Walt Disney Company (DIS)

Payables turnover

		Sep 30, 2023	Sep 30, 2022	Sep 30, 2021	Sep 30, 2020	Sep 30, 2019
Cost of revenue	US$ in thousands	20,670,000	18,582,000	16,256,000	20,346,000	14,047,000
Payables	US$ in thousands	15,125,000	16,205,000	16,357,000	13,183,000	13,778,000
Payables turnover		1.37	1.15	0.99	1.54	1.02

September 30, 2023 calculation

Payables turnover = Cost of revenue ÷ Payables
= $20,670,000K ÷ $15,125,000K
= 1.37

The payables turnover ratio measures how efficiently a company manages its trade credit with suppliers by comparing its purchases to the average accounts payable for a certain period. A higher payables turnover ratio generally indicates that the company is paying off its suppliers more quickly.

Looking at the payables turnover ratio for Walt Disney Co (The) over the past five years, we observe a fluctuating trend. In the fiscal year ending September 30, 2023, the payables turnover ratio increased to 3.91 from 3.36 in the prior year, indicating that the company was able to manage its payments to suppliers more efficiently. This suggests that Disney was able to pay off its trade credit at a faster rate, potentially improving its relationship with suppliers.

Comparing the recent ratio to the one from two years ago (2.76 in fiscal year 2021), we can see a substantial improvement in managing payables. This increase may indicate proactive efforts by Disney to optimize its cash flow management and relationships with suppliers.

Further, when comparing the most recent ratio to that of fiscal year 2020 (3.47) and fiscal year 2019 (3.05), we can observe that the company's ability to manage its payables has been fairly consistent, with occasional fluctuations. This indicates a generally effective management of trade credit over the years.

In conclusion, the increasing trend in Walt Disney Co (The) payables turnover ratio suggests that the company has been managing its trade credit with suppliers more efficiently, potentially enhancing its financial flexibility and relationships with vendors. However, it would be beneficial to conduct a more in-depth analysis of the underlying factors contributing to these fluctuations to better understand the company's payables management strategy.