Warner Music Group (WMG)
Debt-to-equity ratio
| 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Long-term debt | US$ in thousands | 4,014,000 | 3,978,000 | 3,984,000 | 4,004,000 | 3,964,000 | 3,988,000 | 3,986,000 | 3,946,000 | 3,732,000 | 3,785,000 | 3,829,000 | 3,846,000 | 3,346,000 | 3,367,000 | 3,354,000 | 3,387,000 | 3,104,000 | 3,000,000 | 2,983,000 | 2,988,000 |
| Total stockholders’ equity | US$ in thousands | 518,000 | 483,000 | 433,000 | 463,000 | 307,000 | 281,000 | 252,000 | 270,000 | 152,000 | 156,000 | 154,000 | 153,000 | 31,000 | 81,000 | 57,000 | 16,000 | -63,000 | -38,000 | -306,000 | -190,000 |
| Debt-to-equity ratio | 7.75 | 8.24 | 9.20 | 8.65 | 12.91 | 14.19 | 15.82 | 14.61 | 24.55 | 24.26 | 24.86 | 25.14 | 107.94 | 41.57 | 58.84 | 211.69 | — | — | — | — |
September 30, 2024 calculation
Debt-to-equity ratio = Long-term debt ÷ Total stockholders’ equity
= $4,014,000K ÷ $518,000K
= 7.75
Warner Music Group's debt-to-equity ratio has displayed fluctuating trends over the past few quarters, ranging from as low as 7.75 to as high as 211.69. The ratio indicates the proportion of debt financing relative to equity, reflecting the company's financial leverage. Higher ratios suggest greater reliance on debt to finance operations and expansion, which can potentially amplify returns but also increase financial risk.
The significant variations in the debt-to-equity ratio raise concerns about the company's capital structure and financial risk management. The spike in the ratio to 211.69 in December 2020 indicates a substantial increase in debt relative to equity, signaling a potentially unsustainable level of leverage. Subsequent improvements in the ratio to levels around 24-25 in the following quarters suggest efforts to reduce debt levels relative to equity, although these ratios still signify relatively high debt burdens compared to equity.
Overall, Warner Music Group's debt-to-equity ratio highlights its ongoing challenge in managing debt levels and optimizing its capital structure to ensure financial stability and sustainable growth. Further analysis of the company's debt repayment plans, cash flow generation, and overall financial strategy would be crucial to assess its ability to navigate the dynamic financial environment effectively.
Peer comparison
Sep 30, 2024