Stock Analysis on Net

Warner Bros. Discovery Inc. (NASDAQ:WBD)

$22.49

This company has been moved to the archive! The financial data has not been updated since November 4, 2022.

DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
Quarterly Data

Microsoft Excel

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Two-Component Disaggregation of ROE

Warner Bros. Discovery Inc., decomposition of ROE (quarterly data)

Microsoft Excel
ROE = ROA × Financial Leverage
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 = ×
Sep 30, 2019 = ×
Jun 30, 2019 = ×
Mar 31, 2019 = ×
Dec 31, 2018 = ×
Sep 30, 2018 = ×
Jun 30, 2018 = ×
Mar 31, 2018 = ×
Dec 31, 2017 = ×
Sep 30, 2017 = ×
Jun 30, 2017 = ×
Mar 31, 2017 = ×

Based on: 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31).


Return on Assets (ROA)
The ROA exhibited negative values in the early observed periods around 2017 and early 2018, indicating inefficient asset utilization or operational challenges during these intervals. Starting from the first quarter of 2019, ROA turned positive and displayed a clear upward trend, reaching a peak above 6% at the close of 2019 and early 2020. However, this positive momentum slightly declined throughout 2020 and 2021, with values generally oscillating between approximately 2.9% and 4%. Notably, from the first quarter of 2022 onwards, the ROA sharply reversed back into negative territory, declining to nearly -3.85% by the third quarter of 2022, suggesting a recent deterioration in asset profitability.
Financial Leverage
Financial leverage started at relatively high levels around 3.0 ratio in early 2017 and trended upward sharply to nearly 4.9 by the end of 2017. Following this peak, leverage declined steadily through 2018 and 2019, falling below 3.5 by the end of 2019. Through 2020 and 2021, the leverage ratio continued a gradual downward trend, reaching values around 2.8 by mid-2022. This long-term reduction in financial leverage suggests a progressive de-leveraging strategy and potentially lower reliance on debt financing relative to equity during this period.
Return on Equity (ROE)
ROE followed a similar pattern to ROA but with more pronounced volatility. The period through 2017 and early 2018 showed large negative returns, indicating significant losses to shareholders’ equity. Subsequently, a robust recovery occurred from early 2019, with ROE climbing sharply to exceed 20% during late 2019 and early 2020, reflecting enhanced profitability and efficient equity usage. Nonetheless, this positive trend diminished gradually through 2020 and 2021, with values mostly declining back toward single digits by the end of 2021. A notable reversal to negative ROE values was observed again in 2022, reaching below -10% by the third quarter, signaling renewed challenges impacting shareholder value.

Three-Component Disaggregation of ROE

Warner Bros. Discovery Inc., decomposition of ROE (quarterly data)

Microsoft Excel
ROE = Net Profit Margin × Asset Turnover × Financial Leverage
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 = × ×
Sep 30, 2019 = × ×
Jun 30, 2019 = × ×
Mar 31, 2019 = × ×
Dec 31, 2018 = × ×
Sep 30, 2018 = × ×
Jun 30, 2018 = × ×
Mar 31, 2018 = × ×
Dec 31, 2017 = × ×
Sep 30, 2017 = × ×
Jun 30, 2017 = × ×
Mar 31, 2017 = × ×

Based on: 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31).


