Financial Issues, Cost-Volume-Profit, and Financial Ratio Analysis of Walt Disney

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Write an article about Disney including the following: Financial and Cost-Volume-Profit (CVP) analysis
3.1 Financial Issues Face by Disney
The Walt Disney Company operates in the consumer products, media networks and studio entertainment markets, and the company manages and operates amusement parks, parks and resorts, leisure and entertainment facilities (SEC, 2020). The Parks, experience, and products segment experienced a reduction in revenue from 26,786 million in 2019 to 17, 038 M in 2020 even as the direct-to-consumer & international market increased (SEC, 2020). Disney also reported a net loss in 2020, which makes it challenging to fund operations and pay all the workers in a difficult business environment. The company is competitive as it has high-quality content and protected the intellectual property. However, there are concerns that changes in consumer tastes and preferences will have adversely affected the demand for the company’s products and services.
Disney has been directly impacted by the coronavirus pandemic (covid-19) in the US domestic market and the international market. In the 2002 financial year, Disney was forced to close the Disneyland Resort business, and the business did not operate (SEC, 2020). Lockdowns and social distancing measures resulted in fewer visitors going to Disney, some of the company’s employees were furloughed, and there was a severe disruption in the global supply chain. Visits to Disney are an important component of the company’s earnings, and COVID-19 was one of the reasons for the company’s net loss in 2020.
Disney’s leverage ratios increased as COVID-19 had a significant negative impact on the company’s and combined with the loss and credit rating downgrade, Disney will incur higher borrowing costs (SEC, 2020). Furthermore, there was reduced operating cash flow in 2020, and there has only been a slight improvement in the first quarter of 2021. Disney is a large and complex company with links to global supply chains where economic performance in the US and global market affect the company’s growth potential. The coronavirus pandemic is one of the reasons for economic activity decline in 2020 where there has been reduced revenue and earnings.
There was also a rise in customer deposit refunds, which affected the company’s liquidity and occurred when there was a drop in cash inflows. While media network and entrainment are some of the major drivers on revenue, it is the parks and resorts, which have been impacted directly.
3.2 CVP Analysis
 The Cost-Volume-Profit analysis shows that the contribution margin ratio was lower in 2020 at 32.89% compared to 39.57% in the 2019 fiscal year / this was due to the revenue decreasing at a faster rate than the increase in the variable expense. Lower revenue and higher variable expenses are linked to a lower contribution margin. The contribution margin is useful in calculating the profit potential as it represents the revenue that covers the fixed costs and there is operating profit. The fixed costs increased from USD 16,899 million in 2019 to USD 23,449 million in 2020 and resulted in an operating loss in the 2020...