FIN 320 Module Four Case Study Guidelines
FIN 320 Module Four Case Study Guidelines and Rubric
Overview
Financial risks are inherent to both individuals and businesses. For individuals, an example of financial risk would be carrying so much personal debt that it is impossible to qualify for a mortgage to buy a home. Similarly, for a business, an example of financial risk is carrying so much debt, or being so heavily leveraged, that the cost of additional debt becomes too high. This would not allow the business to support a new project or venture that could increase sales. In this case study, you will look at different types of risks and explore how these risks impact growth specific to sales, retained earnings, and dividends.
Directions
Go to the Walt Disney Company’s Investor Relations webpage. Scroll down the page until you see SEC filings. Find and download the quarterly report (Form 10-Q) with the latest filing date. Review the financial statements, and then write a response.
Specifically, you must address the following rubric criteria:
- Systematic and Unsystematic Risk: Explain the differences between systematic and unsystematic risk.
- Financial Risks: Describe the potential impacts of the following types of financial risk on the Walt Disney Company based on the quarterly report:
- Interest rate risk
- Economic risk
- Credit risk
- Operational risk
- Lower Growth Impact: Explain the impact that a lower growth in sales could have on the dividend policy and retained earnings for the company based on the quarterly report.
- Higher Growth Impact: Explain the impact that a higher growth in sales could have on the dividend policy and retained earnings for the company based on the quarterly report.
What to Submit
Your submission should be a 2- to 3-page Microsoft Word document (not including title and resource pages) with 12-point Times New Roman font, double spacing, and one-inch margins. Sources should be cited using APA style.
Module Four Case Study Rubric
CriteriaExceeds Expectations (100%)Meets Expectations (85%)Partially Meets Expectations (55%)Does Not Meet Expectations (0%)ValueSystematic and Unsystematic RiskExceeds expectations in an exceptionally clear, insightful, sophisticated, or creative mannerExplains the differences between systematic and unsystematic riskShows progress toward meeting expectations, but with errors or omissions; areas for improvement may include explaining in more detail the differences between systematic and unsystematic riskDoes not attempt criterion20Financial RisksExceeds expectations in an exceptionally clear, insightful, sophisticated, or creative mannerDescribes the potential impacts of interest rate risk, economic risk, credit risk, and operational risk on the company based on the quarterly reportShows progress toward meeting expectations, but with errors or omissions; areas for improvement may include describing in more detail the potential impacts of interest rate risk, economic risk, credit risk, and operational risk on the company based on the quarterly reportDoes not attempt criterion21Lower Growth ImpactExceeds expectations in an exceptionally clear, insightful, sophisticated, or creative mannerExplains the impact that a lower growth in sales could have on the dividend policy and retained earnings for the company based on the quarterly reportShows progress toward meeting expectations, but with errors or omissions; areas for improvement may include explaining in more detail the impact that a lower growth in sales could have on the dividend policy and retained earnings for the company based on the quarterly reportDoes not attempt criterion22Higher Growth ImpactExceeds expectations in an exceptionally clear, insightful, sophisticated, or creative mannerExplains the impact that a higher growth in sales could have on the dividend policy and retained earnings for the company based on the quarterly reportShows progress toward meeting expectations, but with errors or omissions; areas for improvement may include explaining in more detail the impact that a higher growth in sales could have on the dividend policy and retained earnings for the company based on the quarterly reportDoes not attempt criterion22Clear CommunicationExceeds expectations with an intentional use of language that promotes a thorough understandingConsistently and effectively communicates in an organized way to a specific audienceShows progress toward meeting expectations, but communication is inconsistent or ineffective in a way that negatively impacts understandingShows no evidence of consistent, effective, or organized communication10Citations and AttributionsUses citations for ideas requiring attribution, with few or no minor errorsUses citations for ideas requiring attribution, with consistent minor errorsUses citations for ideas requiring attribution, with major errorsDoes not use citations for ideas requiring attribution5Total:100%
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 29, 2025
or
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________.
