Apple Inc. (NASDAQ:AAPL)

The short-term operating activity ratios exhibit varied trends over the observed period. Inventory turnover generally remained within a range of 28.87 to 45.20, with a noticeable dip to 32.36 and 28.87 in late 2022 and late 2024 respectively. Receivables turnover demonstrated more volatility, peaking at 21.47 in April 2023, but generally declining towards the end of the period. Payables turnover fluctuated between 2.82 and 5.10, showing no clear long-term trend. Working capital turnover experienced significant spikes in June 2021 and March 2024, followed by a lack of reported values in subsequent periods. The average inventory processing period remained relatively stable, generally between 9 and 11 days, with a slight increase to 13 days in late 2024. The average receivable collection period showed a decreasing trend from 34 days in December 2020 to 17 days in April 2023, before increasing again to 33 days by December 2025. The operating cycle fluctuated, with a general trend towards stabilization in the mid-30s. The average payables payment period was consistently higher than the operating cycle, ranging from 72 to 129 days. The cash conversion cycle was consistently negative, indicating efficient liquidity management, but became less negative over time, ending at -70 days.

Inventory Management

Inventory turnover showed a moderate decline in the latter part of the period, potentially indicating slower sales or increased inventory levels. The average inventory processing period remained consistently low, suggesting effective inventory control. The slight increase in processing period towards the end of the observed timeframe warrants monitoring.

Receivables Management

Receivables turnover exhibited considerable fluctuation, with a peak in early 2023 followed by a decline. The average receivable collection period initially decreased, suggesting improved efficiency in collecting receivables, but then increased, potentially indicating a loosening of credit terms or difficulties in collection. The increase in the collection period towards the end of the period could be a cause for concern.

Payables Management

Payables turnover remained relatively stable, with no significant trend observed. The average payables payment period was consistently high, suggesting the company utilizes extended payment terms with its suppliers. This could be a strategic decision to manage cash flow, but also carries the risk of potentially strained supplier relationships.

Overall Efficiency

The working capital turnover ratio showed significant volatility, with limited data available for a comprehensive assessment. The consistently negative cash conversion cycle indicates the company effectively manages its short-term liabilities and converts its operating cycle into positive cash flow. However, the trend of the cash conversion cycle becoming less negative suggests a potential decrease in this efficiency over time.

Cycle Analysis

The operating cycle and cash conversion cycle are closely linked. The consistently negative cash conversion cycle, driven by a longer payables period than receivables and inventory processing periods, suggests the company is effectively financing its operations with supplier credit. The slight narrowing of the cash conversion cycle towards the end of the period suggests a potential shift in this dynamic.

The inventory turnover ratio exhibits fluctuations over the observed period, generally ranging between 28.87 and 45.20. An initial observation reveals a generally increasing trend from December 2020 through June 2022, followed by a period of volatility and a slight upward trend towards the end of the analyzed timeframe.

Initial Increasing Trend (Dec 2020 – Jun 2022)

From December 2020 to June 2022, the inventory turnover ratio generally increased, moving from 36.21 to 40.43. This suggests improving efficiency in managing inventory during this period, potentially due to increased demand or optimized supply chain management. A slight dip is observed in September 2021 (32.37), but the overall trend remains positive.

Period of Volatility (Sep 2022 – Jun 2024)

Following June 2022, the ratio experiences more pronounced fluctuations. It declines to 32.36 in September 2022, then decreases further to 29.24 in March 2022. A recovery is seen in the subsequent quarters, but the ratio remains below the levels observed in the first half of 2022. The ratio fluctuates between approximately 28.87 and 33.80 during this period, indicating potential inconsistencies in sales velocity or inventory levels.

Recent Upward Trend (Jul 2024 – Jun 2025)

The most recent quarters demonstrate a renewed upward trend. The ratio increases from 28.87 in July 2024 to 39.06 in December 2025. This suggests a potential improvement in inventory management or a surge in demand towards the end of the analyzed period. The ratio in June 2025 (36.77) and September 2025 (38.64) indicate a sustained increase.

