Walt Disney Co. (NYSE:DIS)

The analysis of the provided financial ratios and periods reveals several notable trends in operational efficiency and working capital management.

Inventory Turnover

The inventory turnover ratio shows an overall upward trend starting from 25.48 and reaching a peak of 35.63 during the early 2022 quarters. This increase indicates enhanced efficiency in managing inventory, implying the company is selling and replenishing its stock faster. A slight decline follows, stabilizing around 28 to 31 in the most recent periods, suggesting a normalization in inventory management after the peak.

Receivables Turnover

The receivables turnover ratio exhibits some fluctuations but generally trends upward from approximately 4.49 to highs above 7. This suggests improvement in the company's ability to collect receivables more quickly over time. The period around 2022 shows significant improvement, with ratios increasing from the five-range towards seven, indicating robust credit and collections management efforts.

Working Capital Turnover

This ratio displays considerable volatility. Early values are moderate between 6.7 and 9.7, but starting in late 2022, there are extreme spikes reaching 3308.88 and periods of missing data. Such irregular values may indicate either abnormal operational conditions, reporting anomalies, or changes in accounting policies. These spikes reduce sharply to more normalized values around 45-55 in following quarters, suggesting transient issues or extraordinary events affecting working capital usage.

Average Inventory Processing Period

The average inventory processing period remains fairly stable and low, fluctuating between 10 and 14 days. A slight improvement is observed in 2021, with days decreasing from 13 to 10, reflecting more efficient inventory turnover. Stability in recent periods around 12-13 days suggests consistent inventory handling.

Average Receivable Collection Period

This metric shows a declining trend from the range of 81-84 days towards a range of 49-55 days in more recent quarters, reflecting improved collections efficiency. A few intermittent increases occur, but the overall pattern points to faster conversion of receivables into cash.

Operating Cycle

The operating cycle, comprising inventory and receivables processes, decreases from approximately 95 days down to the low 60s, signaling a shortening time span between cash outflows and inflows. This improvement indicates increased efficiency in the overall working capital cycle, beneficial for liquidity and operational effectiveness.

In summary, the data demonstrates strengthened operational efficiencies, particularly in managing receivables and inventory. However, the working capital turnover ratio requires closer scrutiny due to its irregular and extreme values in certain periods, which may merit further investigation. The stable reductions in collection and operating cycle durations further support the view of enhanced working capital management.

Cost of revenues, exclusive of depreciation and amortization

The cost of revenues demonstrated considerable fluctuations across the reported quarters. Initially, from December 2018 through March 2020, values varied moderately, with a peak observed in June 2019 at 12,819 million USD, followed by a slight decline. A pronounced dip occurred in June 2020, dropping sharply to 7,896 million USD, likely reflecting external disruptions during that period. Subsequently, the figures recovered and exhibited a generally upward trajectory with some volatility, attaining the highest level in December 2022 at 16,386 million USD. The subsequent quarters saw moderate fluctuations but remained relatively elevated compared to the earlier periods.

Inventories

Inventories showed a consistent upward trend over the entire timeframe. Starting at 1,357 million USD in December 2018, the inventory levels gradually increased with minor short-term variations. The progression maintained a steady pace, culminating in the highest figure of 2,080 million USD by June 2025. This steady increase suggests ongoing accumulation or build-up of stock, potentially indicative of strategic positioning for anticipated demand or supply chain considerations.

Inventory turnover

Inventory turnover ratios were reported only from June 2019 onward and exhibited an overall decline trend. The turnover ratio peaked at 35.63 in January 2022, indicating efficient inventory management or rapid movement of goods at that point. However, following this peak, the ratio gradually decreased to 28.35 by June 2025. This declining trend may suggest progressively slower inventory movement or increasing holding periods, which could impact operational efficiency and working capital utilization.

Revenue Trends

Revenues exhibit a general upward trajectory over the examined periods, starting at $15,303 million in December 2018 and increasing to $23,650 million by June 2025. However, there are notable fluctuations within this overall increase. Revenues peaked in June 2019 at $20,245 million before experiencing a decline through March 2020, reaching $18,025 million. Following this dip, revenues dropped sharply to $11,779 million in June 2020, likely reflecting extraordinary circumstances. From that point on, a consistent recovery and growth pattern are observable, with revenues rising steadily and achieving a high of $24,690 million in December 2024.

Receivables Analysis

Receivables, net, initially increased substantially from $10,123 million in December 2018 to a high of $17,100 million in December 2019, indicating extended credit or growing sales volume. Subsequently, receivables showed volatility, decreasing to $12,622 million by June 2020 amid the same period of revenue decline. Receivables generally trended around the $12,000 to $14,000 million range in the later periods, with slight fluctuations but no clear upward or downward trend. This could suggest stabilization in credit management or collection practices after the initial spike and subsequent adjustments.

Receivables Turnover Ratio

The receivables turnover ratio demonstrates an improving efficiency in collecting receivables over time. Starting from 4.49 in June 2019, it gradually increased with intermittent variations reaching a peak of 7.48 in June 2025. This upward trend, despite some period-to-period declines, signifies enhanced effectiveness in converting receivables into cash, potentially reflecting improved credit policies or faster collections. The ratio’s growth is consistent with the recovery and growth in revenues observed in the latter periods.

Overall Insights

The financial data reflects a company that endured a significant revenue and receivables impact in early 2020, with a notable recovery and improved operational efficiency thereafter. The concurrent increase in receivables turnover ratio alongside revenue growth indicates strengthened liquidity and credit management controls. Fluctuations in receivables levels, while present, do not impede the overall recovery trend. This profile suggests resilience and adaptive management strategies in response to market challenges during the reviewed timeframe.

