Question

Rate of Return on Investment 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 Pictures, Touchstone Pictures, Hollywood Pictures, Miramax Films, and Buena Vista Theatrical Productions 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 $6,818 $20,356 $28,627 Parks and Resorts 2,220 14,087 22,056 Studio Entertainment 661 5,979 14,750 Consumer Products 1,112 3,811 7,506 Use the DuPont formula to determine the rate of return on investment for the four Disney sectors. Round Profit Margin, ROI to one decimal place and Investment Turnover to two decimal places.

Answer 1

Use the DuPont formula to determine the rate of return on investment for the four Disney sectors. Round Profit Margin

	Profit margin	Investment turnover	ROI
Media networks	6818/20356 = 33.5%	20356/28627 = 0.71	33.5%*0.71 = 23.8%
Parks and Resorts	2220/14087 = 15.8%	14087/22056 = 0.64	15.8%*0.64 = 10.1%
Studio Entertainment	661/5979 = 11.1%	5979/14750 = 0.41	11.1%*.41 = 4.6%
Consumer Products	1112/3811 = 29.2%	3811/7506 = 0.51	29.2%*.51 = 14.9%