Analysis of Short-term (Operating) 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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Short-term Activity Ratios (Summary)
Meta Platforms Inc., short-term (operating) activity ratios
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
An examination of short-term operating activity ratios reveals several noteworthy trends over the five-year period. Generally, the company demonstrates fluctuating, but ultimately improving, efficiency in managing its receivables, while its payables management appears to be lengthening payment terms. Working capital turnover exhibits inconsistency.
- Receivables Turnover
- Receivables turnover generally increased from 8.40 to 10.17 over the period. While a slight dip occurred between 2022 and 2023, the ratio demonstrates a positive trend, indicating the company is becoming more efficient at collecting its receivables. This suggests improved credit and collection policies or a shift in customer base towards quicker payers.
- Payables Turnover
- Payables turnover decreased from 5.55 to 4.07. This indicates a slowing in the rate at which the company pays its suppliers. The decline suggests the company is taking longer to settle its obligations, potentially to preserve cash flow, or due to negotiating extended payment terms with suppliers. This trend warrants further investigation to assess potential impacts on supplier relationships.
- Working Capital Turnover
- Working capital turnover shows considerable fluctuation. It increased significantly from 2.59 to 3.59 between 2021 and 2022, then decreased to 2.48 by 2024 before rising again to 3.00 in 2025. This inconsistency suggests volatility in the relationship between revenue and working capital, potentially linked to changes in inventory management, accounts receivable, or accounts payable. The ratio’s overall movement indicates a moderate improvement in the efficiency of working capital utilization.
- Average Receivable Collection Period
- The average receivable collection period decreased from 43 days to 36 days. This aligns with the increasing receivables turnover and confirms the company is collecting payments from customers more quickly. The reduction in the collection period is a positive sign, improving cash flow and reducing the risk of bad debts.
- Average Payables Payment Period
- The average payables payment period increased from 66 days to 93 days, before decreasing slightly to 90 days. This lengthening of payment terms corroborates the declining payables turnover. The extended payment period could be a strategic decision to manage liquidity, but it also carries the risk of strained supplier relationships and potential loss of early payment discounts.
In summary, the company appears to be improving its efficiency in collecting receivables while simultaneously extending its payment terms to suppliers. The working capital turnover ratio demonstrates instability, requiring further analysis to understand the underlying drivers. The observed trends suggest a focus on cash management, but the implications for supplier relationships should be carefully considered.
Turnover Ratios
Average No. Days
Receivables Turnover
Meta Platforms Inc., receivables turnover calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Revenue | ||||||
| Accounts receivable, net | ||||||
| Short-term Activity Ratio | ||||||
| Receivables turnover1 | ||||||
| Benchmarks | ||||||
| Receivables Turnover, Competitors2 | ||||||
| Alphabet Inc. | ||||||
| Comcast Corp. | ||||||
| Netflix Inc. | ||||||
| Trade Desk Inc. | ||||||
| Walt Disney Co. | ||||||
| Receivables Turnover, Sector | ||||||
| Media & Entertainment | ||||||
| Receivables Turnover, Industry | ||||||
| Communication Services | ||||||
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Receivables turnover = Revenue ÷ Accounts receivable, net
= ÷ =
2 Click competitor name to see calculations.
The receivables turnover ratio exhibited a generally increasing trend over the five-year period. While fluctuations were present, the ratio demonstrated an overall improvement in the efficiency with which the company converts its receivables into cash.
- Overall Trend
- The receivables turnover ratio increased from 8.40 in 2021 to 10.17 in 2025. This indicates a strengthening in the company’s ability to collect its accounts receivable. The most significant increase occurred between 2023 and 2025.
- Year-over-Year Changes
- From 2021 to 2022, the receivables turnover ratio experienced a slight increase, moving from 8.40 to 8.66. A minor decrease was observed from 2022 to 2023, with the ratio declining to 8.34. However, a more substantial increase occurred from 2023 to 2024, rising to 9.68. The largest year-over-year change was from 2024 to 2025, with the ratio reaching 10.17.
- Relationship to Revenue
- Revenue consistently increased throughout the period, rising from US$117,929 million in 2021 to US$200,966 million in 2025. The concurrent increase in the receivables turnover ratio suggests that the growth in revenue was effectively managed with respect to credit and collection policies. The increase in receivables turnover kept pace with revenue growth, indicating efficient management of credit extension and collection processes.
- Accounts Receivable, Net
- Accounts receivable, net, also increased over the period, from US$14,039 million in 2021 to US$19,769 million in 2025. Despite this increase in the absolute value of receivables, the rising receivables turnover ratio demonstrates that the growth in receivables was proportionate to the growth in revenue, and the company maintained or improved its efficiency in collecting these receivables.
