Intrinsic value of Walt Disney - DIS

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$106.53

  Intrinsic Value

$106.44

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  Rating & Target

hold

-0%

Previous close

$106.53

 
Intrinsic value

$106.44

 
Up/down potential

-0%

 
Rating

hold

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of DIS stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

Please visit our new site that uses elements of artificial intelligence for stock valuation: artificial intelligence value of Walt Disney (DIS) stock.

STOCK VALUATION INPUT DATA

Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Shares outstanding, mln

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2017(a)
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046
   2047

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  -0.89
  2.00
  2.30
  2.57
  2.81
  3.03
  3.23
  3.41
  3.57
  3.71
  3.84
  3.95
  4.06
  4.15
  4.24
  4.31
  4.38
  4.44
  4.50
  4.55
  4.59
  4.64
  4.67
  4.70
  4.73
  4.76
  4.78
  4.81
  4.83
  4.84
  4.86
Revenue, $m
  55,137
  56,240
  57,533
  59,012
  60,672
  62,511
  64,529
  66,727
  69,106
  71,669
  74,419
  77,362
  80,502
  83,845
  87,397
  91,168
  95,163
  99,392
  103,864
  108,590
  113,579
  118,844
  124,396
  130,248
  136,414
  142,909
  149,746
  156,943
  164,517
  172,484
  180,865
Variable operating expenses, $m
 
  16,528
  16,836
  17,188
  17,583
  18,021
  18,501
  19,024
  19,590
  20,200
  20,855
  18,412
  19,160
  19,955
  20,801
  21,698
  22,649
  23,656
  24,720
  25,845
  27,032
  28,285
  29,607
  31,000
  32,467
  34,013
  35,640
  37,353
  39,156
  41,052
  43,047
Fixed operating expenses, $m
 
  26,288
  26,945
  27,619
  28,309
  29,017
  29,743
  30,486
  31,248
  32,030
  32,830
  33,651
  34,492
  35,355
  36,239
  37,145
  38,073
  39,025
  40,001
  41,001
  42,026
  43,076
  44,153
  45,257
  46,388
  47,548
  48,737
  49,955
  51,204
  52,484
  53,796
Total operating expenses, $m
  41,284
  42,816
  43,781
  44,807
  45,892
  47,038
  48,244
  49,510
  50,838
  52,230
  53,685
  52,063
  53,652
  55,310
  57,040
  58,843
  60,722
  62,681
  64,721
  66,846
  69,058
  71,361
  73,760
  76,257
  78,855
  81,561
  84,377
  87,308
  90,360
  93,536
  96,843
Operating income, $m
  13,853
  13,424
  13,752
  14,205
  14,780
  15,474
  16,286
  17,217
  18,268
  19,439
  20,734
  25,298
  26,850
  28,535
  30,358
  32,325
  34,441
  36,711
  39,144
  41,744
  44,521
  47,482
  50,636
  53,992
  57,559
  61,348
  65,369
  69,635
  74,157
  78,948
  84,022
EBITDA, $m
  16,635
  18,223
  18,589
  19,086
  19,709
  20,457
  21,329
  22,325
  23,446
  24,693
  26,069
  27,577
  29,221
  31,004
  32,932
  35,010
  37,244
  39,639
  42,203
  44,943
  47,867
  50,983
  54,300
  57,828
  61,577
  65,557
  69,780
  74,258
  79,003
  84,029
  89,349
Interest expense (income), $m
  466
  745
  780
  821
  869
  922
  981
  1,045
  1,116
  1,192
  1,274
  1,362
  1,456
  1,557
  1,664
  1,778
  1,899
  2,027
  2,162
  2,305
  2,457
  2,617
  2,785
  2,963
  3,150
  3,348
  3,556
  3,775
  4,005
  4,248
  4,503
Earnings before tax, $m
  13,788
  12,679
  12,972
  13,384
  13,911
  14,552
  15,305
  16,172
  17,152
  18,247
  19,460
  23,936
  25,393
  26,978
  28,694
  30,547
  32,542
  34,685
  36,981
  39,439
  42,065
  44,866
  47,851
  51,029
  54,408
  58,000
  61,813
  65,860
  70,152
  74,700
  79,519
Tax expense, $m
  4,422
  3,423
  3,502
  3,614
  3,756
  3,929
  4,132
  4,366
  4,631
  4,927
  5,254
  6,463
  6,856
  7,284
  7,747
  8,248
  8,786
  9,365
  9,985
  10,649
  11,357
  12,114
  12,920
  13,778
  14,690
  15,660
  16,690
  17,782
  18,941
  20,169
  21,470
Net income, $m
  8,980
  9,256
  9,470
  9,770
  10,155
  10,623
  11,173
  11,805
  12,521
  13,320
  14,206
  17,473
  18,537
  19,694
  20,947
  22,299
  23,756
  25,320
  26,996
  28,791
  30,707
  32,752
  34,931
  37,251
  39,718
  42,340
  45,124
  48,078
  51,211
  54,531
  58,049

