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Short-term (Operating) Activity Analysis
Quarterly Data
Difficulty: Beginner
Activity ratios measure how efficiently a company performs day-to-day tasks, such us the collection of receivables and management of inventory.
Ratios (Summary)
Amazon.com Inc., short-term (operating) activity ratios (quarterly data)
| Ratio | Description | The company |
|---|---|---|
| Inventory turnover | An activity ratio calculated as cost of goods sold divided by inventory. | Amazon.com Inc.'s inventory turnover improved from Q4 2017 to Q1 2018 but then slightly deteriorated from Q1 2018 to Q2 2018. |
| Payables turnover | An activity ratio calculated as cost of goods sold divided by payables. | Amazon.com Inc.'s payables turnover increased from Q4 2017 to Q1 2018 but then slightly declined from Q1 2018 to Q2 2018. |
| Working capital turnover | An activity ratio calculated as revenue divided by working capital. | Amazon.com Inc.'s working capital turnover deteriorated from Q4 2017 to Q1 2018 and from Q1 2018 to Q2 2018. |
| Average inventory processing period | An activity ratio equal to the number of days in the period divided by inventory turnover over the period. | |
| 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. | Amazon.com Inc.'s average payables payment period declined from Q4 2017 to Q1 2018 but then slightly increased from Q1 2018 to Q2 2018. |
Inventory Turnover
Amazon.com Inc., inventory turnover calculation (quarterly data)
Q2 2018 Calculations
1 Inventory turnover
= (Cost of salesQ2 2018
+ Cost of salesQ1 2018
+ Cost of salesQ4 2017
+ Cost of salesQ3 2017)
÷ Inventories
= ( + + + )
÷ =
| Ratio | Description | The company |
|---|---|---|
| Inventory turnover | An activity ratio calculated as cost of goods sold divided by inventory. | Amazon.com Inc.'s inventory turnover improved from Q4 2017 to Q1 2018 but then slightly deteriorated from Q1 2018 to Q2 2018. |
Payables Turnover
Amazon.com Inc., payables turnover calculation (quarterly data)
Q2 2018 Calculations
1 Payables turnover
= (Cost of salesQ2 2018
+ Cost of salesQ1 2018
+ Cost of salesQ4 2017
+ Cost of salesQ3 2017)
÷ Accounts payable
= ( + + + )
÷ =
| Ratio | Description | The company |
|---|---|---|
| Payables turnover | An activity ratio calculated as cost of goods sold divided by payables. | Amazon.com Inc.'s payables turnover increased from Q4 2017 to Q1 2018 but then slightly declined from Q1 2018 to Q2 2018. |
Working Capital Turnover
Amazon.com Inc., working capital turnover calculation (quarterly data)
Q2 2018 Calculations
1 Working capital turnover
= (Net salesQ2 2018
+ Net salesQ1 2018
+ Net salesQ4 2017
+ Net salesQ3 2017)
÷ Working capital
= ( + + + )
÷ =
| Ratio | Description | The company |
|---|---|---|
| Working capital turnover | An activity ratio calculated as revenue divided by working capital. | Amazon.com Inc.'s working capital turnover deteriorated from Q4 2017 to Q1 2018 and from Q1 2018 to Q2 2018. |
Average Inventory Processing Period
Amazon.com Inc., average inventory processing period calculation (quarterly data)
Q2 2018 Calculations
1 Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ =
| 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. |
Average Payables Payment Period
Amazon.com Inc., average payables payment period calculation (quarterly data)
Q2 2018 Calculations
1 Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ =
| 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. | Amazon.com Inc.'s average payables payment period declined from Q4 2017 to Q1 2018 but then slightly increased from Q1 2018 to Q2 2018. |