In conclusion, the receivables turnover ratio indicates improving efficiency in managing accounts receivable. The company appears to be effectively balancing revenue growth with the collection of outstanding payments.
Payables Turnover
Meta Platforms Inc., payables turnover calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Cost of revenue | ||||||
| Accounts payable | ||||||
| Short-term Activity Ratio | ||||||
| Payables turnover1 | ||||||
| Benchmarks | ||||||
| Payables Turnover, Competitors2 | ||||||
| Alphabet Inc. | ||||||
| Comcast Corp. | ||||||
| Netflix Inc. | ||||||
| Trade Desk Inc. | ||||||
| Walt Disney Co. | ||||||
| Payables Turnover, Sector | ||||||
| Media & Entertainment | ||||||
| Payables Turnover, Industry | ||||||
| Communication Services | ||||||
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Payables turnover = Cost of revenue ÷ Accounts payable
= ÷ =
2 Click competitor name to see calculations.
The analysis reveals fluctuations in payables turnover over the five-year period. While cost of revenue consistently increased, accounts payable and the resulting turnover ratio exhibited a more complex pattern.
- Payables Turnover Trend
- Payables turnover decreased from 5.55 in 2021 to 5.06 in 2022, representing a slight reduction in the efficiency of converting payables into cost of revenue. A modest recovery to 5.35 was observed in 2023. However, a more substantial decline occurred in 2024, with the ratio falling to 3.92. This downward trend continued, albeit at a slower pace, with a value of 4.07 recorded in 2025.
- Accounts Payable and Cost of Revenue Relationship
- Accounts payable generally increased over the period, rising from US$4,083 million in 2021 to US$8,894 million in 2025. This increase did not consistently translate into a proportional increase in cost of revenue. The most significant increase in accounts payable occurred between 2023 and 2024 (US$2,838 million), coinciding with the largest decrease in payables turnover. Cost of revenue increased steadily throughout the period, but the rate of increase in accounts payable outpaced that of cost of revenue in 2024 and 2025.
- Potential Implications
- The declining payables turnover ratio suggests a lengthening of the time it takes to pay suppliers. This could be due to several factors, including negotiating extended payment terms with suppliers, or a potential slowdown in the conversion of inventory into sales. The increase in accounts payable, coupled with the decreasing turnover, warrants further investigation to determine if it indicates improved working capital management or potential liquidity concerns. The stabilization of the ratio between 2024 and 2025 may suggest the company has reached a new equilibrium in its payment practices.
Overall, the observed trends indicate a shift in the company’s payables management practices, requiring further scrutiny to understand the underlying drivers and potential impacts on financial performance.
Working Capital Turnover
Meta Platforms Inc., working capital turnover calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current assets | ||||||
| Less: Current liabilities | ||||||
| Working capital | ||||||
| Revenue | ||||||
| Short-term Activity Ratio | ||||||
| Working capital turnover1 | ||||||
| Benchmarks | ||||||
| Working Capital Turnover, Competitors2 | ||||||
| Alphabet Inc. | ||||||
| Comcast Corp. | ||||||
| Netflix Inc. | ||||||
| Trade Desk Inc. | ||||||
| Walt Disney Co. | ||||||
| Working Capital Turnover, Sector | ||||||
| Media & Entertainment | ||||||
| Working Capital Turnover, Industry | ||||||
| Communication Services | ||||||
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Working capital turnover = Revenue ÷ Working capital
= ÷ =
2 Click competitor name to see calculations.
The working capital turnover ratio exhibited fluctuations over the five-year period. Initial values decreased before increasing again, suggesting shifts in the relationship between working capital and revenue generation.
- Working Capital
- Working capital decreased from US$45,531 million in 2021 to US$32,523 million in 2022, representing a substantial decline. It then increased to US$53,405 million in 2023 and continued to grow, reaching US$66,449 million in 2024 and US$66,886 million in 2025. This indicates a recovery and subsequent stabilization of the company’s short-term assets less short-term liabilities.
- Revenue
- Revenue experienced a slight decrease from US$117,929 million in 2021 to US$116,609 million in 2022. Following this, revenue demonstrated consistent growth, increasing to US$134,902 million in 2023, US$164,501 million in 2024, and reaching US$200,966 million in 2025. This growth trajectory suggests increasing sales and market penetration.
- Working Capital Turnover
- The working capital turnover ratio was 2.59 in 2021. It increased to 3.59 in 2022, coinciding with the decrease in working capital and a slight revenue decline. The ratio then decreased to 2.53 in 2023 and further to 2.48 in 2024, despite revenue growth. Finally, the ratio increased to 3.00 in 2025, aligning with continued revenue expansion and a relatively stable working capital position. The initial increase in 2022 suggests improved efficiency in utilizing working capital to generate revenue, but the subsequent declines in 2023 and 2024 indicate a potential slowdown in this efficiency, even with rising revenue. The final increase in 2025 suggests a renewed improvement in the efficiency of working capital utilization.
