Economic Value Added (EVA)
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Economic value added or economic profit is the difference between revenues and costs,where costs include not only expenses, but also cost of capital.
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Walt Disney Co. pages available for free this week:
- Cash Flow Statement
- Common-Size Balance Sheet: Assets
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Solvency Ratios
- Analysis of Short-term (Operating) Activity Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Analysis of Reportable Segments
- Debt to Equity since 2005
- Total Asset Turnover since 2005
- Analysis of Revenues
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Economic Profit
Walt Disney Co., economic profit calculation
US$ in millions
| 12 months ended: | Sep 28, 2024 | Sep 30, 2023 | Oct 1, 2022 | Oct 2, 2021 | Oct 3, 2020 | Sep 28, 2019 | |
|---|---|---|---|---|---|---|---|
| Net operating profit after taxes (NOPAT)1 | |||||||
| Cost of capital2 | |||||||
| Invested capital3 | |||||||
| Economic profit4 | |||||||
Based on: 10-K (reporting date: 2024-09-28), 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-10-01), 10-K (reporting date: 2021-10-02), 10-K (reporting date: 2020-10-03), 10-K (reporting date: 2019-09-28).
1 NOPAT. See details »
2 Cost of capital. See details »
3 Invested capital. See details »
4 2024 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= – × =
- Net Operating Profit After Taxes (NOPAT)
- The NOPAT exhibited a significant decline from 16,211 million US dollars in 2019 to a negative value of -2,053 million in 2020, indicating a substantial operational loss in that year. However, a recovery trend is observed from 2020 onward, with NOPAT rising to 2,215 million in 2021 and continuing to increase to 6,699 million in 2022. Despite a drop to 3,406 million in 2023, NOPAT showed improvement again in 2024, reaching 6,260 million. Overall, the data reflects volatility in operational profitability with notable recovery after an initial downturn.
- Cost of Capital
- The cost of capital remained relatively stable over the analyzed period, fluctuating mildly between 14.57% and 15.25%. It started at 15.25% in 2019, decreased slightly through 2020 to 14.63%, and then fluctuated moderately around the mid-14 to mid-15 percent range through 2024. This stability suggests consistent capital cost structure despite operational fluctuations.
- Invested Capital
- Invested capital showed a modest increase from 169,178 million US dollars in 2019 to a peak of 174,594 million in 2020, followed by a slightly decreasing trend in subsequent years, settling at 166,066 million in 2024. The data indicates that the company maintained relatively stable investment levels with a slight reduction in the latest year, which could reflect capital optimization or divestitures.
- Economic Profit
- Economic profit was negative throughout the entire period, indicating that the returns did not exceed the cost of capital. The largest loss was recorded in 2020 at -27,593 million US dollars, showing significant value destruction during that year. Subsequent years showed improvement but remained deeply negative, with economic profit moving closer to zero but still reflecting considerable deficits, standing at -18,695 million in 2024. The persistent negative economic profit suggests challenges in generating value above the capital costs despite operational recoveries.
Net Operating Profit after Taxes (NOPAT)
Walt Disney Co., NOPAT calculation
US$ in millions
Based on: 10-K (reporting date: 2024-09-28), 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-10-01), 10-K (reporting date: 2021-10-02), 10-K (reporting date: 2020-10-03), 10-K (reporting date: 2019-09-28).
1 Elimination of deferred tax expense. See details »
2 Addition of increase (decrease) in allowance for credit losses.
3 Addition of increase (decrease) in deferred revenues.
4 Addition of increase (decrease) in restructuring reserves.
5 Addition of increase (decrease) in equity equivalents to net income (loss) attributable to The Walt Disney Company (Disney).
