Analysis of Short-term (Operating) Activity Ratios
Activity ratios measure how efficiently a company performs day-to-day tasks, such us the collection of receivables and management of inventory.
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- Income Statement
- Balance Sheet: Assets
- Common-Size Balance Sheet: Assets
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Analysis of Reportable Segments
- Capital Asset Pricing Model (CAPM)
- Total Asset Turnover since 2005
- Price to Book Value (P/BV) since 2005
- Analysis of Revenues
- Analysis of Debt
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Short-term Activity Ratios (Summary)
Axon Enterprise Inc., short-term (operating) activity ratios
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
- Inventory Turnover
- The inventory turnover ratio exhibited a declining trend overall from 4.78 in 2018 to 2.28 in 2022, indicating a slower rate of inventory sales over the period. There was an initial increase in 2019 to 5.76, followed by a sharp decrease in 2020, which then remained relatively stable but low in subsequent years.
- Receivables Turnover
- Receivables turnover fluctuated moderately, starting at 3.22 in 2018, increasing to 3.61 in 2019, dipping to 2.69 in 2021, and then recovering to 3.32 in 2022. This suggests some variability in the efficiency of collecting receivables but with improvement by the end of the period.
- Payables Turnover
- The payables turnover ratio generally declined from 10.65 in 2018 to 7.7 in 2022, with some fluctuations. Notably, 2019 saw a lower ratio at 8.64, 2020 peaked again at 10.96, before a gradual decrease to the lowest point in 2022, reflecting extended payment terms to suppliers over time.
- Working Capital Turnover
- Working capital turnover demonstrated instability, increasing from 1.07 in 2018 to 1.25 in 2019, then dropping to 0.94 in 2020, rising again to 1.25 in 2021, and decreasing to 0.99 in 2022. This volatility indicates fluctuations in how efficiently the company utilizes its working capital to generate sales.
- Average Inventory Processing Period
- The average inventory processing period showed a significant increase from 76 days in 2018 to 160 days in 2022. After a decline in 2019 to 63 days, it more than doubled by 2020 and continued to rise, signaling challenges in managing inventory turnover and longer holding periods.
- Average Receivable Collection Period
- The average receivable collection period decreased from 113 days in 2018 to 110 days in 2022, despite intermediate increases in 2020 and 2021. This indicates a return to relatively efficient collection times after a period of slower receivables turnover.
- Operating Cycle
- The operating cycle extended markedly from 189 days in 2018 to 270 days by 2022. This increase correlates with the longer inventory processing and fluctuating receivable collection periods, indicating an overall lengthening of the time between inventory acquisition and cash collection.
- Average Payables Payment Period
- The average payables payment period increased from 34 days in 2018 to 47 days in 2022, with some variations. The lengthening payables period suggests the company has been negotiating or utilizing longer credit terms with suppliers.
- Cash Conversion Cycle
- The cash conversion cycle rose substantially from 155 days in 2018 to 223 days in 2022, reflecting the longer operating cycle and extended payables period. This prolonged cash conversion cycle indicates a slower conversion of investments in inventory and receivables into cash, potentially impacting liquidity.
Turnover Ratios
Average No. Days
Inventory Turnover
Axon Enterprise Inc., inventory turnover calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Cost of sales | ||||||
| Inventory | ||||||
| Short-term Activity Ratio | ||||||
| Inventory turnover1 | ||||||
| Benchmarks | ||||||
| Inventory Turnover, Competitors2 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| Eaton Corp. plc | ||||||
| GE Aerospace | ||||||
| Honeywell International Inc. | ||||||
| Lockheed Martin Corp. | ||||||
| RTX Corp. | ||||||
| Inventory Turnover, Sector | ||||||
| Capital Goods | ||||||
| Inventory Turnover, Industry | ||||||
| Industrials | ||||||
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Inventory turnover = Cost of sales ÷ Inventory
= ÷ =
2 Click competitor name to see calculations.
- Cost of Sales
- The cost of sales shows a consistent upward trend over the five-year period. Starting at $161.5 million in 2018, it increased year-over-year to reach $461.3 million by 2022. The growth accelerated particularly between 2021 and 2022, indicating a significant rise in expenses associated with production or procurement during the most recent year.
- Inventory
- Inventory levels also increased steadily from $33.8 million in 2018 to $202.5 million in 2022. Notably, there was a substantial jump between 2021 and 2022, where inventory nearly doubled. This sharp increase suggests an accumulation of stock, which may be due to higher demand expectations, changes in supply chain management, or potential overstocking concerns.
- Inventory Turnover
- Inventory turnover ratio exhibited a declining trend, falling from 4.78 in 2018 to 2.28 in 2022. After peaking at 5.76 in 2019, the ratio decreased sharply over the subsequent years. This decline indicates that inventory was being sold or used less frequently relative to the amount held, implying slower movement of goods or increased holding periods. This trend aligns with the rising inventory levels and may reflect either a strategic stock buildup or potential inefficiencies in inventory management.
- Overall Insights
- The combination of rising cost of sales, growing inventory levels, and declining inventory turnover suggests that while the company is experiencing increased costs, it is simultaneously holding more inventory for longer periods. This scenario could be indicative of supply chain adjustments, increased production capacity, or changing market conditions. These trends warrant close monitoring to ensure inventory levels align with sales demand to avoid liquidity issues or obsolescence risks.
