The Walt Disney Company has four profitable business segments, described as follows: Media Networks: The ABC television and radio network, Disney channel, ESPN, A&E, E!, and Disney.com Parks and Resorts: Walt Disney World Resort, Disneyland, Disney Cruise Line, and other resort properties Studio Entertainment: Walt Disney Studios, which releases films by Pixar Animation Studios, Marvel Studios, Disney/Lucasfilm, and Touchstone Pictures Consumer Products: Character merchandising, Disney stores, books, and magazines Disney recently reported sector income from operations, revenue, and invested assets (in millions) as follows: Income from Operations Revenue Invested Assets Media Networks $7,321 $21,152 $29,887 Parks and Resorts 2,663 15,099 23,335 Studio Entertainment 1,549 6,988 15,155 Consumer Products 1,356 4,274 7,526 a. Use the DuPont formula to determine the return on investment for the four Disney sectors. Round whole percents to one decimal place and investment turnover to two decimal places. Profit Margin Investment Turnover ROI Media Networks fill in the blank 1% fill in the blank 2 fill in the blank 3% Parks and Resorts fill in the blank 4% fill in the blank 5 fill in the blank 6% Studio Entertainment fill in the blank 7% fill in the blank 8 fill in the blank 9% Consumer Products fill in the blank 10% fill in the blank 11 fill in the blank 12% b. How do the four sectors differ in their profit margin, investment turnover, and return on investment? Media Networks has the highest profit margin, while Parks and Resorts has the lowest profit margin. Media Networks has the highest return on investment, while Studio Entertainment has the lowest return on investment.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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The Walt Disney Company has four profitable business segments, described as follows:

Media Networks: The ABC television and radio network, Disney channel, ESPN, A&E, E!, and Disney.com
Parks and Resorts: Walt Disney World Resort, Disneyland, Disney Cruise Line, and other resort properties
Studio Entertainment: Walt Disney Studios, which releases films by Pixar Animation Studios, Marvel Studios, Disney/Lucasfilm, and Touchstone Pictures
Consumer Products: Character merchandising, Disney stores, books, and magazines

Disney recently reported sector income from operations, revenue, and invested assets (in millions) as follows:

	Income from Operations	Revenue	Invested Assets
Media Networks	$7,321		$21,152	$29,887
Parks and Resorts	2,663		15,099	23,335
Studio Entertainment	1,549		6,988	15,155
Consumer Products	1,356		4,274	7,526

a. Use the DuPont formula to determine the return on investment for the four Disney sectors. Round whole percents to one decimal place and investment turnover to two decimal places.

	Profit Margin	Investment Turnover	ROI
Media Networks	fill in the blank 1%	fill in the blank 2	fill in the blank 3%
Parks and Resorts	fill in the blank 4%	fill in the blank 5	fill in the blank 6%
Studio Entertainment	fill in the blank 7%	fill in the blank 8	fill in the blank 9%
Consumer Products	fill in the blank 10%	fill in the blank 11	fill in the blank 12%

b. How do the four sectors differ in their profit margin, investment turnover, and return on investment?

Media Networks has the highest profit margin, while Parks and Resorts has the lowest profit margin. Media Networks has the highest return on investment, while Studio Entertainment has the lowest return on investment.

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