Warner Bros. Discovery Inc. (NASDAQ:WBD)

Receivables Turnover

The receivables turnover ratio exhibited a consistent upward trend over the analyzed period, rising from 3.74 in 2017 to 4.98 in 2021. This indicates an improvement in the efficiency of collecting receivables and suggests that the company became more effective in managing its credit sales and collections.

Payables Turnover

The payables turnover ratio showed some fluctuations, starting at 9.59 in 2017, peaking at 12.11 in 2018, dipping to 8.25 in 2019, and then rising again to 11.21 in 2021. These variations indicate changes in the company's payment practices or vendor terms, but overall, the ratio remained relatively high, implying timely payments to suppliers.

Working Capital Turnover

The working capital turnover ratio experienced significant volatility, with an extreme spike to 45.1 in 2018, followed by a sharp decline to 5.63 in 2019, and a continuing downward trend to 3.2 by 2021. This irregularity suggests inconsistent management or fluctuations in working capital levels, which may have impacted operational efficiency.

Average Receivable Collection Period

The average collection period steadily decreased from 98 days in 2017 to 73 days in 2021, reflecting an acceleration in the rate at which the company collected payments from its customers. This improvement aligns with the rising receivables turnover ratio and indicates enhanced cash flow management.

Average Payables Payment Period

The average payment period demonstrated variability, decreasing from 38 days in 2017 to a low of 30 days in 2018, increasing to 44 days in 2019, then reducing again to 33 days by 2021. This pattern suggests adjustments in payment policies or negotiations with suppliers, aiming to balance cash outflows with operational needs.

Revenues

The revenue figures show a consistent upward trend over the five-year period. Starting at $6,873 million in 2017, revenues increased significantly to $10,553 million in 2018, followed by a moderate rise to $11,144 million in 2019. A slight decline occurred in 2020, with revenues decreasing to $10,671 million, potentially reflecting external challenges during that year. However, revenues rebounded strongly in 2021, reaching $12,191 million, marking the highest level in the observed timeframe.

Receivables, net

Net receivables increased steadily from $1,838 million in 2017 to a peak of $2,633 million in 2019. After 2019, a gradual decline is noted with net receivables decreasing to $2,537 million in 2020 and further to $2,446 million in 2021. This suggests improvements in the management of receivables or changes in credit policies during the later years.

Receivables turnover

The receivables turnover ratio increased over the period, indicating improved efficiency in collecting receivables relative to revenue. Starting at 3.74 in 2017, the ratio rose gradually to 4.23 in 2019, maintaining stability at 4.21 in 2020, and then increasing notably to 4.98 in 2021. This upward trend corresponds with the stabilization and reduction in net receivables despite rising revenues, reflecting stronger collection performance.

Analysis of the financial figures over the five-year period reveals several notable trends.

Costs of Revenues, Excluding Depreciation and Amortization

The costs of revenues, excluding depreciation and amortization, show a general upward trend from 2017 through 2021. Starting at $2,656 million in 2017, these costs increased sharply to $3,935 million in 2018. After a slight decrease to $3,819 million in 2019, the costs stabilized around $3,860 million in 2020 before experiencing a significant rise to $4,620 million in 2021. This pattern indicates increasing operating expenditure related to revenues, with the most substantial growth occurring in 2018 and 2021.

Accounts Payable

Accounts payable exhibited a moderate upward trend over the period. Beginning at $277 million in 2017, the balance increased steadily to $325 million in 2018 and further to $463 million in 2019, marking the highest point in the series. However, there was a decline to $397 million in 2020, followed by a slight recovery to $412 million in 2021. Despite some fluctuations, the overall direction indicates a growth in liabilities owed to suppliers.

Payables Turnover Ratio

The payables turnover ratio fluctuated considerably during the timeframe. It peaked at 12.11 in 2018, reflecting a faster payment cycle or higher use of supplier credit turnover compared to the 9.59 ratio in 2017. The ratio then dropped sharply to 8.25 in 2019, suggesting a slowdown in turnover. It recovered to 9.72 in 2020 and increased further to 11.21 in 2021, moving closer to the elevated level seen in 2018. These variations imply changing payment terms or operational efficiency in managing payables.

