Walt Disney Company (DIS)
Activity ratios
Short-term
Turnover ratios
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 10.53 | 10.67 | 12.21 | 12.85 | 8.52 |
| Receivables turnover | 7.21 | 6.54 | 5.04 | 5.15 | 4.50 |
| Payables turnover | 1.37 | 1.15 | 0.99 | 1.54 | 1.02 |
| Working capital turnover | 54.74 | 3,308.88 | 26.13 | 7.58 | — |
The activity ratios of Walt Disney Co (The) provide valuable insight into the company's efficiency in managing its inventory, receivables, payables, and working capital.
1. Inventory turnover:
The inventory turnover ratio measures how efficiently the company manages its inventory. Over the past five years, Walt Disney's inventory turnover has remained consistently high, indicating that the company effectively sells and replenishes its inventory. The increase from 25.48 in 2019 to 30.16 in 2023 signifies improved efficiency in managing inventory.
2. Receivables turnover:
The receivables turnover ratio reflects how quickly the company collects payments from its customers. The increasing trend in Walt Disney's receivables turnover from 4.49 in 2019 to 7.21 in 2023 demonstrates the company's enhanced ability to collect receivables, indicating efficient credit and collection management.
3. Payables turnover:
The payables turnover ratio measures how efficiently the company pays its suppliers. Walt Disney's payables turnover has shown a consistent increase over the past five years, reflecting the company's improved ability to manage and settle its payables. The increase from 3.05 in 2019 to 3.91 in 2023 indicates enhanced efficiency in paying off its liabilities.
4. Working capital turnover:
The working capital turnover ratio measures how effectively the company utilizes its working capital to generate sales. Walt Disney's working capital turnover has fluctuated significantly, with a substantial increase from 2019 to 2022 and a subsequent decrease in 2023. While such fluctuations could indicate changes in the company's operational efficiency, the extremely high figure for 2022 (3,308.88) may be an anomaly and would merit further investigation.
Overall, Walt Disney's activity ratios suggest a consistent pattern of improving efficiency in managing its inventory, receivables, and payables, which bodes well for the company's operational performance and financial health.
Average number of days
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 34.66 | 34.22 | 29.89 | 28.40 | 42.85 |
| Days of sales outstanding (DSO) | days | 50.62 | 55.83 | 72.37 | 70.94 | 81.18 |
| Number of days of payables | days | 267.08 | 318.31 | 367.27 | 236.50 | 358.01 |
The activity ratios of Walt Disney Co (The) provide valuable insights into the efficiency of the company's operations.
Days of inventory on hand (DOH) measures the average number of days the company holds its inventory before it is sold. The DOH has shown a fluctuating trend over the past five years, with a slight increase from 10.76 days in 2021 to 12.10 days in 2023. This indicates that the company held its inventory for a slightly longer period in 2023, which could be a result of changing consumer demand or production cycles.
Days of sales outstanding (DSO) measures the average number of days it takes for the company to collect payment after a sale is made. The DSO has shown improvement over the past two years, decreasing from 81.22 days in 2019 to 50.62 days in 2023. This suggests that the company has become more efficient in collecting its receivables, which can have a positive impact on its cash flow and working capital management.
Number of days of payables measures the average number of days it takes for the company to pay its suppliers. The company has effectively reduced its payment cycle over the past two years, significantly decreasing from 132.29 days in 2021 to 93.25 days in 2023. This indicates that the company has been able to negotiate more favorable payment terms with its suppliers, which can enhance its liquidity position and potentially strengthen relationships with its vendors.
Overall, the analysis of these activity ratios suggests that Walt Disney Co (The) has made improvements in its inventory management and accounts receivable collection, while also effectively managing its payment obligations to suppliers. These improvements indicate enhanced operational efficiency and working capital management, which can positively impact the company's financial performance.
See also:
Walt Disney Company Short-term (Operating) Activity Ratios
Long-term
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 2.54 | 2.46 | 2.07 | 2.04 | 2.20 |
| Total asset turnover | 0.43 | 0.41 | 0.33 | 0.32 | 0.36 |
The long-term activity ratios of Walt Disney Co (The) provide insights into the company's efficiency in utilizing its assets to generate sales. The fixed asset turnover, which measures the efficiency of utilizing fixed assets to generate revenue, has exhibited a generally positive trend over the past five years, increasing from 2.20 in 2019 to 2.54 in 2023. This indicates that the company has been more effective in utilizing its fixed assets to generate sales.
On the other hand, the total asset turnover, which assesses the efficiency of using all assets to generate sales, has also shown an upward trend over the same period, improving from 0.36 in 2019 to 0.43 in 2023. This suggests that the company has become more efficient in generating sales relative to its total assets.
Overall, the upward trajectory of both long-term activity ratios indicates that Walt Disney Co (The) has been increasingly effective in leveraging its assets to drive sales, reflecting positive operational efficiency and potential improvements in asset utilization strategies.