"As the federal reserve conducts monetary policy, it influences employment and inflation primarily through using its policy tools to influence the availability and cost of crediting in the economy" (federalreserve.gov)
The federal reserve does effect companies and it has effected the Walt Disney Company. The primary tool used is the federal funds rate-it is the rate banks pay for overnight borrowing in the federal funds market or stock market. The changes in all of these funds influence interest rates and then in turn influences households to borrow money. "For example, when interest rates go down, it becomes cheaper to borrow, so households are more willing to buy goods and services, and businesses are in better position to purchase items to expand there business such as property and equipment" (federalreserve.gov). According to Nasdaq the Walt Disney Company had a debt of 54.4 billion dollars in October 2021, it was down from 58.6 billion the year before (nasdaq.com). This seems like a big deal, bit to a company like Disney it was not that big. "Walt Disney has a huge capitalization of 27.3B, and so it could probably strengthen its balance sheets by raising capital if needed" (nasdaq.com). Even though they had lost money Disney has almost fully recovered from the pandemic. They raised food prices, merchandise and some gate fees to help off set the cost.
Fiscal Policy is the use of government spending and taxation to influence the economy. Governments typically use fiscal policy to promote strong and sustainable growth and reduce poverty (imf.org). Disney has helped boost the economy in California and Florida for years. Also, France Disney has helped it grow economically. Euro Disney is the largest company in that area and is now excelling. Euro Disney brought in 1.6 billion dollars by the end of September of 2019 (forbes.com). Even though they were thriving the pandemic did hurt Euro Disney and had to have the government help them out. Euro Disney was own 40% by Disney and 10% by the Saudi Prince Awalud Bin Talal. Walt came in and took over the Saudi Prince's 10% which gave ownership back to Walt Disney and the government.
Fiscal Policy and the Federal Reserve does impact companies. The way Disney recovered was through raising prices on merchandise, food and lodging. It did this not only here in the US but also all across the world.
References
retrieved September 23,2022 from www.forbes.com/magic-behind-disneys-60-billion-boost-to-fence
retrieved September 23,2022 from www.imf.org/finance/developement
Simply wall st 2021. "Walt Disney has a Somewhat Strained Balance Sheet. retrieved September 23,2022 from www.nasdaq.com
The entertainment industry was hit incredibly hard by the pandemic. Disney has, to the outside eye, had a remarkable recovery. With people being so desperate to get back outside and enjoy life again, the rising costs of food and merchandise seemed minimal. Disney's digital innovation has helped keep the corporation afloat: "Based on the fiscal earnings report released in August, Disney’s efforts to recover from a historic revenue loss in 2020 have proved effective, as Disney theme parks delivered a 26 percent increase in revenue sales this past quarter" (Armijo, 2022). This growth was largely do the the success of Disney+ in tandem with the reopening of theme parks. Disney's continual innovation has kept consumers begging for more, keeping the corporation incredibly profitable.
Armijo, A. (2022, September 17). Disney's pandemic recovery is bringing digital innovation to forefront of theme parks. Skift. Retrieved October 1, 2022, from https://skift.com/2022/09/14/disneys-pandemic-recovery-is-bringing-digital-innovation-to-forefront-of-theme-parks/