Is Disneys direction more attractive than its present location?
This is pretty subjective. But I’ll say that given a new medium to explore and in a democratizing world, Disney has terrific potential going forward. 6. Do Disney’s gross margins exceed 50%? It’s a hassle that Disney doesn’t break out its gross margins for investors, lumping all costs together and leaving us with just operating income. I’m going to assume, given Disney’s 18% operating margins, that gross margins are between 35-45%. I’ll put a call into them to see if they break out the costs of revenues for us. 7. Net Margins of at least 7% No problem here. Disney has net margins of 9%. But its margins were as high as 11% two years ago, so this isn’t the direction we’d hope for. 8. Does Disney have cash & marketable securities of no less than 1.5x its long-term debt? This one is a hindrance. Disney has loads of debt. As of March 31, Disney’s ratio of cash-to-debt was 0.05, well below our ideal of 1.5x debt. Disney did incur a lot of debt as a result of the acquisition of Cap Cities/ABC
