Warner Bros. Discovery Inc. (NASDAQ:WBD)

Over the analyzed period, several key financial ratios reveal notable trends in operational efficiency, liquidity, leverage, profitability, and returns.

Asset Turnover

The reported total asset turnover demonstrated a moderate upward trend, increasing from 0.30 in 2017 to 0.35 by 2021, suggesting improved efficiency in utilizing assets to generate sales. The adjusted asset turnover mirrored this pattern, rising from 0.31 to 0.36 over the same period, indicating consistent operational improvements after adjustments.

Current Ratio (Liquidity)

Liquidity saw a significant shift, with the reported current ratio sharply declining from a very high 5.34 in 2017 to around 1.06 in 2018, before gradually improving to 2.10 by 2021. The adjusted current ratio followed a similar trajectory, starting even higher at 6.22 in 2017, dropping to 1.14 in 2018, and then stabilizing around 2.45 during 2020 and 2021. This suggests a normalization of liquidity levels after an initially elevated position, likely reflecting balance sheet restructuring or operational changes.

Leverage Ratios

All measures of leverage show a consistent downward trend, indicating progressive deleveraging. The reported debt to equity ratio decreased markedly from 3.21 in 2017 to 1.29 in 2021, while the adjusted ratio followed a similar decline from 2.61 to 1.08. Likewise, reported debt to capital reduced from 0.76 to 0.56, and adjusted ratios from 0.72 to 0.52, highlighting a strategic reduction in reliance on debt financing. Financial leverage also fell consistently, with reported figures moving from 4.89 to 2.97 and adjusted from 3.96 to 2.32, signifying lower total asset to equity multiples over time.

Profitability Margins

Profitability ratios experienced significant volatility. The reported net profit margin turned positive in 2018 after a negative margin in 2017 (-4.9%), peaking at 18.57% in 2019, but then declining to 8.25% by 2021. Adjusted margins showed a similar pattern but ended lower at 3.19% in 2021 after a peak of 16.25% in 2019. This indicates a recovery from initial losses followed by profit margin compression in recent years.

Return on Equity (ROE)

Returns to equity holders display comparable trends, with reported ROE shifting from a negative -7.31% in 2017 to a peak of 20.92% in 2019, followed by a decline to 8.67% in 2021. Adjusted ROE also moved from negative to positive, peaking at 13.34% in 2019 but falling sharply to 2.67% by 2021. These patterns reflect strong improvements and subsequent pressures on profitability impacting shareholder returns.

Return on Assets (ROA)

ROA transitioned from negative values in 2017 (-1.49% reported, -1.06% adjusted) to positive through the period, hitting reported highs of 6.13% in 2019 and adjusted highs of 5.55% in 2019. Subsequently, ROA declined to 2.92% (reported) and 1.15% (adjusted) by 2021, indicating reduced efficiency in asset utilization to generate net income.

In summary, the data reflects a period of initial financial stress followed by recovery and operational efficiency gains, particularly in asset utilization and leverage management. However, after reaching peaks around 2019, profitability and returns exhibited downward trends, suggesting emerging challenges or shifts in market or operational conditions impacting margins and equity returns in the latter years.

The financial data reveals several key trends over the five-year period ending December 31, 2021. Revenues and assets exhibit overall growth, while efficiency metrics show varied performance but generally positive movement toward the end of the period.

Revenues

Revenues increased steadily from 2017 to 2021, starting at approximately 6.9 billion US dollars and reaching nearly 12.2 billion US dollars in 2021. The most notable increase occurred between 2017 and 2018, with subsequent years reflecting more moderate growth and a slight dip in 2020.

Total Assets

Total assets showed significant growth from about 22.6 billion US dollars in 2017 to roughly 34.4 billion US dollars by 2021. The increase was consistent annually, reflecting ongoing asset accumulation or investments made by the company. Growth was relatively stable after the sharp rise from 2017 to 2018.