Commission File Number 001-38842
file_0.jpg
Delaware
83-0940635
State or Other Jurisdiction of
I.R.S. Employer Identification
Incorporation or Organization
500 South Buena Vista Street
Burbank, California 91521
Address of Principal Executive Offices and Zip Code
(818) 560-1000
Registrant’s Telephone Number, Including Area Code
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, $0.01 par value
DIS
New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
☒
Accelerated filer
☐
Non-accelerated filer
☐
Smaller reporting company
☐
Emerging growth company
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒
There were 1,797,746,311 shares of common stock outstanding as of April 30, 2025.
THE WALT DISNEY COMPANY
Form 10-Q
For the Fiscal Quarter Ended March 29, 2025
TABLE OF CONTENTS
Page
PART I
ITEM 1.
ITEM 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
ITEM 3.
Quantitative and Qualitative Disclosures About Market Risk
ITEM 4.
PART II
ITEM 1.
ITEM 1A.
ITEM 2.
Unregistered Sales of Equity Securities and Use of Proceeds
ITEM 5.
ITEM 6.
Cautionary Note on Forward-Looking Statements
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements generally relate to future events or our future financial or operating performance and may include statements concerning, among other things, financial results; business plans (including statements regarding new services and products and future expenditures, costs and investments); future liabilities and other obligations; impairments and amortization; estimates of the financial impact of certain items, accounting treatment, events or circumstances; competition and seasonality on our businesses and results of operations; and capital allocation, including share repurchases and dividends. In some cases, you can identify forward-looking statements because they contain words such as “may,” “will,” “would,” “should,” “expects,” “plans,” “could,” “intends,” “target,” “projects,” “forecasts,” “believes,” “estimates,” “anticipates,” “potential,” “continue,” “assumption” or “judgment” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans or intentions. These statements reflect our current views with respect to future events and are based on assumptions as of the date of this report. These statements are subject to known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from expectations or results projected or implied by forward-looking statements.
Such differences may result from actions taken by the Company, including restructuring or strategic initiatives (including capital investments, asset acquisitions or dispositions, new or expanded business lines or cessation of certain operations), our execution of our business plans (including the content we create and intellectual properties (IP) we invest in, our pricing decisions, our cost structure and our management and other personnel decisions), our ability to quickly execute on cost rationalization while preserving revenue, the discovery of additional information or other business decisions, as well as from developments beyond the Company’s control, including:
•the occurrence of subsequent events;
•deterioration in domestic and global economic conditions or failure of conditions to improve as anticipated;
•deterioration in or pressures from competitive conditions, including competition to create or acquire content, competition for talent and competition for advertising revenue;
•consumer preferences and acceptance of our content, offerings, pricing model and price increases, and corresponding subscriber additions and churn, and the market for advertising sales on our direct-to-consumer services and linear networks;
•health concerns and their impact on our businesses and productions;
•international, including tariffs and other trade policies, political or military developments;
•regulatory and legal developments;
•technological developments;
•labor markets and activities, including work stoppages;
•adverse weather conditions or natural disasters; and
•availability of content.
Such developments may further affect entertainment, travel and leisure businesses generally and may, among other things, affect (or further affect, as applicable):
•our operations, business plans or profitability, including direct-to-consumer profitability;
•demand for our products and services;
•the performance of the Company’s content;
•our ability to create or obtain desirable content at or under the value we assign the content;
•the advertising market for programming;
•taxation; and
•performance of some or all Company businesses either directly or through their impact on those who distribute our products.
Additional factors include those described in our 2024 Annual Report on Form 10-K, including under the captions “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and “Business,” in our subsequent quarterly reports on Form 10-Q, including under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and in our subsequent filings with the Securities and Exchange Commission.
A forward-looking statement is neither a prediction nor a guarantee of future events or circumstances. You should not place undue reliance on the forward-looking statements. Unless required by federal securities laws, we assume no obligation to update any of these forward-looking statements, or to update the reasons actual results could differ materially from those anticipated, to reflect circumstances or events that occur after the statements are made.
