Warner Music Group (WMG)
Cash conversion cycle
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 8.70 | 7.57 | 7.70 | 6.15 | 6.56 |
| Days of sales outstanding (DSO) | days | 69.54 | 58.99 | 58.04 | 63.06 | 63.21 |
| Number of days of payables | days | 20.71 | 18.79 | 23.49 | 20.54 | 23.04 |
| Cash conversion cycle | days | 57.53 | 47.77 | 42.25 | 48.66 | 46.73 |
September 30, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 8.70 + 69.54 – 20.71
= 57.53
The cash conversion cycle of Warner Music Group has fluctuated over the past five years. In 2023, the company's cash conversion cycle was 57.53 days, an increase from the previous year's 47.77 days. This indicates that it took Warner Music Group longer to convert its investments in inventory and accounts receivable into cash during the most recent fiscal year.
Comparing to earlier years, the cash conversion cycle in 2023 was higher than in 2021 but lower than in 2020. This suggests that Warner Music Group has experienced some inefficiencies in managing its operating cycle in 2023 compared to the previous two years.
Overall, a higher cash conversion cycle means that Warner Music Group has more capital tied up in inventory and accounts receivable, potentially impacting its liquidity and ability to generate cash flow. The company may need to evaluate and improve its inventory management and accounts receivable processes to shorten its cash conversion cycle and enhance its financial performance.
Peer comparison
Sep 30, 2023