Warner Music Group (WMG)
Days of sales outstanding (DSO)
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|
| Receivables turnover | 5.25 | 6.19 | 6.29 | 5.79 | 5.77 | |
| DSO | days | 69.54 | 58.99 | 58.04 | 63.06 | 63.21 |
September 30, 2023 calculation
DSO = 365 ÷ Receivables turnover
= 365 ÷ 5.25
= 69.54
Warner Music Group's Days Sales Outstanding (DSO) measures the average number of days that the company takes to collect revenue after making a sale. The trend in DSO can provide insights into the efficiency of the company's accounts receivable management over time.
Analyzing Warner Music Group's DSO over the past five years, we observe a fluctuating pattern. In fiscal year 2019 and 2020, the DSO remained relatively stable around 63 days. However, there was a slight increase in DSO to 63.21 days in 2019.
In more recent fiscal years, Warner Music Group experienced a notable upward trend in DSO. The DSO increased to 63.06 days in 2020, followed by a further rise to 58.04 days in 2021 and 58.99 days in 2022. Notably, there was a significant increase to 69.54 days in 2023, indicating that the company took longer to collect revenue from its sales in that period.
This upward trend in DSO could suggest potential challenges in accounts receivable management or an increase in credit sales with longer payment terms. It is essential for Warner Music Group to monitor and manage its DSO effectively to ensure timely collection of receivables and maintain healthy cash flows. Additionally, the company may need to assess its credit policies and collections processes to optimize cash conversion cycles and improve overall financial performance.
Peer comparison
Sep 30, 2023