Alphabet Inc. (NASDAQ:GOOG)

Receivables Turnover

The receivables turnover ratio shows a generally increasing trend from 5.9 in 2020 to a peak of 7.03 in 2022, indicating improved efficiency in collecting receivables during this period. However, there is a slight decline to 6.41 in 2023, followed by a modest recovery to 6.69 in 2024. Overall, the ratio remains higher than the 2020 level, suggesting better management of receivables over time.

Payables Turnover

Payables turnover exhibits notable volatility. It rises sharply from 15.16 in 2020 to 24.61 in 2022, implying faster payment to suppliers during this period. Then, the ratio decreases to 17.79 in 2023 before slightly increasing again to 18.32 in 2024. Despite fluctuations, the overall trend suggests a more aggressive payment policy in the earlier years followed by moderation.

Working Capital Turnover

Working capital turnover shows a consistent upward trend across the period. Starting at 1.55 in 2020, the ratio improves steadily, reaching 4.69 in 2024. This progressive increase indicates that the company is generating more revenue per unit of working capital, reflecting enhanced efficiency in using its short-term assets and liabilities to support sales.

Average Receivable Collection Period

The average receivable collection period declines from 62 days in 2020 to a low of 52 days in 2022, suggesting quicker collection cycles. However, it rises again to 57 days in 2023 and slightly improves to 55 days in 2024. In general, the shorter collection periods compared to 2020 point to better accounts receivable management, though some variability exists.

Average Payables Payment Period

This metric decreases substantially from 24 days in 2020 to 15 days in 2022, indicating faster payments to suppliers. It then increases to 21 days in 2023 before settling at 20 days in 2024. The trend reveals an initial push towards quicker supplier payments followed by a return toward slightly longer payment terms, which may reflect strategic adjustments in cash flow management.

Revenues

Revenues demonstrate a consistent upward trajectory over the five-year period. Starting from 182,527 million USD in 2020, revenues increased substantially to 350,018 million USD by the end of 2024. This represents a nearly doubling of revenue, suggesting strong growth and expanding business operations.

Accounts Receivable, Net

The net accounts receivable balance has also increased steadily from 30,930 million USD in 2020 to 52,340 million USD in 2024. The rise in receivables parallels revenue growth, indicating that a higher volume of sales is generating more outstanding amounts owed by customers. However, the increase in receivables is somewhat proportional to revenue expansion, implying stable credit and collection policies.

Receivables Turnover Ratio

The receivables turnover ratio shows some variability throughout the period. It increased from 5.9 in 2020 to a peak of 7.03 in 2022, indicating improved efficiency in collecting receivables. Thereafter, it declined to 6.41 in 2023 before rising again to 6.69 in 2024. These fluctuations could be due to changes in credit terms, customer payment behavior, or collection efforts, but overall the turnover remains within a relatively consistent range, suggesting stable management of receivables relative to sales.

Cost of Revenues

The cost of revenues shows a consistent upward trend over the five-year period. Starting at $84,732 million in 2020, it increased to $110,939 million in 2021, then further to $126,203 million in 2022. The growth continued to $133,332 million in 2023 and reached $146,306 million in 2024. This steady increase suggests rising costs associated with the production and delivery of goods and services over the years.

Accounts Payable

Accounts payable experienced fluctuations but showed an overall increasing trend. It started at $5,589 million in 2020, rose slightly to $6,037 million in 2021, then declined to $5,128 million in 2022. However, it increased again to $7,493 million in 2023 and further to $7,987 million in 2024. The volatility in accounts payable could indicate changes in payment policies or supplier terms through these years.

Payables Turnover Ratio

The payables turnover ratio exhibited notable variability over the period. It rose from 15.16 in 2020 to a peak of 24.61 in 2022, indicating faster payments to suppliers that year. However, it dropped significantly to 17.79 in 2023, and slightly increased to 18.32 in 2024. This pattern suggests that the company’s efficiency in managing payables peaked in 2022 but moderated thereafter, potentially reflecting shifts in cash management strategies or supplier relationship dynamics.

The financial data reveals distinct trends in working capital, revenues, and working capital turnover over the five-year period.

Working Capital

Working capital has steadily declined from US$117,462 million in 2020 to US$74,589 million in 2024. This represents a substantial decrease, indicating that current liabilities may be rising faster than current assets, or current assets are being managed more efficiently with a lower net working capital requirement.

Revenues

Revenues have demonstrated consistent growth throughout the period, increasing from US$182,527 million in 2020 to US$350,018 million in 2024. This reflects a robust upward trend, showing the company’s capacity to expand sales or services effectively year over year.

Working Capital Turnover

The working capital turnover ratio has shown a strong upward trajectory, advancing from 1.55 in 2020 to 4.69 in 2024. This indicates improving efficiency in using working capital to generate revenues. The ratio nearly tripled in the period, suggesting that the company is generating significantly more sales per unit of working capital invested.

Overall, the data suggests increasing operational efficiency as the company generates higher revenues with progressively lower levels of working capital. The marked improvement in working capital turnover supports this interpretation, evidencing enhanced asset utilization and possibly optimized management of short-term assets and liabilities. However, the continued reduction in working capital warrants careful monitoring to avoid potential liquidity constraints despite strong revenue growth.

Receivables Turnover

The receivables turnover ratio exhibits a general upward trend from 5.9 in 2020 to a peak of 7.03 in 2022, indicating an improvement in the efficiency of collecting receivables during that period. However, there is a decline in 2023 to 6.41, followed by a moderate recovery to 6.69 in 2024. This pattern suggests some variability in collection efficiency after 2022, with a slight weakening and subsequent partial stabilization.

Average Receivable Collection Period

The average collection period shows a consistent improvement from 62 days in 2020 down to 52 days in 2022, reflecting faster collection of receivables over these years. In 2023, the period increases to 57 days, indicating a slowdown in collections, but declines again to 55 days in 2024, denoting a partial improvement. The inverse relationship with the receivables turnover ratio is evident, as changes in collection period correspond closely with fluctuations in turnover.

Overall Analysis

The data reveals an overall improvement in receivables management up to 2022, with quicker collections and higher turnover ratios. However, the subsequent years show signs of volatility, with some deterioration in collection speed and turnover efficiency in 2023, followed by a slight recovery in 2024. These trends may suggest external factors or operational changes impacting the receivables process in recent periods.

Payables Turnover

The payables turnover ratio exhibited a fluctuating pattern over the observed periods. It increased significantly from 15.16 in 2020 to a peak of 24.61 in 2022, indicating a faster rate of paying off suppliers in that year. However, this ratio then declined to 17.79 in 2023 and slightly rose to 18.32 in 2024. The initial rise suggests improved efficiency in settling payables up to 2022, but the subsequent decrease may point to a moderation in payment speed or changes in procurement or credit terms.

Average Payables Payment Period

The average number of days taken to pay suppliers decreased from 24 days in 2020 to 15 days in 2022, reflecting an acceleration in payment timing. Following 2022, the payment period increased again to 21 days in 2023 and then marginally reduced to 20 days in 2024. This trend mirrors the payables turnover ratio, with a shortened payment period indicating quicker payments up to 2022 and a lengthening thereafter suggesting a degree of payment timing relaxation.

Overall Insights

The data indicates that the company improved its efficiency in managing payables up to 2022, reducing the time taken to settle its debts and increasing turnovers. After 2022, there is a noticeable shift, with slower payables turnover and longer average payment periods, possibly reflecting strategic adjustments, cash flow management considerations, or changes in supplier terms.