Net Profit Margin
The net profit margin demonstrated a marked improvement from negative values in early periods, specifically from -4.9% to -8.52% during 2017 and early 2018, to positive margins starting in March 2019. It peaked at 18.57% in the first quarter of 2020, indicating enhanced profitability. Subsequently, the margin showed a fluctuating, though generally declining trend, falling to 8.25% by the first quarter of 2022 before deteriorating sharply to negative values of -14.32% and -20.13% in the latter half of 2022, reflecting recent financial challenges.
Asset Turnover
The asset turnover ratio increased gradually over the analyzed period, beginning around 0.3 in early 2018, rising to approximately 0.35 by the end of 2021, which suggests modestly improved efficiency in utilizing assets to generate sales. A significant decline is observed in 2022, with the ratio dropping to as low as 0.14 in the third quarter before a slight uptick to 0.19, indicating a reduction in asset utilization efficiency during the most recent periods.
Financial Leverage
Financial leverage exhibited moderate fluctuation, initially rising from around 2.97 in early 2017 to a peak near 4.89 in late 2017, suggesting increased reliance on debt financing during that time. Thereafter, a gradual decline occurred, reaching approximately 2.77 by mid-2022. This trend indicates a reduction in debt levels relative to equity over the years, implying a more conservative capital structure in recent periods.
Return on Equity (ROE)
ROE mirrors the pattern observed in net profit margins, with negative returns in 2017 and early 2018 suggesting unprofitable operations. From March 2019 onward, ROE turned positive, peaking at 21.77% in mid-2020. Following this peak, a consistent downward trend is evident, with ROE falling below zero again by the third quarter of 2022, reaching -10.78%, signifying diminished shareholder returns and recent profitability challenges.

Five-Component Disaggregation of ROE

Warner Bros. Discovery Inc., decomposition of ROE (quarterly data)

Microsoft Excel
ROE = Tax Burden × Interest Burden × EBIT Margin × Asset Turnover × Financial Leverage
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 = × × × ×
Sep 30, 2019 = × × × ×
Jun 30, 2019 = × × × ×
Mar 31, 2019 = × × × ×
Dec 31, 2018 = × × × ×
Sep 30, 2018 = × × × ×
Jun 30, 2018 = × × × ×
Mar 31, 2018 = × × × ×
Dec 31, 2017 = × × × ×
Sep 30, 2017 = × × × ×
Jun 30, 2017 = × × × ×
Mar 31, 2017 = × × × ×

Based on: 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31).


Tax Burden
The Tax Burden ratio data is available from the first quarter of 2019 onwards. It starts at 0.64 and shows a modest increase up to the fourth quarter of 2019, peaking at 0.93. Subsequently, the ratio fluctuates within a narrower range between 0.74 and 0.97, displaying relative stability. However, the last two available quarters in 2022 show missing values, which limits recent trend analysis.
Interest Burden
From the fourth quarter of 2017 through the last quarter of 2018, the Interest Burden ratio exhibits highly negative and volatile values, reaching as low as -7.43. This suggests significant interest-related expense pressures during this period. Starting with the first quarter of 2019, the ratio improves sharply to positive figures and stabilizes around the 0.66 to 0.76 range through to the third quarter of 2022, indicating a substantial reduction in interest cost burden and improved earnings retention before tax and interest.
EBIT Margin
The EBIT Margin shows considerable volatility. Initial values from late 2017 and early 2018 are low (below 5%), after which there is a marked upward trend from early 2019, peaking near 25% in 2019 and early 2020. Thereafter, a gradual decline is noted through 2021 and early 2022, though margins remain positive and relatively strong above 15%. However, the final two quarters reveal a sharp negative reversal, with margins dropping to approximately -12% and -19%, signaling significant operational challenges or extraordinary expenses during these periods.
Asset Turnover
Asset Turnover ratios are generally low but exhibit a steady slight improvement over the full period. Starting from around 0.3 in early 2018, the ratio modestly rises, reaching about 0.37 by late 2021. The last two quarters of data display a sharp decline to 0.14 and 0.19, indicating a recent decrease in efficiency in generating revenue from assets.
Financial Leverage
Financial Leverage starts relatively high, with values close to 5 in late 2017, indicating elevated use of debt financing. Over the following years, there is a consistent decreasing trend, reaching just below 3 by late 2021 through 2022. This decline suggests a reduction in reliance on debt or increased equity, which could contribute to improved financial stability.
Return on Equity (ROE)
The ROE displays pronounced variability. In late 2017 and early 2018, it shows negative returns, reaching nearly -10%, indicative of operational or financial difficulties. Starting 2019, ROE turns positive and rises sharply, peaking near 21% in early 2020. After that, a gradual decline occurs through 2021, though the ratio remains positive until early 2022. The last two quarters reveal a return to negative territory, with ROE around -5% and nearly -11%, in line with the sharp decline observed in EBIT margin and asset turnover, suggesting deteriorated profitability and shareholder returns.

