Adobe Inc. (NASDAQ:ADBE)

The short-term operating activity ratios exhibit varied trends over the observed period. Generally, the company demonstrates consistent, though fluctuating, efficiency in managing its receivables and payables. However, significant volatility is apparent in the working capital turnover ratio, particularly in certain quarters.

Receivables Turnover

The receivables turnover ratio generally fluctuates between 8.41 and 13.03. An increasing trend is observed from late 2021 through the first half of 2023, peaking at 13.03 in February 2025. Following this peak, the ratio experiences a slight decline. Overall, the company appears to be effectively converting its receivables into cash, with some seasonal variations.

Payables Turnover

The payables turnover ratio demonstrates a more stable pattern, generally ranging from 5.40 to 7.92. There is a slight upward trend from 2021 to 2022, followed by fluctuations. The ratio remains relatively consistent throughout the observed period, suggesting a consistent approach to managing payments to suppliers.

Working Capital Turnover

The working capital turnover ratio displays substantial volatility. It begins at 8.67 and experiences significant spikes in the first half of 2022 (57.86 and 31.92) and again in the first half of 2024 (42.33 and 13.19). A particularly high value of 133.99 is recorded in August 2025. These spikes suggest periods of highly efficient working capital utilization, potentially driven by specific business activities or accounting adjustments. The ratio then declines again, indicating a return to more typical levels. The fluctuations warrant further investigation to understand the underlying drivers.

Average Receivable Collection Period

The average receivable collection period generally remains between 28 and 43 days. A decreasing trend is observed from 2021 to 2023, reaching a low of 28 days in February 2025. This suggests an improvement in the speed of collecting receivables. The period then increases slightly, remaining around 33 days in the later periods.

Average Payables Payment Period

The average payables payment period fluctuates between 46 and 68 days. It generally remains stable, with no clear long-term trend. The period fluctuates around the 50-60 day range, indicating a consistent, though potentially negotiable, payment schedule with suppliers. A slight increase to 60 days is observed in the final period.

In summary, the company demonstrates generally healthy liquidity management, as indicated by the receivables and payables turnover ratios. The significant fluctuations in working capital turnover require further scrutiny to determine their cause and potential impact on overall financial performance.

The receivables turnover ratio exhibits fluctuations over the observed period, generally ranging between approximately 8.41 and 13.03. An initial period of relative stability is followed by increased variability. A detailed examination reveals distinct trends and patterns in the ratio’s performance.

Overall Trend

From March 2021 through December 2021, the ratio demonstrates a slight decline, moving from 9.00 to 8.41. This is followed by a period of recovery and increased volatility through the remainder of 2022, peaking at 10.94 in June 2023 before declining again to 8.73 in December 2023. The most recent period, from March 2024 through November 2025, shows a generally increasing trend, with a peak of 13.03 in May 2025, followed by a slight decrease.

Short-Term Fluctuations

A notable increase in the receivables turnover ratio is observed between June 2022 (10.51) and June 2023 (10.94), suggesting improved efficiency in collecting receivables during that timeframe. Conversely, a decrease is apparent between September 2023 (10.20) and December 2023 (8.73), potentially indicating a slowdown in collections or a change in credit terms. The most recent quarters show a strong upward trend, with a significant jump from November 2024 (10.38) to May 2025 (13.03).

Relationship to Revenue

The observed fluctuations in the receivables turnover ratio do not appear to be directly correlated with consistent increases or decreases in revenue. While revenue generally trends upward throughout the period, the receivables turnover ratio exhibits independent variations. This suggests that factors beyond overall sales volume, such as credit policies, collection efforts, and customer payment behavior, significantly influence the ratio’s performance.

Recent Performance

The latest reported value, for November 2025, is 10.14. This represents a decrease from the peak of 13.03 in May 2025, but remains above the values observed during the earlier portion of the analyzed period. The recent fluctuations warrant continued monitoring to determine if this represents a temporary deviation or the beginning of a new trend.

In conclusion, the receivables turnover ratio demonstrates a dynamic pattern over the analyzed period. While generally stable, it is subject to short-term fluctuations influenced by factors beyond revenue growth. Recent performance indicates a potential shift in collection efficiency, requiring further investigation.

The payables turnover ratio exhibits fluctuations over the observed period, generally ranging between 5.40 and 7.92. An initial decline is noted from March 2021 to June 2021, followed by a period of relative stability through December 2021. A subsequent increase is observed in the first half of 2022, before another period of fluctuation. The ratio generally trends upward from September 2022 through March 2024, reaching a peak in March 2024, then declines through November 2024 before stabilizing in the final reported periods.

Overall Trend

The payables turnover ratio does not demonstrate a consistently strong upward or downward trend. Instead, it oscillates, suggesting changes in the company’s payment practices or the timing of purchases relative to cost of revenue. The most significant sustained increase occurred between September 2022 and March 2024.

Short-Term Fluctuations

A noticeable decrease in the ratio is observed between March 5, 2021 (6.76) and June 4, 2021 (5.60). This suggests a potential increase in the amount of credit taken from suppliers or a slower rate of paying suppliers during that quarter. A similar, though less pronounced, decrease occurs between December 2, 2022 (5.71) and March 3, 2023 (6.51). Conversely, increases are seen between June 3, 2022 (5.53) and September 2, 2022 (6.66), and between December 1, 2023 (7.50) and March 1, 2024 (7.92).

Recent Performance

The ratio decreased from a high of 7.92 in March 2024 to 6.12 in November 2025. This recent decline warrants further investigation to determine if it represents a shift in supplier relationships, changes in purchasing strategies, or potential liquidity concerns. The ratio stabilizes in the final two periods, suggesting the decline may have bottomed out.

