Warner Music Group (WMG)
Cash conversion cycle
| Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 6.41 | 6.08 | 6.38 | 7.12 | 8.70 | 8.07 | 8.07 | 7.31 | 7.57 | 6.60 | 6.81 | 6.22 | 7.70 | 6.49 | 6.12 | 5.48 | 6.15 | 4.53 | 5.50 | 5.70 |
| Days of sales outstanding (DSO) | days | 73.32 | 71.33 | 70.28 | 71.32 | 69.21 | 68.98 | 63.98 | 63.00 | 59.69 | 60.65 | 58.18 | 61.25 | 57.86 | 60.41 | 60.54 | 71.04 | 63.06 | 59.89 | 61.76 | 71.10 |
| Number of days of payables | days | 18.72 | 13.22 | 20.13 | 16.52 | 20.71 | 17.32 | 19.95 | 15.76 | 18.79 | 18.79 | 23.18 | 20.29 | 23.49 | 18.56 | 18.22 | 16.51 | 20.54 | 15.72 | 20.80 | 17.71 |
| Cash conversion cycle | days | 61.01 | 64.19 | 56.53 | 61.92 | 57.20 | 59.73 | 52.09 | 54.54 | 48.47 | 48.45 | 41.81 | 47.17 | 42.06 | 48.34 | 48.45 | 60.00 | 48.66 | 48.69 | 46.46 | 59.09 |
September 30, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 6.41 + 73.32 – 18.72
= 61.01
The cash conversion cycle for Warner Music Group has shown some fluctuations over the past several quarters. It is a measure of how long it takes for a company to convert its investments in inventory and other resources into cash flows from sales.
The trend for Warner Music Group's cash conversion cycle has been relatively stable over the analyzed periods, ranging from a low of 41.81 days to a high of 64.19 days. A lower cash conversion cycle is generally more favorable as it indicates that the company is able to collect cash from its sales more quickly and efficiently.
Warner Music Group's cash conversion cycle was at its lowest point in Q1 2022 at 41.81 days, indicating a more efficient management of working capital during that period. The cycle then increased gradually until Q2 2024, reaching a peak of 64.19 days.
Overall, Warner Music Group should monitor its cash conversion cycle closely to ensure efficient management of its working capital. Any significant changes in the cycle may require further analysis to identify potential areas for improvement in the company's cash flow management processes.
Peer comparison
Sep 30, 2024