Warner Music Group (WMG)
Solvency ratios
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.44 | 0.46 | 0.48 | 0.46 | 0.48 |
| Debt-to-capital ratio | 0.89 | 0.93 | 0.96 | 0.99 | 1.02 |
| Debt-to-equity ratio | 7.75 | 12.91 | 24.55 | 107.94 | — |
| Financial leverage ratio | 17.67 | 27.83 | 51.50 | 232.61 | — |
Warner Music Group's solvency ratios reflect its ability to meet its financial obligations and the extent to which it relies on debt to finance its operations.
The debt-to-assets ratio indicates the proportion of the company's assets financed by debt. Warner Music Group's debt-to-assets ratio has decreased from 0.48 in 2020 to 0.44 in 2024, which suggests a more favorable position in terms of asset coverage by debt.
The debt-to-capital ratio measures the percentage of the company's capital that is funded by debt. Warner Music Group's debt-to-capital ratio has trended downwards from 1.02 in 2020 to 0.89 in 2024, indicating a decreasing reliance on debt to finance its operations.
The debt-to-equity ratio indicates the relative contribution of debt and equity to the company's capital structure. Warner Music Group's debt-to-equity ratio fluctuated significantly from 2020 to 2023 before declining to 7.75 in 2024, signifying a lower level of debt compared to equity in its capital structure.
The financial leverage ratio shows the extent to which the company's assets are funded by debt. Warner Music Group's financial leverage ratio has shown a decreasing trend from 232.61 in 2020 to 17.67 in 2024, suggesting a reduction in the company's reliance on debt to support its operations.
Overall, the declining trend in the solvency ratios of Warner Music Group indicates an improving financial position with lower dependence on debt for financing its activities and a stronger ability to meet its financial obligations. Investors and creditors may view these trends positively as they suggest improved financial health and stability for the company.
Coverage ratios
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 4.52 | 5.03 | 5.71 | 5.12 | -1.80 |
Warner Music Group's interest coverage ratio has shown a generally improving trend over the past five years. In 2024, the interest coverage ratio stood at 4.52, decreasing from the previous year but still indicating that the company generates enough operating income to cover its interest expenses. The ratio was highest in 2022 at 5.71, suggesting an enhanced ability to meet interest obligations. In 2021 and 2023, the interest coverage ratios were 5.12 and 5.03, respectively, both demonstrating strong capacity to handle interest payments.
However, it is notable that in 2020, Warner Music Group had a negative interest coverage ratio of -1.80, indicating that the company's operating income was insufficient to cover its interest expenses for that particular period. This negative ratio could raise concerns about the company's financial health and ability to meet its debt obligations at that time.
Overall, the improving trend in interest coverage ratios from 2020 to 2022 is a positive indication of Warner Music Group's strengthening financial position and ability to honor its interest payments. Monitoring this ratio over time can provide valuable insights into the company's debt management and financial stability.