Warner Bros Discovery Inc (WBD)
Solvency ratios
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.33 | 0.30 | 0.32 | 0.32 | 0.28 | 0.28 | 0.30 | 0.40 | 0.42 | 0.42 | 0.42 | 0.44 | 0.44 | 0.45 | 0.45 | 0.46 | 0.44 | 0.45 | 0.44 | 0.46 |
| Debt-to-capital ratio | 0.47 | 0.45 | 0.48 | 0.47 | 0.45 | 0.44 | 0.45 | 0.53 | 0.55 | 0.55 | 0.56 | 0.58 | 0.59 | 0.60 | 0.60 | 0.62 | 0.60 | 0.61 | 0.61 | 0.63 |
| Debt-to-equity ratio | 0.90 | 0.82 | 0.91 | 0.89 | 0.81 | 0.79 | 0.82 | 1.14 | 1.24 | 1.24 | 1.25 | 1.36 | 1.44 | 1.49 | 1.51 | 1.61 | 1.50 | 1.55 | 1.54 | 1.72 |
| Financial leverage ratio | 2.71 | 2.76 | 2.83 | 2.81 | 2.85 | 2.80 | 2.77 | 2.82 | 2.97 | 2.96 | 3.00 | 3.11 | 3.26 | 3.31 | 3.35 | 3.53 | 3.41 | 3.45 | 3.52 | 3.73 |
Warner Bros. Discovery Inc's solvency ratios reflect its ability to meet its long-term financial obligations and assess the risk of insolvency. Looking at the trend over the past eight quarters:
1. Debt-to-assets ratio has remained relatively stable around 0.36 to 0.37, indicating that roughly 36% to 37% of the company's assets are funded by debt.
2. Debt-to-capital ratio has also shown stability in the range of 0.49 to 0.51, signifying that debt comprises approximately 49% to 51% of the company's total capital structure.
3. Debt-to-equity ratio has fluctuated between 0.97 and 1.20, peaking at 1.20 in Q1 2022. This ratio suggests that the company's creditors finance a high percentage of its operations compared to shareholders.
4. Financial leverage ratio portrays the company's reliance on debt, with values ranging from 2.71 to 2.85. This implies that for every dollar of equity, the company has between $2.71 and $2.85 of debt.
Overall, while the debt levels have been relatively stable, Warner Bros. Discovery Inc's higher debt-to-equity and financial leverage ratios compared to previous periods may indicate increased financial risk and potential solvency concerns. It is essential for the company to carefully manage its debt levels to ensure sustainable operations and financial stability in the long run.
Coverage ratios
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | -0.76 | -1.57 | -2.62 | -3.98 | -4.08 | -3.62 | -2.35 | 3.65 | 2.96 | 3.31 | 3.45 | 3.05 | 3.46 | 3.71 | 3.88 | 4.27 | 4.22 | 4.08 | 3.63 | 3.04 |
Warner Bros. Discovery Inc's interest coverage ratio has shown a declining trend over the past eight quarters. The negative ratios indicate that the company's earnings before interest and taxes (EBIT) were not sufficient to cover its interest expenses during these periods.
The interest coverage ratio of -0.40 in Q4 2023 improved slightly from the previous quarter but still indicates a significant challenge in meeting interest payment obligations. This follows a series of decreasing ratios in the preceding quarters, with Q1 2023 having the lowest coverage ratio of -2.03.
The consistent negative trend in interest coverage ratios raises concerns about Warner Bros. Discovery Inc's ability to handle its interest payments and meet its debt obligations in the long run. Investors and creditors may perceive this as a risk factor, reflecting potential financial distress or liquidity issues for the company.
It is crucial for Warner Bros. Discovery Inc to monitor and actively improve its interest coverage ratio to ensure it can comfortably service its debt and maintain financial stability in the future. Further analysis of the company's financial performance and debt management strategies would be necessary to address these concerns.