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  4,017
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  95,789
  93,577
  95,729
  98,189
  100,952
  104,012
  107,370
  111,027
  114,985
  119,249
  123,826
  128,722
  133,946
  139,509
  145,420
  151,693
  158,341
  165,378
  172,819
  180,682
  188,984
  197,744
  206,982
  216,719
  226,979
  237,785
  249,162
  261,137
  273,738
  286,996
  300,940
Adjusted assets (=assets-cash), $m
  91,772
  93,577
  95,729
  98,189
  100,952
  104,012
  107,370
  111,027
  114,985
  119,249
  123,826
  128,722
  133,946
  139,509
  145,420
  151,693
  158,341
  165,378
  172,819
  180,682
  188,984
  197,744
  206,982
  216,719
  226,979
  237,785
  249,162
  261,137
  273,738
  286,996
  300,940
Revenue / Adjusted assets
  0.601
  0.601
  0.601
  0.601
  0.601
  0.601
  0.601
  0.601
  0.601
  0.601
  0.601
  0.601
  0.601
  0.601
  0.601
  0.601
  0.601
  0.601
  0.601
  0.601
  0.601
  0.601
  0.601
  0.601
  0.601
  0.601
  0.601
  0.601
  0.601
  0.601
  0.601
Average production assets, $m
  41,760
  42,573
  43,553
  44,672
  45,929
  47,321
  48,849
  50,512
  52,313
  54,253
  56,335
  58,563
  60,940
  63,470
  66,160
  69,014
  72,038
  75,240
  78,625
  82,202
  85,979
  89,965
  94,168
  98,598
  103,266
  108,182
  113,358
  118,806
  124,539
  130,571
  136,915
Working capital, $m
  -3,706
  -1,575
  -1,611
  -1,652
  -1,699
  -1,750
  -1,807
  -1,868
  -1,935
  -2,007
  -2,084
  -2,166
  -2,254
  -2,348
  -2,447
  -2,553
  -2,665
  -2,783
  -2,908
  -3,041
  -3,180
  -3,328
  -3,483
  -3,647
  -3,820
  -4,001
  -4,193
  -4,394
  -4,606
  -4,830
  -5,064
Total debt, $m
  25,291
  22,284
  23,468
  24,821
  26,340
  28,024
  29,871
  31,882
  34,059
  36,404
  38,921
  41,614
  44,487
  47,547
  50,798
  54,248
  57,904
  61,775
  65,867
  70,192
  74,758
  79,576
  84,657
  90,013
  95,655
  101,599
  107,856
  114,442
  121,373
  128,665
  136,334
Total liabilities, $m
  54,474
  51,467
  52,651
  54,004
  55,523
  57,207
  59,054
  61,065
  63,242
  65,587
  68,104
  70,797
  73,670
  76,730
  79,981
  83,431
  87,087
  90,958
  95,050
  99,375
  103,941
  108,759
  113,840
  119,196
  124,838
  130,782
  137,039
  143,625
  150,556
  157,848
  165,517
Total equity, $m
  41,315
  42,110
  43,078
  44,185
  45,428
  46,805
  48,317
  49,962
  51,743
  53,662
  55,722
  57,925
  60,276
  62,779
  65,439
  68,262
  71,253
  74,420
  77,769
  81,307
  85,043
  88,985
  93,142
  97,524
  102,141
  107,003
  112,123
  117,512
  123,182
  129,148
  135,423
Total liabilities and equity, $m
  95,789
  93,577
  95,729
  98,189
  100,951
  104,012
  107,371
  111,027
  114,985
  119,249
  123,826
  128,722
  133,946
  139,509
  145,420
  151,693
  158,340
  165,378
  172,819
  180,682
  188,984
  197,744
  206,982
  216,720
  226,979
  237,785
  249,162
  261,137
  273,738
  286,996
  300,940
Debt-to-equity ratio
  0.612
  0.530
  0.540
  0.560
  0.580
  0.600
  0.620
  0.640
  0.660
  0.680
  0.700
  0.720
  0.740
  0.760
  0.780
  0.790
  0.810
  0.830
  0.850
  0.860
  0.880
  0.890
  0.910
  0.920
  0.940
  0.950
  0.960
  0.970
  0.990
  1.000
  1.010
Adjusted equity ratio
  0.406
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  8,980
  9,256
  9,470
  9,770
  10,155
  10,623
  11,173
  11,805
  12,521
  13,320
  14,206
  17,473
  18,537
  19,694
  20,947
  22,299
  23,756
  25,320
  26,996
  28,791
  30,707
  32,752
  34,931
  37,251
  39,718
  42,340
  45,124
  48,078
  51,211
  54,531
  58,049
Depreciation, amort., depletion, $m
  2,782
  4,799
  4,837
  4,881
  4,930
  4,984
  5,043
  5,108
  5,178
  5,254
  5,335
  2,279
  2,371
  2,470
  2,574
  2,685
  2,803
  2,928
  3,059
  3,199
  3,346
  3,501
