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The Walt Disney Co (The Walt Disney Co) Degree of Financial Leverage : 2.78 (As of Mar. 2024)


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What is The Walt Disney Co Degree of Financial Leverage?

Degree of Financial Leverage (DFL) measures the percentage change in EPS for a unit change in Earnings Before Interest and Taxes (EBIT). The Walt Disney Co's Degree of Financial Leverage for the quarter that ended in Mar. 2024 was 2.78. The higher Degree of Financial Leverage, the more volatile earnings will be.

The industry rank for The Walt Disney Co's Degree of Financial Leverage or its related term are showing as below:

DIS's Degree of Financial Leverage is ranked worse than
91.17% of 1019 companies
in the Media - Diversified industry
Industry Median: 0.99 vs DIS: 2.78

The Walt Disney Co Degree of Financial Leverage Historical Data

The historical data trend for The Walt Disney Co's Degree of Financial Leverage can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

The Walt Disney Co Degree of Financial Leverage Chart

The Walt Disney Co Annual Data
Trend Sep14 Sep15 Sep16 Sep17 Sep18 Sep19 Sep20 Sep21 Sep22 Sep23
Degree of Financial Leverage
Get a 7-Day Free Trial Premium Member Only Premium Member Only 6.39 1.21 0.10 0.80 19.00

The Walt Disney Co Quarterly Data
Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22 Dec22 Mar23 Jun23 Sep23 Dec23 Mar24
Degree of Financial Leverage Get a 7-Day Free Trial Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 1.08 4.09 19.00 -0.88 2.78

Competitive Comparison of The Walt Disney Co's Degree of Financial Leverage

For the Entertainment subindustry, The Walt Disney Co's Degree of Financial Leverage, along with its competitors' market caps and Degree of Financial Leverage data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.


The Walt Disney Co's Degree of Financial Leverage Distribution in the Media - Diversified Industry

For the Media - Diversified industry and Communication Services sector, The Walt Disney Co's Degree of Financial Leverage distribution charts can be found below:

* The bar in red indicates where The Walt Disney Co's Degree of Financial Leverage falls into.



The Walt Disney Co Degree of Financial Leverage Calculation

The Walt Disney Co's Degree of Financial Leverage for the quarter that ended in Mar. 2024 is calculated as:

Degree of Financial Leverage=% Change in Earnings per Share (Diluted)**/% Change in EBIT
=( 0.92 (Mar. 2024) / 2.25 (Mar. 2023) - 1 )/( 6434 (Mar. 2024) / 8174 (Mar. 2023) - 1 )
=-0.5911/-0.2129
=2.78***

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

** TTM data of EPS and EBIT was used to calculate Degree of Financial Leverage.
*** Please be aware that the Degree of Financial Leverage calculations are based on company-level data using the primary share class. The calculated data provided is for demonstration purposes and may slightly differ from the results displayed in the title due to potential variations caused by currency exchange rate differences throughout the year.


The Walt Disney Co  (NYSE:DIS) Degree of Financial Leverage Explanation

Degree of Financial Leverage (DFL) is a leverage ratio that measures the sensitivity of a company’s Earnings per Share (EPS) to fluctuations in its operating income, also referred to as Earnings Before Interest and Taxes (EBIT), resulting from adjustments in its capital structure. DFL is an essential tool for companies to assess the appropriate level of debt or financial leverage in their capital structure. When EBIT remains relatively stable, it results in stable earnings and earnings per share. In such cases, the company may consider taking on substantial debt. However, for companies operating in industries with significant fluctuations in EBIT, it is advisable to keep debt at a manageable level.

The higher Degree of Financial Leverage, the more volatile earnings will be. Because interest is a fixed expense, leverage can amplify earnings and EPS. This is beneficial when EBIT is growing, but it can become problematic in tough economic conditions when EBIT is under pressure.

Be Aware

The use of financial leverage varies across different industries and business sectors, and the application of Degree of Financial Leverage (DFL) should be adjusted accordingly.


The Walt Disney Co Degree of Financial Leverage Related Terms

Thank you for viewing the detailed overview of The Walt Disney Co's Degree of Financial Leverage provided by GuruFocus.com. Please click on the following links to see related term pages.


The Walt Disney Co (The Walt Disney Co) Business Description

Address
500 South Buena Vista Street, Burbank, CA, USA, 91521
Disney operates in three global business segments: entertainment, sports, and experiences. Entertainment and experiences both benefit from franchises and characters the firm has created over the course of a century. Entertainment includes the ABC broadcast network, several cable television networks, and the Disney+ and Hulu streaming services. Within the segment, Disney also engages in movie and television production and distribution, with content licensed to movie theaters, other content providers, or, increasingly, kept in-house for use on Disney's own streaming platform and television networks. The sports segment houses ESPN and the ESPN+ streaming service. Experiences contains Disney's theme parks and vacation destinations, and also benefits from merchandise licensing.
Executives
Sonia L Coleman officer: Sr. EVP and Chief HR Officer 500 SOUTH BUENA VISTA STREET, BURBANK CA 91521
Brent Woodford officer: EVP, Control, Fin Plan & Tax 1441 GARDINER LANE, LOUISVILLE KY 40213
Amy Chang director 2100 SEAPORT BLVD., C/O INFORMATICA CORPORATION, REDWOOD CITY CA 94063
Kevin A Lansberry officer: Interim Chief Finan Officer 500 SOUTH BUENA VISTA STREET, BURBANK CA 91521
Christine M Mccarthy officer: SEVP-Chief Financial Officer 500 SOUTH BUENA VISTA STREET, BURBANK CA 91521-0964
Carolyn Everson director C/O THE HERTZ CORPORATION, 225 BRAE BOULEVARD, PARK RIDGE NJ 07656-0713
Kristina K Schake officer: Sr. EVP and Chief Comm Officer 500 SOUTH BUENA VISTA STREET, BURBANK CA 91521
Horacio E Gutierrez officer: Sr EVP, General Counsel & Secy 500 SOUTH BUENA VISTA STREET, BURBANK CA 91521
Geoff Morrell officer: SEVP Chf Corp Affairs Officer 500 SOUTH BUENA VISTA STREET, BURBANK CA 91521
Robert A Chapek officer: Chief Executive Officer 500 SOUTH BUENA VISTA STREET, BURBANK CA 91521
Paul J Richardson officer: Sr. EVP and Chief HR Officer 500 SOUTH BUENA VISTA STREET, BURBANK CA 91521
Calvin Mcdonald director C/O LULULEMON ATHLETICA INC., 1818 CORNWALL AVENUE, VANCOUVER A1 V6J 1C7
Robert A Iger director, officer: Chairman and CEO C/O WALT DISNEY CO, 500 S BUENA VISTA STREET, BURBANK CA 91521-1062
Zenia B. Mucha officer: SEVP Corporate Communications 500 SOUTH BUENA VISTA STREET, BURBANK CA 91521
Mary Jayne Parker officer: SEVP and Chief HR Officer 500 SOUTH BUENA VISTA STREET, BURBANK CA 91521-0966