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.
Short-term Activity Ratios (Summary)
Walgreens Boots Alliance Inc., short-term (operating) activity ratios
Based on: 10-K (reporting date: 2019-08-31), 10-K (reporting date: 2018-08-31), 10-K (reporting date: 2017-08-31), 10-K (reporting date: 2016-08-31), 10-K (reporting date: 2015-08-31), 10-K (reporting date: 2014-08-31).
| Short-term activity ratio | Description | The company |
|---|---|---|
| Inventory turnover | An activity ratio calculated as cost of goods sold divided by inventory. | Walgreens Boots Alliance Inc. inventory turnover ratio improved from 2017 to 2018 and from 2018 to 2019. |
| Receivables turnover | An activity ratio equal to revenue divided by receivables. | Walgreens Boots Alliance Inc. receivables turnover ratio improved from 2017 to 2018 but then slightly deteriorated from 2018 to 2019 not reaching 2017 level. |
| Payables turnover | An activity ratio calculated as cost of goods sold divided by payables. | Walgreens Boots Alliance Inc. payables turnover ratio increased from 2017 to 2018 and from 2018 to 2019. |
| Short-term activity ratio | Description | The company |
|---|---|---|
| Average inventory processing period | An activity ratio equal to the number of days in the period divided by inventory turnover over the period. | Walgreens Boots Alliance Inc. number of days of inventory outstanding improved from 2017 to 2018 and from 2018 to 2019. |
| Average receivable collection period | An activity ratio equal to the number of days in the period divided by receivables turnover. | |
| Operating cycle | Equal to average inventory processing period plus average receivables collection period. | Walgreens Boots Alliance Inc. operating cycle improved from 2017 to 2018 and from 2018 to 2019. |
| Average payables payment period | An estimate of the average number of days it takes a company to pay its suppliers; equal to the number of days in the period divided by payables turnover ratio for the period. | |
| Cash conversion cycle | A financial metric that measures the length of time required for a company to convert cash invested in its operations to cash received as a result of its operations; equal to average inventory processing period plus average receivables collection period minus average payables payment period. | Walgreens Boots Alliance Inc. cash conversion cycle improved from 2017 to 2018 and from 2018 to 2019. |
Inventory Turnover
Walgreens Boots Alliance Inc., inventory turnover calculation, comparison to benchmarks
| Aug 31, 2019 | Aug 31, 2018 | Aug 31, 2017 | Aug 31, 2016 | Aug 31, 2015 | Aug 31, 2014 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Cost of sales | 106,790) | 100,745) | 89,052) | 87,477) | 76,520) | 54,823) | |
| Inventories | 9,333) | 9,565) | 8,899) | 8,956) | 8,678) | 6,076) | |
| Short-term Activity Ratio | |||||||
| Inventory turnover1 | 11.44 | 10.53 | 10.01 | 9.77 | 8.82 | 9.02 | |
| Benchmarks | |||||||
| Inventory Turnover, Competitors2 | |||||||
| Costco Wholesale Corp. | 11.66 | 11.16 | — | — | — | — | |
| Target Corp. | 5.61 | — | — | — | — | — | |
| Walmart Inc. | 8.70 | — | — | — | — | — | |
| Inventory Turnover, Sector | |||||||
| Consumer Staples Distribution & Retail | 8.77 | — | — | — | — | — | |
| Inventory Turnover, Industry | |||||||
| Consumer Staples | 8.24 | — | — | — | — | — | |
Based on: 10-K (reporting date: 2019-08-31), 10-K (reporting date: 2018-08-31), 10-K (reporting date: 2017-08-31), 10-K (reporting date: 2016-08-31), 10-K (reporting date: 2015-08-31), 10-K (reporting date: 2014-08-31).
