When we focus on the financial aspect of this deal, then we analyze both companiesâ€™ financial conditions in after the deal. The first to explain is the Walt Disneyâ€™s financial statement evaluation that describes the impact of $4 billion transactions on the company.
The deal occurred between both companies in 2013. The above table shows the last five-year financial data of the Walt Disney Company. The data of this table shows that companyhas continuously grown after the deal with Lucas Films. (Disney Group, 2018)
The main part to consider here relates to Disney which shows a continuous price increase in its share price during the takeover time, which shows a high growth trend. The chart is as follows:
This shows a continuous increase in the prices which would lead to the mark of 123 $/share with a slight variation in 2016.(Disney Group, 2018)
Now we discuss the revenue of the Disney Company, which continuously increases year to year. The recent annual report of 2017 mentioned $55137 million revenue while the revenue mentionedin 2013, the year of the dealing is $45041 million. During the last year, the company earned 10 million above revenue as compared to the dealing year. Similarly, the total assets, total liabilities and financial activities of Walt Disney Company are increasing year by year after the deal with the Lucas Film Company. While the operating activities, investing activities and shareholders’ equity of the Walt Disney Company has decreased. The reason behind the decrease is the company investing more in the Lucas Film than its capability. When the company does not invest in different projects, then the company has the ability to pay dividend. However, these two conditions canâ€™t have a major effect on Walt Disneyâ€™s financial performance.(Disney Group, 2018)
Similarly, when we discuss the Lucas Film Company, its financial performance has improved automatically because Lucas Film after the dealing is owned by Walt Disney. When Disneyâ€™s performance increases then Lucasâ€™ performance will also improve. The important point of consideration is the payment of $4.06 Billion which includes giving out equity shareholding of 2% of the Disneyâ€™s capital. This is fine for the organization as it is under the names excluded for TAX.
All in all, the strength of the Walt Disney Company and its financial stabilityin the entertainment business has increased and will also increase in the business decisions as well. In the Hollywood, Disney might take more profit due to this transaction because the cash flow of Disney Company is increasing year by year and also, as above mentioned;itimproves the overall financial performance.
According to the CFO of the Walt Disney Company, the transaction occurred after Disney financial calculations in agreeing to buy Lucas Film. Lucas Film was driven mostly by the Star Wars series which isnow in the theme park of Disney.
According to Lucas films, the owner Lucas had considered making the movies himself, but this will take a staggering 10 years of production, and at the age of 70 Lucas was considering retirement. ……………………
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