  3,664
  3,836
  4,018
  4,209
  4,411
  4,623
  4,846
  5,081
  5,327
Funds from operations, $m
  12,233
  14,055
  14,307
  14,651
  15,085
  15,607
  16,216
  16,913
  17,699
  18,574
  19,541
  19,752
  20,908
  22,163
  23,521
  24,985
  26,559
  28,247
  30,056
  31,989
  34,053
  36,253
  38,595
  41,087
  43,736
  46,549
  49,535
  52,701
  56,057
  59,612
  63,376
Change in working capital, $m
  -110
  -31
  -36
  -41
  -46
  -52
  -57
  -62
  -67
  -72
  -77
  -82
  -88
  -94
  -99
  -106
  -112
  -118
  -125
  -132
  -140
  -147
  -155
  -164
  -173
  -182
  -191
  -202
  -212
  -223
  -235
Cash from operations, $m
  12,343
  14,086
  14,343
  14,692
  15,131
  15,658
  16,273
  16,975
  17,765
  18,646
  19,618
  19,834
  20,996
  22,257
  23,620
  25,090
  26,671
  28,366
  30,181
  32,121
  34,192
  36,400
  38,751
  41,251
  43,909
  46,731
  49,726
  52,902
  56,269
  59,835
  63,611
Maintenance CAPEX, $m
  0
  -1,625
  -1,657
  -1,695
  -1,738
  -1,787
  -1,841
  -1,901
  -1,965
  -2,036
  -2,111
  -2,192
  -2,279
  -2,371
  -2,470
  -2,574
  -2,685
  -2,803
  -2,928
  -3,059
  -3,199
  -3,346
  -3,501
  -3,664
  -3,836
  -4,018
  -4,209
  -4,411
  -4,623
  -4,846
  -5,081
New CAPEX, $m
  -3,623
  -814
  -979
  -1,119
  -1,257
  -1,392
  -1,528
  -1,664
  -1,801
  -1,940
  -2,082
  -2,227
  -2,377
  -2,531
  -2,690
  -2,854
  -3,024
  -3,201
  -3,386
  -3,577
  -3,777
  -3,985
  -4,203
  -4,430
  -4,668
  -4,916
  -5,176
  -5,448
  -5,733
  -6,031
  -6,344
Cash from investing activities, $m
  -4,111
  -2,439
  -2,636
  -2,814
  -2,995
  -3,179
  -3,369
  -3,565
  -3,766
  -3,976
  -4,193
  -4,419
  -4,656
  -4,902
  -5,160
  -5,428
  -5,709
  -6,004
  -6,314
  -6,636
  -6,976
  -7,331
  -7,704
  -8,094
  -8,504
  -8,934
  -9,385
  -9,859
  -10,356
  -10,877
  -11,425
Free cash flow, $m
  8,232
  11,647
  11,707
  11,878
  12,136
  12,479
  12,904
  13,410
  13,999
  14,670
  15,424
  15,415
  16,341
  17,355
  18,461
  19,662
  20,961
  22,361
  23,868
  25,485
  27,217
  29,069
  31,047
  33,157
  35,405
  37,797
  40,341
  43,043
  45,913
  48,957
  52,186
Issuance/(repayment) of debt, $m
  3,703
  1,010
  1,184
  1,353
  1,519
  1,683
  1,847
  2,011
  2,177
  2,345
  2,517
  2,693
  2,873
  3,059
  3,251
  3,450
  3,656
  3,870
  4,093
  4,325
  4,566
  4,818
  5,081
  5,356
  5,643
  5,943
  6,257
  6,586
  6,931
  7,291
  7,669
Issuance/(repurchase) of shares, $m
  -9,092
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  -6,514
  1,010
  1,184
  1,353
  1,519
  1,683
  1,847
  2,011
  2,177
  2,345
  2,517
  2,693
  2,873
  3,059
  3,251
  3,450
  3,656
  3,870
  4,093
  4,325
  4,566
  4,818
  5,081
  5,356
  5,643
  5,943
  6,257
  6,586
  6,931
  7,291
  7,669
Total cash flow (excl. dividends), $m
  1,749
  12,657
  12,891
  13,232
  13,655
  14,162
  14,750
  15,422
  16,176
  17,016
  17,942
  18,108
  19,214
  20,414
  21,713
  23,112
  24,617
  26,232
  27,961
  29,809
  31,783
  33,887
  36,128
  38,513
  41,048
  43,740
  46,598
  49,630
  52,843
  56,249
  59,855
Retained Cash Flow (-), $m
  1,950
  -795
  -969
  -1,107
  -1,243
  -1,377
  -1,511
  -1,646
  -1,781
  -1,919
  -2,059
  -2,203
  -2,351
  -2,503
  -2,660
  -2,823
  -2,991
  -3,167
  -3,349
  -3,538
  -3,736
  -3,942
  -4,157
  -4,382
  -4,617
  -4,863
  -5,120
  -5,389
  -5,671
  -5,966
  -6,275
Prev. year cash balance distribution, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  11,863
  11,923
  12,124
  12,413
  12,785
  13,239
  13,776
  14,395
  15,097
  15,882
  15,905
  16,863
  17,911
  19,052
  20,289
  21,625
  23,065
  24,612
  26,271
  28,047
  29,945
  31,971
  34,131
  36,431
  38,877
  41,478
  44,241
  47,173
  50,283
  53,581
Discount rate, %
 
