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Issues or opportunities that Disney would face

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Explain any issues or opportunities that Disney would face based on Disney ratios over the past five years.
Please be clear and concise and have the main points up front. Always back up arguments with data/evidence and
source information when possible.

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Solution Summary

This solution is comprised of a detailed explanation of opportunities and issues that Disney may face in the near future based on the ratios over the past five years for Disney.

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Based on the ratios over the past five years for Disney, we are able to make predictions for the opportunities and issues that Disney may face in the near future.

Opportunities:

Increase in sales
This is shown by the company's days' sales outstanding. Days' sales outstanding represent the average length of time that the firm must wait after making a sale before receiving cash.

Disney DSO (Days Sales Outstanding) (see attachment for details).

It appears that Walt Disney takes less than two months for them to receive their cash from sales that were made on credits. Because of the great increase in sales and the reflection of decrease in debt ratio, this length of time does not hurt Walt Disney.

Debt ratio or total debt to total assets is used to "measure the percentage of funds provided by creditors" (Brigham & Houston, 2007, p. 110). Since total debt includes all current liabilities and long-term debt Walt Disney will be in an exceptional situation, if they will borrow again, because creditors prefer low debt ratios.

In addition, ...

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