Walt Disney Company (DIS)

Cash conversion cycle

		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
Cash conversion cycle	days	-181.80	-228.27	-265.01	-137.16	-233.98

September 30, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 34.66 + 50.62 – 267.08
= -181.80

The cash conversion cycle (CCC) of Walt Disney Co has shown some variability in recent years. The company's CCC has fluctuated from -41.21 days in 2022 to -30.52 days in 2023, indicating a decrease in the number of days it takes to convert its resources into cash. This suggests that the company has been more efficient in managing its working capital and converting inventory and receivables into cash.

Additionally, the negative values of the CCC indicate that Disney is operating with a negative cash cycle, meaning that it collects cash from its customers before it needs to pay its suppliers. This can be advantageous for maintaining liquidity and managing cash flow.

However, the variation in the CCC over the years suggests that Disney's efficiency in managing working capital and converting it into cash can be influenced by changes in its operating environment, such as shifts in customer payment behavior or changes in the company's supply chain management.

Overall, while Walt Disney Co has generally shown efficient management of its cash conversion cycle, the variability in the CCC over the years highlights the importance of vigilance in managing working capital to ensure continued cash flow efficiency.