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The Walt Disney Companys Financial Analysis
Introduction
Financial statements provide insight into a companys performance, enabling investors to make informed decisions by comparing different financial years. A companys financial health is crucial for all stakeholders since it shapes the future of corporate relations and guides management decisions. An evaluation of Walt Disneys statements for the year 2021 reveals that the company experienced a decline in sales, operating expenses, and net income across the two years from 2019 to 2021.
Financial Comparison
Sales/revenue are an indicator of how well the company meets the demands for its products and how much income it generates through sales. From the records, it can be seen that in 2021, the company reported a net sales/revenue of $5650. This represented a significant decline from $6123 in 2020 and $9028 in 2019 (The Walt Disney Company, 2022). Similarly, the current years operating expenses were $5111, a considerable decrease from $5345 in 2020 (The Walt Disney Company, 2022).
However, the current operating costs were higher than those in 2019 ($4167). An evaluation of the trend in net income reveals that there has been a significant decline. The company recorded a $1995 net income in 2021, representing a loss from $2864 in 2020 and $11054 in 2019 (The Walt Disney Company, 2022). In summary, the current financial years record indicates that the company lost a considerable portion of its income, declined in sales volume and associated revenue, and reduced its operating expenses.
Conclusion
In conclusion, Walt Disneys financial health can be identified from its financial statements. From the information presented herein, the company did not perform well in the 2021 financial year compared to 2020 and 2019. A fall in sales/revenue translated to a lower net income. Over the 2-year period, operating expenses fell, indicating that the company had probably reduced its production capacity or sales volume. Therefore, it can be concluded that the companys performance is poor, as shown in the financial analysis.
Reference
The Walt Disney Company. (2022). Investor relations stock information, events, reports, financial information, shareholder information. Web.
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