the property and later, the official name was changed to Disneyland Park as a way to distinguish it from the expanding complex in the 1990s. The idea of developing Disneyland was based on Walt Disney’s experiences on the various amusement parks that he visited along with his daughters in the year 1930s and 1940s. With this idea, he envisioned building a tourist attraction close to his studios in Burbank to entertain fans who were willing to visit. After assessment he realized that the site was too small and decided to build it on a 160 acre land near Anaheim in the year 1953.

The vision and mission statements are tailored to suit the entertainment, amusement park and the mass media. Disney’s corporate mission statement is “Using our portfolio of brands to differentiate our content, services and consumer products, we seek to develop the most creative, innovative and profitable entertainment experiences and related products in the world.” The vision statement on the other hand is “to be one of the world’s leading producers and providers of entertainment and information.”

Question 5. Company’s strategies

Disney’s corporate strategy is based on three basic principles. One of the principles involves creating a high quality family content through incorporating a wide range of businesses to its structure. The second principle is exploiting the technological innovation to make entertainment experiences more memorable not only to the children but also to the adults. The third principle revolves about international expansion.

Disneyland employs both growth and differentiation strategies. The company provides entertainment products to practically every person in the world, especially with the core emphasis on the family oriented programs. Through this generic competitive strategy, the company ensures quality and uniqueness through innovation, and differentiates the company’s products from those of its competitors. The company also uses the intensive strategies for growth where it uses product development as the basic intensive growth strategy. The strategy involves providing new products in the company’s existing and current markets and the company does this through releasing new movies with corresponding merchandise to generate more profits from its target customers globally. Each of the activities fit well to the business strategy as they have proved successful to marketing the company.

Question 8 – Financial statements

Income statement

Annual Income Statement (values in 000’s)Period Ending: 10/1/2016 Total Revenue $55,632,000 Cost of Revenue $29,993,000 Gross Profit $25,639,000 Operating Expenses Research and Development $0 Sales, General and Admin. $8,754,000 Non-Recurring Items $156,000 Other Operating Items $2,527,000 Operating Income $14,202,000 Add’l income/expense items $0 Earnings Before Interest and Tax $15,128,000 Interest Expense $260,000 Earnings Before Tax $14,868,000 Income Tax $5,078,000 Minority Interest ($399,000) Equity Earnings/Loss Unconsolidated Subsidiary $926,000 Net Income-Cont. Operations $10,317,000 Net Income $9,391,000 Net Income Applicable to Common Shareholders $9,391,000 Balance sheet

Annual Income Statement (values in 000’s)

Period Ending: 10/1/2016 Current Assets Cash and Cash Equivalents $4,610,000 Short-Term Investments $0 Net Receivables $9,065,000 Inventory $1,390,000 Other Current Assets $1,901,000 Total Current Assets $16,966,000 Long term assets Long-Term Investments $4,280,000 Fixed Assets $27,349,000 Goodwill $27,810,000 Intangible Assets $6,949,000 Other Assets $8,679,000 Deferred Asset Charges $0 Total Assets $92,033,000 Current liabilities Accounts Payable $9,130,000 Short-Term Debt / Current Portion of Long-Term Debt $3,687,000 Other Current Liabilities $4,025,000 Total Current Liabilities $16,842,000 Long-Term Debt $16,483,000 Other Liabilities $7,706,000 Deferred Liability Charges $3,679,000 Misc. Stocks $0 Minority Interest $4,058,000 Total Liabilities $48,768,000 Stock Holders’ Equity Common Stocks $35,859,000 Capital Surplus $0 Retained Earnings $66,088,000 Treasury Stock ($54,703,000) Other Equity ($3,979,000) Total Equity $43,265,000 Total Liabilities & Equity $92,033,000 (ROA, ROS, ROE, Debt to Equity, Stock price, Net Revenue, and Net Income) for the year 2016

Return on Assets (ROA) = 10.6375

Return on Equity (ROE) = 20.6876

Debt to Equity = 0.4262

Stock price = 139.92

Net Revenue = $55,632

Net Income = $9,391

Return on Sales (ROS) = (Profit/revenue)100 = ($25,639/$55,632)100= 46.09

Return on assets is an indicator of how profitable a company is relative to its total assets. Return on assets provides investors with an idea as to how efficient a company’s management is at utilizing its assets to generate earnings. Return on sales is useful in discovering the long-term trends over the course of the year as it can easily be calculated. It is highly valuable in tracking the efficiency of an operation over a certain period of time. The debt-equity ratio is used to evaluate a company’s financial leverage. Stock prices on the other hand is essential as it determines the company’s value. Net revenue accounts for the price reductions, direct expenses and refunds and therefore helps in understanding the amount of discounts that a business can allow. Net income is an important financial metric in business as it represents the amount of money remaining after all the operating expenses, taxes, interests and preferred stock dividends have been deducted from the total revenue. Return on assets shows the profitability of the investment and thus gives the CEO an insight of what to invest in and what to change to improve on the profits. It also provides the shareholders with information as to whether it is worth investing in the company.

Question 9- Overall evaluation

Based on the Walt Disney Company has a company value of 139.92 which is a better rank. The company has also a considerable net revenue and net income. The company has a good debt equity ratio of 0.4. Most of the larger companies have an acceptable debt equity ratio at 1.5 or 2 and below while for the smaller companies it is not acceptable. With a debt ratio of 0.4, it means that the company has fewer debts compared to its equity and therefore the company is not struggling to make success. The more debts a company has, the more it is difficult to accomplish its goals as more money is spent in paying debts rather than expanding on the company. Less debts translates to a higher net revenue and the consequent net income while higher debts reduces the profit margin. Recommendations include:

Disneyland should penetrate developing markets to benefit from the high growth rates

The company should diversify the business to increase product scope

Forster an online presence as an advertising strategy References

Disney Financial Statements 2005-2019 | DIS: Retrieved from: https://www.macrotrends.net/stocks/charts/DIS/disney/financial-statementsNasdaq. DIS Company Financials. Retrieved from: https://www.nasdaq.com/symbol/dis/financials?query=income-statement