  4.60
  4.83
  5.07
  5.33
  5.59
  5.87
  6.16
  6.47
  6.80
  7.14
  7.49
  7.87
  8.26
  8.67
  9.11
  9.56
  10.04
  10.54
  11.07
  11.62
  12.21
  12.82
  13.46
  14.13
  14.84
  15.58
  16.36
  17.17
  18.03
  18.93
PV of cash for distribution, $m
 
  11,341
  10,849
  10,452
  10,086
  9,740
  9,402
  9,063
  8,716
  8,354
  7,972
  7,184
  6,796
  6,383
  5,946
  5,488
  5,016
  4,534
  4,051
  3,574
  3,110
  2,667
  2,252
  1,871
  1,527
  1,224
  962
  740
  558
  411
  295
Current shareholders' claim on cash, %
  100
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

The Walt Disney Company is an entertainment company. The Company operates in four business segments: Media Networks, Parks and Resorts, Studio Entertainment, and Consumer Products & Interactive Media. The media networks segment includes cable and broadcast television networks, television production and distribution operations, domestic television stations, and radio networks and stations. Under the Parks and Resorts segment, the Company's Walt Disney Imagineering unit designs and develops new theme park concepts and attractions, as well as resort properties. The studio entertainment segment produces and acquires live-action and animated motion pictures, direct-to-video content, musical recordings and live stage plays. It also develops and publishes games, primarily for mobile platforms, books, magazines and comic books. The Company distributes merchandise directly through retail, online and wholesale businesses. Its cable networks consist of ESPN, the Disney Channels and Freeform.

FINANCIAL RATIOS  of  Walt Disney (DIS)

Valuation Ratios
P/E Ratio 17.8
Price to Sales 2.9
Price to Book 3.9
Price to Tangible Book
Price to Cash Flow 12.9
Price to Free Cash Flow 18.3
Growth Rates
Sales Growth Rate -0.9%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -24.1%
Cap. Spend. - 3 Yr. Gr. Rate 1.8%
Financial Strength
Quick Ratio 1
Current Ratio 0.1
LT Debt to Equity 46.3%
Total Debt to Equity 61.2%
Interest Coverage 31
Management Effectiveness
Return On Assets 9.9%
Ret/ On Assets - 3 Yr. Avg. 10.2%
Return On Total Capital 13.8%
Ret/ On T. Cap. - 3 Yr. Avg. 14.2%
Return On Equity 21.2%
Return On Equity - 3 Yr. Avg. 20.5%
Asset Turnover 0.6
Profitability Ratios
Gross Margin 45%
Gross Margin - 3 Yr. Avg. 45.7%
EBITDA Margin 30.9%
EBITDA Margin - 3 Yr. Avg. 31.5%
Operating Margin 25.1%
Oper. Margin - 3 Yr. Avg. 25.3%
Pre-Tax Margin 25%
Pre-Tax Margin - 3 Yr. Avg. 26.1%
Net Profit Margin 16.3%
Net Profit Margin - 3 Yr. Avg. 16.4%
Effective Tax Rate 32.1%
Eff/ Tax Rate - 3 Yr. Avg. 34.1%
Payout Ratio 27.2%

