Walt Disney Co. (NYSE:DIS)

The analysis of the financial turnover ratios and associated metrics over the examined years reveals several noteworthy trends and shifts in operational efficiency and working capital management.

Inventory Turnover

This ratio peaked in the year ending 2021 at 33.91 then showed a gradual decline through subsequent years, decreasing to 27.54 by the year ending 2025. This suggests a slowing in inventory movement as fewer inventory cycles are completed annually, potentially indicating an accumulation of stock or less rapid sales.

Receivables Turnover

Receivables turnover initially dipped slightly from 5.15 in 2020 to 5.04 in 2021 but then exhibited a strong increase, reaching around 7.14 by 2025. This pattern reflects improving efficiency in collection processes, resulting in faster conversion of receivables into cash.

Payables Turnover

Payables turnover decreased in 2021, reaching its lowest point at 2.76, followed by a recovery and stabilization around the 3.9 level by 2025. The decline and subsequent rise suggest adjustments in payment policies or negotiation terms with suppliers, reflecting cautious management of payables.

Working Capital Turnover

Significant volatility is observed in this ratio, with an unusually high spike to 3308.88 in 2022, which is an outlier compared to other periods where values remain considerably lower (26.13 in 2021 and 54.74 in 2023). Data for 2024 and 2025 are missing, making trend interpretation more challenging. Generally, such extreme variation could indicate exceptional changes in working capital components or reporting anomalies during that year.

Average Inventory Processing Period

The number of days inventory remains before sale has remained relatively stable, fluctuating between 11 and 13 days through the years. This steady period aligns with the gradual decrease in inventory turnover, suggesting relatively consistent inventory management practices.

Average Receivable Collection Period

The collection period improved significantly from 72 days in 2021 to 51 days by 2023 and remained steady thereafter. This denotes enhanced credit management efficiency, contributing to better cash inflows and liquidity.

Operating Cycle

The operating cycle has shortened over time, reducing from 83 days in 2021 to 64 days in 2024 and 2025. This indicates a quicker turnaround in the overall process of purchasing inventory, selling products, and collecting cash, enhancing operational efficiency.

Average Payables Payment Period

This period lengthened notably in 2021, rising from 110 to 132 days, and then shortened back to around 93-94 days in subsequent years. The longer payment period in 2021 could indicate strategic use of supplier credit or liquidity considerations, followed by a return to more normal payment cycles.

Cash Conversion Cycle (CCC)

The CCC remained negative throughout all years, shifting from -26 days in 2020 to an extreme of -49 days in 2021, then moderating to around -30 days in later years. A negative cash conversion cycle implies that the company collects cash from operations quicker than it pays its suppliers, signaling strong working capital management and healthy liquidity.

In summary, the company demonstrates consistent improvements in receivables management and operational efficiency as reflected in shorter collection and operating cycles. Inventory turnover shows a mild decline, indicating a slower inventory flow, while payables turnover and payment periods have fluctuated, revealing some shifts in supplier payment management. The cash conversion cycle's persistently negative status highlights effective working capital and liquidity strategies. Some anomalies in working capital turnover, notably in 2022, warrant further examination for data quality or extraordinary operational factors.

Cost of revenues, exclusive of depreciation and amortization

Over the analyzed period, the cost of revenues shows a clear upward trend, increasing from 43,880 million US dollars in 2020 to 58,766 million US dollars in 2025. The most substantial jump occurs between 2021 and 2022, rising from 45,131 million to 54,401 million US dollars. After 2022, the cost stabilizes somewhat but still grows modestly. This steady increase suggests rising operational expenses related to goods and services sold, which could be due to scaling of operations, inflationary pressures, or changes in input costs.

Inventories

Inventories exhibit a growth trend as well, starting at 1,583 million US dollars in 2020 and rising to 2,134 million US dollars by 2025. While the inventory level dips slightly in 2021, it subsequently increases year over year. This rise in inventory levels may reflect stockpiling in anticipation of higher demand or expansion in product offerings. The increase in inventories alongside rising cost of revenues might also indicate changes in supply chain management or production scheduling.

Inventory turnover

Inventory turnover shows a declining trend over the years, decreasing from 27.72 in 2020 to 27.54 in 2025 after peaking at 33.91 in 2021. A higher turnover ratio in 2021 suggests that inventory was cycled more quickly that year compared to others. The subsequent decline indicates that inventories are turning over less frequently, which could imply slower sales relative to inventory levels or potentially increasing inventory carrying periods. This reduction in turnover efficiency might necessitate closer inventory management oversight.

Revenues

The revenue figures demonstrate a consistent upward trend over the reported periods. Starting at 65,388 million US dollars, the revenue increased steadily each year, reaching 94,425 million US dollars by the last period. This growth indicates a positive expansion in the company's sales performance and overall market demand.

Receivables, Net

The net receivables show a relatively stable pattern with minor fluctuations. Beginning at 12,708 million US dollars, the values slightly increased to 13,367 million in the subsequent year but saw a marginal decline to 12,652 million and then further to 12,330 million in the middle periods. Toward the end, the net receivables rose again, reaching 13,217 million US dollars. This stability suggests effective management of credit sales and collections, maintaining a balanced level of outstanding customer payments.