Relationship to Cost of Revenue

While the payables turnover ratio fluctuates, it generally moves in a manner consistent with changes in cost of revenue. Periods of increasing cost of revenue often coincide with increases in the ratio, and vice versa. However, this relationship is not always consistent, indicating that factors beyond cost of revenue influence the ratio.

In conclusion, the payables turnover ratio demonstrates a dynamic pattern over the analyzed period. While no single dominant trend is apparent, the recent decline from March 2024 to November 2025 merits attention and further scrutiny.

The working capital turnover ratio exhibits considerable fluctuation throughout the observed period. Initially, the ratio demonstrates a decline from 8.67 in March 2021 to 6.22 in September 2021, followed by a substantial increase to 9.09 in December 2021. This pattern of volatility continues into the subsequent periods.

Initial Decline and Subsequent Volatility (Mar 2021 - Dec 2021)

The initial decrease in the working capital turnover ratio suggests a less efficient utilization of working capital in generating revenue during the first three quarters of 2021. However, the sharp rebound in December 2021 indicates a significant improvement in this efficiency, potentially due to seasonal factors or changes in working capital management practices.

A period of pronounced increases is observed from March 2022 through December 2022, peaking at 57.86 in March 2022 before decreasing to 20.28 by December 2022. This suggests a period of very efficient working capital management followed by a stabilization.

Significant Increase and Subsequent Moderation (Mar 2022 - Dec 2022)

The exceptionally high ratio in March 2022 warrants further investigation, as it could indicate either exceptionally strong sales relative to working capital or a potentially unsustainable reduction in working capital levels. The subsequent moderation suggests a return to more typical levels of working capital utilization.

From March 2023 to November 2024, the ratio generally declines, reaching a low of 6.85 in December 2022 and fluctuating between approximately 13 and 30. The final period shows extreme values, with a ratio of 133.99 in May 2025, followed by a negative value in February 2025 and another negative value in November 2025.

Recent Trends and Anomalies (Mar 2023 - Nov 2025)

The recent downward trend in the ratio, culminating in negative values, is a significant concern. Negative values indicate that working capital is negative, which is unusual and requires immediate attention. This could be due to a substantial decrease in current assets or a significant increase in current liabilities. The extremely high ratio in May 2025, coupled with the subsequent negative values, suggests substantial and potentially erratic changes in working capital components. Further investigation is needed to understand the underlying causes of these fluctuations and their implications for the company’s financial health.

Overall, the working capital turnover ratio demonstrates a high degree of variability throughout the analyzed period. While periods of efficient working capital utilization are evident, the recent trends and anomalies, particularly the negative ratios, necessitate a thorough review of working capital management practices and underlying financial conditions.

The average receivable collection period exhibited fluctuations over the observed timeframe, generally remaining within a range of 28 to 43 days. An initial decrease was noted from 41 days in March 2021 to 37 days in June 2021, maintaining at that level through September 2021. A subsequent increase to 43 days occurred by December 2021.

Overall Trend

The period demonstrates cyclical behavior. Following the peak of 43 days in December 2021, the collection period decreased to 33 days by March 2023. A subsequent rise was observed, peaking at 42 days in December 2023, before declining sharply to 29 days in March 2024. The period then fluctuated between 28 and 36 days through November 2025.

A notable acceleration in collection speed occurred in the first half of 2024, with the average collection period reaching a low of 29 days in March 2024. This suggests improved efficiency in collecting receivables during that period. The subsequent quarters show a return to a more typical range, though remaining relatively stable.

Recent Performance

From September 2024 through November 2025, the average collection period remained relatively consistent, fluctuating between 33 and 36 days. This indicates a stabilization of collection practices following the significant decrease observed earlier in 2024.

The fluctuations observed throughout the period may be attributable to various factors, including changes in credit policies, customer payment behavior, and the timing of revenue recognition. Further investigation would be required to determine the specific drivers behind these changes.

Long-Term Observations

The average collection period has not exhibited a strong directional trend over the entire period. While there are periods of increase and decrease, the metric generally remains within a manageable range, suggesting consistent, though not always improving, management of accounts receivable.

The average payables payment period exhibited fluctuations over the observed period, generally ranging between 46 and 68 days. An initial increase is noted from 54 days in March 2021 to a peak of 68 days in September 2021, followed by a decline to 61 days by December 2021.

Overall Trend

From March 2021 through November 2023, the average payables payment period demonstrated considerable variability without a clear, sustained directional trend. The period generally oscillated between the low 50s and mid 60s. A noticeable downward trend emerges in late 2023 and early 2024, reaching a low of 46 days in March 2024. Subsequently, the period increased again, reaching 56 days in November 2024 before decreasing to 50 days in February 2025. The latest reported period, ending November 2025, shows a rise to 60 days.

Short-Term Fluctuations

A period of relative stability is observed between June and December 2022, with the payment period fluctuating between 64 and 66 days. A similar period of relative stability is seen between September 2023 and February 2025, with the payment period fluctuating between 49 and 56 days. The most significant single-quarter increase occurred between May and August 2025, rising from 49 to 60 days.

Recent Performance

The most recent measurements indicate a slight increase in the average payables payment period. The period rose from 50 days in February 2025 to 60 days in November 2025. This warrants further investigation to determine if this represents a temporary fluctuation or the beginning of a new trend.

The observed variations in the average payables payment period may be influenced by factors such as supplier negotiations, changes in purchasing patterns, and the company’s cash management strategies. Continued monitoring of this metric is recommended to identify any potential impacts on liquidity and supplier relationships.