Financial Management - Essay Example

The data provided herewith were taken from sources of good repute. They unanimously illustrate the leadership of DIS in its sector and industry, and they altogether declare that DIS is a strategic buy at its current price range. Prospects for the US economy remains bleak as indicators currently report no improvement since the year 2007 when the downturn first set in. Since 2006, GDP has been decreasing year-on-year and all other economic variables have depicted the same economically bleak scenario.

In 2008, the annual averages of the benchmark treasury rates and the federal fund rates have been lowered to 1.37 and 1.92, respectively, while the unemployment rate increased to 7.2%. In March 2009, the benchmark treasury rate and the federal fund rate were as low as 0.21 and 0.18, respectively, while the unemployment rate increased further to 8.5%. It should not be surprising that the series of disasters in the economic arena dealt a heavy blow to the overall investors' confidence in the financial markets.

In the year 2008, the market indices took such drastic plunges that badly damaged the market valuation of listed companies - Dow Jones decreased by 35%, S&P 500 decreased by 39%, and NASDAQ decreased by 42%. The first quarter of the year 2009 further lowered Dow Jones to 7,608.92, S&P 500 to 797.87 and NASDAQ to 1528.59. (AOL Website) Despite the turmoil in the economy and in the financial markets, Walt Disney Company (DIS) has managed to do very well in 2008. Next to Time Warner Inc. (TWX), DIS is the second largest multimedia conglomerate in the world in terms of assets.

It is into the production of movies, music, and television shows, the publishing of its renowned materials and the operation of its well-frequented theme parks. While shares of its holding company are traded in NYSE, Disneyland Corporation's subsidiaries are variously traded in the Buenos Aires stock market and in European bourses such as XETRA, Berlin, Stuttgart, Paris, Munich, Hanover, London and Paris. (Yahoo! Finance) Since January 2000, Robert A. Iger has been the company's President and Chief Executive Officer.

(2008 Walt Disney Co Annual Report) Under his efficient leadership, DIS has come up with sales amounting to $37.8 billion and with a net income of $4.4 billion in 2008 - an impressive feat in the light of the prevailing economic scenario. DIS has over 150,000 employees and has assets worth over $64.9 billion as of the year-end of 2008. As of 01 May 2009, DIS has market capitalization amounting to over $40.73 billion. (Yahoo! Finance) Compared to its competitors, DIS also has done a lot better in the stock market.

Comparing their 2008 year-end prices with their 2006 year-end prices, losses were computed at 33% for DIS, 73% for CBS Corporation (CBS), 56% for News Corporation (NWS), and 53% for (TWX). Their respective closing prices as of the end of April 2009 were