Receivables Turnover Ratio

The receivables turnover ratio exhibits a clear improvement over time, increasing from 5.15 to a peak near 7.21 before stabilizing slightly above 7 in the latest periods. This upward trend in turnover ratio implies enhanced efficiency in collecting receivables, reflecting stronger credit policies or improved cash collection processes, allowing the company to convert receivables to cash more rapidly.

Cost of Revenues, Exclusive of Depreciation and Amortization

The cost of revenues exhibited an upward trend from approximately 43.9 billion USD in 2020 to roughly 58.8 billion USD in 2025. There was a steady increase year over year, with a noticeable acceleration from 2021 to 2023. The amounts remained relatively stable between 2023 and 2025, indicating a plateau in cost growth during the latter period.

Accounts and Accrued Payables

The accounts and accrued payables rose initially from about 13.2 billion USD in 2020 to a peak of approximately 16.4 billion USD in 2021. Following this peak, the payables decreased gradually to a low near 14.8 billion USD in 2024 before a slight increase to 15.1 billion USD in 2025. This pattern suggests some fluctuation in short-term liabilities with a tendency toward stabilization in recent years.

Payables Turnover Ratio

The payables turnover ratio declined from 3.33 in 2020 to a low of 2.76 in 2021, indicating slower payment to suppliers for that year. Subsequently, the ratio increased steadily each year, reaching near 3.9 by 2025. This rising ratio from 2021 onward points to an improvement in the efficiency of managing payables or a faster payment cycle in the more recent periods.

Overall Analysis

The company experienced a consistent increase in cost of revenues over the analyzed timeframe, with some leveling off in the last two years. Payables showed some volatility but generally decreased after 2021, suggesting tighter control or reduced reliance on short-term supplier credit. The trend in the payables turnover ratio further supports improved payment practices post-2021, as the company appears to be turning over its payables at a faster rate, enhancing operational liquidity and supplier relationships.

The financial data of the company over the reported periods reveals several notable trends and fluctuations, particularly in working capital, revenues, and working capital turnover ratios.

Working Capital

The working capital shows significant volatility throughout the periods. Initially, there was a substantial decrease from 8,623 million USD in October 2020 to just 2,580 million USD in October 2021, followed by a dramatic drop to only 25 million USD in October 2022. Subsequently, it improved somewhat to 1,624 million USD by September 2023 but then deteriorated sharply to negative values in the last two periods, reaching -9,358 million USD in September 2024 and further declining to -9,895 million USD in September 2025. This suggests increasing liquidity challenges or shifts in short-term asset and liability management in the most recent years.

Revenues

Revenues exhibited a steady upward trend across the reported periods, increasing from 65,388 million USD in 2020 to 94,425 million USD in 2025. This consistent growth reflects successful top-line expansion over the years, with notable increases particularly in the intervals from 2021 to 2023. Such a positive revenue trajectory could indicate effective business strategies, enhanced market presence, or product/service demand growth.

Working Capital Turnover

The working capital turnover ratio exhibits extreme fluctuations that align with the irregular working capital figures. Starting at 7.58 in 2020, the ratio spiked to 26.13 in 2021 and then reached an exceptionally high value of 3,308.88 in 2022, indicative of minimal working capital relative to revenue during that year. It declined sharply to 54.74 in 2023 and is not provided for the last two years. These volatility patterns may suggest operational inefficiencies or changing capital utilization over time.

In summary, while the company’s revenue generation has shown steady growth, working capital management appears unstable, particularly evident in the transition to negative working capital and the extreme volatility in working capital turnover. This could imply potential liquidity risk, operational challenges, or shifts in asset-liability structure requiring closer monitoring and strategic attention going forward.

Inventory Turnover

The inventory turnover ratio exhibited an initial increase from 27.72 to 33.91 between 2020 and 2021, indicating an improvement in the frequency of inventory replacement. Subsequently, there was a gradual decline each year, moving from 31.23 in 2022 to 27.54 in 2025. This trend suggests a deceleration in inventory turnover rates over the later years, potentially reflecting changes in inventory management efficiency or shifts in sales volumes.

Average Inventory Processing Period

The average inventory processing period decreased from 13 days in 2020 to 11 days in 2021, paralleling the increase in inventory turnover during the same period. From 2022 onwards, this metric stabilized around 12 to 13 days, indicating a relatively steady time frame for inventory processing in recent years. This stability suggests that, despite fluctuations in turnover, the duration to process inventory remained consistent in the latter periods.

The financial data reveals a clear trend in the company's receivables management over the six-year period ending in 2025.

Receivables Turnover Ratio

This ratio has exhibited a general upward trend from 5.15 in 2020 to a peak of 7.21 in 2023, followed by a slight but consistent decrease to 7.14 by 2025. The increase up to 2023 indicates an improvement in the company's efficiency in collecting its receivables, suggesting enhanced credit management or faster customer payments over time. The slight decline post-2023, though minimal, may suggest a stabilization or modest relaxation in collection efficiency.

