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uests (Moskowitz, Katz, and Levering, 1985). The firm's objectives are (1) to maintain industry leadership where it is held, and (2) to pursue industry leadership in all activity areas where it is not held.

The financial performance of the company is assessed within the context of financial ratios, and in the context of strategic funds flow. The strategic funds flow is presented in illustrative form in figure 1, which may be found on the following page. The relevant financial ratios are as follows:

a. Gross profit margin: company average for the 19881990 time period: 27.0 percent; projected company margin for 1991: 23.5 percent; and projected company average for the 19921995 time period: 27.0 percent (Swort, 1991).

b. Net profit margin: company average for the 19881990 time period: 14.9 percent; projected company margin for 1991: 12.8 percent; and projected company average for the 19921995 time period: 14.3 percent (Swort, 1991). c. Return on total capital: company average for the 19881990 time period: 18.3 percent; projected company margin

Figure 1

Strategic Funds Flow

The Walt Disney Company

19881990 Mean

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sold ( |(Net Income(

| | |

$2873mil | $3936mil | $ 689mil |(Net

|(Costs(  | Profit

| $4625mil | 14.9%

$1063mil | Sales(

$1341mil |  |(Asset Turnover

| $5132mil | 0.90 times

...