Analysis of Liquidity Ratios
Quarterly Data
Liquidity ratios measure the company ability to meet its short-term obligations.
Liquidity Ratios (Summary)
Warner Bros. Discovery Inc., liquidity ratios (quarterly data)
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).
The financial analysis over the presented quarters reveals several noteworthy trends in the liquidity ratios of the company. The current ratio, quick ratio, and cash ratio display varying dynamics reflecting changes in the company's short-term financial health and its ability to cover immediate obligations.
- Current Ratio
- The current ratio shows a fluctuating pattern from March 2018 through September 2022. It started relatively high at 1.83 in early 2018, declining to a low of 1.01 by the third quarter of 2018. Following this, there was a general upward trend with notable increases reaching a peak of 2.1 in June 2022, indicating an improved capacity to meet short-term liabilities with current assets. However, this was followed by a sharp decline to 1.07 in March 2022 and further dropping to 0.86 by September 2022, signaling potential liquidity pressure in the latest periods.
- Quick Ratio
- Similar to the current ratio, the quick ratio displays a downward adjustment early in the timeline, hitting its lowest point at 0.81 in September 2018. Subsequently, it rose steadily through 2021 and mid-2022, peaking at 1.85 in June 2022. This trend suggests that the company’s liquid assets excluding inventory became increasingly sufficient to cover short-term liabilities. However, a notable deterioration occurs in the last two quarters, with the quick ratio declining to 0.62 by September 2022, indicating diminished liquidity excluding inventory assets.
- Cash Ratio
- The cash ratio exhibited a more moderate but consistent increase from as low as 0.14 in September 2018 to a peak of 1.17 in June 2022, reflecting enhanced cash and cash equivalents relative to current liabilities. This upward movement suggests strengthening cash reserves over this period. Nonetheless, the liquidity cushion quickly eroded in the final two quarters observed, falling sharply to 0.17 by September 2022, highlighting a significant reduction in immediate cash available to cover short-term debts.
Overall, the data demonstrates that the company's liquidity ratios improved steadily from late 2018 through mid-2022, indicating an improving position in terms of short-term financial health and risk coverage. However, the sudden and sharp declines in all three liquidity ratios in the last two quarters signal a reversal of this trend, pointing to emerging liquidity challenges that may require attention. This pattern suggests a potential increase in short-term financial risk moving forward if the downward trend continues.
Current Ratio
Warner Bros. Discovery Inc., current ratio calculation (quarterly data)
| 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 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||
| Current assets | 12,672) | 15,449) | 7,173) | 7,264) | 6,656) | 6,728) | 5,865) | 6,130) | 5,478) | 4,717) | 4,626) | 5,217) | 4,313) | 4,932) | 4,025) | 4,231) | 3,914) | 3,906) | 4,521) | ||||||
| Current liabilities | 14,676) | 14,436) | 3,562) | 3,459) | 3,335) | 3,565) | 3,142) | 3,082) | 2,756) | 2,576) | 2,875) | 3,239) | 2,837) | 3,874) | 3,475) | 3,997) | 3,860) | 2,696) | 2,465) | ||||||
| Liquidity Ratio | |||||||||||||||||||||||||
| Current ratio1 | 0.86 | 1.07 | 2.01 | 2.10 | 2.00 | 1.89 | 1.87 | 1.99 | 1.99 | 1.83 | 1.61 | 1.61 | 1.52 | 1.27 | 1.16 | 1.06 | 1.01 | 1.45 | 1.83 | ||||||
| Benchmarks | |||||||||||||||||||||||||
| Current Ratio, Competitors2 | |||||||||||||||||||||||||
| Alphabet Inc. | 2.52 | 2.81 | 2.87 | 2.93 | 2.98 | 3.15 | 3.10 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Comcast Corp. | 0.84 | 0.88 | 0.86 | 0.85 | 1.03 | 0.92 | 0.96 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Meta Platforms Inc. | 2.57 | 2.52 | 2.81 | 3.15 | 4.23 | 5.43 | 6.08 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Netflix Inc. | 1.14 | 1.05 | 1.05 | 0.95 | 1.17 | 1.23 | 1.27 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Trade Desk Inc. | 1.91 | 1.92 | 1.91 | 1.71 | 1.76 | 1.77 | 1.72 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Walt Disney Co. | 1.02 | 1.06 | 1.10 | 1.08 | 1.24 | 1.23 | 1.31 | 1.32 | 1.34 | 0.94 | 0.80 | — | — | — | — | — | — | — | — | ||||||
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).
