Ethics and Compliance of The Disney Company FIN 370 March 5, 2013 Ethics and Compliance Paper The Walt Disney Company is known for its compelling entertainment experiences. From revolutionizing the way people connect with sports, to creating new realities in interactive experiences, we are dedicated to immersing our Guests, audiences and consumers in never-before-seen ways (Disney Careers, 2012). The company’s primary financial goals are to maximize earnings and cash flow, and to allocate capital toward growth initiatives that will drive long-term shareholder value.
Team C will discuss and assess the role of ethics and compliance in the financial environment and describe Walt Disney’s procedures that are in place to ensure ethical behavior. Team C will then move on to explain how financial markets work in the United States, identify Walt Disney’s processes used to comply with the SEC regulations, and finally evaluate the financial performance over the last two years using financial ratios, and discussing the trend for each ratios revealing Walt Disney’s financial health. Roles of Ethics and Compliance in Disney’s Financial Organization
The Walt Disney Company is an equal opportunity employer in regard to race, religion, color, sex, sexual orientation, national origin, age, marital status, covered veteran status, mental or physical disability, pregnancy, or any other basis prohibited by state or federal law. (The Walt Disney Company. ) The Walt Disney Company contains a Human Resource department that enforces all company policies and monitors all harassment prevention and discrimination policies. The Walt Disney Company, its employees, and cast members make the magic happen.
It is in the company’s best interest to enforce all codes of conduct to maintain a fair and successful work atmosphere. The culture and values reinforce the commitment and responsibility to the people of the organization. There are three categories that employees are provided with; Talent acquisition, Learning and Development, and Employee Benefits. The Walt Disney Company offers a comprehensive total rewards package that helps you live your best life, grow personally and professionally, and get rewarded for the results you deliver.
Depending on your position The Walt Disney Company offers six main incentives, Understand your pay total compensation opportunity, Pursue Good Health your health and wellness benefits, Build Your Career your growth and development resources, Take time to Refuel your time off and work/life program, and lastly Save for Tomorrow your retirement and financial benefits. Procedures to Ensure Ethical Behavior The Walt Disney Company incorporates best-in-class business standards as a key pillar of its business practices.
Compliance training, including training regarding the Company’s Standards of Business Conduct and Ethics, is provided to employees and Cast Members worldwide through the Company’s learning management system known as Disney Development Connection. It is the Company’s intent, through its compliance training, to ensure that all of its employees and Cast Members have the knowledge and training to act ethically and legally, in compliance with the Company’s Standards of Business Conduct. Financial Markets in the United States
The Unites States financial markets consist of many separate markets for diverse products offered on a range of trading platform and exchanges. Among the many products traded are fixed-income securities, equities, foreign exchange, and derivatives. The Treasury Department is responsible for a wide range of activities such as advising the President on economic and financial issues, encouraging sustainable economic growth. The Treasury Department operates and maintains systems that are critical to the nation’s financial infrastructure. Processes used to comply SEC
In a time where there is an increasing focus on unethical behavior within public companies from senior managers, it is increasingly critical that organizations establish policies and processes to ensure that it is complying with the rules and regulations put in place by the Securities and Exchange Commission (SEC). The Walt Disney Company is able to meet its reporting requirements through the use of technology , internal disclosure control, internal controls over financial reporting, and independent accounting auditors who verify that these controls are in place and working as intended.
Technology: The SEC requires that Disney post all Interactive Data Files required to be submitted and post3ed pursuant to Rule 405 of Regulations S-T during the preceding 12 months. When visiting the Investor Relations tab of The Walt Disney Company corporate website shows the historical SEC filings are listed by category for a variety of required reports, including 10-K, 10-Q, 8-K, 11-K, S-8, 425, S-4, and proxy statement.
