Warner Bros Discovery Inc (WBD)
Liquidity ratios
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 0.89 | 0.80 | 0.76 | 0.82 | 0.93 | 0.88 | 0.81 | 0.84 | 0.93 | 0.86 | 1.07 | 2.01 | 2.10 | 2.00 | 1.89 | 1.87 | 1.99 | 1.99 | 1.83 | 1.61 |
| Quick ratio | 0.34 | 0.21 | 0.21 | 0.20 | 0.29 | 0.16 | 0.18 | 0.16 | 0.25 | 0.17 | 0.18 | 1.18 | 1.14 | 0.93 | 0.80 | 0.70 | 0.69 | 0.78 | 0.66 | 0.51 |
| Cash ratio | 0.34 | 0.21 | 0.21 | 0.20 | 0.29 | 0.16 | 0.18 | 0.16 | 0.25 | 0.17 | 0.18 | 1.18 | 1.14 | 0.93 | 0.80 | 0.70 | 0.69 | 0.78 | 0.66 | 0.51 |
Warner Bros Discovery Inc's liquidity ratios reflect its ability to meet its short-term obligations. The current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, has shown a fluctuating trend over the past few years. It increased from 1.61 in March 2020 to a peak of 2.10 in December 2021, indicating a stronger liquidity position. However, the ratio declined thereafter, reaching 0.89 by December 2024, which may raise concerns about the company's ability to meet its short-term obligations with its current assets.
The quick ratio, which provides a more conservative measure of liquidity by excluding inventory from current assets, also fluctuated over the years. It ranged from 0.16 in March 2023 to a high of 1.18 in March 2022. The ratio increased steadily until December 2021 but decreased to 0.34 by December 2024, indicating potential challenges in meeting short-term obligations without relying on inventory.
The cash ratio, which assesses the company's ability to cover its current liabilities with its cash and cash equivalents, followed a similar pattern as the quick ratio. It peaked at 1.18 in March 2022 but declined to 0.34 by December 2024. This indicates that while the company had a significant amount of cash relative to its current liabilities in the past, the level of cash available for immediate obligations has decreased over time.
Overall, Warner Bros Discovery Inc's liquidity ratios have exhibited a mixed performance, with fluctuations observed in the current, quick, and cash ratios. The declining trend in these ratios towards the end of the period may raise concerns about the company's short-term liquidity position and its ability to meet obligations as they come due.
See also:
Additional liquidity measure
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 3.74 | 4.85 | 33.01 | 52.77 | 64.24 | 51.29 | 61.50 | 91.72 | 72.85 | 44.45 | 49.86 |
Warner Bros Discovery Inc's cash conversion cycle has shown fluctuations over the periods reported. The cash conversion cycle measures how long it takes for a company to convert its investments in inventory and other resources into cash flows from sales. A shorter cash conversion cycle is generally preferred as it indicates more efficient management of working capital.
The company's cash conversion cycle decreased from 49.86 days on March 31, 2020, to 4.85 days on June 30, 2022, and further dropped to 0.00 days by December 31, 2022. This substantial reduction suggests that Warner Bros Discovery Inc has improved its inventory turnover and collection of receivables, leading to faster conversion of investments into cash.
A zero cash conversion cycle indicates that the company is almost instantly converting its investments into cash, which can be a sign of efficient operations and strong working capital management. This can signify effective inventory management, quick collection of receivables, and optimized payment of payables.
It is essential for Warner Bros Discovery Inc to maintain effective working capital management practices to sustain a low or zero cash conversion cycle and ensure a healthy cash flow position. This can support the company's financial health and provide flexibility for future investments and growth opportunities.