Cost of Sales and Inventory Relationship

The cost of sales generally increased over the period, with notable peaks in December 2020, December 2021, and December 2022. Inventory levels also show an overall increase, but the inventory turnover ratio’s fluctuations suggest that the growth in sales did not consistently outpace the growth in inventory. The ratio’s movements are influenced by both the cost of sales and inventory levels, and their combined effect determines the observed trends.

In conclusion, the inventory turnover ratio demonstrates a dynamic pattern over the analyzed timeframe. While an initial increasing trend suggests efficient inventory management, subsequent volatility indicates potential challenges. The recent upward trend provides a positive signal, but continued monitoring is recommended to assess the sustainability of this improvement.

The receivables turnover ratio exhibits considerable fluctuation over the observed period, spanning from December 2020 to December 2025. Generally, the ratio indicates the efficiency with which the company converts its receivables into cash. A higher ratio generally suggests more efficient collection practices, while a lower ratio may indicate slower collections or a more lenient credit policy.

Initial Period (Dec 2020 - Jun 2021)

The receivables turnover ratio began at 10.85 in December 2020, then increased significantly, peaking at 19.87 in June 2021. This initial increase suggests improved efficiency in collecting receivables during this timeframe. The increase coincides with a decrease in accounts receivable, net, while net sales remained relatively stable or decreased slightly.

Subsequent Fluctuations (Sep 2021 - Dec 2022)

Following the peak, the ratio decreased to 12.52 by December 2021, then rose again to 16.32 in December 2022. This period demonstrates volatility, with the ratio fluctuating between approximately 12 and 16. Accounts receivable, net, increased during September 2021, contributing to the initial decline in turnover, but decreased again by December 2022.

Recent Trends (Mar 2023 - Dec 2023)

A notable increase to 21.47 was observed in March 2023, representing the highest point in the observed period. This was followed by a decrease to 16.63 in September 2023 and a slight increase to 17.48 in December 2023. Net sales increased significantly in December 2023, while accounts receivable, net, remained relatively stable.

Latest Period (Mar 2024 - Dec 2025)

The ratio decreased to 10.46 in September 2025, and then increased to 10.91 in December 2025. This recent decline suggests a potential slowdown in the collection of receivables, or a deliberate extension of credit terms. Accounts receivable, net, increased substantially during this period, while net sales also increased, but at a slower rate.

Overall, the receivables turnover ratio demonstrates a cyclical pattern with no clear, sustained trend. The fluctuations appear to be influenced by both changes in net sales and the level of accounts receivable, net. Further investigation into the company’s credit policies and collection practices would be necessary to fully understand the drivers behind these variations.

The accounts payable turnover ratio exhibits fluctuations over the observed period, spanning from December 2020 to December 2025. Generally, the ratio indicates the efficiency with which the company is managing its accounts payable, reflecting how many times it pays its suppliers within a year. A higher ratio generally suggests more efficient management, while a lower ratio could indicate slower payments or potential liquidity issues. The analysis reveals periods of both improvement and decline in this metric.

Initial Period (Dec 2020 - Jun 2021)

The payables turnover ratio initially demonstrates an increase from 2.82 in December 2020 to 4.88 in March 2021, and further to 5.07 in June 2021. This suggests an improved ability to manage and pay off supplier invoices during this timeframe. The increase could be attributed to factors such as efficient procurement processes or timely payments to take advantage of early payment discounts.

Subsequent Decline (Jun 2021 - Dec 2021)

Following the peak in June 2021, the ratio declines to 3.89 in September 2021 and 2.90 in December 2021. This decrease may indicate a lengthening of the payment cycle, potentially due to increased bargaining power with suppliers or a deliberate strategy to conserve cash.

Fluctuations and Recovery (Dec 2021 - Jun 2022)

The ratio experiences a recovery in the first half of 2022, rising from 4.15 in March 2022 to 4.54 in June 2022. However, this is preceded by a value of 2.90 in December 2021, indicating continued volatility. This period suggests a return to more efficient payment practices, but with ongoing fluctuations.