1 2019 Calculation
Inventory turnover = Cost of sales ÷ Inventories
= 106,790 ÷ 9,333 = 11.44
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Inventory turnover | An activity ratio calculated as cost of goods sold divided by inventory. | Walgreens Boots Alliance Inc. inventory turnover ratio improved from 2017 to 2018 and from 2018 to 2019. |
Receivables Turnover
Walgreens Boots Alliance Inc., receivables turnover calculation, comparison to benchmarks
| Aug 31, 2019 | Aug 31, 2018 | Aug 31, 2017 | Aug 31, 2016 | Aug 31, 2015 | Aug 31, 2014 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Sales | 136,866) | 131,537) | 118,214) | 117,351) | 103,444) | 76,392) | |
| Accounts receivable, net | 7,226) | 6,573) | 6,528) | 6,260) | 6,849) | 3,218) | |
| Short-term Activity Ratio | |||||||
| Receivables turnover1 | 18.94 | 20.01 | 18.11 | 18.75 | 15.10 | 23.74 | |
| Benchmarks | |||||||
| Receivables Turnover, Competitors2 | |||||||
| Costco Wholesale Corp. | 97.30 | 82.94 | — | — | — | — | |
| Target Corp. | 117.77 | — | — | — | — | — | |
| Walmart Inc. | 81.22 | — | — | — | — | — | |
| Receivables Turnover, Sector | |||||||
| Consumer Staples Distribution & Retail | 86.88 | — | — | — | — | — | |
| Receivables Turnover, Industry | |||||||
| Consumer Staples | 34.73 | — | — | — | — | — | |
Based on: 10-K (reporting date: 2019-08-31), 10-K (reporting date: 2018-08-31), 10-K (reporting date: 2017-08-31), 10-K (reporting date: 2016-08-31), 10-K (reporting date: 2015-08-31), 10-K (reporting date: 2014-08-31).
1 2019 Calculation
Receivables turnover = Sales ÷ Accounts receivable, net
= 136,866 ÷ 7,226 = 18.94
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Receivables turnover | An activity ratio equal to revenue divided by receivables. | Walgreens Boots Alliance Inc. receivables turnover ratio improved from 2017 to 2018 but then slightly deteriorated from 2018 to 2019 not reaching 2017 level. |
Payables Turnover
Walgreens Boots Alliance Inc., payables turnover calculation, comparison to benchmarks
| Aug 31, 2019 | Aug 31, 2018 | Aug 31, 2017 | Aug 31, 2016 | Aug 31, 2015 | Aug 31, 2014 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Cost of sales | 106,790) | 100,745) | 89,052) | 87,477) | 76,520) | 54,823) | |
| Trade accounts payable | 14,341) | 13,566) | 12,494) | 11,000) | 10,088) | 4,315) | |
| Short-term Activity Ratio | |||||||
| Payables turnover1 | 7.45 | 7.43 | 7.13 | 7.95 | 7.59 | 12.71 | |
| Benchmarks | |||||||
| Payables Turnover, Competitors2 | |||||||
| Costco Wholesale Corp. | 11.38 | 10.96 | — | — | — | — | |
| Target Corp. | 5.46 | — | — | — | — | — | |
| Walmart Inc. | 8.19 | — | — | — | — | — | |
| Payables Turnover, Sector | |||||||
| Consumer Staples Distribution & Retail | 8.34 | — | — | — | — | — | |
| Payables Turnover, Industry | |||||||
| Consumer Staples | 6.89 | — | — | — | — | — | |
Based on: 10-K (reporting date: 2019-08-31), 10-K (reporting date: 2018-08-31), 10-K (reporting date: 2017-08-31), 10-K (reporting date: 2016-08-31), 10-K (reporting date: 2015-08-31), 10-K (reporting date: 2014-08-31).
1 2019 Calculation
Payables turnover = Cost of sales ÷ Trade accounts payable
= 106,790 ÷ 14,341 = 7.45
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Payables turnover | An activity ratio calculated as cost of goods sold divided by payables. | Walgreens Boots Alliance Inc. payables turnover ratio increased from 2017 to 2018 and from 2018 to 2019. |
Working Capital Turnover
Walgreens Boots Alliance Inc., working capital turnover calculation, comparison to benchmarks
| Aug 31, 2019 | Aug 31, 2018 | Aug 31, 2017 | Aug 31, 2016 | Aug 31, 2015 | Aug 31, 2014 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Current assets | 18,700) | 17,846) | 19,753) | 25,883) | 19,657) | 12,242) | |
| Less: Current liabilities | 25,769) | 21,667) | 18,547) | 17,013) | 16,557) | 8,895) | |
| Working capital | (7,069) | (3,821) | 1,206) | 8,870) | 3,100) | 3,347) | |
| Sales | 136,866) | 131,537) | 118,214) | 117,351) | 103,444) | 76,392) | |
| Short-term Activity Ratio | |||||||
| Working capital turnover1 | — | — | 98.02 | 13.23 | 33.37 | 22.82 | |
| Benchmarks | |||||||
| Working Capital Turnover, Competitors2 | |||||||
| Costco Wholesale Corp. | 602.22 | 381.36 | — | — | — | — | |
| Target Corp. | — | — | — | — | — | — | |
| Walmart Inc. | — | — | — | — | — | — | |
| Working Capital Turnover, Sector | |||||||
| Consumer Staples Distribution & Retail | — | — | — | — | — | — | |
| Working Capital Turnover, Industry | |||||||
| Consumer Staples | — | — | — | — | — | — | |
Based on: 10-K (reporting date: 2019-08-31), 10-K (reporting date: 2018-08-31), 10-K (reporting date: 2017-08-31), 10-K (reporting date: 2016-08-31), 10-K (reporting date: 2015-08-31), 10-K (reporting date: 2014-08-31).