Reported Total Asset Turnover Ratio

The reported total asset turnover ratio, which measures efficiency in generating revenues from assets, was generally low but exhibited modest improvement through the period. Starting near 0.30 in 2017, it declined slightly around 2020, then improved to 0.35 by 2021, indicating enhanced utilization of assets in generating sales.

Adjusted Revenues and Assets

Adjusted revenues follow a pattern similar to reported revenues, starting at about 7.0 billion US dollars in 2017 and rising to approximately 12.1 billion US dollars in 2021. Adjusted total assets slightly differ but demonstrate comparable trends to reported total assets, growing from around 22.8 billion US dollars in 2017 to roughly 33.7 billion US dollars in 2021.

Adjusted Total Asset Turnover Ratio

The adjusted total asset turnover ratio indicates a slightly higher efficiency than the reported ratio, with growth from 0.31 in 2017 to 0.36 in 2021. This suggests that when certain adjustments are considered, the company’s asset utilization efficiency improved marginally more than what the reported figures indicate.

In summary, the company experienced sustained revenue and asset growth over the analyzed period despite a small revenue contraction in 2020. Total asset turnover ratios, both reported and adjusted, show a positive trend in asset utilization efficiency, culminating at their highest levels in 2021, which may reflect improved operational performance or asset management strategies.

Current Assets

Current assets declined sharply from 9,991 million USD in 2017 to 4,231 million USD in 2018, indicating a substantial reduction in liquidity resources. Subsequently, current assets displayed a consistent recovery trend, rising to 5,217 million USD in 2019, then to 6,130 million USD in 2020, and reaching 7,264 million USD by the end of 2021.

Current Liabilities

Current liabilities showed an increasing trend from 1,871 million USD in 2017 to a peak of 3,997 million USD in 2018. After this peak, liabilities decreased to 3,239 million USD in 2019 and further declined to 3,082 million USD in 2020 before slightly increasing again to 3,459 million USD in 2021. This pattern reflects a volatile but generally elevated level of short-term obligations compared to 2017.

Reported Current Ratio

The reported current ratio demonstrated a significant decrease from a very strong liquidity position of 5.34 in 2017 down to 1.06 in 2018, reflecting the sharp asset decline and liabilities surge observed that year. After 2018, the ratio improved steadily to 1.61 in 2019, 1.99 in 2020, and 2.1 by the end of 2021, indicating a gradual strengthening of short-term financial stability.

Adjusted Current Assets

Adjusted current assets followed a pattern similar to that of reported current assets, starting at 10,046 million USD in 2017 and dropping to 4,277 million USD in 2018. This set also shows recovery over the following years, increasing progressively to 5,271 million USD in 2019, 6,189 million USD in 2020, and 7,318 million USD in 2021. The adjusted figures consistently track slightly above the reported assets.

Adjusted Current Liabilities

Adjusted current liabilities rose from 1,616 million USD in 2017 to 3,748 million USD in 2018, mirroring the reported liabilities' trends but starting from a lower base and reaching a peak similarly in 2018. The liabilities then decreased year over year to 2,750 million USD in 2019 and 2,525 million USD in 2020, with a slight increase to 2,981 million USD in 2021. These adjustments suggest refined measurement or classification of short-term obligations.

Adjusted Current Ratio

Adjusted current ratio dropped from a very high liquidity standing of 6.22 in 2017 to a low of 1.14 in 2018, reflecting the liquidity stresses indicated by the adjusted asset and liability figures. Following this drop, there was a steady improvement to 1.92 in 2019 and further to 2.45 in 2020, where it stabilized and remained at 2.45 through 2021. The adjusted ratios consistently present a more conservative but improving liquidity profile compared to the reported ratios.

Total debt

The total debt showed an overall gradual decrease from US$14,785 million at the end of 2017 to US$15,014 million at the end of 2021. The debt peaked during 2018 at US$17,045 million and then declined steadily over the subsequent years.

