Analysis of Long-term (Investment) Activity Ratios
Activity ratios measure how efficiently a company performs day-to-day tasks, such us the collection of receivables and management of inventory.
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- Balance Sheet: Assets
- Common-Size Income Statement
- Common-Size Balance Sheet: Assets
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Profitability Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Present Value of Free Cash Flow to Equity (FCFE)
- Return on Assets (ROA) since 2008
- Price to Operating Profit (P/OP) since 2008
- Analysis of Debt
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Long-term Activity Ratios (Summary)
Warner Bros. Discovery Inc., long-term (investment) activity ratios
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Net fixed asset turnover | ||||||
| Net fixed asset turnover (including operating lease, right-of-use asset) | ||||||
| Total asset turnover | ||||||
| Equity turnover |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
- Net Fixed Asset Turnover
- The net fixed asset turnover ratio exhibited an initial increase from 11.51 in 2017 to a peak of 13.19 in 2018. Subsequently, there was a decline in this ratio to 11.72 in 2019, followed by a more pronounced drop to 8.85 in 2020. A slight recovery is observed in 2021 with the ratio rising modestly to 9.13. This trend indicates fluctuating efficiency in utilizing net fixed assets to generate revenue, with a noticeable weakening post-2018.
- Net Fixed Asset Turnover (Including Operating Lease, Right-of-Use Asset)
- When including operating lease right-of-use assets, the net fixed asset turnover ratio remained steady at 11.51 in 2017 and 13.19 in 2018 but experienced a sharp decline beginning 2019, dropping to 7.13, then further decreasing to 5.99 in 2020. A slight improvement occurred in 2021, reaching 6.52. This steeper decline compared to the standard net fixed asset turnover suggests that the incorporation of lease assets significantly impacts asset efficiency metrics, particularly from 2019 onwards.
- Total Asset Turnover
- The total asset turnover ratio displayed modest growth over the five-year period. Starting at 0.30 in 2017, it progressively increased to 0.32 in 2018, 0.33 in 2019, and though it dipped slightly to 0.31 in 2020, it rebounded to the highest level in the series, 0.35, in 2021. This pattern reflects a generally improving capacity to generate sales from the total asset base despite the minor setback in 2020.
- Equity Turnover
- The equity turnover ratio showed a declining trend from 1.49 in 2017 down to 1.26 in 2018, further decreasing to 1.13 in 2019 and reaching a low of 1.02 in 2020. A marginal recovery was noted in 2021 with a slight increase to 1.05. This gradual decline points to diminishing efficiency in using shareholders’ equity to generate revenue, with only a limited rebound in the most recent year.
Net Fixed Asset Turnover
Warner Bros. Discovery Inc., net fixed asset turnover calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Revenues | ||||||
| Property and equipment, net | ||||||
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover1 | ||||||
| Benchmarks | ||||||
| Net Fixed Asset Turnover, Competitors2 | ||||||
| Alphabet Inc. | ||||||
| Comcast Corp. | ||||||
| Meta Platforms Inc. | ||||||
| Netflix Inc. | ||||||
| Take-Two Interactive Software Inc. | ||||||
| Walt Disney Co. | ||||||
| Net Fixed Asset Turnover, Sector | ||||||
| Media & Entertainment | ||||||
| Net Fixed Asset Turnover, Industry | ||||||
| Communication Services | ||||||
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Net fixed asset turnover = Revenues ÷ Property and equipment, net
= ÷ =
2 Click competitor name to see calculations.
- Revenues
- The revenues demonstrate a generally increasing trend over the observed period. Starting at $6,873 million in 2017, revenues saw a substantial increase to $10,553 million in 2018 and continued to grow steadily, reaching $12,191 million by the end of 2021. This growth indicates a positive expansion of the company's top-line performance, albeit with a slight decline from 2019 to 2020 before recovering in 2021.
- Property and Equipment, Net
- The net value of property and equipment consistently increased each year, rising from $597 million in 2017 to $1,336 million in 2021. This upward trend suggests ongoing investments in fixed assets, likely aimed at supporting business operations or future growth initiatives. The substantial increase, particularly after 2019, reflects significant capital expenditures or asset acquisitions.