Average Receivable Collection Period

The average number of days required to collect receivables has decreased significantly from 71-72 days in 2020-2021 to 51 days by 2023, maintaining that level through 2025. This reduction aligns inversely with the increase in receivables turnover, confirming improved collection speed and possibly better cash flow management starting from 2022 onward and sustained thereafter.

Overall, the trends suggest enhanced operational effectiveness in managing credit and collections, with the company reducing the time outstanding receivables remain on the books, thereby potentially improving liquidity. The stabilization of these metrics in the final years indicates a consistent maintenance of improved receivables processes.

Inventory Processing Period

The average inventory processing period initially decreased from 13 days in 2020 to 11 days in 2021, indicating an improvement in inventory turnover efficiency. However, from 2021 onwards, the period slightly increased, stabilizing at 13 days by 2024 and 2025. This suggests a return to earlier inventory levels, reflecting a consistent but modest timeframe for inventory management in recent years.

Receivable Collection Period

The average receivable collection period showed a notable improvement starting from 71 days in 2020 to 72 days in 2021, then significantly decreased to 56 days in 2022. This declining trend continued, reaching 51 days by 2023 and maintaining that level through 2025. The reduction implies enhanced efficiency in collecting receivables, improving cash flow and reducing credit risk over the analyzed periods.

Operating Cycle

The overall operating cycle duration declined from 84 days in 2020 to 83 days in 2021, with a more pronounced decrease to 68 days in 2022 and 63 days in 2023. The cycle slightly increased to 64 days in 2024 and remained stable in 2025. This overall shortening of the operating cycle reflects improved operational efficiency, driven mainly by faster receivables collection and stable inventory processing times.

The analysis of the payables-related financial metrics over the reported periods reveals several noteworthy trends that reflect changes in the company's management of its payables and cash conversion cycle.

Payables Turnover

The payables turnover ratio exhibited some fluctuation across the years. Starting from 3.33, it declined to 2.76 in the subsequent period, indicating slower payments to suppliers or increased average payables during that year. However, from that low point, the turnover ratio increased significantly to 3.36 and further to a peak of 3.91. This upward trend stabilized somewhat near the end, with values of 3.97 and 3.9. The overall pattern suggests an initial loosening followed by a tightening and improvement in payable turnover efficiency.

Average Payables Payment Period

The average payables payment period, measured in days, does not show a linear trend but rather an inverse pattern compared to the turnover ratio. The payment period increased from 110 days to a high of 132 days, indicating extended payment terms or slower payments at that stage. Subsequently, this period shortened markedly to 109 days and continued to decrease to reach approximately 92-94 days in the most recent years. This reduction in payment days corresponds with the rise in payables turnover and reflects a strategic effort to pay suppliers more promptly or possibly negotiate shorter pay cycles.

In summary, the company initially adopted a longer payment period, which may have been a response to liquidity management or supply chain terms. However, the most recent data indicate a move towards faster payment to suppliers, as evidenced by rising payables turnover and reduced payment periods. This shift could enhance supplier relationships and improve overall operational efficiency, although it may also impact cash flow management strategies.

The financial data reveals notable trends in the company's working capital management over the examined periods. The analysis focuses on the average inventory processing period, average receivable collection period, average payables payment period, and the cash conversion cycle.

Average Inventory Processing Period

The inventory processing period exhibits minor fluctuations, starting at 13 days and decreasing to 11 days by the second year. Subsequently, it rises slightly to 12 days and remains relatively stable at 12 to 13 days over the remaining periods. Overall, the inventory turnover period demonstrates moderate consistency without significant volatility.

Average Receivable Collection Period

There is a clear improvement in the collection period for receivables. Initially, the period was fairly high, at 71 and 72 days in the first two years. However, a significant decrease occurs thereafter, dropping to 56 days and further to 51 days by the third year, maintaining this improved level for the subsequent periods. This shortening collection period indicates enhanced efficiency in receivables management and potentially better cash inflows.

Average Payables Payment Period

The payment period to suppliers shows more variation. It rises sharply from 110 days to a peak of 132 days by the second year, implying extended payment terms or slower payments to suppliers. Thereafter, a contraction occurs, dropping to 109 days, then significantly further to around 92 to 94 days in the last three years. The trend suggests a move toward faster payment cycles, which could impact supplier relations or cash outflows.

Cash Conversion Cycle

The cash conversion cycle remains negative throughout, ranging from -26 days to as low as -49 days. This consistent negative cycle implies that the company collects cash from customers significantly before it needs to pay its suppliers, which is a positive sign of liquidity management. Although the cycle improves (becomes more negative) to -49 days by the second year, it then gradually moves back toward less negative values around -28 to -30 days. The negative cash conversion cycle confirms efficient working capital management, supporting strong operational cash flow positions.

In summary, the data reflect a company maintaining stable inventory turnover, improving receivables collection efficiency, reducing payable days after an initial increase, and sustaining a favorable negative cash conversion cycle. These trends collectively indicate effective management of cash flows and operational liquidity.