1 Q3 2022 Calculation
Current ratio = Current assets ÷ Current liabilities
= 12,672 ÷ 14,676 = 0.86
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals notable trends in the liquidity position of the company over the period observed. Key metrics such as current assets, current liabilities, and the current ratio provide insights into the company's short-term financial health.
- Current Assets
- Current assets exhibited fluctuations across the quarters, initially ranging between approximately 3,900 and 5,200 million U.S. dollars from 2018 through early 2022. A significant spike occurred in the quarter ending June 30, 2022, where current assets surged dramatically to 15,449 million U.S. dollars, followed by a decrease to 12,672 million U.S. dollars in the subsequent quarter ending September 30, 2022.
- Current Liabilities
- Current liabilities also showed variability within a narrower range, generally oscillating between approximately 2,400 and 3,600 million U.S. dollars until early 2022. There was a pronounced increase in current liabilities from the quarter ending March 31, 2022, rising to 14,436 million U.S. dollars and slightly increasing further to 14,676 million U.S. dollars by the quarter ending September 30, 2022.
- Current Ratio
- The current ratio, representing the company's ability to cover short-term obligations with short-term assets, demonstrated an initial decline from a strong position of 1.83 in March 2018 to a low near 1.0 in the latter half of 2018, indicating tighter liquidity. Subsequently, the ratio improved to a peak of around 2.1 in early 2022, signaling a strengthened liquidity buffer. However, the last two quarters show a sharp decrease to below 1.0 (1.07 and then 0.86), which may suggest increased liquidity strain or a shift in asset and liability structure.
Overall, the data indicate that the company maintained a generally adequate liquidity position through most of the period, with current ratios mostly above or near 1.0. The sharp increases in both current assets and liabilities in mid-2022 suggest a considerable structural change or an extraordinary event impacting working capital. Despite the increase in absolute asset and liability values, the sharp decline in the current ratio to below unity in the most recent quarter may warrant scrutiny, as it reflects a reduced capacity to meet short-term obligations without additional financing or asset conversion.
Quick Ratio
Warner Bros. Discovery Inc., quick ratio calculation (quarterly data)
| 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 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||
| Cash and cash equivalents | 2,422) | 2,575) | 4,162) | 3,905) | 3,116) | 2,834) | 2,008) | 2,091) | 1,893) | 1,683) | 1,453) | 1,552) | 813) | 1,321) | 745) | 986) | 531) | 392) | 812) | ||||||
| Receivables, net | 6,669) | 7,049) | 2,426) | 2,446) | 2,462) | 2,657) | 2,476) | 2,537) | 2,444) | 2,473) | 2,564) | 2,633) | 2,695) | 2,854) | 2,625) | 2,620) | 2,578) | 2,747) | 2,654) | ||||||
| Total quick assets | 9,091) | 9,624) | 6,588) | 6,351) | 5,578) | 5,491) | 4,484) | 4,628) | 4,337) | 4,156) | 4,017) | 4,185) | 3,508) | 4,175) | 3,370) | 3,606) | 3,109) | 3,139) | 3,466) | ||||||