- Net Fixed Asset Turnover
- The net fixed asset turnover ratio indicates the efficiency of the company in utilizing its fixed assets to generate revenues. The ratio increased from 11.51 in 2017 to a peak of 13.19 in 2018, reflecting improved asset utilization. However, from 2018 onwards, the ratio declined to 9.13 by 2021. This decreasing trend suggests that as the company expanded its assets base, revenue generation relative to these assets did not keep pace, indicating a possible reduction in operational efficiency or a lag between asset investment and revenue realization.
Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset)
Warner Bros. Discovery Inc., net fixed asset turnover (including operating lease, right-of-use asset) calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Revenues | ||||||
| Property and equipment, net | ||||||
| Operating lease right-of-use assets (included in Other noncurrent assets) | ||||||
| Property and equipment, net (including operating lease, right-of-use asset) | ||||||
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover (including operating lease, right-of-use asset)1 | ||||||
| Benchmarks | ||||||
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Competitors2 | ||||||
| Alphabet Inc. | ||||||
| Comcast Corp. | ||||||
| Meta Platforms Inc. | ||||||
| Netflix Inc. | ||||||
| Take-Two Interactive Software Inc. | ||||||
| Walt Disney Co. | ||||||
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Sector | ||||||
| Media & Entertainment | ||||||
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Industry | ||||||
| Communication Services | ||||||
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Net fixed asset turnover (including operating lease, right-of-use asset) = Revenues ÷ Property and equipment, net (including operating lease, right-of-use asset)
= ÷ =
2 Click competitor name to see calculations.
The financial data reveals several key trends over the five-year period from 2017 to 2021.
- Revenues
- Revenues show a generally increasing trend, starting at US$6,873 million in 2017 and rising to US$12,191 million by 2021. The most significant jump occurs between 2017 and 2018, with an increase of nearly 53%. Revenue continues to grow steadily thereafter, despite a minor dip between 2019 and 2020, where it decreases slightly from US$11,144 million to US$10,671 million, likely influenced by external factors in that year. By 2021, revenues recover strongly, reaching a peak in the dataset.
- Property and Equipment, Net (including operating lease, right-of-use asset)
- There is a substantial increase in net property and equipment values over the period, rising from US$597 million in 2017 to US$1,871 million in 2021. The most pronounced growth occurs between 2018 and 2019, where the figure nearly doubles, suggesting significant investments or acquisitions in fixed assets or rights-of-use during that time. The upward trend continues, but at a slower pace from 2019 onwards.
- Net Fixed Asset Turnover (including operating lease, right-of-use asset)
- This ratio, which measures how efficiently fixed assets generate revenues, shows a declining trend overall. It peaks at 13.19 in 2018 but falls sharply to 7.13 in 2019, then continues declining to 5.99 in 2020. A slight improvement is observed in 2021 with an increase to 6.52. The decline from 2018 onwards suggests that the company’s asset base grew faster than its revenues, potentially reflecting large capital expenditures or investments whose revenue benefits are yet to be fully realized.
Total Asset Turnover
Warner Bros. Discovery Inc., total asset turnover calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Revenues | ||||||
| Total assets | ||||||
| Long-term Activity Ratio | ||||||
| Total asset turnover1 | ||||||
| Benchmarks | ||||||
| Total Asset Turnover, Competitors2 | ||||||
| Alphabet Inc. | ||||||
| Comcast Corp. | ||||||
| Meta Platforms Inc. | ||||||
| Netflix Inc. | ||||||
| Take-Two Interactive Software Inc. | ||||||
| Walt Disney Co. | ||||||
| Total Asset Turnover, Sector | ||||||
| Media & Entertainment | ||||||
| Total Asset Turnover, Industry | ||||||
| Communication Services | ||||||
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Total asset turnover = Revenues ÷ Total assets
= ÷ =
2 Click competitor name to see calculations.
- Revenues
- Revenues exhibited an overall upward trend from 2017 to 2021. Starting at 6,873 million US dollars in 2017, revenues increased significantly to 10,553 million in 2018. The growth continued at a slower pace, reaching 11,144 million in 2019. There was a slight decline in 2020 to 10,671 million, followed by a recovery and further growth to 12,191 million in 2021. This pattern suggests a general expansion in revenue generation capability, with a minor dip in 2020 possibly attributable to external factors affecting that year.