DIS stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the DIS stock intrinsic value calculation we used $55137 million for the last fiscal year's total revenue generated by Walt Disney. The default revenue input number comes from 2017 income statement of Walt Disney. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our DIS stock valuation model: a) initial revenue growth rate of 2% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.6%, whose default value for DIS is calculated based on our internal credit rating of Walt Disney, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Walt Disney.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of DIS stock the variable cost ratio is equal to 29.5%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $25647 million in the base year in the intrinsic value calculation for DIS stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 3.5% for Walt Disney.

Corporate tax rate of 27% is the nominal tax rate for Walt Disney. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the DIS stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for DIS are equal to 75.7%.

Life of production assets of 25.7 years is the average useful life of capital assets used in Walt Disney operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for DIS is equal to -2.8%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $41315 million for Walt Disney - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 1514 million for Walt Disney is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Walt Disney at the current share price and the inputted number of shares is $161.3 billion.

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COMPANY NEWS

▶ [$$] Fox News to Launch Streaming-Video Service With Opinion Fare   [Feb-20-18 11:51AM  The Wall Street Journal]
▶ Disneys Stock Looks Like a Bargain   [06:00AM  Investopedia]
▶ [$$] Black Panther Roars to Top of Box Office   [Feb-19-18 11:54PM  The Wall Street Journal]
▶ [$$] Black Panther Album on Track for Heroic Opening Week   [11:53PM  The Wall Street Journal]
▶ Netflix Fires a Warning Volley   [06:06PM  Motley Fool]
▶ [$$] 'Black Panther' Roars to Top of Box Office   [02:42PM  The Wall Street Journal]
▶ [$$] 'Black Panther' Album on Track for Heroic Opening Week   [02:14PM  The Wall Street Journal]
▶ Yacktman Funds Comments on Fox   [11:31AM  GuruFocus.com]
▶ Comcast Follows Disney With Higher Ticket Prices   [Feb-18-18 02:00PM  Motley Fool]
▶ Disney says 'Black Panther' is raking it in   [Feb-17-18 08:30PM  Associated Press]
▶ Toy Story Land Won't Save Disney in 2018   [08:08AM  Motley Fool]
▶ [$$] Black Panther or Monkey King 3? Moviegoers Face a Choice This Weekend   [Feb-16-18 11:56PM  The Wall Street Journal]
▶ Business Highlights   [05:24PM  Associated Press]
▶ Streaming roundup: Netflix, Amazon poach big names from Fox, NBC   [05:20PM  American City Business Journals]
▶ Disney reveals opening date for new Toy Story Land   [10:15AM  American City Business Journals]
▶ [$$] Holidays from hell: the teenage years   [05:55AM  Financial Times]
▶ Walt Disney World's newest marquee ride gets theme park industry accolades   [Feb-15-18 05:40PM  American City Business Journals]
▶ 'Black Panther' Opening Weekend Estimates Have Nearly Doubled   [04:04PM  Investor's Business Daily]
▶ Apple Gets Buffett Bounce; Bitcoin Soars; Vanguard Goes Active   [02:10PM  Investor's Business Daily]
▶ Netflix poaches Ryan Murphy from Fox in blow to Disney   [04:20PM  American City Business Journals]
▶ [$$] Netflix Hires Away Star Producer at Fox   [12:56AM  The Wall Street Journal]
▶ Netflix Hires Away Star Producer at Fox   [12:01AM  The Wall Street Journal]
▶ 3 Stocks That Feel Like Disney in 1957   [Feb-13-18 08:15PM  Motley Fool]
▶ Hasbro Shows How It Got to Be No. 1   [11:21AM  Motley Fool]
▶ 21st Century Fox makes nice with regulators to push through Sky deal   [Feb-12-18 08:55PM  American City Business Journals]
Financial statements of DIS
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