Walt Disney Co. (NYSE:DIS)

Current Ratio

The current ratio showed a notable improvement from 0.8 at the end of 2019 to a peak above 1.3 in mid-2020, indicating an enhancement in short-term liquidity during that period. From early 2021 through early 2023, the ratio fluctuated slightly but generally remained around 1.0 to 1.1, reflecting a stable ability to cover current liabilities with current assets. However, from late 2023 onward, the current ratio exhibited a declining trend, dropping below 0.7 by early 2025. This decline suggests a weakening in the company's short-term financial position, with current liabilities increasing relative to current assets.

Quick Ratio

The quick ratio mirrored the initial improvement seen in the current ratio, rising from 0.69 at the end of 2019 to a peak above 1.15 in mid-2020, signifying stronger liquidity excluding inventories. For the subsequent two years, the ratio hovered near 0.8 to 1.0, indicating moderate liquid asset coverage of current liabilities. Starting in late 2023, the quick ratio demonstrated a more pronounced downward trend than the current ratio, falling below 0.6 by early 2025. This pattern indicates a reduction in readily available liquid assets relative to current liabilities, which could highlight growing short-term liquidity constraints.

Cash Ratio

The cash ratio increased sharply from 0.2 at the end of 2019 to around 0.75 in mid-2020, reflecting a significant build-up in cash and cash equivalents during the initial periods. Following this peak, the ratio declined steadily over time, settling around 0.4 to 0.5 through 2021 and 2022. By early 2023, the ratio fell further to near 0.3, briefly recovering slightly to levels near 0.4 in mid-2023. From late 2023 through early 2025, the cash ratio continued its downward trajectory, reaching about 0.16. This sustained decrease highlights a marked reduction in the company's most liquid assets, potentially increasing reliance on other less liquid current assets to meet short-term obligations.

Overall Liquidity Analysis

All three liquidity ratios demonstrated initial improvement during 2020, suggestive of a period of strengthened liquidity possibly in response to external conditions requiring higher reserves. The ratios then stabilized for approximately two years before trending downwards starting in late 2023. The persistent decline in current, quick, and cash ratios through early 2025 signals a weakening liquidity profile, with less cushion to absorb short-term financial pressures. The sharper drop in quick and cash ratios, as compared to the current ratio, may indicate increased inventory levels or other current assets that are less liquid, or a buildup in current liabilities. These trends warrant close monitoring to ensure that short-term financial flexibility does not deteriorate further.

The analysis of the quarterly financial data reveals several notable trends in the company's short-term liquidity and working capital management over the observed periods.

Current Assets

Current assets generally fluctuated throughout the timeline without a clear linear trend. Starting at approximately $27.8 billion at the end of 2019, these assets increased notably early in 2020, peaking near $41.3 billion in the second quarter of 2020. Following this peak, current assets declined gradually and then experienced moderate fluctuations, generally trending downwards toward the most recent figures, where they fell to around $23.8 billion by mid-2025. This pattern may indicate variability in liquidity or inventory and receivables management over this period.

Current Liabilities

Current liabilities began at roughly $34.8 billion at the end of 2019 and showed a gradual decrease through the middle of 2020, reaching a low of approximately $26.6 billion in the first quarter of 2021. Subsequently, current liabilities increased again, peaking between $34.8 billion and $35.6 billion towards late 2023 and early 2024. Afterward, liabilities fluctuated, ending at about $33.0 billion by mid-2025. This variance implies shifts in the company’s short-term obligations, possibly due to operational changes or financing activities.

Current Ratio

The current ratio displayed significant volatility over the observed quarters. Initially low at 0.8, it improved considerably by mid-2020, reaching a peak of around 1.34, indicating an improved liquidity position where current assets exceeded current liabilities by a greater margin. From there, the ratio exhibited a declining trend, stabilizing near 1.0 through most of 2021 and early 2022. However, starting from late 2022, the ratio steadily declined below 1.0, reaching lows of approximately 0.67 to 0.73 towards 2024 and 2025, which suggests a tightening liquidity position and a potential increase in short-term financial risk.