Mid-Period Volatility (Jun 2022 - Dec 2022)

From June 2022 through December 2022, the ratio demonstrates a downward trend, falling from 4.54 to 3.81. This suggests a potential slowdown in payment activity or an increase in outstanding payables. The ratio remains relatively stable around the 3.4 to 3.9 range for the remainder of 2022.

Recent Trends (Dec 2022 - Dec 2025)

The ratio shows a peak of 5.10 in April 2023, followed by a decline to 3.16 in September 2025. There is a general trend of fluctuation, with peaks and troughs occurring throughout the period. The most recent value, 3.25 in December 2025, is slightly higher than the value in September 2025, but remains below the peak observed in April 2023. The ratio appears to be stabilizing in the 3.16-3.25 range towards the end of the observed period.

Overall, the payables turnover ratio demonstrates a pattern of cyclical changes rather than a consistent upward or downward trend. The fluctuations suggest that the company’s payment practices are influenced by various factors, including supplier relationships, cash flow management, and potentially seasonal variations in cost of sales. Further investigation into the underlying drivers of these fluctuations would be necessary to determine the optimal payment strategy.

The working capital turnover ratio exhibits significant fluctuations throughout the observed period. Initially, the ratio demonstrates a strong upward trend from December 2020 through June 2021, peaking at 52.06. Following this peak, the ratio declines to 39.10 by September 2021, before experiencing a substantial increase to 67.80 in December 2021. Subsequent quarterly values are unavailable until December 2022, at which point the ratio is not calculable due to negative working capital. The ratio reappears in March 2024 at 39.69, increasing sharply to 83.07 in June 2024, before becoming uncalculable again due to negative working capital in subsequent quarters.

Working Capital Trend

Working capital values generally decreased from December 2020 to June 2022, becoming negative and remaining so for the majority of the period. A positive value is observed in December 2023, but is followed by a return to negative values in subsequent quarters. This volatility in working capital significantly impacts the interpretability of the turnover ratio.

Net Sales Trend

Net sales demonstrate seasonal patterns, with generally lower sales in the March and June quarters and higher sales in the December quarter. While sales decreased from December 2020 to June 2021, they rebounded strongly in December 2021 and remained relatively stable, with fluctuations, through the end of the observation period. The increase in net sales from September 2024 to December 2024 is particularly notable.

Ratio Interpretation

The high turnover ratios observed in the earlier periods (June 2021, December 2021, and June 2024) suggest efficient utilization of working capital to generate sales. However, the frequent instances of negative working capital render the ratio unreliable and difficult to interpret for a substantial portion of the period. The inability to calculate the ratio due to negative working capital indicates potential liquidity concerns or aggressive financing strategies. The sharp increase in the ratio in June 2024, coupled with the subsequent return to negative working capital, warrants further investigation.

The relationship between working capital and net sales appears complex and dynamic. The observed fluctuations necessitate a deeper analysis of the underlying components of working capital – accounts receivable, inventory, and accounts payable – to understand the drivers behind these trends and their impact on the company’s operational efficiency and financial health.

The average inventory processing period demonstrates relative stability over the analyzed period, with fluctuations primarily occurring between 9 and 13 days. An initial period of consistency at 10 days is observed, followed by a slight increase to 11 days, then a return to 9 and 10 days before fluctuating again.

Overall Trend

The metric generally remains within a narrow range, indicating efficient inventory management. There isn't a pronounced upward or downward trend across the entire timeframe. The average processing period hovers around 11 days, with deviations from this average appearing to be cyclical rather than directional.

Short-Term Fluctuations

A slight increase to 11 days is noted in the September 2021 and subsequent quarters, persisting through the first half of 2022. This is followed by a period of lower processing times, reaching a low of 8 days in September 2022. A subsequent rise to 13 days is observed in the December 2024 quarter, representing the highest value in the series, before decreasing again.

Recent Performance

The most recent quarters show a return towards the historical average. The period concludes with values of 10 days in June 2025 and 9 days in September and December 2025. This suggests a potential stabilization after the peak observed in late 2024.