2
PART I. FINANCIAL INFORMATION
Item 1: Financial Statements
THE WALT DISNEY COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited; in millions, except per share data)
Quarter Ended
Six Months Ended
March 29, 2025
March 30, 2024
March 29, 2025
March 30, 2024
Revenues:
Services
$
21,258
$
19,757
$
43,306
$
40,732
Products
2,363
2,326
5,005
4,900
Total revenues
23,621
22,083
48,311
45,632
Costs and expenses:
Cost of services (exclusive of depreciation and amortization)
(13,378)
(12,663)
(27,167)
(26,585)
Cost of products (exclusive of depreciation and amortization)
(1,432)
(1,509)
(3,049)
(3,174)
Selling, general, administrative and other
(3,981)
(3,790)
(7,911)
(7,573)
Depreciation and amortization
(1,324)
(1,242)
(2,600)
(2,485)
Total costs and expenses
(20,115)
(19,204)
(40,727)
(39,817)
Restructuring and impairment charges
(109)
(2,052)
(252)
(2,052)
Interest expense, net
(346)
(311)
(713)
(557)
Equity in the income of investees
36
141
128
322
Income before income taxes
3,087
657
6,747
3,528
Income taxes
314
(441)
(702)
(1,161)
Net income
3,401
216
6,045
2,367
Net income attributable to noncontrolling interests
(126)
(236)
(216)
(476)
Net income (loss) attributable to The Walt Disney Company (Disney)
$
3,275
$
(20)
$
5,829
$
1,891
Earnings (loss) per share attributable to Disney:
Diluted
$
1.81
$
(0.01)
$
3.21
$
1.03
Basic
$
1.81
$
(0.01)
$
3.22
$
1.03
Weighted average number of common and common equivalent shares outstanding:
Diluted
1,814
1,834
1,816
1,838
Basic
1,808
1,834
1,810
1,833
See Notes to Condensed Consolidated Financial Statements
3
THE WALT DISNEY COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(unaudited; in millions)
Quarter Ended
Six Months Ended
March 29, 2025
March 30, 2024
March 29, 2025
March 30, 2024
Net income
$
3,401
$
216
$
6,045
$
2,367
Other comprehensive income (loss), net of tax:
Market value adjustments for hedges
(253)
115
109
(204)
Pension and postretirement medical plan adjustments
18
(24)
43
(45)
Foreign currency translation and other
54
(119)
606
55
Other comprehensive income (loss)
(181)
(28)
758
(194)
Comprehensive income
3,220
188
6,803
2,173
Net income attributable to noncontrolling interests
(126)
(236)
(216)
(476)
Other comprehensive income (loss) attributable to noncontrolling interests
(8)
21
64
(23)
Comprehensive income (loss) attributable to Disney
$
3,086
$
(27)
$
6,651
$
1,674
See Notes to Condensed Consolidated Financial Statements
4
THE WALT DISNEY COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited; in millions, except per share data)
March 29, 2025
September 28, 2024
ASSETS
Current assets
Cash and cash equivalents
$
5,852
$
6,002
Receivables, net
12,571
12,729
Inventories
1,999
2,022
Content advances
1,063
2,097
Other current assets
1,250
2,391
Total current assets
22,735
25,241
Produced and licensed content costs
31,820
32,312
Investments
8,794
4,459
Parks, resorts and other property
Attractions, buildings and equipment
79,721
76,674
Accumulated depreciation
(47,532)
(45,506)
32,189
31,168
Projects in progress
5,740
4,728
Land
1,166
1,145
39,095
37,041
Intangible assets, net
10,006
10,739
Goodwill
73,313
73,326
Other assets
10,070
13,101
Total assets
$
195,833
$
196,219
LIABILITIES AND EQUITY
Current liabilities
Accounts payable and other accrued liabilities
$
20,729
$
21,070
Current portion of borrowings
6,446
6,845
Deferred revenue and other
6,854
6,684
Total current liabilities
34,029
34,599
Borrowings
36,443
38,970
Deferred income taxes
6,298
6,277
Other long-term liabilities
10,297
10,851
Commitments and contingencies (Note 13)
Equity
Preferred stock
—
—
Common stock, $0.01 par value, Authorized – 4.6 billion shares, Issued – 1.9 billion shares
59,199
58,592
Retained earnings
53,733
49,722
Accumulated other comprehensive loss
(2,877)
(3,699)
Treasury stock, at cost, 63 million shares at March 29, 2025 and 47 million shares at September 28, 2024
(5,716)
(3,919)
Total Disney Shareholders’ equity
104,339
TOPIC 2: Ready for Future Customers?PROMPT: Using the product or service you selected for your written assignments, consider how will your client market this product/service to potential customers in Generations Z and Alpha? Is your client ready to do so? 