Total Discovery, Inc. stockholders’ equity

Stockholders’ equity experienced a consistent upward trend, starting at US$4,610 million at the end of 2017 and reaching US$11,599 million by the end of 2021. Equity nearly doubled from 2018 to 2019 and continued to increase yearly, reflecting growing net assets for the company.

Reported debt to equity ratio

The reported debt to equity ratio demonstrated a clear decreasing pattern from 3.21 in 2017 to 1.29 in 2021. This indicates a significant reduction in leverage, with the company improving its capital structure by gradually lowering its debt level relative to equity.

Adjusted total debt

The adjusted total debt followed a similar pattern to total debt, peaking at US$17,781 million in 2018 and declining to US$15,643 million by 2021. The slight discrepancy between total debt and adjusted total debt values reflects additional financial adjustments that modestly amplified debt figures but maintained the overall trend of reduction.

Adjusted total equity

Adjusted total equity expanded markedly from US$5,740 million in 2017 to US$14,512 million in 2021, more than doubling during this period. This growth further supports an overall stronger equity base when considering accounting adjustments.

Adjusted debt to equity ratio

The adjusted debt to equity ratio decreased from 2.61 in 2017 to 1.08 in 2021, mirroring the improvements in financial leverage seen in the reported figures. The consistent decline suggests enhanced financial stability and a more conservative capital structure over the five-year period.

The financial data over the five-year period reveals several key trends regarding the company's debt and capital structure.

Total Debt and Capital Levels

The total debt showed a fluctuating but generally declining trend from 2018 onwards. It increased from approximately 14,785 million USD in 2017 to a peak of 17,045 million USD in 2018, then gradually decreased to 15,014 million USD by the end of 2021. Meanwhile, total capital consistently increased over the period, rising from 19,395 million USD in 2017 to 26,613 million USD in 2021, indicating an expanding capital base.

Reported Debt to Capital Ratio

This ratio steadily declined during the period from 0.76 in 2017 to 0.56 in 2021. The decreasing ratio indicates an improved capital structure with proportionally less reliance on debt financing relative to total capital, suggesting enhanced financial stability and potentially lower financial risk.

Adjusted Debt and Capital Metrics

The adjusted total debt and capital figures, which consider additional adjustments beyond simple totals, mirrored the trends observed in the reported numbers. Adjusted total debt rose from 14,990 million USD in 2017 to a peak in 2018 at 17,781 million USD before decreasing to 15,643 million USD in 2021. Adjusted total capital expanded substantially from 20,730 million USD in 2017 to a high of 30,551 million USD in 2018, sustaining levels above 30,000 million USD through 2021.

Adjusted Debt to Capital Ratio

The adjusted debt to capital ratio declined noticeably from 0.72 in 2017 to 0.52 in 2021. This downward trajectory aligns with the reported ratio and confirms the company's reduced leverage when considering adjusted financial metrics. The ratio stabilized somewhat after 2019 around 0.54 before continuing to decline.

Overall Assessment

Overall, the data reflects a strategic reduction in leverage with a simultaneous growth in capital over the period. The company appears to have enhanced its financial structure by lowering both reported and adjusted debt-to-capital ratios, which may improve its creditworthiness and capacity for future investment. The stable or increasing capital base coupled with declining relative debt levels indicates an emphasis on financial strength and lower risk exposure in recent years.

The financial data over the five-year period reveals several key trends in the company's asset base, equity, and financial leverage ratios.

Total assets

The total assets grew steadily from US$22.6 billion in 2017 to US$34.4 billion by the end of 2021. The most significant increase occurred between 2017 and 2018, indicating a period of substantial asset accumulation. After 2018, asset growth slowed but remained positive, reflecting continued expansion or investment.

Total Discovery, Inc. stockholders’ equity

Stockholders' equity more than doubled from approximately US$4.6 billion in 2017 to around US$11.6 billion in 2021. This consistent upward trend signifies strengthening equity capital, improving the company’s net worth and financial stability over time.

Reported financial leverage

The reported financial leverage ratio showed a consistent decline from 4.89 in 2017 to 2.97 in 2021. This declining trend suggests a reduction in reliance on debt financing relative to equity, enhancing the company's leverage profile and potentially lowering financial risk.