Inventory Turnover Correlation

The average inventory processing period exhibits an inverse relationship with inventory turnover. When inventory turnover increases, the processing period tends to decrease, and vice versa. For example, the peak in inventory turnover in September 2022 (45.20) corresponds with the lowest processing period (8 days). Conversely, lower turnover rates in quarters like December 2020 (36.21) and December 2022 (32.36) align with slightly longer processing periods (10 and 11 days respectively).

In conclusion, the average inventory processing period indicates a generally efficient inventory management system. While fluctuations occur, they remain within a manageable range, and the metric appears responsive to changes in inventory turnover.

The average receivable collection period demonstrates fluctuations over the observed timeframe. Initially, a decreasing trend is apparent, followed by periods of relative stability and subsequent increases. A detailed examination reveals specific patterns in the company’s efficiency in collecting its receivables.

Initial Decreasing Trend (Dec 26, 2020 – Jun 26, 2021)

The average receivable collection period decreased from 34 days in December 2020 to 18 days in June 2021. This indicates an improvement in the speed at which the company collects payments from its customers during this period. This could be attributed to more efficient credit and collection policies, or a change in customer payment behavior.

Fluctuation and Stabilization (Jun 26, 2021 – Dec 25, 2021)

Following the initial decrease, the collection period experienced some volatility, rising to 29 days by December 2021. However, the period remained within a relatively narrow range of 18 to 29 days throughout this six-month period, suggesting a stabilization of collection efficiency after the initial improvement.

Subsequent Variations (Dec 25, 2021 – Sep 30, 2023)

The period from December 2021 to September 2023 shows continued fluctuations. The collection period decreased to a low of 17 days in April 2023, but generally remained between 20 and 28 days. This suggests ongoing, but less dramatic, changes in collection efficiency.

Increasing Trend (Sep 30, 2023 – Dec 27, 2025)

From September 2023, an upward trend in the average receivable collection period is observed. The period increased to 35 days by December 2025, representing a significant increase compared to the levels seen in the earlier part of the observed timeframe. This could indicate a loosening of credit terms, slower customer payments, or potential issues with the collection process. The period reached 33 days in the subsequent quarter, indicating the increase may not be a sustained trend.

Overall, the company’s average receivable collection period has exhibited variability. While initial improvements in collection speed were evident, more recent periods suggest a potential lengthening of the collection cycle, warranting further investigation into the underlying causes.

The operating cycle, along with its component parts, exhibits fluctuations over the observed period. Generally, the operating cycle demonstrates a pattern of initial reduction followed by increases and subsequent stabilization, with a recent upward trend. A closer examination of the individual components reveals the drivers behind these changes.

Average Inventory Processing Period

The average inventory processing period remained relatively stable between 9 and 11 days for the majority of the observed timeframe, from December 2020 through June 2023. A slight increase to 12 and 13 days was noted in the subsequent quarters, before decreasing again to 10 days in March 2025. This suggests a generally efficient inventory management process, with minor variations potentially linked to seasonal demand or supply chain dynamics.

Average Receivable Collection Period

The average receivable collection period showed more pronounced variability. A significant decrease was observed from 34 days in December 2020 to 18 days in June 2021, indicating improved efficiency in collecting receivables. This was followed by a period of fluctuation, peaking at 35 days in June 2025, with a high of 31 days in September 2024. The period generally ranged between 20 and 29 days. The recent increase suggests a potential lengthening of credit terms offered to customers or a slowdown in customer payments.

Operating Cycle

The operating cycle initially decreased from 44 days in December 2020 to a low of 27 days in June 2021, driven primarily by the reduction in the receivable collection period. The cycle then increased to 39 days in December 2021 before stabilizing around the low 30s for several quarters. A notable increase to 44 days was observed in September 2024, and this trend continued into June 2025, reaching 44 days. This recent increase is likely attributable to the combined effect of a slightly increasing inventory processing period and a more substantial increase in the receivable collection period. The operating cycle’s recent upward trend warrants further investigation to determine the underlying causes and potential impact on cash flow.

Overall, the observed trends suggest a generally well-managed operating cycle, though recent increases in both the receivable collection period and, consequently, the overall operating cycle, merit attention. Continued monitoring of these ratios is recommended to identify any persistent issues and ensure optimal working capital management.

