Warner Music Group (WMG)

Short-term

Turnover ratios

Warner Music Group's inventory turnover has been relatively stable over the analyzed periods, with an average of around 55 times per year. This indicates that the company is managing its inventory efficiently by quickly selling and replacing stock.

The receivables turnover ratio fluctuated slightly but remained around 5-6 times per year, suggesting that Warner Music Group is collecting its receivables in a timely manner. A higher receivables turnover ratio signifies that the company is efficient in collecting payments from its customers.

On the other hand, the payables turnover ratio has shown more variability, indicating changes in the company's payment practices to suppliers. Despite the fluctuations, the average payables turnover was around 20 times per year, implying that Warner Music Group is maintaining a balance in managing its payables.

Unfortunately, the data does not include the working capital turnover ratio, so it is not possible to assess the company's efficiency in utilizing its working capital resources.

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Average number of days

Warner Music Group's activity ratios reflect its efficiency in managing inventory, accounts receivable, and accounts payable.

Days of inventory on hand (DOH) have shown fluctuation over the periods, but generally, they have been around 6-8 days, indicating that the company is efficient in managing its inventory and converting it into sales quickly.

Days of sales outstanding (DSO) have also varied, but the trend has been decreasing over recent periods. This suggests that Warner Music Group has been collecting receivables more quickly, which is a positive sign of efficient credit management.

The number of days of payables has also fluctuated, but on average, the company takes around 15-20 days to pay its suppliers. This indicates that Warner Music Group is managing its payables effectively and potentially using favorable credit terms from suppliers.

Overall, the activity ratios suggest that Warner Music Group is effectively managing its working capital and operational efficiency. The decreasing trend in DSO and stable DOH indicates improvement in managing accounts receivable and inventory, while the relatively stable number of days of payables shows effective management of supplier payments.

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Long-term

Warner Music Group's long-term activity ratios indicate the efficiency of the company in generating revenue and utilizing its assets. The fixed asset turnover ratio has shown a relatively stable trend over the periods, with values ranging between 12.90 to 15.35. This ratio measures how efficiently the company utilizes its fixed assets to generate sales revenue. The consistent high values of fixed asset turnover suggest that Warner Music Group is effectively using its fixed assets to generate sales throughout the periods analyzed.

On the other hand, the total asset turnover ratio has shown some fluctuations, with values ranging between 0.65 to 0.77. This ratio measures how efficiently the company utilizes all its assets to generate sales. The fluctuating values of total asset turnover indicate variability in the company's ability to generate sales relative to its total assets. Overall, a total asset turnover ratio of less than 1 suggests that Warner Music Group might not be efficiently utilizing all its assets to generate sales.

In conclusion, while the fixed asset turnover ratio remains consistently high, indicating effective utilization of fixed assets, there seems to be some variability in the efficiency of Warner Music Group in generating sales in relation to its total assets as seen in the fluctuating total asset turnover ratios.