Adjusted total assets

Adjusted total assets exhibited a pattern similar to total assets, initially rising sharply from US$22.8 billion in 2017 to US$33.3 billion in 2019, followed by slower growth reaching US$33.7 billion in 2021. The adjustment appears to smooth the asset growth curve slightly but confirms the overall upward trajectory.

Adjusted total equity

Adjusted total equity demonstrated a strong upward movement from US$5.7 billion in 2017 to US$14.5 billion in 2021. This increase, which is more pronounced than in reported equity figures, indicates that adjustments account for additional equity value or valuation considerations, emphasizing an improved equity position over the period.

Adjusted financial leverage

The adjusted financial leverage ratio decreased from 3.96 in 2017 to 2.32 in 2021, mirroring the trend observed in the reported leverage ratio but at consistently lower levels. This indicates a steady improvement in capital structure when factoring in adjustments, reflecting decreasing dependence on debt and strengthening financial health.

Overall, the data reflects a company that has progressively increased its asset base and shareholders’ equity while simultaneously improving its leverage ratios. The consistent decrease in both reported and adjusted financial leverage ratios over time indicates a strategic effort to reduce financial risk and enhance capital structure, which may improve creditworthiness and investor confidence. The more pronounced growth in adjusted equity compared to reported equity suggests that adjustments, potentially for fair value or other accounting refinements, paint an even stronger picture of the company’s financial position.

The financial data reveals several key trends over the five-year period under review.

Net income (loss) available to Discovery, Inc.

The net income shows a distinct recovery and growth from a loss of $337 million in 2017 to a peak of $2,069 million in 2019. However, after this peak, net income declines gradually to $1,219 million in 2020 and further to $1,006 million in 2021. Despite the decline after 2019, net income remains positive and substantially higher than the 2017 and 2018 levels.

Revenues

Revenues demonstrate a strong upward trend, growing consistently from approximately $6.9 billion in 2017 to over $12.1 billion in 2021. Growth is steady with minor fluctuation in 2020, where revenues slightly decreased compared to 2019 but then rebounded strongly in 2021.

Reported net profit margin

The reported net profit margin aligns with the net income performance, starting negative at -4.9% in 2017 and improving significantly to 18.57% in 2019. Subsequently, the margin declines to 11.42% in 2020 and further to 8.25% in 2021, indicating some contraction in profitability relative to revenues after reaching its peak in 2019.

Adjusted net income (loss)

Adjusted net income follows a similar trajectory to the reported net income but with reduced volatility. It moves from a loss of $242 million in 2017 to a high of $1,848 million in 2019, then decreases to $1,437 million in 2020 and sharply declines to $387 million in 2021. This decline in 2021 signals heightened challenges or adjustments not reflected in raw net income figures.

Adjusted revenues

Adjusted revenues closely mirror the trends in reported revenues, increasing from $6.95 billion in 2017 to $12.1 billion in 2021. The progression is generally steady, with a slight dip in 2020 before recovery in 2021, consistent with the reported revenues.

Adjusted net profit margin

The adjusted net profit margin mirrors the adjusted net income trend. It improves from a negative -3.48% in 2017 to a peak of 16.25% in 2019 and remains relatively strong at 13.4% in 2020. However, it decreases substantially to 3.19% in 2021, indicating a marked reduction in profitability on an adjusted basis during the latest year.

Overall, the data illustrates a period of substantial growth in revenues and profitability up to 2019, followed by a downward adjustment in profit margins and net income in the subsequent two years despite continued revenue growth. The sharp reduction in adjusted profitability in 2021 suggests increased costs, expenses, or one-time impacts affecting financial performance during that year.

The financial data presents several noteworthy trends in profitability and equity over the observed five-year period.

