Walt Disney Co. (NYSE:DIS)

The analysis of the quarterly financial ratios and related time periods exhibits distinct trends over the observed timeline.

Inventory Turnover

The inventory turnover ratio shows an initial increase from about 28.8 to a peak near 35.6 during early 2022, indicating improved efficiency in inventory management and faster sales. Following this peak, there is a gradual decline through 2023 and into 2025, ending around 27.5, suggesting a slowing in the inventory cycle or a build-up of inventory relative to sales towards the later periods.

Receivables Turnover

This ratio demonstrates a generally upward trend, rising from 4.32 in early 2021 to above 7.0 by 2025. The increase implies enhanced effectiveness in collecting receivables, a positive indication of credit and cash flow management.

Working Capital Turnover

A notable volatility is evident with this ratio. It begins in a modest range around 7 to 9 in early periods but spikes extraordinarily to values exceeding 100 and even over 3000 during mid-2022. This extreme fluctuation likely points to irregularities or one-off events affecting working capital or sales figures. Following this, the ratio returns to more typical levels near 45 to mid-50s, before data become sparse in later periods with many missing values, limiting conclusive interpretation across the entire timeline.

Average Inventory Processing Period

This period remains fairly stable, fluctuating slightly between 10 and 13 days across the full range of dates. The consistency suggests stable inventory turnover speed in calendar days, aligning with the observation of the inventory turnover ratio's general stability apart from early fluctuations.

Average Receivable Collection Period

There is a clear downward trend in the days taken to collect receivables, decreasing from 84 days to the low 50s by the end of the observed periods. This enhancement points to accelerating cash inflows through more efficient collection practices or improved customer payment behavior.

Operating Cycle

The operating cycle, calculated as the sum of inventory processing and receivable collection periods, reflects an improving trend with a reduction from 97 days to the low-to-mid 60s. This contraction indicates a faster conversion of inventory and receivables into cash, which is favorable for liquidity and operational efficiency.

Cost of Revenues, Exclusive of Depreciation and Amortization

The cost of revenues exhibited notable fluctuations over the analyzed periods. Starting at a high level, it decreased significantly in the second quarter of 2021 before rising steadily through the remainder of 2021 and into early 2022. A peak occurred in the first quarter of 2022, followed by a subsequent decline and stabilization with modest fluctuations in the following quarters. More recently, values show a general downward trend through mid-2025, indicating efforts to control or reduce these costs over time.

Inventories

Inventories showed a gradual upward trend across the time frame. Beginning with moderate values, inventory levels increased steadily, with occasional minor fluctuations, reaching their highest points towards the end of the period. This indicates a general buildup of inventory, which could reflect strategic stocking in anticipation of higher demand or slower turnover.

Inventory Turnover

Inventory turnover ratios display a declining pattern across the quarters analyzed. Initially high and relatively stable, turnover ratios peaked in early 2022 and then progressively decreased. The downward trend suggests inventory is being held longer before being sold, which might indicate slowing sales velocity or increased inventory levels not fully matched by revenue growth. This aligns with the observed inventory accumulation trend.

Overall Insights

The combined trends of increasing inventory levels alongside decreasing inventory turnover and fluctuating but relatively controlled cost of revenues suggest a potential shift in operational or market dynamics. The firm appears to manage costs effectively despite rising inventories, but the declining turnover ratio might warrant attention to inventory management efficiency or demand forecasting strategies. These patterns could impact working capital requirements and profitability if the trends continue.

Revenues

Revenues exhibit a generally upward trend over the observed periods, with some notable fluctuations. Starting from a value of approximately 16.2 billion, revenues showed gradual increases through the early 2021 quarters, peaking around 23.5 billion in early 2022. Subsequently, revenues experienced periods of decline and recovery, with values oscillating between approximately 21 billion and nearly 25 billion. The latter periods maintain a relatively high level compared to the initial values, indicating sustained revenue growth with occasional quarterly variability.

Receivables, net

The net receivables demonstrate some variability but do not follow a clear trend of increase or decrease. The values start near 14 billion and generally fluctuate within a range of approximately 12 to 14 billion throughout the timeframe. Periodic decreases are followed by recoveries, signifying variability in collections or credit management. No consistent growth or decline pattern is discernible from the data.

Receivables Turnover Ratio

The receivables turnover ratio shows a clear and consistent increasing trend across the periods. Beginning at around 4.3, it steadily rises to values above 7.0 in the most recent quarters. This indicates improvement in the company's efficiency in collecting receivables over time. A higher turnover ratio suggests that receivables are being converted to cash more quickly, positively impacting liquidity and operational cash flow management.

Working Capital

The working capital displayed a generally declining trend over the observed periods. Initially, it started at a positive 8,328 million USD and steadily decreased throughout the timeline, turning negative starting in the period ending December 31, 2022. From that point onward, working capital remained negative, reaching values as low as -11,294 million USD and fluctuating around this lower range through subsequent periods. This indicates increasing short-term liabilities relative to current assets over time.

Revenues

Revenue figures exhibited fluctuations but an overall upward trajectory over the periods. It began at approximately 16,249 million USD and increased to peak near 23,650 million USD in the later periods. Despite some quarters showing slight declines or plateaus, the general trend reflects growth in the company's top-line performance throughout the observed timeframe.