Working Capital

The working capital experienced a significant decline from 8,120 million US dollars in 2017 to 234 million US dollars in 2018. Subsequently, it showed a recovery trend, increasing to 1,978 million US dollars in 2019, then further to 3,048 million in 2020, and reaching 3,805 million in 2021. Despite this recovery, the 2021 value remains substantially lower than the 2017 peak.

Revenues

Revenues demonstrated a consistent upward trend over the five-year period. Starting at 6,873 million US dollars in 2017, revenues rose significantly to 10,553 million in 2018, and continued to increase each year afterwards, reaching 12,191 million US dollars by the end of 2021. This indicates sustained growth in the company's top-line performance.

Working Capital Turnover

The working capital turnover ratio showed a dramatic fluctuation. It was relatively low at 0.85 in 2017, then surged sharply to 45.1 in 2018, coinciding with the drastic reduction in working capital. From 2019 onwards, the turnover ratio declined steadily to 5.63 in 2019, then to 3.5 in 2020, and to 3.2 in 2021. This trend suggests an initial efficiency spike likely due to low working capital, followed by stabilization at more moderate turnover rates as working capital improved.

Overall Analysis

Over the period examined, revenues grew steadily, indicating expanding business operations. Working capital data shows an initial sharp decrease followed by a gradual recovery, suggesting operational or financial restructuring effects. The working capital turnover ratio's volatility reflects these changes in working capital levels relative to revenues, with initial efficiency distortions normalizing in later years. The trends imply a company navigating through adjustment phases but achieving revenue growth and improving normalcy in capital management efficiency over time.

Receivables Turnover

The receivables turnover ratio exhibits a generally increasing trend from 2017 to 2021, starting at 3.74 in 2017 and rising to 4.98 by 2021. This indicates an improvement in the efficiency with which the company collects its accounts receivable over the five-year period. The ratio showed steady growth from 2017 to 2019, a slight dip in 2020, followed by a significant increase in 2021.

Average Receivable Collection Period

The average receivable collection period, measured in days, demonstrates a consistent decline from 98 days in 2017 to 73 days in 2021. This decreasing pattern mirrors the trend in receivables turnover, suggesting that the company has managed to shorten the time it takes to collect payments from customers. The most notable improvement occurred between 2020 and 2021, where the collection period decreased from 87 to 73 days, indicating enhanced cash flow efficiency.

Overall Insights

The trends in both the receivables turnover ratio and the average collection period reveal a positive trajectory in the management of accounts receivable. The firm has progressively increased turnover rates and reduced collection days, optimizing its liquidity and potentially reducing credit risk. The data implies strengthening operational effectiveness in credit policies or collection processes over the analyzed timeframe.

Payables Turnover

The payables turnover ratio exhibits variability over the five-year period. Starting at 9.59 in 2017, it increased significantly to 12.11 in 2018, indicating a faster rate of paying off suppliers. However, in 2019, this ratio declined to 8.25, suggesting a slower payment pace. The ratio then recovered somewhat in 2020 to 9.72 and further increased in 2021 to 11.21. Overall, the trend shows fluctuations, with the ratio peaking in 2018 and 2021, pointing toward periods of quicker payments during those years.

Average Payables Payment Period

The average number of days taken to pay payables inversely mirrors the payables turnover trend, as expected. Beginning at 38 days in 2017, the payment period shortened to 30 days in 2018, reflecting quicker payments to suppliers. In 2019, the payment period extended markedly to 44 days, the longest in the dataset. Subsequently, it reduced to 38 days in 2020 and further to 33 days in 2021. The fluctuations indicate variability in the company's payment management, with 2019 representing a year of lengthened payable terms and 2018 and 2021 evidencing more prompt settlements.

Summary of Trends

The data reveals that the company's payable management experienced notable fluctuations across the five years. The swiftest payment periods were in 2018 and 2021, while the slowest payments occurred in 2019. This volatility may reflect changes in working capital policies, supplier negotiation strategies, or operational cash flow conditions. The inverse relationship between payables turnover and average payables payment period remains consistent, confirming the reliability of the measures.