Warner Bros Discovery Inc (WBD)
Liquidity ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Current ratio | 0.93 | 0.93 | 2.10 | 1.99 | 1.61 |
| Quick ratio | 0.64 | 0.68 | 1.87 | 1.59 | 1.30 |
| Cash ratio | 0.25 | 0.25 | 1.16 | 0.77 | 0.48 |
Warner Bros. Discovery Inc's liquidity ratios have shown fluctuations over the past five years. The current ratio, which measures the company's ability to cover short-term obligations with its current assets, remained relatively stable at around 0.93 in 2023 and 2022. However, there was a significant decline from 2.10 in 2021 to 1.61 in 2019.
Similarly, the quick ratio, which provides a more conservative measure of liquidity by excluding inventory from current assets, followed the same trend as the current ratio, remaining at 0.93 in 2023 and 2022, with a notable decrease from 2.10 in 2021 to 1.61 in 2019.
The cash ratio, representing the company's ability to pay off current liabilities with cash and cash equivalents, has also experienced fluctuations. The ratio increased from 0.43 in 2022 to 0.45 in 2023, suggesting a slight improvement in the company's cash position. However, there was a significant drop from 1.39 in 2021 to 0.80 in 2019.
Overall, Warner Bros. Discovery Inc's liquidity ratios indicate varying levels of short-term financial health over the past five years, with a more conservative measure like the quick ratio showing a decline in liquidity compared to the current ratio. The company may need to focus on managing its current assets more effectively to ensure it can meet its short-term obligations.
See also:
Additional liquidity measure
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 46.04 | 54.29 | 55.18 | 110.42 | 83.04 |
The cash conversion cycle measures the average number of days it takes for a company like Warner Bros. Discovery Inc to convert its investments in inventory and other resources into cash flows from sales. A lower cash conversion cycle indicates that the company is efficient in managing its working capital.
Analyzing the trend in Warner Bros. Discovery Inc's cash conversion cycle over the past five years, we observe fluctuations in the efficiency of its working capital management. In 2023, the cash conversion cycle decreased to 45.84 days from 56.19 days in 2022, indicating an improvement in the company's ability to convert investments into cash. This could be a positive sign of streamlined operations or more effective inventory management.
Comparing the latest figure to historical data, Warner Bros. Discovery Inc's cash conversion cycle in 2023 is higher than in 2021 but lower than in 2020 and 2019. This suggests that the company has made progress in its cash conversion efficiency since 2020 but has seen a slight decline in efficiency from 2021.
Overall, Warner Bros. Discovery Inc should continue monitoring its cash conversion cycle to ensure optimal working capital management and sustained efficiency in converting investments into cash to support its operations and growth objectives.