1 2019 Calculation
Working capital turnover = Sales ÷ Working capital
= 136,866 ÷ -7,069 = —
2 Click competitor name to see calculations.
Average Inventory Processing Period
Walgreens Boots Alliance Inc., average inventory processing period calculation, comparison to benchmarks
| Aug 31, 2019 | Aug 31, 2018 | Aug 31, 2017 | Aug 31, 2016 | Aug 31, 2015 | Aug 31, 2014 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||
| Inventory turnover | 11.44 | 10.53 | 10.01 | 9.77 | 8.82 | 9.02 | |
| Short-term Activity Ratio (no. days) | |||||||
| Average inventory processing period1 | 32 | 35 | 36 | 37 | 41 | 40 | |
| Benchmarks (no. days) | |||||||
| Average Inventory Processing Period, Competitors2 | |||||||
| Costco Wholesale Corp. | 31 | 33 | — | — | — | — | |
| Target Corp. | 65 | — | — | — | — | — | |
| Walmart Inc. | 42 | — | — | — | — | — | |
| Average Inventory Processing Period, Sector | |||||||
| Consumer Staples Distribution & Retail | 42 | — | — | — | — | — | |
| Average Inventory Processing Period, Industry | |||||||
| Consumer Staples | 44 | — | — | — | — | — | |
Based on: 10-K (reporting date: 2019-08-31), 10-K (reporting date: 2018-08-31), 10-K (reporting date: 2017-08-31), 10-K (reporting date: 2016-08-31), 10-K (reporting date: 2015-08-31), 10-K (reporting date: 2014-08-31).
1 2019 Calculation
Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ 11.44 = 32
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Average inventory processing period | An activity ratio equal to the number of days in the period divided by inventory turnover over the period. | Walgreens Boots Alliance Inc. number of days of inventory outstanding improved from 2017 to 2018 and from 2018 to 2019. |
Average Receivable Collection Period
Walgreens Boots Alliance Inc., average receivable collection period calculation, comparison to benchmarks
| Aug 31, 2019 | Aug 31, 2018 | Aug 31, 2017 | Aug 31, 2016 | Aug 31, 2015 | Aug 31, 2014 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||
| Receivables turnover | 18.94 | 20.01 | 18.11 | 18.75 | 15.10 | 23.74 | |
| Short-term Activity Ratio (no. days) | |||||||
| Average receivable collection period1 | 19 | 18 | 20 | 19 | 24 | 15 | |
| Benchmarks (no. days) | |||||||
| Average Receivable Collection Period, Competitors2 | |||||||
| Costco Wholesale Corp. | 4 | 4 | — | — | — | — | |
| Target Corp. | 3 | — | — | — | — | — | |
| Walmart Inc. | 4 | — | — | — | — | — | |
| Average Receivable Collection Period, Sector | |||||||
| Consumer Staples Distribution & Retail | 4 | — | — | — | — | — | |
| Average Receivable Collection Period, Industry | |||||||
| Consumer Staples | 11 | — | — | — | — | — | |
Based on: 10-K (reporting date: 2019-08-31), 10-K (reporting date: 2018-08-31), 10-K (reporting date: 2017-08-31), 10-K (reporting date: 2016-08-31), 10-K (reporting date: 2015-08-31), 10-K (reporting date: 2014-08-31).
1 2019 Calculation
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ 18.94 = 19
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Average receivable collection period | An activity ratio equal to the number of days in the period divided by receivables turnover. |
Operating Cycle
Walgreens Boots Alliance Inc., operating cycle calculation, comparison to benchmarks
No. days
| Aug 31, 2019 | Aug 31, 2018 | Aug 31, 2017 | Aug 31, 2016 | Aug 31, 2015 | Aug 31, 2014 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||
| Average inventory processing period | 32 | 35 | 36 | 37 | 41 | 40 | |
| Average receivable collection period | 19 | 18 | 20 | 19 | 24 | 15 | |
| Short-term Activity Ratio | |||||||
| Operating cycle1 | 51 | 53 | 56 | 56 | 65 | 55 | |
| Benchmarks | |||||||
| Operating Cycle, Competitors2 | |||||||
| Costco Wholesale Corp. | 35 | 37 | — | — | — | — | |
| Target Corp. | 68 | — | — | — | — | — | |
| Walmart Inc. | 46 | — | — | — | — | — | |
| Operating Cycle, Sector | |||||||
| Consumer Staples Distribution & Retail | 46 | — | — | — | — | — | |
| Operating Cycle, Industry | |||||||
| Consumer Staples | 55 | — | — | — | — | — | |
Based on: 10-K (reporting date: 2019-08-31), 10-K (reporting date: 2018-08-31), 10-K (reporting date: 2017-08-31), 10-K (reporting date: 2016-08-31), 10-K (reporting date: 2015-08-31), 10-K (reporting date: 2014-08-31).
