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Royal Dutch Shell PLC (RDSA) | Short-term (Operating) Activity Analysis

Activity ratios measure how efficiently a company performs day-to-day tasks, such us the collection of receivables and management of inventory.


Ratios (Summary)

Royal Dutch Shell PLC, short-term (operating) activity ratios

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    Dec 31, 2012 Dec 31, 2011 Dec 31, 2010 Dec 31, 2009 Dec 31, 2008
  Turnover Ratios
Inventory turnover 15.18 16.23 12.54 10.15 23.70
Receivables turnover 11.62 9.73 9.83 9.31 14.88
Payables turnover 11.01 10.48 10.68 9.47 17.83
Working capital turnover 26.31 27.47 29.82 23.84 41.51
  Average No. of Days
Average inventory processing period 24 22 29 36 15
Add: Average receivable collection period 31 38 37 39 25
Operating cycle 55 60 66 75 40
Less: Average payables payment period 33 35 34 39 20
Cash conversion cycle 22 25 32 37 19

Source: Based on data from Royal Dutch Shell PLC Annual Reports

Ratio Description The company
Inventory turnover An activity ratio calculated as revenue divided by inventory. Royal Dutch Shell PLC's inventory turnover improved from 2010 to 2011 but then slightly deteriorated from 2011 to 2012.
Receivables turnover An activity ratio equal to revenue divided by receivables. Royal Dutch Shell PLC's receivables turnover deteriorated from 2010 to 2011 but then improved from 2011 to 2012 exceeding 2010 level.
Payables turnover An activity ratio calculated as revenue divided by payables. Royal Dutch Shell PLC's payables turnover declined from 2010 to 2011 but then increased from 2011 to 2012 exceeding 2010 level.
Working capital turnover An activity ratio calculated as revenue divided by working capital. Royal Dutch Shell PLC's working capital turnover deteriorated from 2010 to 2011 and from 2011 to 2012.
Average inventory processing period An activity ratio equal to the number of days in the period divided by inventory turnover over the period. Royal Dutch Shell PLC's average inventory processing period improved from 2010 to 2011 but then slightly deteriorated from 2011 to 2012.
Average receivable collection period An activity ratio equal to the number of days in the period divided by receivables turnoverd. Royal Dutch Shell PLC's average receivable collection period deteriorated from 2010 to 2011 but then improved from 2011 to 2012 exceeding 2010 level.
Operating cycle Equal to average inventory processing period plus average receivables collection period. Royal Dutch Shell PLC's operating cycle improved from 2010 to 2011 and from 2011 to 2012.
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. Royal Dutch Shell PLC's average payables payment period increased from 2010 to 2011 but then declined significantly from 2011 to 2012.
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. Royal Dutch Shell PLC's cash conversion cycle improved from 2010 to 2011 and from 2011 to 2012.

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Inventory Turnover

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    Dec 31, 2012 Dec 31, 2011 Dec 31, 2010 Dec 31, 2009 Dec 31, 2008
  Selected Financial Data (USD $ in millions)
Revenue 467,153  470,171  368,056  278,188  458,361 
Inventories 30,781  28,976  29,348  27,410  19,342 
  Inventory Turnover, Comparison to Industry
Royal Dutch Shell PLC1 15.18 16.23 12.54 10.15 23.70
  Industry, Oil & Gas 15.26 16.58 14.87 13.19 23.54

Source: Based on data from Royal Dutch Shell PLC Annual Reports

2012 Calculations

1 Inventory turnover = Revenue ÷ Inventories
= 467,153 ÷ 30,781 = 15.18

Ratio Description The company
Inventory turnover An activity ratio calculated as revenue divided by inventory. Royal Dutch Shell PLC's inventory turnover improved from 2010 to 2011 but then slightly deteriorated from 2011 to 2012.

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Receivables Turnover

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    Dec 31, 2012 Dec 31, 2011 Dec 31, 2010 Dec 31, 2009 Dec 31, 2008
  Selected Financial Data (USD $ in millions)
Revenue 467,153  470,171  368,056  278,188  458,361 
Trade receivables 40,210  48,307  37,436  29,872  30,813 
  Receivables Turnover, Comparison to Industry
Royal Dutch Shell PLC1 11.62 9.73 9.83 9.31 14.88
  Industry, Oil & Gas 11.65 11.30 10.36 9.78 14.87

Source: Based on data from Royal Dutch Shell PLC Annual Reports

2012 Calculations

1 Receivables turnover = Revenue ÷ Trade receivables
= 467,153 ÷ 40,210 = 11.62

Ratio Description The company
Receivables turnover An activity ratio equal to revenue divided by receivables. Royal Dutch Shell PLC's receivables turnover deteriorated from 2010 to 2011 but then improved from 2011 to 2012 exceeding 2010 level.

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Payables Turnover

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    Dec 31, 2012 Dec 31, 2011 Dec 31, 2010 Dec 31, 2009 Dec 31, 2008
  Selected Financial Data (USD $ in millions)
Revenue 467,153  470,171  368,056  278,188  458,361 
Trade payables 42,448  44,844  34,476  29,379  25,705 
  Payables Turnover, Comparison to Industry
Royal Dutch Shell PLC1 11.01 10.48 10.68 9.47 17.83
  Industry, Oil & Gas 11.51 11.61 10.69 10.39 16.45

Source: Based on data from Royal Dutch Shell PLC Annual Reports

2012 Calculations

1 Payables turnover = Revenue ÷ Trade payables
= 467,153 ÷ 42,448 = 11.01

Ratio Description The company
Payables turnover An activity ratio calculated as revenue divided by payables. Royal Dutch Shell PLC's payables turnover declined from 2010 to 2011 but then increased from 2011 to 2012 exceeding 2010 level.