| Current liabilities | 14,676) | 14,436) | 3,562) | 3,459) | 3,335) | 3,565) | 3,142) | 3,082) | 2,756) | 2,576) | 2,875) | 3,239) | 2,837) | 3,874) | 3,475) | 3,997) | 3,860) | 2,696) | 2,465) | ||||||
| Liquidity Ratio | |||||||||||||||||||||||||
| Quick ratio1 | 0.62 | 0.67 | 1.85 | 1.84 | 1.67 | 1.54 | 1.43 | 1.50 | 1.57 | 1.61 | 1.40 | 1.29 | 1.24 | 1.08 | 0.97 | 0.90 | 0.81 | 1.16 | 1.41 | ||||||
| Benchmarks | |||||||||||||||||||||||||
| Quick Ratio, Competitors2 | |||||||||||||||||||||||||
| Alphabet Inc. | 2.29 | 2.62 | 2.72 | 2.79 | 2.85 | 3.01 | 2.94 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Comcast Corp. | 0.63 | 0.68 | 0.71 | 0.71 | 0.89 | 0.80 | 0.84 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Meta Platforms Inc. | 2.34 | 2.34 | 2.62 | 2.94 | 3.94 | 5.09 | 5.86 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Netflix Inc. | 0.79 | 0.78 | 0.78 | 0.71 | 0.94 | 0.99 | 1.06 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Trade Desk Inc. | 1.88 | 1.87 | 1.85 | 1.65 | 1.70 | 1.68 | 1.62 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Walt Disney Co. | 0.87 | 0.91 | 0.98 | 0.94 | 1.07 | 1.07 | 1.17 | 1.15 | 1.16 | 0.81 | 0.69 | — | — | — | — | — | — | — | — | ||||||
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).
1 Q3 2022 Calculation
Quick ratio = Total quick assets ÷ Current liabilities
= 9,091 ÷ 14,676 = 0.62
2 Click competitor name to see calculations.
The analysis of the financial data reveals several notable trends in the liquidity position over the reported periods.
- Total Quick Assets
- Total quick assets exhibit a generally increasing trend from March 2018 through September 2022, starting at 3,466 million USD and reaching a peak of 9,624 million USD in June 2022 before slightly declining to 9,091 million USD in September 2022. This reflects a strengthening of liquid assets over time, with particularly strong growth observed in the years 2021 and 2022.
- Current Liabilities
- Current liabilities demonstrate substantial fluctuations across the periods. Initially ranging between approximately 2,465 and 4,000 million USD from 2018 through 2021, liabilities spike dramatically starting March 2022, climbing to over 14,436 million USD and maintaining a similar high level through September 2022. This significant increase may indicate a heightened short-term debt or obligations occurring in early 2022.
- Quick Ratio
- The quick ratio, a key measure of liquidity, initially shows a declining trend from 1.41 in March 2018 to a low of 0.81 by September 2018. Following this, it improves steadily, surpassing 1.0 consistently from mid-2019 and reaching a high of 1.85 in June 2022. However, a sharp decline occurs in the subsequent quarters, with the quick ratio falling to 0.67 in June 2022 and further to 0.62 by September 2022. This pattern corresponds inversely with the surge in current liabilities during the same period, which outweighs the increase in quick assets, leading to a weakening liquidity position.
Overall, the company showed improving liquidity and stronger quick assets over most of the period, but the sudden rise in current liabilities in 2022 has negatively impacted the quick ratio, indicating increased short-term financial pressure as of the latest quarters.