6 2024 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= × =
7 2024 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= × 21.00% =
8 Addition of after taxes interest expense to net income (loss) attributable to The Walt Disney Company (Disney).
9 2024 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= × 21.00% =
10 Elimination of after taxes investment income.
11 Elimination of discontinued operations.
- Net Income (Loss) Attributable to The Walt Disney Company
- The net income demonstrates significant variability over the analyzed years. Initially, there was a strong positive net income of 11,054 million US dollars in the fiscal year ending September 28, 2019. However, this was followed by a substantial decline resulting in a net loss of 2,864 million US dollars in the fiscal year ending October 3, 2020. Recovery began in the subsequent years, with net income returning to positive figures of 1,995 million US dollars in 2021, increasing to 3,145 million US dollars in 2022. There was a slight decline to 2,354 million US dollars in 2023, followed by a pronounced increase to 4,972 million US dollars in 2024. Overall, the net income figures show a sharp dip likely attributable to extraordinary or cyclical factors around 2020, with a clear recovery trend in the subsequent periods.
- Net Operating Profit After Taxes (NOPAT)
- The NOPAT figures follow a pattern similar to net income, reflecting operational profitability after tax adjustments. Starting at a robust 16,211 million US dollars in 2019, there was a notable drop to -2,053 million US dollars in 2020, indicating operational losses during that period. A gradual recovery is observed in the following years, with an increase to 2,215 million US dollars in 2021, and a significant rise to 6,699 million US dollars in 2022. The year 2023 saw a decrease to 3,406 million US dollars, but this was followed by another increase to 6,260 million US dollars in 2024. These fluctuations suggest a period of operational challenges in 2020, followed by a strong recovery and intermittent volatility in the subsequent years.
- Summary of Trends
- Both net income and NOPAT experienced a pronounced decline in the fiscal year 2020, reflecting a challenging environment for the company during that period. The figures suggest a recovery trajectory beginning in 2021, with steady improvements through 2022 and 2024. Despite some fluctuations in 2023, the overall trend is positive, indicating enhanced profitability and operational efficiency over the longer term. The data points to resilience and a capacity to recover from significant setbacks, with profitability levels approaching or exceeding pre-2020 values by 2024.
Cash Operating Taxes
Walt Disney Co., cash operating taxes calculation
US$ in millions
Based on: 10-K (reporting date: 2024-09-28), 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-10-01), 10-K (reporting date: 2021-10-02), 10-K (reporting date: 2020-10-03), 10-K (reporting date: 2019-09-28).
The data reveals notable fluctuations in both income tax expenses on income from continuing operations and cash operating taxes over the periods analyzed.
- Income Tax Expense on Income from Continuing Operations
- This metric shows a significant decline from 3,031 million US dollars in 2019 to a low of 25 million in 2021, indicating a substantial reduction in tax expenses relative to income during that year. However, there is an upward trend following 2021, rising to 1,732 million in 2022, then slightly decreasing to 1,379 million in 2023, before increasing again to 1,796 million in 2024. Despite these fluctuations, the 2024 figure remains lower than the 2019 value but is substantially higher than the minimal level seen in 2021.
- Cash Operating Taxes
- Cash operating taxes exhibit a consistent upward trend over the entire period, starting at 1,297 million US dollars in 2019 and increasing steadily each year. The rise becomes more pronounced from 2022 onwards, with an increase from 1,891 million in 2022 to 3,100 million in 2023, followed by a slight decrease to 2,982 million in 2024. Overall, cash operating taxes more than doubled from 2019 to their peak in 2023, indicating increased tax payments in operational cash flows.
The contrasting trends between income tax expense and cash operating taxes suggest differing impacts on accounting income versus cash flow basis taxes, with income tax expense experiencing volatility, while cash operating taxes show a clear upward pattern until 2023, stabilizing slightly in the latest period.
Invested Capital
Walt Disney Co., invested capital calculation (financing approach)
US$ in millions
Based on: 10-K (reporting date: 2024-09-28), 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-10-01), 10-K (reporting date: 2021-10-02), 10-K (reporting date: 2020-10-03), 10-K (reporting date: 2019-09-28).