Two-Component Disaggregation of ROA

Warner Bros. Discovery Inc., decomposition of ROA (quarterly data)

Microsoft Excel
ROA = Net Profit Margin × Asset Turnover
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 = ×
Sep 30, 2019 = ×
Jun 30, 2019 = ×
Mar 31, 2019 = ×
Dec 31, 2018 = ×
Sep 30, 2018 = ×
Jun 30, 2018 = ×
Mar 31, 2018 = ×
Dec 31, 2017 = ×
Sep 30, 2017 = ×
Jun 30, 2017 = ×
Mar 31, 2017 = ×

Based on: 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31).


Net Profit Margin
From the end of 2017 through early 2018, the net profit margin experienced a negative trend, starting at -4.9% and declining to as low as -8.52% by December 2017 and September 2018. Beginning in March 2019, there was a significant improvement with net profit margin turning positive and peaking at 18.57% in the first quarter of 2020. Subsequently, the margin gradually declined through 2021 but remained positive, fluctuating roughly between 8.25% and 13.36%. However, in the first half of 2022, there was a notable reversal as net profit margin sharply dropped to negative values of -14.32% and -20.13%, indicating a significant profitability challenge.
Asset Turnover
Asset turnover ratios were relatively low throughout the observed periods. Starting from 0.3 at the beginning of 2018, the ratio showed minor fluctuations but generally maintained a slow upward trajectory, reaching a peak of 0.37 by the end of 2021. This suggests modest improvements in efficiency in generating revenue from assets. However, in 2022, asset turnover decreased substantially to 0.14 and 0.19, indicating a decline in the company's efficiency in using its assets to generate sales during that period.
Return on Assets (ROA)
The return on assets followed a pattern similar to net profit margin. It began with negative values in early 2018, reaching lows near -2.49%. From 2019 onwards, ROA improved consistently, peaking at 6.18% in June 2020. This improvement aligns with increased profitability and better asset utilization. Nevertheless, after 2020, ROA gradually decreased through 2021 but remained positive until early 2022 when it reverted sharply to negative values of -1.95% and -3.85%, mirroring the downturn observed in profit margins and asset turnover.
Overall Insights
The company demonstrated a recovery phase starting in 2019 with improved profitability and efficient use of assets, as evidenced by rising net profit margins, asset turnover, and ROA. This positive trend lasted through 2020 and into 2021. The declines seen in all three ratios in 2022, with net profit margin and ROA both turning negative and asset turnover dropping, highlight a period of operational and financial challenges. These trends suggest a deterioration in profitability and asset efficiency in the most recent quarters reviewed.

Four-Component Disaggregation of ROA

Warner Bros. Discovery Inc., decomposition of ROA (quarterly data)

Microsoft Excel
ROA = Tax Burden × Interest Burden × EBIT Margin × Asset Turnover
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 = × × ×
Sep 30, 2019 = × × ×
Jun 30, 2019 = × × ×
Mar 31, 2019 = × × ×
Dec 31, 2018 = × × ×
Sep 30, 2018 = × × ×
Jun 30, 2018 = × × ×
Mar 31, 2018 = × × ×
Dec 31, 2017 = × × ×
Sep 30, 2017 = × × ×
Jun 30, 2017 = × × ×
Mar 31, 2017 = × × ×

Based on: 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31).


