Alphabet Inc. (NASDAQ:GOOG)

The analysis of the financial ratios over the observed quarters indicates several noteworthy trends regarding the company's operational efficiency and working capital management.

Receivables Turnover

The receivables turnover ratio has shown variability within a range between approximately 6.4 and 8.1 over the reported periods. Starting from around 5.9 in early 2020, it increased to peak near 8.13 in late 2022 before exhibiting a general gradual decline towards 6.75 by mid-2025. This pattern suggests periods of improved efficiency in collecting receivables, followed by some moderation in collection speed towards the more recent quarters.

Payables Turnover

The payables turnover ratio displays significant fluctuation, with values ranging from about 15.16 to a high near 33.89. Peaks were observed notably in mid-2022, indicating accelerated payment to suppliers during that time. Post-peak, the ratio declined and stabilized around the high teens to low twenties by mid-2025. This suggests varying degrees of supplier payment pacing, with some periods of faster settlements reverting to more moderate levels subsequently.

Working Capital Turnover

The working capital turnover ratio presents a clear upward trend over the period analyzed. Beginning near 1.55 in early 2020, it steadily increased each quarter, reaching levels above 5.0 in 2024 before a slight dip in mid-2025. This consistent increase implies enhanced efficiency in utilizing working capital to generate revenue, reflecting improved operational performance in the management of current assets and liabilities.

Average Receivable Collection Period

The average collection period for receivables experienced a general decline from about 62 days early in 2020 to a low near 45 days in late 2021, signaling improvements in cash collection processes. However, from 2022 onward, the days fluctuated between mid-40s and mid-50s without a distinct trend, indicating some variability but no sustained deterioration or improvement in receivables collection efficiency.

Average Payables Payment Period

The average payment period to suppliers shows a fluctuating yet generally low trend over the span, starting at 24 days in early 2020, decreasing to as low as 11 days in mid-2022, and then increasing again to roughly 20 days by mid-2025. These fluctuations align with the observed volatility in payables turnover, reflecting changes in supplier payment policies or liquidity management strategies.

In summary, the company demonstrates a notable improvement in working capital efficiency, indicated by the rising working capital turnover. Receivables turnover and collection period reveal some initial gains in efficiencies but show signs of stabilization or slight regression in recent periods. Payables-related ratios illustrate a dynamic approach to supplier payments with periods of rapid settlements followed by normalization. These patterns suggest ongoing active management of working capital components, balancing between accelerating collections and optimizing payment schedules.

The analysis of the quarterly financial data reveals several key trends and patterns related to revenues, accounts receivable, and receivables turnover over the observed periods.

Revenues

Revenues exhibit a general upward trend with notable seasonal fluctuations. Beginning in March 2020 with approximately $41.2 billion, there is a dip in the second quarter of 2020, followed by steady growth through the end of 2021, culminating in a peak near $75.3 billion in December 2021. A similar seasonal pattern appears annually, with revenues typically higher in the fourth quarter. Post-2021, revenues fluctuate but maintain an upward trajectory, reaching another peak of about $96.4 billion in June 2025. This indicates sustained growth over the five-year span, despite some quarter-to-quarter volatility.

Accounts Receivable, Net

Accounts receivable balances also show an overall increasing trend, moving from roughly $21.8 billion in March 2020 to around $55.0 billion in June 2025. Similar to revenues, receivables rise and fall in a seasonal pattern with peaks often aligning with higher revenue quarters, particularly in the fourth quarter. The growth in receivables is consistent with the revenue expansion, suggesting proportional increases in credit extended to customers over time.

Receivables Turnover

The receivables turnover ratio presents moderate variability without a clear long-term trend. Initial figures indicate a turnover of approximately 5.9 in late 2020, which increases to above 7.0 in several quarters, peaking at around 8.13 in December 2022. Subsequently, the ratio fluctuates between roughly 6.4 and 7.9, indicating relatively stable collection efficiency. Despite the increasing receivables and revenues, the turnover ratio remains within a consistent range, suggesting the company's credit and collection policies have maintained steady effectiveness.

Overall, the financial data indicates healthy revenue growth accompanied by a proportional increase in accounts receivable. The consistent receivables turnover ratios imply that the company's management of receivables has remained effective across the analyzed periods. Seasonal patterns are evident in both revenues and receivables, reflecting typical business cyclicality.

The quarterly financial data reveals several notable trends concerning cost of revenues, accounts payable, and payables turnover ratios over the observed periods.

Cost of Revenues

The cost of revenues demonstrated an overall upward trajectory from March 31, 2020, through June 30, 2025. Starting at approximately $18.98 billion in March 2020, the figure increased with fluctuations, reaching peaks around $40.6 billion in December 2024. Despite intermittent slight declines or moderate growth in certain quarters, the general pattern reflects a consistent increase, indicating rising operational costs or increased sales volumes over time.

Accounts Payable

Accounts payable showed variability but with an overall upward trend. Beginning at about $4.1 billion in March 2020, the value experienced fluctuations, including notable increases in late 2021 and through 2024, peaking at approximately $8.5 billion in June 2025. Some quarters such as March 2022 exhibited a dip compared to prior periods, but the broader view suggests either increased purchases on credit or extended payment terms consistent with growth in expenses or scale of operations.

