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Selling assets at a loss is rarely a positive indicator for a company's financial health; however, Disney's decision to recognize such impairments reflects an effort to align book values with current market realities. For instance, properties like Marvel and Star Wars, once considered invaluable, are now being re-assessed. The dramatic write-downs hint at a broader overvaluation during past acquisitions, with some assets not delivering the expected returns.
The Curious Case of the Rising Effective Tax Rate
A particularly striking detail emerges from Disney's recent earnings report: the effective tax rate skyrocketed from around 30% last year to an eye-watering 67.7%. This sudden surge has sparked widespread speculation and analysis.