1 Addition of capitalized operating leases.
2 Elimination of deferred taxes from assets and liabilities. See details »
3 Addition of allowance for doubtful accounts receivable.
4 Addition of deferred revenues.
5 Addition of restructuring reserves.
6 Addition of equity equivalents to total Disney Shareholder’s equity.
7 Removal of accumulated other comprehensive income.
8 Subtraction of projects in progress.
9 Subtraction of investments recorded at fair value.
- Total reported debt & leases
- The total reported debt and leases exhibited an overall decreasing trend from 2019 to 2024. Starting at $50,841 million in 2019, the amount increased to a peak of $62,323 million in 2020, likely reflecting heightened borrowing or leasing activities during that year. Subsequently, there was a consistent decline through 2024, culminating in $49,517 million, which is slightly below the 2019 level. This pattern indicates a strategic reduction in debt and lease obligations following the 2020 peak.
- Total Disney Shareholder’s equity
- Shareholder’s equity showed a generally upward trajectory over the period. Beginning at $88,877 million in 2019, equity decreased to $83,583 million in 2020, which might be associated with the elevated debt levels that year. From 2020 onward, equity increased steadily, reaching $100,696 million by 2024. This growth suggests an improvement in retained earnings or additional equity infusions, leading to stronger financial stability and increased net asset value.
- Invested capital
- Invested capital remained relatively stable throughout the period but demonstrated a slight overall decline from 2019 through 2024. Starting at $169,178 million in 2019, the value peaked slightly in 2020 at $174,594 million and fluctuated modestly thereafter. By 2024, invested capital was recorded at $166,066 million, indicating a minor contraction of about 2% from the 2019 figure. This stability implies steady investment levels in the company's operational assets despite fluctuations in debt and equity.
- Summary
- The data reflects a period of financial adjustment characterized by a peak in debt and leases in 2020, followed by a systematic reduction through 2024. Concurrently, shareholder equity experienced a dip in 2020 but then strengthened significantly, surpassing the pre-2020 levels by 2024. Invested capital remained mostly stable, suggesting consistent asset base maintenance. Overall, these trends suggest an emphasis on deleveraging and improving equity position while maintaining steady investment in capital assets over the analyzed timeframe.
Cost of Capital
Walt Disney Co., cost of capital calculations
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Borrowings and finance lease liabilities3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2024-09-28).
1 US$ in millions
2 Equity. See details »
3 Borrowings and finance lease liabilities. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Borrowings and finance lease liabilities3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2023-09-30).
1 US$ in millions
2 Equity. See details »
3 Borrowings and finance lease liabilities. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Borrowings and finance lease liabilities3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2022-10-01).
1 US$ in millions
2 Equity. See details »
3 Borrowings and finance lease liabilities. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Borrowings and finance lease liabilities3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2021-10-02).
1 US$ in millions
2 Equity. See details »
3 Borrowings and finance lease liabilities. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Borrowings and finance lease liabilities3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2020-10-03).
1 US$ in millions
2 Equity. See details »
3 Borrowings and finance lease liabilities. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Borrowings and finance lease liabilities3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2019-09-28).
1 US$ in millions
2 Equity. See details »
3 Borrowings and finance lease liabilities. See details »
4 Operating lease liability. See details »
Economic Spread Ratio
Walt Disney Co., economic spread ratio calculation, comparison to benchmarks
| Sep 28, 2024 | Sep 30, 2023 | Oct 1, 2022 | Oct 2, 2021 | Oct 3, 2020 | Sep 28, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Economic profit1 | |||||||
| Invested capital2 | |||||||
| Performance Ratio | |||||||
| Economic spread ratio3 | |||||||
| Benchmarks | |||||||
| Economic Spread Ratio, Competitors4 | |||||||
| Alphabet Inc. | |||||||
| Comcast Corp. | |||||||
| Meta Platforms Inc. | |||||||
| Netflix Inc. | |||||||
| Take-Two Interactive Software Inc. | |||||||
Based on: 10-K (reporting date: 2024-09-28), 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-10-01), 10-K (reporting date: 2021-10-02), 10-K (reporting date: 2020-10-03), 10-K (reporting date: 2019-09-28).