- Total Assets
- Total assets grew steadily over the period, rising from 22,555 million US dollars in 2017 to 34,427 million in 2021. The most notable increase occurred between 2017 and 2018, with assets climbing by approximately 10,000 million. Growth continued at a more moderate pace through 2019 to 2021, indicating ongoing investments or acquisitions but at a decelerated rate.
- Total Asset Turnover
- The total asset turnover ratio showed a gradual improvement overall, moving from 0.30 in 2017 to 0.35 in 2021. After incremental increases through 2018 and 2019, the ratio dipped slightly to 0.31 in 2020 before rising again to its highest level in 2021. This ratio indicates the efficiency with which assets are used to generate revenues. The upward trend suggests that despite the company’s expanding asset base, it has managed to improve asset utilization over the five-year period.
- Summary
- The data reflects a company experiencing growth in both total revenues and assets over the five-year timeframe. Although revenues saw a temporary decline in 2020, the overall trajectory remains positive. The rise in total assets indicates increased investment or business expansion activities. Concurrently, the improvement in total asset turnover ratio reveals enhanced efficiency in asset utilization, which mitigates concerns about asset growth outpacing revenue generation. Together, these patterns suggest a strengthening operational performance pertaining to scale and efficiency during the analyzed period.
Equity Turnover
Warner Bros. Discovery Inc., equity turnover calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Revenues | ||||||
| Total Discovery, Inc. stockholders’ equity | ||||||
| Long-term Activity Ratio | ||||||
| Equity turnover1 | ||||||
| Benchmarks | ||||||
| Equity Turnover, Competitors2 | ||||||
| Alphabet Inc. | ||||||
| Comcast Corp. | ||||||
| Meta Platforms Inc. | ||||||
| Netflix Inc. | ||||||
| Take-Two Interactive Software Inc. | ||||||
| Walt Disney Co. | ||||||
| Equity Turnover, Sector | ||||||
| Media & Entertainment | ||||||
| Equity Turnover, Industry | ||||||
| Communication Services | ||||||
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Equity turnover = Revenues ÷ Total Discovery, Inc. stockholders’ equity
= ÷ =
2 Click competitor name to see calculations.
- Revenue Trends
- Revenues have shown a consistent overall increase from 2017 to 2021. Starting at $6,873 million in 2017, revenues increased sharply in 2018 to $10,553 million. Moderate growth continued in 2019 with revenues reaching $11,144 million, followed by a slight decline in 2020 to $10,671 million. In 2021, revenues rebounded to $12,191 million, reaching the highest level within the five-year period.
- Stockholders’ Equity Trends
- Total Discovery, Inc. stockholders’ equity has exhibited steady growth throughout the observed period. Beginning at $4,610 million in 2017, equity increased to $8,386 million in 2018 and continued its upward trajectory to $9,891 million in 2019. The growth trend persisted in 2020, with equity reaching $10,464 million and further increasing to $11,599 million in 2021.
- Equity Turnover Analysis
- The equity turnover ratio demonstrated a consistent downward trend from 2017 to 2020, declining from 1.49 in 2017 to 1.02 in 2020. This indicates a reduction in revenue generated per dollar of equity over this period. However, in 2021, the equity turnover slightly increased to 1.05, suggesting a modest improvement in how effectively equity is being utilized to generate revenues.
- Overall Insights
- The company experienced robust revenue growth initially, particularly between 2017 and 2018, but faced a minor setback in 2020 before recovering in 2021. Concurrently, stockholders’ equity grew steadily, reflecting strengthening financial stability and possibly retained earnings or capital infusion. The declining equity turnover ratio over four years implies that revenue growth lagged behind the growth in equity, but the slight improvement in 2021 may indicate enhanced efficiency in capital utilization moving forward.