Net Income (Loss) and Adjusted Net Income

Net income showed a significant turnaround from a loss of US$337 million in 2017 to a strong profit of US$2,069 million in 2019. This was followed by a decline in 2020 and 2021, with net income dropping to US$1,219 million and US$1,006 million, respectively. Adjusted net income followed a similar trajectory, improving from a loss of US$242 million in 2017 to a peak of US$1,848 million in 2019, but then decreasing to US$1,437 million in 2020 and substantially falling to US$387 million in 2021. This indicates that while profitability increased sharply until 2019, there was a notable weakening in earnings quality and performance in the subsequent years.

Total and Adjusted Stockholders’ Equity

Total stockholders’ equity grew steadily year-over-year, rising from US$4,610 million in 2017 to US$11,599 million in 2021. Adjusted total equity also saw consistent increase, from US$5,740 million in 2017 to US$14,512 million in 2021. The continuous growth in both reported and adjusted equity suggests a strengthening capital base and retained earnings accumulation over time, supporting the company’s financial stability and capacity to absorb losses.

Return on Equity (ROE) — Reported and Adjusted

Reported ROE moved from a negative value of -7.31% in 2017 to a strong peak of 20.92% in 2019, before decreasing to 11.65% in 2020 and further down to 8.67% in 2021. Adjusted ROE similarly rose from -4.22% in 2017 to 13.34% in 2019, then declined to 10.20% in 2020 and dropped sharply to 2.67% by 2021. This pattern reveals an initial period of improving profitability relative to equity, which was not sustained in the later years, signifying potential challenges in generating returns from equity at the levels seen earlier in the period.

Overall, the financial data reflect a company that experienced a robust recovery and growth phase through 2019, evidenced by increasing income, equity, and returns. However, from 2020 onward, profitability measures and returns on equity weakened markedly, despite continued growth in equity. This divergence may indicate pressures on operational performance or market conditions that negatively affected earnings, even as the company maintained a solid equity base. The substantial decline in adjusted net income and adjusted ROE in 2021 is especially notable, suggesting a need for further analysis into the factors behind this downturn.

The financial data exhibits several notable trends across the reported periods. Net income, both reported and adjusted, demonstrates considerable fluctuations. Initially, the company faced a net loss in 2017, followed by substantial gains in 2018 and 2019. However, net income declined in 2020 and further decreased in 2021, indicating some challenges in maintaining profitability after the peak year of 2019. The adjusted net income follows a similar pattern, although the magnitude of changes differs slightly, suggesting the impact of adjustments on profitability measurement.

Total assets and adjusted total assets both show a steady increase over the five-year period. Assets grew from approximately 22.6 billion US dollars in 2017 to around 34.4 billion US dollars in 2021, reflecting expansion or acquisition activities that enhanced the asset base. The adjusted total assets consistently remain close in value but slightly lower than the reported totals, which may account for certain asset revaluations or exclusions.

Return on assets (ROA), a measure of profitability relative to the asset base, reveals a volatile but overall positive trend from 2017 through 2021. Reported ROA shifted from a negative figure in 2017 to a strong peak in 2019 before declining over the next two years. Adjusted ROA similarly increased and peaked in 2019, then experienced a sharp decrease, especially notable in 2021 where the adjusted ROA dropped to just above 1%, indicating reduced efficiency in generating net income from assets.

Profitability Trends

The transition from a net loss in 2017 to peak profitability in 2019 followed by declines suggests a period of recovery and growth culminating in 2019, with possible emerging operational or market challenges thereafter.

Asset Growth

The continuous increase in both reported and adjusted total assets illustrates ongoing investment or acquisition strategies. The narrowing gap between reported and adjusted assets implies relatively stable asset quality and accounting treatments.

Return on Assets

The volatility in ROA highlights sensitivity in earnings relative to asset base expansions. The decline in ROA in the latter periods may reflect increased assets not yet translating into proportionate earnings or rising costs impacting net income.

Overall, the company exhibited growth in asset base and profitability improvement through 2019 but faced pressures on net income and efficiency in subsequent years, warranting attention to operational performance and asset utilization moving forward.