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Working Capital Turnover

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    Dec 31, 2012 Dec 31, 2011 Dec 31, 2010 Dec 31, 2009 Dec 31, 2008
  Selected Financial Data (USD $ in millions)
Current assets 114,734  119,777  112,894  96,457  116,570 
Less: Current liabilities 96,979  102,659  100,552  84,789  105,529 
Working capital 17,755  17,118  12,342  11,668  11,041 
Revenue 467,153  470,171  368,056  278,188  458,361 
  Working Capital Turnover, Comparison to Industry
Royal Dutch Shell PLC1 26.31 27.47 29.82 23.84 41.51
  Industry, Oil & Gas 16.12 24.43 19.76 22.65 38.48

Source: Based on data from Royal Dutch Shell PLC Annual Reports

2012 Calculations

1 Working capital turnover = Revenue ÷ Working capital
= 467,153 ÷ 17,755 = 26.31

Ratio Description The company
Working capital turnover An activity ratio calculated as revenue divided by working capital. Royal Dutch Shell PLC's working capital turnover deteriorated from 2010 to 2011 and from 2011 to 2012.

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Average Inventory Processing Period

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    Dec 31, 2012 Dec 31, 2011 Dec 31, 2010 Dec 31, 2009 Dec 31, 2008
  Selected Financial Data
Inventory turnover 15.18 16.23 12.54 10.15 23.70
  Average Inventory Processing Period (no. of days), Comparison to Industry
Royal Dutch Shell PLC1 24 22 29 36 15
  Industry, Oil & Gas 24 22 25 28 16

Source: Based on data from Royal Dutch Shell PLC Annual Reports

2012 Calculations

1 Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ 15.18 = 24

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. Royal Dutch Shell PLC's average inventory processing period improved from 2010 to 2011 but then slightly deteriorated from 2011 to 2012.

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Average Receivable Collection Period

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    Dec 31, 2012 Dec 31, 2011 Dec 31, 2010 Dec 31, 2009 Dec 31, 2008
  Selected Financial Data
Receivables turnover 11.62 9.73 9.83 9.31 14.88
  Average Receivable Collection Period (no. of days), Comparison to Industry
Royal Dutch Shell PLC1 31 38 37 39 25
  Industry, Oil & Gas 31 32 35 37 25

Source: Based on data from Royal Dutch Shell PLC Annual Reports

2012 Calculations

1 Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ 11.62 = 31

Ratio Description The company
Average receivable collection period An activity ratio equal to the number of days in the period divided by receivables turnoverd. Royal Dutch Shell PLC's average receivable collection period deteriorated from 2010 to 2011 but then improved from 2011 to 2012 exceeding 2010 level.

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Operating Cycle

No. of days

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    Dec 31, 2012 Dec 31, 2011 Dec 31, 2010 Dec 31, 2009 Dec 31, 2008
  Selected Financial Data
Average inventory processing period 24 22 29 36 15
Average receivable collection period 31 38 37 39 25
  Operating Cycle, Comparison to Industry
Royal Dutch Shell PLC1 55 60 66 75 40
  Industry, Oil & Gas 55 54 60 65 40

Source: Based on data from Royal Dutch Shell PLC Annual Reports

2012 Calculations

1 Operating cycle = Average inventory processing period + Average receivable collection period
= 24 + 31 = 55

Ratio Description The company
Operating cycle Equal to average inventory processing period plus average receivables collection period. Royal Dutch Shell PLC's operating cycle improved from 2010 to 2011 and from 2011 to 2012.

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Average Payables Payment Period

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    Dec 31, 2012 Dec 31, 2011 Dec 31, 2010 Dec 31, 2009 Dec 31, 2008
  Selected Financial Data
Payables turnover 11.01 10.48 10.68 9.47 17.83
  Average Payables Payment Period (no. of days), Comparison to Industry
Royal Dutch Shell PLC1 33 35 34 39 20
  Industry, Oil & Gas 32 31 34 35 22

Source: Based on data from Royal Dutch Shell PLC Annual Reports

2012 Calculations

1 Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ 11.01 = 33

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. Royal Dutch Shell PLC's average payables payment period increased from 2010 to 2011 but then declined significantly from 2011 to 2012.

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Cash Conversion Cycle

No. of days

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    Dec 31, 2012 Dec 31, 2011 Dec 31, 2010 Dec 31, 2009 Dec 31, 2008
  Selected Financial Data
Average inventory processing period 24 22 29 36 15
Average receivable collection period 31 38 37 39 25
Average payables payment period 33 35 34 39 20
  Cash Conversion Cycle, Comparison to Industry
Royal Dutch Shell PLC1 22 25 32 37 19
  Industry, Oil & Gas 24 23 26 30 18

Source: Based on data from Royal Dutch Shell PLC Annual Reports

2012 Calculations

1 Cash conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= 24 + 31 – 33 = 22

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. Royal Dutch Shell PLC's cash conversion cycle improved from 2010 to 2011 and from 2011 to 2012.

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