Walt Disney Company (DIS)
Liquidity ratios
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | |
|---|---|---|---|---|---|
| Current ratio | 0.73 | 1.05 | 1.00 | 1.08 | 1.32 |
| Quick ratio | 0.54 | 0.85 | 0.83 | 0.94 | 1.30 |
| Cash ratio | 0.17 | 0.46 | 0.40 | 0.51 | 0.82 |
Based on the data provided for Walt Disney Company's liquidity ratios, there are notable variations over the past five years. The current ratio has shown a declining trend, indicating a decrease in the company's ability to meet its short-term obligations with its current assets. The current ratio was at its lowest in 2024 at 0.73, which raises concerns about the company's liquidity position.
Similarly, the quick ratio, which provides a more conservative measure of liquidity by excluding inventory from current assets, has also decreased over the years. A declining trend in the quick ratio suggests that Walt Disney may have trouble meeting its short-term obligations without relying on selling inventory.
The cash ratio, which is the most stringent measure of liquidity as it only considers cash and cash equivalents, has also shown a decreasing trend. The cash ratio was at its lowest in 2024 at 0.17, indicating a reduced ability of the company to cover its current liabilities with its cash reserves alone.
Overall, the liquidity ratios of Walt Disney Company have been on a downward trajectory, signaling potential liquidity challenges. It is essential for the company to closely monitor its liquidity position and implement strategies to improve its short-term financial health.
See also:
Walt Disney Company Liquidity Ratios
Additional liquidity measure
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | -176.12 | -181.80 | -228.27 | -265.01 | -137.16 |
The cash conversion cycle for Walt Disney Company has shown improvement over the past five years. The company has effectively reduced its cash conversion cycle, indicating more efficient management of the working capital.
In 2020, the cash conversion cycle was at -137.16 days, reflecting that on average, Disney was able to convert its inventory into cash and receive payments from customers in a shorter time frame. This trend continued as the cash conversion cycle further decreased to -265.01 days in 2021, implying a quicker turnover of inventory and receivables.
By 2022, the cash conversion cycle improved significantly to -228.27 days, showcasing the company's ability to efficiently manage its cash flows and operating cycle. This positive trend continued in 2023, with a further reduction to -181.80 days, indicating Disney's continued focus on streamlining its working capital processes.
The most recent data for 2024 shows an even lower cash conversion cycle of -176.12 days, suggesting that Walt Disney Company has been successful in enhancing its liquidity position and optimizing its working capital management.
Overall, the consistent decrease in the cash conversion cycle over the years signifies Disney's effectiveness in managing its operating cycle, converting inventory into cash, and collecting receivables efficiently. This improvement is a positive indication of the company's financial health and operational efficiency.