Working Capital Turnover

The working capital turnover ratio showed significant variability. Early periods displayed modest values ranging from around 7.3 to 26.13, suggesting relatively stable asset utilization. However, certain periods demonstrated abnormally high or missing figures, such as a spike to 3,308.88, followed by gaps or no data points. These extreme values likely correspond to instances of working capital nearing zero or becoming negative, thereby distorting the ratio. Later periods lacked sufficient data for a complete trend analysis.

Summary Insights

The company experienced a consistent decrease in working capital, crossing into negative territory in late 2022 and maintaining deficits thereafter. This might reflect changes in liquidity management, increasing current liabilities, or asset structure adjustments. Despite the deterioration in working capital, revenues improved overall, pointing to robust sales growth or increased market activity.

The combination of declining working capital and rising revenues suggests a potential increase in operational efficiency in terms of revenue generation relative to available working capital; however, the negative working capital position may also carry risks associated with short-term solvency and liquidity.

The working capital turnover ratio's volatility and data gaps limit its reliability as a consistent performance metric for recent periods and may be affected by the negative working capital values.

The analysis of the inventory turnover ratio over the observed periods reveals an initial upward trend followed by a gradual decline. Specifically, the ratio increased from 28.8 to a peak of 35.63 between early 2021 and early 2022, indicating a stronger efficiency in inventory management and faster inventory movement during this timeframe. Subsequent to this peak, the ratio generally decreased, reaching approximately 27.54 by the end of the last period in September 2025. This decline suggests a slowdown in the turnover rate, possibly reflecting changes in sales volume, inventory levels, or supply chain dynamics.

Correspondingly, the average inventory processing period, which measures the average number of days inventory is held before being sold, exhibits an inverse relationship to the turnover ratio. The period was at 13 days in early 2021, shortened to 10 days by early 2022, signifying improved inventory processing efficiency. From this point, the period stabilized mostly around 12 to 13 days through the latter quarters, indicating a return to longer inventory holding periods consistent with the observed decrease in turnover ratio.

Inventory Turnover Ratio Trends

Initial increase from approximately 28.8 to 35.63 over about one year, followed by a gradual decline to just below 28 by late 2025.

This pattern implies enhanced inventory efficiency initially, succeeded by a reduction in inventory turnover rates.

Average Inventory Processing Period Trends

Decline from 13 days to 10 days early in the timeline, indicating quicker inventory turnover.

Subsequent stabilization between 12 and 13 days, suggesting a steady state of inventory holding duration in the latter periods.

Relationship Between Metrics

The inverse relationship between inventory turnover and processing period is evident, confirming consistent improvements and later moderation in inventory management efficiency.

In summary, the inventory management showed marked improvement during the initial periods of the data, characterized by increased turnover and reduced processing time. After reaching a peak, these indicators shifted toward more moderate efficiency levels, highlighting potential operational adjustments or market conditions impacting the company's inventory handling in the later periods.

Receivables Turnover

The receivables turnover ratio demonstrates a clear upward trend over the observed periods. Starting from 4.32 in early 2021, the ratio experienced steady increases, peaking at several points such as 7.42 in March 2024 and maintaining levels generally above 6.5 from late 2022 onward. This suggests that the company has improved its efficiency in collecting receivables, turning over its receivables more frequently over time.

Average Receivable Collection Period

The average receivable collection period decreased significantly from 84 days at the beginning of 2021 to values fluctuating around the low 50s from late 2022 onward. The decline indicates that the company has been able to shorten the time it takes to collect payments from customers. Although some variability exists, particularly with minor increases around the end of 2023 and early 2024, the overall pattern signifies a positive improvement in collection efficiency.

Summary of Trends

Overall, the trends reveal enhanced management of receivables, as evidenced by the increasing receivables turnover ratio accompanied by a decreasing average collection period. This combination indicates more effective credit and collection practices, contributing to improved cash flow management. The company appears to have strengthened its collection processes over the period, resulting in quicker conversion of sales to cash.

The analysis of the quarterly financial periods reveals discernible trends in inventory management, receivable collections, and overall operating efficiency.

Average Inventory Processing Period

The average inventory processing period demonstrated a decrease from 13 days in early 2021 to a low of 10 days by the beginning of 2022. Following this, the period showed a gradual lengthening, stabilizing around 12 to 13 days from late 2022 through 2025. This suggests an initial improvement in inventory turnover efficiency, with a subsequent adjustment to a slightly longer, but stable, inventory holding period.

Average Receivable Collection Period

The receivable collection period exhibited a notable improvement over the analyzed intervals, declining from 84 days at the start of 2021 to around 49-55 days in the later periods. The most significant reductions occurred in 2021 and 2022, indicating enhanced effectiveness in collecting receivables. Although minor fluctuations appeared thereafter, the general pattern points toward expedited cash collection processes.

Operating Cycle

The operating cycle, which encompasses both inventory processing and receivable collection times, showed a marked downward trend initially, from 97 days to around 61 days by early 2025. This contraction reflects improved operational efficiency, driven primarily by reductions in the receivable collection period and, to a lesser extent, shorter inventory processing times. Small increases toward the end of the examined period indicate some variability but the overall trajectory remains toward a more efficient cycle.

Overall, the data indicate a concerted effort to streamline operations through shorter inventory holding and receivables collection periods, contributing to a reduced operating cycle and presumably improved working capital management.