1 2019 Calculation
Operating cycle = Average inventory processing period + Average receivable collection period
= 32 + 19 = 51
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Operating cycle | Equal to average inventory processing period plus average receivables collection period. | Walgreens Boots Alliance Inc. operating cycle improved from 2017 to 2018 and from 2018 to 2019. |
Average Payables Payment Period
Walgreens Boots Alliance Inc., average payables payment period calculation, comparison to benchmarks
| Aug 31, 2019 | Aug 31, 2018 | Aug 31, 2017 | Aug 31, 2016 | Aug 31, 2015 | Aug 31, 2014 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||
| Payables turnover | 7.45 | 7.43 | 7.13 | 7.95 | 7.59 | 12.71 | |
| Short-term Activity Ratio (no. days) | |||||||
| Average payables payment period1 | 49 | 49 | 51 | 46 | 48 | 29 | |
| Benchmarks (no. days) | |||||||
| Average Payables Payment Period, Competitors2 | |||||||
| Costco Wholesale Corp. | 32 | 33 | — | — | — | — | |
| Target Corp. | 67 | — | — | — | — | — | |
| Walmart Inc. | 45 | — | — | — | — | — | |
| Average Payables Payment Period, Sector | |||||||
| Consumer Staples Distribution & Retail | 44 | — | — | — | — | — | |
| Average Payables Payment Period, Industry | |||||||
| Consumer Staples | 53 | — | — | — | — | — | |
Based on: 10-K (reporting date: 2019-08-31), 10-K (reporting date: 2018-08-31), 10-K (reporting date: 2017-08-31), 10-K (reporting date: 2016-08-31), 10-K (reporting date: 2015-08-31), 10-K (reporting date: 2014-08-31).
1 2019 Calculation
Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ 7.45 = 49
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Average payables payment period | An estimate of the average number of days it takes a company to pay its suppliers; equal to the number of days in the period divided by payables turnover ratio for the period. |
Cash Conversion Cycle
Walgreens Boots Alliance Inc., cash conversion cycle calculation, comparison to benchmarks
No. days
| Aug 31, 2019 | Aug 31, 2018 | Aug 31, 2017 | Aug 31, 2016 | Aug 31, 2015 | Aug 31, 2014 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||
| Average inventory processing period | 32 | 35 | 36 | 37 | 41 | 40 | |
| Average receivable collection period | 19 | 18 | 20 | 19 | 24 | 15 | |
| Average payables payment period | 49 | 49 | 51 | 46 | 48 | 29 | |
| Short-term Activity Ratio | |||||||
| Cash conversion cycle1 | 2 | 4 | 5 | 10 | 17 | 26 | |
| Benchmarks | |||||||
| Cash Conversion Cycle, Competitors2 | |||||||
| Costco Wholesale Corp. | 3 | 4 | — | — | — | — | |
| Target Corp. | 1 | — | — | — | — | — | |
| Walmart Inc. | 1 | — | — | — | — | — | |
| Cash Conversion Cycle, Sector | |||||||
| Consumer Staples Distribution & Retail | 2 | — | — | — | — | — | |
| Cash Conversion Cycle, Industry | |||||||
| Consumer Staples | 2 | — | — | — | — | — | |
Based on: 10-K (reporting date: 2019-08-31), 10-K (reporting date: 2018-08-31), 10-K (reporting date: 2017-08-31), 10-K (reporting date: 2016-08-31), 10-K (reporting date: 2015-08-31), 10-K (reporting date: 2014-08-31).
1 2019 Calculation
Cash conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= 32 + 19 – 49 = 2
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Cash conversion cycle | A financial metric that measures the length of time required for a company to convert cash invested in its operations to cash received as a result of its operations; equal to average inventory processing period plus average receivables collection period minus average payables payment period. | Walgreens Boots Alliance Inc. cash conversion cycle improved from 2017 to 2018 and from 2018 to 2019. |