Walt Disney Company (DIS)
Activity ratios
Short-term
Turnover ratios
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 10.16 | 10.53 | 10.67 | 12.21 | 12.85 |
| Receivables turnover | 7.18 | 7.21 | 6.54 | 5.04 | 5.15 |
| Payables turnover | 1.39 | 1.37 | 1.15 | 0.99 | 1.54 |
| Working capital turnover | — | 54.74 | 3,308.88 | 26.13 | 7.58 |
The inventory turnover ratio for Walt Disney Company has slightly decreased over the past five years, indicating a slightly longer time taken to sell and replace inventory. This may suggest either a change in inventory management practices or a shift in product demand.
The receivables turnover ratio has shown some fluctuations but generally has remained at a healthy level, reflecting the company's ability to efficiently collect outstanding receivables from its customers.
The payables turnover ratio has been relatively stable over the years, indicating that Walt Disney Company is managing its outstanding payables effectively by paying its suppliers in a timely manner.
The working capital turnover ratio for Walt Disney Company has shown significant variability, with a dramatic increase in 2022 followed by a substantial decrease in 2023. This ratio measures how efficiently the company is utilizing its working capital to generate revenue. The sharp fluctuations in this ratio may be due to changes in operating activities or financial strategies within the company. Further analysis would be needed to understand the underlying reasons for these fluctuations.
Overall, while the activity ratios of Walt Disney Company show some variability over the years, the company appears to be effectively managing its inventory, receivables, payables, and working capital to support its operations.
Average number of days
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 35.93 | 34.66 | 34.22 | 29.89 | 28.40 |
| Days of sales outstanding (DSO) | days | 50.85 | 50.62 | 55.83 | 72.37 | 70.94 |
| Number of days of payables | days | 262.90 | 267.08 | 318.31 | 367.27 | 236.50 |
Walt Disney Company's activity ratios provide insights into the efficiency of its inventory management, collection of receivables, and payment to suppliers.
1. Days of Inventory on Hand (DOH):
- Walt Disney's DOH has been increasing over the past five years, from 28.40 days in 2020 to 35.93 days in 2024. This indicates that the company is holding onto inventory for a longer period before selling it.
- The rising trend may suggest challenges in managing inventory levels or changes in the production or procurement process.
2. Days of Sales Outstanding (DSO):
- The DSO for Walt Disney shows fluctuation over the years, with a peak in 2021 at 72.37 days, decreasing to 50.85 days in 2024.
- This metric reflects the average number of days it takes for the company to collect payment from its customers. A decrease in DSO indicates improvements in receivables management and efficient collection processes.
3. Number of Days of Payables:
- The number of days of payables for Walt Disney has been volatile, with significant fluctuations from 236.50 days in 2020 to 262.90 days in 2024.
- A longer payable period suggests that Walt Disney is taking longer to pay its suppliers, which can be a strategic move to manage cash flow.
Overall, Walt Disney's activity ratios indicate a need to monitor inventory levels closely to avoid overstocking, continue improving collections efficiency, and manage payables effectively to optimize working capital management.
See also:
Walt Disney Company Short-term (Operating) Activity Ratios
Long-term
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 2.47 | 2.54 | 2.46 | 2.07 | 2.04 |
| Total asset turnover | 0.47 | 0.43 | 0.41 | 0.33 | 0.32 |
Walt Disney Company's long-term activity ratios, as indicated by the fixed asset turnover and total asset turnover ratios, have shown a positive trend over the past five years.
The fixed asset turnover ratio measures the efficiency of the company in generating revenue from its fixed assets. From 2020 to 2024, the ratio has increased from 2.04 to 2.47, suggesting that Disney has been more effective in utilizing its fixed assets to generate sales.
The total asset turnover ratio reflects how effectively the company is using its total assets to generate revenue. Over the same period, the total asset turnover ratio has also shown improvement, increasing from 0.32 in 2020 to 0.47 in 2024. This indicates that Disney has been able to generate more revenue relative to its total asset base.
Overall, the improving trend in both fixed asset turnover and total asset turnover ratios signifies that Walt Disney Company has been making efficient use of its assets to drive sales and create value for its shareholders.