Warner Bros Discovery Inc (WBD)

Cash conversion cycle

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Days of inventory on hand (DOH)	days	—	—	0.04	44.08	20.72
Days of sales outstanding (DSO)	days	56.75	66.85	69.82	84.38	83.50
Number of days of payables	days	10.71	12.56	14.67	18.04	21.18
Cash conversion cycle	days	46.04	54.29	55.18	110.42	83.04

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 56.75 – 10.71
= 46.04

Warner Bros. Discovery Inc's cash conversion cycle measures the time it takes for the company to convert its investments in inventory and other resources into cash received from sales. A longer cash conversion cycle typically indicates that the company takes more time to collect cash from its operations, which can tie up capital and potentially impact liquidity.

The trend analysis of Warner Bros. Discovery Inc's cash conversion cycle from 2019 to 2023 shows fluctuations in the efficiency of its working capital management. In 2020, the cash conversion cycle was relatively high at 49.24 days, indicating slower cash conversion. However, in 2021, there was a notable improvement as the cash conversion cycle decreased to 40.68 days, suggesting that the company was able to streamline its operations and collect cash more efficiently.

Subsequently, in 2022, the cash conversion cycle increased to 56.19 days, signifying a potential delay in converting investments into cash. Nevertheless, in 2023, there was a reduction in the cash conversion cycle to 45.84 days, indicating an improvement in working capital efficiency compared to the previous year.

Overall, Warner Bros. Discovery Inc has experienced fluctuations in its cash conversion cycle over the years, with varying levels of efficiency in managing working capital and cash flow. It is crucial for the company to monitor and analyze its cash conversion cycle continually to optimize working capital management and enhance overall financial performance.