Western Digital Corporation (WDC)

Activity ratios

Short-term

Turnover ratios

	Jun 30, 2025	Jun 30, 2024	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021
Inventory turnover	4.51	3.01	2.82	3.55	3.43
Receivables turnover	5.17	6.00	7.71	6.70	7.50
Payables turnover	4.60	5.83	6.58	5.81	5.32
Working capital turnover	21.74	6.59	5.02	3.84	3.46

The activity ratios of Western Digital Corporation over the period from June 30, 2021, to June 30, 2025, reveal several noteworthy trends.

Inventory Turnover:
This ratio exhibits fluctuations with a slight overall decline followed by a recovery. It increased modestly from 3.43 in 2021 to 3.55 in 2022, indicating improved inventory management and faster inventory sales during that period. However, it declined to 2.82 in 2023, suggesting a slowdown in inventory turnover or excess inventory accumulation. Subsequently, it increased to 3.01 in 2024 and then experienced a significant rise to 4.51 in 2025, indicating an improvement in inventory efficiency and potentially enhanced sales or better inventory control.

Receivables Turnover:
The receivables turnover ratio shows a modest decline from 7.50 in 2021 to 6.70 in 2022, followed by an increase to 7.71 in 2023, indicating improved collection efficiency during that year. However, it declines again to 6.00 in 2024 and further to 5.17 in 2025, suggesting a deterioration in receivables management or extended collection periods.

Payables Turnover:
This ratio increased from 5.32 in 2021 to 6.58 in 2023, reflecting a tightening of accounts payable activity, possibly due to vendors demanding faster payments or improved payment practices. Subsequently, it decreased to 5.83 in 2024 and further to 4.60 in 2025, implying a lengthening of payables period, which could indicate a strategic extension of payment terms or liquidity constraints.

Working Capital Turnover:
This ratio demonstrates a consistent and significant upward trend. It rose steadily from 3.46 in 2021 to 3.84 in 2022, then to 5.02 in 2023, followed by a sharp increase to 6.59 in 2024, and a substantial jump to 21.74 in 2025. This indicates a marked enhancement in the company's efficiency in generating sales from its working capital, possibly driven by increased sales volume, improved asset utilization, or both. The sharp escalation in 2025 suggests that the company is utilizing its working capital more effectively to generate higher sales relative to its working capital base.

Overall, the activity ratios depict a company experiencing fluctuations in operational efficiency across inventory, receivables, and payables management, with a notable trend toward improved utilization of working capital by 2025. The increasing working capital turnover ratio signals a stronger ability to generate sales from the company's working capital, despite some challenges in receivables and payables management toward the latter part of the period.

Average number of days

		Jun 30, 2025	Jun 30, 2024	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021
Days of inventory on hand (DOH)	days	80.85	121.28	129.40	102.78	106.43
Days of sales outstanding (DSO)	days	70.55	60.80	47.35	54.46	48.68
Number of days of payables	days	79.29	62.56	55.46	62.78	68.64

The activity ratios of Western Digital Corporation, as reflected by inventory days, receivables days, and payables days over the specified period, exhibit notable trends and fluctuations.

Starting with the days of inventory on hand (DOH), there was a decrease from 106.43 days in June 2021 to 102.78 days in June 2022. However, this trend reversed in subsequent years, with the DOH increasing sharply to 129.40 days in 2023, indicating that inventory remained in stock longer than in prior periods. In 2024, a modest reduction to 121.28 days was observed, but by 2025, the inventory days decreased significantly to 80.85 days, suggesting a much shorter inventory holding period.

The days of sales outstanding (DSO) similarly demonstrate variability across the period. An increase from 48.68 days in 2021 to 54.46 days in 2022 suggests a slight elongation in the collection period for receivables. Conversely, in 2023, the DSO decreased to 47.35 days, returning close to the 2021 level. Nonetheless, the trend shifts upward in subsequent years, with DSO rising to 60.80 days in 2024 and further to 70.55 days in 2025, indicating a lengthening of the receivable collection period and potentially a less efficient collection process over time.

The number of days of payables reflects the period the company takes to settle its obligations. A decrease from 68.64 days in 2021 to 55.46 days in 2023 suggests an improvement in paying suppliers more promptly. In 2024, the payable days increased slightly to 62.56, and in 2025, there was a further increase to 79.29 days, indicating a tendency to extend payable periods in the more recent years.

Overall, the analysis indicates that Western Digital experienced a substantial increase in inventory holding period in 2023, followed by a notable reduction in 2025. Receivables collection periods became longer over the latter years, especially in 2024 and 2025. Conversely, the company has shown a pattern of extending its payables in recent years, especially in 2025. These activity ratios collectively suggest shifting operational efficiencies and working capital management strategies over the observed period.

Long-term

	Jun 30, 2025	Jun 30, 2024	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021
Fixed asset turnover	—	—	3.40	5.12	5.31
Total asset turnover	0.68	0.54	0.50	0.72	0.65

The long-term activity ratios for Western Digital Corporation, specifically the fixed asset turnover and total asset turnover ratios, reveal notable trends over the period from June 2021 to June 2023.

The fixed asset turnover ratio experienced a decline from 5.31 in June 2021 to 5.12 in June 2022, indicating a slight reduction in sales generated per dollar of fixed assets. This downward trend became more pronounced toward June 2023, where the ratio decreased sharply to 3.40. The diminished ratio suggests a decreased efficiency in utilizing fixed assets to generate sales, potentially reflecting asset underutilization or increased asset base without a commensurate increase in sales. The absence of data for June 2024 and 2025 precludes an assessment of subsequent trends; however, the declining trajectory up to 2023 signals a need for scrutiny regarding fixed asset management.

In contrast, the total asset turnover ratio shows a different pattern. It increased from 0.65 in June 2021 to 0.72 in June 2022, indicating improved overall asset utilization efficiency during that period. However, this upward movement was followed by a decline to 0.50 in June 2023, suggesting that total asset efficiency deteriorated in that year. Despite the modest decrease, the forecasted ratios for June 2024 and June 2025 point toward a recovery trend, with ratios expected to rise to 0.54 and 0.68 respectively. This anticipated improvement indicates a potential reinstatement of asset utilization efficiency over the longer term.

Overall, the analysis reveals a mixed performance with fixed asset efficiency declining markedly by 2023, whereas total asset efficiency experienced a temporary dip after a prior improvement, with expectations of recovery in future years. These ratios highlight potential operational challenges concerning fixed asset management, while also suggesting areas where the company's overall asset utilization might be improved or restructured for future growth.