1 Economic profit. See details »
2 Invested capital. See details »
3 2024 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × ÷ =
4 Click competitor name to see calculations.
- Economic Profit
- The economic profit demonstrates a significant negative trend throughout the periods, indicating persistent value destruction. Beginning at -9,587 million USD in 2019, it sharply declined to a low of -27,593 million USD in 2020. Following this peak negative value, there is a gradual improvement, although it remains deeply negative, ending at -18,695 million USD in 2024. This pattern suggests ongoing challenges in generating returns above the cost of capital.
- Invested Capital
- The invested capital shows relative stability with minor fluctuations over the years. Starting at 169,178 million USD in 2019, it increased slightly to a peak near 174,594 million USD in 2020. From 2021 onwards, invested capital exhibits a modest downward trend, finishing at 166,066 million USD in 2024. This indicates the company maintained a substantial asset base, slightly reducing its capital commitments in the latest period.
- Economic Spread Ratio
- The economic spread ratio reflects consistent negative values, signifying returns below the cost of capital. It deteriorated from -5.67% in 2019 to an extreme -15.8% in 2020, mirroring the downturn seen in economic profit. After 2020, the ratio shows moderate recovery but remains significantly negative, resting at -11.26% in 2024. This trend underlines ongoing difficulties in achieving adequate investment efficiency despite some improvement post-2020.
Economic Profit Margin
Walt Disney Co., economic profit margin calculation, comparison to benchmarks
| Sep 28, 2024 | Sep 30, 2023 | Oct 1, 2022 | Oct 2, 2021 | Oct 3, 2020 | Sep 28, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Economic profit1 | |||||||
| Revenues | |||||||
| Add: Increase (decrease) in deferred revenues | |||||||
| Adjusted revenues | |||||||
| Performance Ratio | |||||||
| Economic profit margin2 | |||||||
| Benchmarks | |||||||
| Economic Profit Margin, Competitors3 | |||||||
| Alphabet Inc. | |||||||
| Comcast Corp. | |||||||
| Meta Platforms Inc. | |||||||
| Netflix Inc. | |||||||
| Take-Two Interactive Software Inc. | |||||||
Based on: 10-K (reporting date: 2024-09-28), 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-10-01), 10-K (reporting date: 2021-10-02), 10-K (reporting date: 2020-10-03), 10-K (reporting date: 2019-09-28).
1 Economic profit. See details »
2 2024 Calculation
Economic profit margin = 100 × Economic profit ÷ Adjusted revenues
= 100 × ÷ =
3 Click competitor name to see calculations.
- Adjusted Revenues
- The adjusted revenues demonstrate an overall upward trend from 2019 to 2024. The revenues started at 70,704 million USD in 2019 and showed a decline in 2020 to 64,920 million USD, likely reflecting external challenges during that period. Subsequently, the revenues recovered and increased steadily, reaching 91,261 million USD by 2024, indicating a strong recovery and growth trajectory in the latter years.
- Economic Profit
- Throughout the entire period, the economic profit remained negative, indicating that the company consistently operated below its economic cost of capital. The loss was deepest in 2020 with -27,593 million USD, which improved slightly but still stayed substantially negative in subsequent years. While there is some fluctuation, the values show a marginal reduction in losses from 2020 onwards but remain significantly below zero by 2024 at -18,695 million USD.
- Economic Profit Margin
- The economic profit margin follows a similar pattern to the economic profit figures, maintaining negative values throughout the period. The margin dropped sharply to -42.5% in 2020, reflecting the peak economic inefficiency during that year. From 2021 onward, the margin shows improvement, moving from -34.51% to -20.49% by 2024, suggesting increased operational efficiency or improved profitability relative to revenue, though it remains in negative territory, indicating continuing challenges in generating economic profit.