Payables Turnover Ratio

The payables turnover ratio, starting data availability in the latter part of 2020, displayed variability across periods. After being around 15 in late 2020, the ratio rose to higher levels around 22.5 by December 2020 and exhibited peaks and troughs thereafter. High points such as 33.89 in March 2022 suggest periods of faster payment to suppliers, whereas subsequent decreases to lower twenties or high teens indicate a slowing pace of accounts payable turnover. The fluctuation in this ratio might reflect changing payment policies or shifts in supplier negotiations.

In summary, the increasing cost of revenues aligned with growing accounts payable suggests expansion in business activities or inflationary pressures on costs. Variations in the payables turnover ratio indicate changes in payment practices which may be linked to liquidity management or strategic supplier relationships.

The analysis of the quarterly financial data reveals several noteworthy trends regarding working capital, revenues, and working capital turnover over the observed periods.

Working Capital

Working capital shows a generally declining trend over the entirety of the periods. Beginning at approximately 106.8 billion US dollars in March 2020, it fluctuates slightly in the mid-periods but then declines more consistently from 115.9 billion in March 2022 to a low near 70.4 billion in March 2025. An exception to this decline appears at the latest data point in June 2025, where working capital rises to roughly 78.9 billion. Early periods show moderate stability, but the downward trajectory becomes more pronounced in recent years.

Revenues

Revenues exhibit a generally positive growth momentum across the quarters, albeit with some variability. Starting at around 41.2 billion US dollars in March 2020, revenues increase substantially over time, reaching approximately 96.5 billion by June 2025. Although fluctuations exist, such as slight decreases or plateaus in some quarters (notably September 2022 and March 2023), the overall trajectory is upward. This growth trend appears quite pronounced in the intervals from late 2020 through 2025, demonstrating substantial revenue expansion.

Working Capital Turnover

The working capital turnover ratio, calculated only from late 2020 onward, shows a clear and steady increasing trend. Starting at a ratio of 1.55 in September 2020, it rises progressively each quarter—passing 2.0 in late 2020, moving above 3.0 by early 2023, and ultimately reaching a peak near 5.11 in June 2025, before a slight decline to 4.71 in the most recent quarter. This indicates an improving efficiency in generating revenues from available working capital, reflecting better utilization of short-term assets and liabilities over time.

Overall Insights

The interplay between decreasing working capital and increasing revenues results in a strengthening working capital turnover ratio, implying enhanced operational efficiency. The decrease in working capital alongside rising revenues suggests that the company has been increasingly effective at deploying its working capital to support revenue growth. Minor fluctuations in working capital near the end of the timeline do not materially alter the long-term trend. The continuous improvement in the turnover ratio highlights an operational focus on optimizing resource allocation and capital management.

The data reflects the trends in receivables turnover and the average receivable collection period over multiple quarters from March 2020 through June 2025.

Receivables Turnover

Receivables turnover ratios were not reported for the initial four quarters up to December 31, 2020. Starting from March 31, 2021, the ratio began at 5.9 and exhibited an overall upward trend, peaking at 8.13 in December 2022. Following this peak, a gradual decline is observed, with the ratio decreasing to 6.75 by June 30, 2025. This indicates improved efficiency in collection of receivables up to late 2022, followed by a modest reduction in collection efficiency in subsequent quarters.

Average Receivable Collection Period

This metric, also absent during the initial quarters, started at 62 days in March 2021. It generally shows an inverse pattern relative to receivables turnover as expected. The collection period shortened to a minimum of 45 days in December 2022, corresponding with the peak receivables turnover, indicating faster collections. Thereafter, the period slowly increased, reaching up to 57 days in December 2023 before settling around 52-54 days through mid-2025, suggesting a slight lengthening in the time taken to collect receivables compared to the peak efficiency period.

The analysis of the payables turnover ratio reveals a fluctuating trend between the first available quarter, March 31, 2020, and June 30, 2025. Initially, the ratio recorded a value of 15.16, and it gradually increased over the following quarters, reaching a peak of 33.89 in June 2022. This peak indicates a more frequent payment to suppliers during this period. Subsequently, the ratio declined and exhibited volatility, fluctuating between approximately 17.53 and 30.41 through the final quarters analyzed.

The average payables payment period, measured in days, shows an inverse relationship to the payables turnover ratio. It started at 24 days in March 2020, decreasing to a low of 11 days by June 2022, consistent with the peak observed in the payables turnover ratio. After this decline, the payment period increased again, showing variability with values mostly between 15 and 21 days towards the later periods up to June 2025.

Overall, the data indicates that the company generally shortened its payables payment period and increased its payables turnover from 2020 to mid-2022, suggesting an enhanced efficiency or change in payment policy. Post mid-2022, there is evidence of normalization or relaxation in payables management, with both the turnover ratio decreasing and the payment period lengthening slightly but remaining relatively volatile.

Payables Turnover Ratio Trends

Increased from 15.16 to a peak of 33.89 (Mar 2020 to Jun 2022), followed by fluctuations between 17.53 and 30.41 through mid-2025.

Average Payables Payment Period Trends

Decreased from 24 days to 11 days (Mar 2020 to Jun 2022), then rose to a fluctuating range mostly between 15 and 21 days by mid-2025.

Relationship Between Metrics

An inverse correlation is observed: when the turnover ratio increased, the payment period decreased, indicating faster payment cycles, and vice versa.

Insights

The company demonstrated greater payment efficiency and reduced days payable outstanding until mid-2022, potentially improving supplier relationships or cash flow management. The subsequent trend towards extended payment periods may indicate strategic changes in working capital management or operational adjustments.