Overall, the data indicates that there was a period of enhanced liquidity in 2020, followed by a gradual erosion of that liquidity over subsequent years. The current ratio's decline to below 1.0 in recent quarters warrants attention, as it implies that current liabilities consistently exceeded current assets, which could affect the company's ability to cover its short-term obligations without relying on asset sales or external financing. The patterns in current assets and liabilities suggest active adjustments in working capital components, possibly reflecting strategic responses to market conditions, operational demands, or broader economic factors.

Trend in Total Quick Assets

The total quick assets showed a general increasing trend from late 2019 to mid-2020, rising from approximately 23.9 billion US dollars to a peak of around 35.7 billion US dollars. Subsequently, a gradual decline occurred, with values fluctuating between 24.3 billion and 29.3 billion US dollars through 2021 and into 2022. From early 2023 onwards, a consistent downward movement is observable, with total quick assets decreasing to approximately 18.4 billion US dollars by the middle of 2025.

Trend in Current Liabilities

Current liabilities remained relatively stable around the mid-30 billion US dollar mark in late 2019 and early 2020, showing a decline in mid-2020 to about 26.6 billion US dollars. From late 2020 until early 2023, liabilities showed an oscillating pattern between 26.5 billion and 31.1 billion US dollars. After early 2023, liabilities exhibited an increasing tendency, rising to a high of roughly 35.6 billion US dollars by mid-2024, followed by a slight decrease but remaining near 33 billion US dollars approaching mid-2025.

Quick Ratio Analysis

The quick ratio improved significantly from 0.69 at the end of 2019 to over 1.15 by mid-2020, indicating improvement in short-term liquidity during that period. Between late 2020 and early 2022, the ratio remained fairly stable but showed a slow declining trend from about 1.17 to values in the 0.83 range. Starting in 2023, the quick ratio declined more sharply, falling below 0.70, reaching its lowest points around 0.53–0.54 during mid-2024, suggesting increasing liquidity pressure. The ratio showed a slight recovery to approximately 0.57 approaching mid-2025 but remained below earlier levels.

Overall Liquidity Insights

Overall, the data illustrates a period of improved liquidity during 2020, followed by a gradual deterioration through 2023 and into 2025. Despite fluctuations, short-term assets have not kept pace with growing or stable current liabilities especially in recent periods, as evidenced by the declining quick ratio. This trend suggests an increasing risk in meeting short-term obligations without relying on inventory or other less liquid assets.

Total Cash Assets

The total cash assets exhibited significant fluctuations over the observed periods. Initially, there was a sharp increase from 6,833 million USD to a peak of 23,115 million USD within mid-2020. Following this peak, cash assets showed a general declining trend, decreasing to approximately 11,615 million USD by late 2022. Subsequently, there was some recovery reaching around 14,182 million USD in late 2023. However, from that point onwards, cash assets consistently declined again, reaching a low near 5,367 million USD by mid-2025. This pattern suggests periods of both strong liquidity buildup and subsequent drawdowns, potentially reflecting strategic cash usage or external economic influences.

Current Liabilities

Current liabilities showed a moderate degree of variation, generally maintaining a high level throughout the period. The values fluctuated within a range from approximately 26,628 million USD to peaks near 35,473 million USD. Notably, liabilities decreased somewhat during 2020 but subsequently rose again, with the highest values observed between late 2023 and early 2024. Towards mid-2025, there was a modest decrease yet the level remained elevated relative to earlier years, indicating sustained short-term financial obligations.

Cash Ratio

The cash ratio demonstrated a declining trend over the timeframe. Initially, it improved significantly from 0.20 to a high of 0.75 during mid-2020, coinciding with the peak in cash assets. After this peak, the ratio steadily decreased, reaching around 0.40 by late 2022 and further falling to approximately 0.16 by mid-2025. This diminution reflects a declining proportion of cash relative to current liabilities, indicating potentially reduced liquidity coverage of short-term obligations over time.

Overall Insights

The data illustrates a initial phase of increased liquidity, as reflected by rising cash assets and an improved cash ratio, possibly in response to external uncertainties or strategic cash accumulation. This phase was followed by a prolonged period of cash depletion amidst fluctuating but generally high current liabilities, leading to lower liquidity coverage ratios. The sustained high level of current liabilities combined with decreasing cash assets and cash ratios could signal increased pressure on short-term financial flexibility. Management may need to address liquidity management and short-term debt obligations moving forward.