Warner Bros Discovery Inc (WBD)
Liquidity ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Current ratio | 0.89 | 0.93 | 0.93 | 2.10 | 1.99 |
| Quick ratio | 0.34 | 0.25 | 0.25 | 1.14 | 0.77 |
| Cash ratio | 0.34 | 0.25 | 0.25 | 1.14 | 0.77 |
Warner Bros Discovery Inc's liquidity ratios show fluctuations over the analyzed period. The current ratio increased steadily from 1.99 in December 2020 to 2.10 in December 2021, indicating an improvement in the company's ability to cover its short-term obligations with current assets. However, there was a significant decline in the current ratio to 0.93 for both December 2022 and December 2023, and a further decrease to 0.89 by December 2024, raising concerns about the company's short-term liquidity position.
Similarly, the quick ratio followed a similar pattern, starting at 0.77 in December 2020, improving to 1.14 in December 2021, and then dropping substantially to 0.25 for December 2022 and remaining at that level through December 2024. This suggests that the company may face difficulty in meeting its immediate liabilities with its most liquid assets.
The cash ratio mirrored the trend of the quick ratio, starting at 0.77 in December 2020, reaching 1.14 in December 2021, and falling to 0.25 for December 2022, maintaining the same level through December 2024. This indicates that Warner Bros Discovery Inc's ability to cover its current liabilities solely with cash and cash equivalents has weakened.
Overall, Warner Bros Discovery Inc's liquidity ratios show a concerning decline in liquidity from 2022 to 2024, as indicated by the decreasing current ratio, quick ratio, and cash ratio. Management may need to assess and improve the company's liquidity position to ensure its ability to meet short-term obligations efficiently.
See also:
Additional liquidity measure
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 0.00 | 8.91 | 0.00 | 52.77 | 91.72 |
Warner Bros Discovery Inc's cash conversion cycle has shown a significant improvement over the years. In 2020, the company's cash conversion cycle was 91.72 days, indicating that it took approximately 91 days to convert its investments in raw materials into cash receipts. By the end of 2021, this cycle had reduced to 52.77 days, reflecting a quicker turnaround in converting inventory to cash.
In 2022 and 2024, Warner Bros Discovery Inc managed to achieve a cash conversion cycle of 0.00 days, suggesting that the company was able to convert its investments into cash almost immediately, or even before paying off its suppliers. This scenario is favorable as it shows efficient management of working capital.
By the end of 2023, the company's cash conversion cycle increased slightly to 8.91 days, still indicating a relatively efficient process of converting investments in raw materials into cash proceeds.
Overall, Warner Bros Discovery Inc's improving trend in the cash conversion cycle demonstrates enhanced efficiency in managing its working capital and converting investments into cash, which is a positive indicator for the company's financial health and operational effectiveness.