Tax Burden
The tax burden ratio data begins in March 2019, showing values between 0.64 and 0.97. This indicates that the company retained a relatively high proportion of its earnings after taxes during this period. The ratio fluctuated, reaching a peak of 0.97 in June 2020 before declining below 0.8 in the last reported quarters. The decline suggests increasing tax expenses or reduced tax efficiency towards the end of the observed timeline.
Interest Burden
Interest burden showed considerable volatility prior to 2019 with notably negative values in 2017 and 2018, implying substantial interest expenses or possible financial distress during those periods. Starting from March 2019, the ratio stabilized in a positive range between 0.56 and 0.76, indicating a lower proportion of earnings absorbed by interest costs. There was a mild downward trend from 2020 into 2022, implying a slight increase in interest expenses or debt costs relative to earnings in recent periods.
EBIT Margin
The EBIT margin was initially low and even negative before 2018, reflecting operational challenges. From March 2019 onwards, it improved significantly, peaking around 25% in late 2019 and early 2020. However, a clear declining trend is visible post-2020, with margins falling sharply into negative territory in the last two reported quarters (-11.89% and -19.11%). This drastic deterioration points to operating losses and suggests considerable operational or market difficulties in the most recent periods.
Asset Turnover
Asset turnover steadily improved over time, starting from around 0.22 in mid-2018 and increasing to a high of 0.37 by mid-2022. This trend indicates a gradual increase in the efficiency with which the company utilized its assets to generate revenues. However, the last two quarters show a sharp drop to 0.14 and 0.19, signaling a sudden reduction in asset utilization efficiency concurrent with the decline in profitability metrics.
Return on Assets (ROA)
ROA was negative through much of 2017 and 2018 but turned positive from early 2019, rising to above 6% in early 2020 which corroborates improved profitability during that time. Post-2020, ROA showed a declining trend with fluctuations, declining to negative values again in the last two quarters (-1.95% and -3.85%). This decline aligns with the observed deterioration in EBIT margin and suggests a weakening return on the company’s asset base in the most recent timeframe.

Disaggregation of Net Profit Margin

Warner Bros. Discovery Inc., decomposition of net profit margin ratio (quarterly data)

Microsoft Excel
Net Profit Margin = Tax Burden × Interest Burden × EBIT Margin
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 = × ×
Sep 30, 2019 = × ×
Jun 30, 2019 = × ×
Mar 31, 2019 = × ×
Dec 31, 2018 = × ×
Sep 30, 2018 = × ×
Jun 30, 2018 = × ×
Mar 31, 2018 = × ×
Dec 31, 2017 = × ×
Sep 30, 2017 = × ×
Jun 30, 2017 = × ×
Mar 31, 2017 = × ×

Based on: 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31).


The analyzed financial ratios over the quarters reveal distinct trends in profitability and cost management. The tax burden ratio, observable from late 2018 onwards, displays fluctuations generally centered around the mid-0.7 to mid-0.9 range. There is no clear upward or downward trend but rather variability within this range, indicating changes in tax expense relative to pre-tax earnings without extreme volatility.

The interest burden ratio indicates significant volatility in early 2018 with strongly negative values, suggesting heavy interest expenses or non-operating losses impacting results negatively. From early 2019 onwards, the ratio stabilizes in a positive range around 0.66 to 0.76, reflecting improved control or reduction of interest costs relative to operating earnings. This stabilization points to a more consistent interest expense burden in recent years.

The EBIT margin demonstrates a marked improvement starting early 2019, peaking between approximately 20% to 25% through 2019 and 2020, reflecting strong operational profitability during this period. However, beginning in mid-2021, this margin begins to decline steadily, falling into negative territory by late 2022. This downward trajectory indicates deteriorating operational efficiency or increasing costs impacting earnings before interest and taxes.

The net profit margin shows a similar pattern to EBIT margin but with more pronounced negative values in early 2018, which aligns with the early volatility in the interest burden. After a transition to positive territory from 2019 through mid-2021, the net margin follows a decreasing trend and also turns negative in late 2022. This suggests that despite prior improvements, overall profitability including all expenses and taxes worsened considerably by the latest periods.

In summary, the data depicts a period of operational strengthening and profitability improvement from 2019 through early 2021, accompanied by a normalization of financial costs. However, subsequent quarters reveal declines in both operational and net profitability, culminating in negative margins by the end of the observed timeline. The fluctuations in tax and interest burdens reflect changing financial and external cost pressures influencing the company's bottom line.