Cash Ratio
Warner Bros. Discovery Inc., cash ratio calculation (quarterly data)
| 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 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||
| Cash and cash equivalents | 2,422) | 2,575) | 4,162) | 3,905) | 3,116) | 2,834) | 2,008) | 2,091) | 1,893) | 1,683) | 1,453) | 1,552) | 813) | 1,321) | 745) | 986) | 531) | 392) | 812) | ||||||
| Total cash assets | 2,422) | 2,575) | 4,162) | 3,905) | 3,116) | 2,834) | 2,008) | 2,091) | 1,893) | 1,683) | 1,453) | 1,552) | 813) | 1,321) | 745) | 986) | 531) | 392) | 812) | ||||||
| Current liabilities | 14,676) | 14,436) | 3,562) | 3,459) | 3,335) | 3,565) | 3,142) | 3,082) | 2,756) | 2,576) | 2,875) | 3,239) | 2,837) | 3,874) | 3,475) | 3,997) | 3,860) | 2,696) | 2,465) | ||||||
| Liquidity Ratio | |||||||||||||||||||||||||
| Cash ratio1 | 0.17 | 0.18 | 1.17 | 1.13 | 0.93 | 0.79 | 0.64 | 0.68 | 0.69 | 0.65 | 0.51 | 0.48 | 0.29 | 0.34 | 0.21 | 0.25 | 0.14 | 0.15 | 0.33 | ||||||
| Benchmarks | |||||||||||||||||||||||||
| Cash Ratio, Competitors2 | |||||||||||||||||||||||||
| Alphabet Inc. | 1.76 | 2.04 | 2.16 | 2.17 | 2.30 | 2.44 | 2.44 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Comcast Corp. | 0.20 | 0.25 | 0.30 | 0.30 | 0.44 | 0.42 | 0.49 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Meta Platforms Inc. | 1.84 | 1.82 | 2.08 | 2.27 | 3.26 | 4.31 | 5.05 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Netflix Inc. | 0.79 | 0.78 | 0.78 | 0.71 | 0.94 | 0.99 | 1.06 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Trade Desk Inc. | 0.74 | 0.73 | 0.71 | 0.53 | 0.56 | 0.53 | 0.54 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Walt Disney Co. | 0.42 | 0.45 | 0.48 | 0.51 | 0.59 | 0.60 | 0.64 | 0.67 | 0.75 | 0.40 | 0.20 | — | — | — | — | — | — | — | — | ||||||
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).
1 Q3 2022 Calculation
Cash ratio = Total cash assets ÷ Current liabilities
= 2,422 ÷ 14,676 = 0.17
2 Click competitor name to see calculations.
The financial data reveals notable fluctuations in total cash assets, current liabilities, and the cash ratio over the examined periods. The analysis focuses on these trends to provide insights into the company's liquidity position and short-term financial health.
- Total Cash Assets
- Total cash assets exhibit a generally upward trend from March 31, 2018, through December 31, 2021, increasing from 812 million US dollars to a peak of 3905 million US dollars in the fourth quarter of 2021. This growth showcases an accumulation of liquid resources over the span of nearly four years. However, a notable decline is observed in 2022, with cash assets falling significantly to 2575 million US dollars in the first quarter and further to 2422 million US dollars in the third quarter, indicating a possible shift in cash management or operational dynamics during 2022.
- Current Liabilities
- Current liabilities present mixed movements. From March 31, 2018, to December 31, 2021, the liabilities fluctuate around a band between approximately 2465 million and 3565 million US dollars, without a clear sustained upward or downward pattern. However, a drastic increase occurs in 2022, where current liabilities surge to 14,436 million US dollars in the first quarter and 14,676 million US dollars in the third quarter, representing a substantial rise. This abrupt increase in current obligations could suggest increased short-term debt or other liabilities arising during this period, potentially impacting the company's liquidity and financial stability.
- Cash Ratio
- The cash ratio, reflecting the company's ability to cover current liabilities with cash and cash equivalents, shows variability consistent with the trends in cash assets and liabilities. Initially low in 2018, ranging from 0.14 to 0.33, it improves steadily to reach values above 1.0 in late 2021, peaking at 1.17 in March 31, 2022. This indicates a strong liquidity position as the company had more than one dollar in cash for each dollar of current liabilities during this period. However, a sharp decline in the cash ratio is observed thereafter in 2022, dropping to 0.18 and 0.17 by the last reported quarters. This steep fall reflects the combined effect of the significant increase in current liabilities and the reduction in cash assets, suggesting a weakened ability to cover short-term liabilities solely with cash reserves.
Overall, the data illustrates an improvement in liquidity from 2018 through late 2021, characterized by increasing cash assets and a rising cash ratio. The onset of 2022 marks a pivotal change, with a substantial increase in current liabilities coupled with a reduction in cash assets, leading to a sharp decline in the cash ratio. These developments may warrant a careful review of the company’s working capital management and short-term financial obligations during 2022.