The average payables payment period exhibited fluctuations over the observed period, spanning from December 2020 to December 2025. An initial decrease was followed by periods of both increases and decreases, ultimately concluding with a period similar to the beginning of the observation window.

Initial Decline and Subsequent Increase (Dec 2020 - Jun 2021)

The average payables payment period began at 129 days in December 2020, demonstrating a substantial decline to 75 days by March 2021. This downward trend continued, reaching a low of 72 days in June 2021. This suggests an improvement in the efficiency of paying suppliers during this timeframe.

Fluctuations and Return to Higher Values (Jun 2021 - Jun 2022)

Following the initial decline, the period increased to 94 days by September 2021, then rose further to 126 days by December 2021. A subsequent decrease to 88 days was observed in March 2022, followed by a further reduction to 80 days in June 2022. This period indicates a degree of volatility in payment practices.

Continued Variability (Jun 2022 - Dec 2023)

The period increased to 105 days in September 2022, then decreased to 96 days by the end of the year. The first half of 2023 saw a drop to 72 days in April, followed by 79 days in July, and then a rise to 107 days in December. This continued fluctuation suggests potential changes in supplier agreements or internal payment processing.

Recent Trends (Dec 2023 - Dec 2025)

From December 2023 through December 2025, the average payables payment period showed a pattern of 80 days, 83 days, 120 days, 107 days, 92 days, 84 days, 115 days, and finally 112 days. The period ended at 112 days, which is comparable to the initial value of 129 days observed in December 2020, indicating a potential return to earlier payment practices.

Overall, the average payables payment period demonstrated considerable variability throughout the analyzed period. While periods of efficient payment were observed, there were also instances of extended payment terms, suggesting a dynamic relationship with suppliers and potentially influenced by internal financial management strategies.

The cash conversion cycle demonstrates significant fluctuation over the observed period, ranging from -85 to -71 days. Generally, the cycle remains negative, indicating efficient liquidity management. However, notable shifts occur within the components contributing to this cycle.

Average Inventory Processing Period

This period remains relatively stable, fluctuating between 9 and 13 days. A slight upward trend is visible in late 2023 and early 2024, peaking at 13 days before returning to 11-12 days. The period concludes at 10 days, mirroring the initial value. This suggests consistent inventory management with minor, temporary adjustments.

Average Receivable Collection Period

The receivable collection period exhibits more volatility. It begins at 34 days, decreasing substantially to 18 days by June 2021. A subsequent increase is observed, reaching 35 days by June 2025, with peaks at 31 and 33 days in late 2024 and early 2025 respectively. This suggests varying effectiveness in collecting receivables, potentially influenced by sales volume or customer payment terms. The initial and final values indicate a cyclical pattern.

Average Payables Payment Period

The payables payment period demonstrates the most significant variation, ranging from 72 to 129 days. A substantial decrease is seen from December 2020 (129 days) to March 2021 (75 days). The period then increases again, peaking at 126 days in December 2021, before fluctuating between 79 and 120 days. A general trend towards longer payment periods is observed in the latter half of the analyzed timeframe, concluding at 115 days. This suggests a dynamic approach to supplier payment terms, potentially leveraging available credit or negotiating extended payment schedules.

Cash Conversion Cycle – Overall Trend

The negative cash conversion cycle is primarily driven by the extended payables payment period relative to the inventory processing and receivable collection periods. The cycle’s fluctuations correlate with changes in the receivable collection and payables payment periods. Periods of increased receivable collection times and/or extended payables payment times result in a less negative (closer to zero) cash conversion cycle. The cycle’s most negative values occur when receivables are collected quickly and payables are paid relatively promptly. The cycle stabilizes around -70 days in the final quarters, indicating a consistent, efficient management of working capital.

In summary, the company demonstrates effective working capital management, consistently maintaining a negative cash conversion cycle. Fluctuations are observed in receivable collection and payables payment periods, requiring ongoing monitoring to optimize liquidity and maintain financial flexibility.