The observed fluctuations in the working capital turnover ratio warrant further investigation to understand the underlying drivers. While revenue growth is evident, the varying efficiency with which working capital is converted into sales requires attention. The relationship between changes in working capital and revenue should be examined to determine the factors influencing the ratio’s performance.
Average Receivable Collection Period
Meta Platforms Inc., average receivable collection period calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Receivables turnover | ||||||
| Short-term Activity Ratio (no. days) | ||||||
| Average receivable collection period1 | ||||||
| Benchmarks (no. days) | ||||||
| Average Receivable Collection Period, Competitors2 | ||||||
| Alphabet Inc. | ||||||
| Comcast Corp. | ||||||
| Netflix Inc. | ||||||
| Trade Desk Inc. | ||||||
| Walt Disney Co. | ||||||
| Average Receivable Collection Period, Sector | ||||||
| Media & Entertainment | ||||||
| Average Receivable Collection Period, Industry | ||||||
| Communication Services | ||||||
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ =
2 Click competitor name to see calculations.
The average receivable collection period exhibited a generally stable pattern with a slight decreasing trend over the five-year period. While fluctuations occurred, the metric ultimately moved from 43 days in 2021 to 36 days in 2025. This suggests an improvement in the efficiency of collecting receivables.
- Average Receivable Collection Period
- In 2021, the average receivable collection period was 43 days. A minor decrease to 42 days was observed in 2022. The period then increased slightly to 44 days in 2023 before demonstrating a more pronounced decline to 38 days in 2024 and further to 36 days in 2025. This indicates a strengthening ability to convert receivables into cash over time.
The receivables turnover ratio, while not the primary focus, provides supporting context. The ratio increased from 8.40 in 2021 to 10.17 in 2025, which aligns with the decreasing collection period. A higher turnover ratio generally implies faster collection of receivables, reinforcing the observed trend in the average collection period.
- Relationship to Receivables Turnover
- The observed decrease in the average receivable collection period correlates with an increase in the receivables turnover ratio. This positive relationship suggests that improvements in collection efficiency are contributing to a faster rate of converting receivables into cash. The combined trend indicates effective management of credit and collection processes.
The fluctuations in the average collection period, particularly the increase in 2023, warrant further investigation to understand the underlying causes. However, the overall trend suggests a positive development in the company’s working capital management.
Average Payables Payment Period
Meta Platforms Inc., average payables payment period calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Payables turnover | ||||||
| Short-term Activity Ratio (no. days) | ||||||
| Average payables payment period1 | ||||||
| Benchmarks (no. days) | ||||||
| Average Payables Payment Period, Competitors2 | ||||||
| Alphabet Inc. | ||||||
| Comcast Corp. | ||||||
| Netflix Inc. | ||||||
| Trade Desk Inc. | ||||||
| Walt Disney Co. | ||||||
| Average Payables Payment Period, Sector | ||||||
| Media & Entertainment | ||||||
| Average Payables Payment Period, Industry | ||||||
| Communication Services | ||||||
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ =
2 Click competitor name to see calculations.
An examination of the short-term activity ratios reveals a shifting pattern in the management of payables. Specifically, the payables turnover ratio and the average payables payment period demonstrate notable changes over the five-year period.
- Payables Turnover
- The payables turnover ratio decreased from 5.55 in 2021 to 5.06 in 2022, indicating a slightly slower rate of paying suppliers. A modest recovery to 5.35 was observed in 2023, but a more substantial decline occurred in 2024, with the ratio falling to 3.92. This trend continued into 2025, with a ratio of 4.07, suggesting a continued, though lessened, slowdown in the rate at which payables are settled.
- Average Payables Payment Period
- Correspondingly, the average payables payment period lengthened from 66 days in 2021 to 72 days in 2022. A slight decrease to 68 days occurred in 2023. However, 2024 saw a significant increase to 93 days, representing the longest payment period within the observed timeframe. The period remained elevated in 2025, decreasing slightly to 90 days. This indicates a trend towards extending the time taken to settle obligations to suppliers.
The observed trends suggest a potential shift in the company’s payables management strategy. The declining payables turnover and increasing average payment period could be attributable to several factors, including attempts to conserve cash, negotiation of extended payment terms with suppliers, or changes in the timing of purchases relative to sales. Further investigation would be required to determine the underlying causes and assess the implications of these changes for the company’s financial health and supplier relationships.