Internal Disclosure: Disney’s policy that all SEC filings be signed by a senior member helps ensure that filings are in fact correct. This layer policy adds a layer of accountability to senior management. Organizations Financial Performance during the Past 2 Years (“Stock Analysis On Net”, 2013). Current ratio is the liquidity ratio calculated as current assets divided by current liabilities. Walt Disney Co. ‘s current ratio improved from 2010 to 2011 but then deteriorated significantly from 2011 to 2012. |Walt Disney Co. Current Ratio | | | | | | | | |Sep 29, 2012 |Oct 1, 2011 | |Selected Financial Data (USD $ in millions) | | | |Current assets |13,709 |13,757 | |Current liabilities |12,813 |12,088 | |Current Ratio, Comparison to Industry | | | |Walt Disney Co. |1. 07 |1. 4 | |Industry, Consumer Services |– |1. 19 | | | | | | | | | Current ratio = Current assets ? Current liabilities = 13,709 ? 12,813 = 1. 07 Debt-to-equity ratio is the solvency ratio calculated as total debt divided by total shareholders’ equity. Walt Disney Co. ‘s debt-to-equity ratio deteriorated from 2010 to 2011 but then slightly improved from 2011 to 2012. |Walt Disney Co. Debt to Equity | | | | | | | | |Sep 29, 2012 |Oct 1, 2011 | |Selected Financial Data (USD $ in millions) | | | |Current portion of borrowings |3,614 |3,055 | |Borrowings, excluding current portion |10,697 |10,922 | |Capital lease obligations |284 |288 | |Total debt |14,595 |14,265 | |Total Disney Shareholder’s equity |39,759 |37,385 | |Debt to Equity, Comparison to Industry | | | |Walt Disney Co. |0. 37 |0. 38 | |Industry, Consumer Services |– |0. 56 | Debt to equity = Total debt ? Total Disney Shareholder’s equity = 14,595 ? 39,759 = 0. 37 Return on equity is a profitability ratio calculated as net income divided by shareholders’ equity. Walt Disney Co. ‘s ROE improved from 2010 to 2011 and from 2011 to 2012. |Walt Disney Co. Return on Equity (ROE) | | | | | | | | |Sep 29, 2012 |Oct 1, 2011 | |Selected Financial Data (USD $ in millions) | | | |Net income attributable to The Walt Disney Company (Disney) |5,682 |4,807 | |Total Disney Shareholder’s equity |39,759 |37,385 | |ROE, Comparison to Industry | | | |Walt Disney Co. |14. 9% |12. 86% | |Industry, Consumer Services |– |17. 61% | | | | | ROE = 100 ? Net income attributable to The Walt Disney Company (Disney) ? Total Disney Shareholder’s equity = 100 ? 5,682 ? 39,759 = 14. 29% Receivables turnover is an activity ratio equal to revenue divided by receivables. Walt Disney Co. ‘s receivables turnover improved from 2010 to 2011 but then deteriorated significantly from 2011 to 2012. |Walt Disney Co. Receivables Turnover | | | | | | | | |Sep 29, 2012 |Oct 1, 2011 | |Selected Financial Data (USD $ in millions) | | | |Revenues |42,278 |40,893 | |Receivables |6,540 |6,182 | |Receivables Turnover, Comparison to Industry | | |Walt Disney Co. |6. 46 |6. 1 | |Industry, Consumer Services |– |25. 06 | Receivables turnover = Revenues ? Receivables = 42,278 ? 6,540 = 6. 46 Trends for Ratios/ Financial Health With the current trends for ratio and the financial health of The Walt Disney Corporation it is apparent that The Walt Disney Corporation is one of the world’s leading businesses. Within the Disney amusement parks they are gearing towards a greener planet. Continuing to be innovated and cutting edge is something that Disney had never lacked. Even though they lost there Pixar king Steve Jobs this past year they continue to be successful in all areas.
There is no doubt that Walt built his legacy on a vision. Conclusion The Walt Disney Company is a great success and continues to be. This paper addressed the role of ethics and compliance, we established that the Walt Disney Company had a code of conduct that is made available to all employees. Each employee goes through a thourough background check and hiring process. The benefits of being a Disney employee surpasses most expectations. The Walt Disney Company has many procedures in place to ensure ethical behavior on both the companies and employees part. We identified the financial markets and the process the organizations use to comply with the SEC.
In addition we evaluated the organizations financial performance during the past two years clearly outlined the equations and financial ratios. The Walt Disney Company continues to be a great success and a place where dreams come true for those who believe in their dream s. References Disney careers. (2013). Retrieved from http://disneycareers. com/en/our-businesses/overview/ Financial Markets in the US. (2012). Retrieved from http://www. treasury. gov/resources-center Stock Analysis on Net. (2013). Retrieved from http://www. stock-analysisi-on. net/NYSE/Company/walt-disney-co The Walt Disny Company. (2012). Retrieved from http://www. thewaltdisneycompany. com/investors/financial-information. com