Working Capital

The working capital values exhibit significant volatility across the observed quarters. Initially, the company records negative working capital, with a steep decline reaching a trough near -13,223 million USD in mid-2019. Following this, there is a sharp improvement in early 2020, turning positive and peaking above 10,000 million USD in the second quarter of 2020. However, this positive trend does not sustain, as values fluctuate between positive and negative through subsequent periods, ending close to -9,152 million USD by mid-2025. This pattern indicates irregular management or seasonality of current assets and liabilities, with notable instability over the years.

Revenues

Revenues demonstrate an overall increasing trend with some interruptions. From around 15,300 million USD at the end of 2018, there is a rising trajectory peaking at over 23,650 million USD by mid-2025. There are some dips corresponding to periods of sharp working capital decline, particularly noticeable around mid-2020 where revenues dropped to approximately 11,779 million USD, likely reflecting adverse external conditions. After this trough, revenue figures recover steadily, maintaining a generally upward momentum, suggesting resilience and growth in the company’s sales performance.

Working Capital Turnover

This ratio is only recorded from October 2020 onwards, showing dramatic variability. Initial values range in the single digits, increasing to mid-double digits and eventually spiking extraordinarily to values such as 3308.88, 420.2, and 112.96 within subsequent quarters. The absence of data in many periods limits a continuous trend analysis, but the volatility suggests significant fluctuations in efficiency relating revenues to working capital. Peaks in turnover might be attributed to low or near-zero working capital balances causing inflated ratio values, reflecting potential liquidity stress or operational adjustments.

Inventory Turnover Ratio

The inventory turnover ratio exhibits an overall upward trend from 25.48 at the beginning of the observed period to a peak of 35.63. Following this peak, there is a gradual decline, with values stabilizing around the high 20s to low 30s by the latest periods. This suggests an improvement in inventory efficiency early on, reaching optimal levels before a slight reduction in turnover speed in recent quarters.

Average Inventory Processing Period

The average inventory processing period shows an inverse pattern relative to the inventory turnover ratio. Initially, the processing period shortens from 14 days down to 10 days, indicating improved inventory handling speed. Subsequently, the period slightly lengthens and stabilizes around 12 to 13 days towards the latter part of the timeline, reflecting a modest slowdown in inventory processing consistent with the decrease in turnover ratio.

Overall Analysis

The data points to enhancements in inventory management practices during the earlier phases, marked by increased turnover and reduced processing times. However, these gains level off in the more recent periods, with slight declines suggesting either cautious inventory replenishment strategies or shifts in demand dynamics. The relative stability in recent quarters indicates a balanced approach to inventory management, maintaining efficiency while possibly addressing external market or operational factors.

The data reveals observable trends in the receivables turnover ratio and the average receivable collection period over multiple quarters spanning from late 2018 to mid-2025.

Receivables Turnover Ratio

Starting from 4.49 in late 2019, the receivables turnover ratio exhibits a general upward trend throughout the observed period. Initial values around 4.39 to 4.49 show moderate turnover, which steadily improves to rates exceeding 7.0 in several recent quarters, with peaks such as 7.48 and 7.42 noted in late 2024 and early 2025. This increasing trend suggests enhanced efficiency in collecting receivables over time.

There are minor fluctuations observed during the earlier part of the dataset, particularly during the period impacted by the global disruptions in early to mid-2020, but the overall momentum is positive, reaching its highest levels toward the end of the data series.

Average Receivable Collection Period

The corresponding average receivable collection period, expressed in days, displays an inversely proportional pattern to the receivables turnover ratio, which is consistent with financial theory. Initially, the number of days is relatively high, at 81 to 83 days in late 2019 and early 2020, indicating slower collections.

Over time, this period decreases, reaching lows in the mid-40s to low 50s range in the later quarters such as mid to late 2024 and early 2025. These reductions confirm that the company collects its receivables more quickly as time progresses, which aligns with the increase in receivables turnover.

The data also shows slight short-term variations, possibly due to external factors, but the trend toward a shorter collection cycle is clear and sustained.

In summary, the analyzed metrics indicate a substantial improvement in the efficiency of receivable collections over the observed years. The company has enhanced its ability to convert receivables into cash, reducing the average collection period and increasing turnover ratio, which likely contributes positively to liquidity and working capital management.

Average Inventory Processing Period

The average inventory processing period shows a general decline from 14 days in December 2019 down to 10 days by mid-2022. This indicates improved efficiency in inventory turnover over this period. From late 2022 onwards, the period stabilizes around 12 to 13 days, suggesting a plateau in inventory management improvements in recent quarters.

Average Receivable Collection Period

The average receivable collection period fluctuates significantly throughout the observed quarters. Starting at 81 days in December 2019, it initially decreases to a low of 49 days by mid-2024 but exhibits several oscillations, rising at times above 70 days, such as in early 2020 and early 2021. This variability indicates some inconsistency in the efficiency of collections, though the overall trend suggests a gradual improvement in receivables turnover.

Operating Cycle

The operating cycle shows a declining trend from 95 days at the end of 2019 to a low of 61 days by mid-2024. This trend reflects enhanced operational efficiency, as the combined period of inventory processing and receivable collection shortens. Despite minor fluctuations, the cycle remains below 70 days in most recent periods, reinforcing the positive movement towards faster cash conversion.