Receivables Turnover
Axon Enterprise Inc., receivables turnover calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net sales | ||||||
| Accounts and notes receivable, net of allowance | ||||||
| Short-term Activity Ratio | ||||||
| Receivables turnover1 | ||||||
| Benchmarks | ||||||
| Receivables Turnover, Competitors2 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| Eaton Corp. plc | ||||||
| GE Aerospace | ||||||
| Honeywell International Inc. | ||||||
| Lockheed Martin Corp. | ||||||
| RTX Corp. | ||||||
| Receivables Turnover, Sector | ||||||
| Capital Goods | ||||||
| Receivables Turnover, Industry | ||||||
| Industrials | ||||||
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Receivables turnover = Net sales ÷ Accounts and notes receivable, net of allowance
= ÷ =
2 Click competitor name to see calculations.
- Net Sales
- Net sales exhibited a consistent and substantial upward trend over the five-year period. Starting from $420,068 thousand in 2018, the sales increased each year, reaching $1,189,935 thousand by the end of 2022. This reflects a compound growth indicative of strong revenue expansion and market demand.
- Accounts and Notes Receivable, Net of Allowance
- The accounts and notes receivable also showed significant growth throughout the years. From $130,579 thousand in 2018, the figure rose steadily to $358,190 thousand in 2022. This increase mirrors the growth in net sales, suggesting higher credit sales or larger outstanding balances over time.
- Receivables Turnover Ratio
- The receivables turnover ratio fluctuated over the period. It increased from 3.22 in 2018 to 3.61 in 2019, indicating improved efficiency in collecting receivables. However, there was a decline to 2.97 in 2020 and further to 2.69 in 2021, signifying slower collection rates in these years. In 2022, the ratio rebounded to 3.32, suggesting a partial recovery in collection efficiency. Overall, despite the temporary dip, the receivables turnover ratio remained relatively stable, implying a generally consistent management of receivables in relation to sales.
Payables Turnover
Axon Enterprise Inc., payables turnover calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Cost of sales | ||||||
| Accounts payable | ||||||
| Short-term Activity Ratio | ||||||
| Payables turnover1 | ||||||
| Benchmarks | ||||||
| Payables Turnover, Competitors2 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| Eaton Corp. plc | ||||||
| GE Aerospace | ||||||
| Honeywell International Inc. | ||||||
| Lockheed Martin Corp. | ||||||
| RTX Corp. | ||||||
| Payables Turnover, Sector | ||||||
| Capital Goods | ||||||
| Payables Turnover, Industry | ||||||
| Industrials | ||||||
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Payables turnover = Cost of sales ÷ Accounts payable
= ÷ =
2 Click competitor name to see calculations.
- Cost of Sales
- The cost of sales showed a consistent and significant increase over the five-year period. Starting at 161,485 thousand US dollars in 2018, it rose steadily each year, reaching 461,297 thousand US dollars by the end of 2022. This upward trend indicates growing production or procurement expenses, which may be reflective of expanding business activities or increasing input costs.
- Accounts Payable
- Accounts payable also increased throughout the period but with some fluctuations. Beginning at 15,164 thousand US dollars in 2018, the figure rose sharply to 25,874 thousand in 2019, slightly decreased to 24,142 thousand in 2020, then increased again to 32,220 thousand in 2021, and more than doubled to 59,918 thousand in 2022. This pattern suggests a growing reliance on supplier credit or extended payment terms in recent years, particularly in 2022.
- Payables Turnover Ratio
- The payables turnover ratio, which measures how quickly the company pays its suppliers, exhibited variability over the years. It started at 10.65 in 2018, decreased to 8.64 in 2019, then increased to 10.96 in 2020, declined slightly to 10.01 in 2021, and dropped more substantially to 7.7 in 2022. The declining ratio in 2022 indicates slower payments to suppliers, which may reflect changes in payment policies or cash flow management strategies amid rising payables.
Working Capital Turnover
Axon Enterprise Inc., working capital turnover calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Current assets | ||||||
| Less: Current liabilities | ||||||
| Working capital | ||||||
| Net sales | ||||||
| Short-term Activity Ratio | ||||||
| Working capital turnover1 | ||||||
| Benchmarks | ||||||
| Working Capital Turnover, Competitors2 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| Eaton Corp. plc | ||||||
| GE Aerospace | ||||||
| Honeywell International Inc. | ||||||
| Lockheed Martin Corp. | ||||||
| RTX Corp. | ||||||
| Working Capital Turnover, Sector | ||||||
| Capital Goods | ||||||
| Working Capital Turnover, Industry | ||||||
| Industrials | ||||||
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Working capital turnover = Net sales ÷ Working capital
= ÷ =
2 Click competitor name to see calculations.
- Working Capital
- The working capital has demonstrated a generally increasing trend over the analyzed period. Starting at 392,144 thousand US dollars in 2018, it experienced moderate growth in the following year, reaching 423,525 thousand. A significant increase occurred in 2020, with working capital rising to 725,621 thousand, followed by a slight decrease in 2021. In 2022, there was a substantial surge, bringing working capital to its peak value of 1,202,632 thousand.
- Net Sales
- Net sales have shown consistent and robust growth throughout the period. Beginning at 420,068 thousand US dollars in 2018, sales increased each year without exception. The most notable increases took place in 2021 and 2022, with net sales reaching 863,381 thousand and 1,189,935 thousand, respectively. This upward trajectory reflects a strong expansion in the company's revenue-generating capacity.
- Working Capital Turnover
- The working capital turnover ratio exhibited some variability across the years. It started at 1.07 in 2018, increased to 1.25 in 2019, then dropped notably to 0.94 in 2020. The ratio rebounded to 1.25 in 2021 before declining again to 0.99 in 2022. These fluctuations indicate changes in the efficiency with which working capital is used to generate sales. The drop in 2020 suggests lower efficiency that year, possibly linked to operational or market conditions, while the rebounds in 2019 and 2021 imply periods of improved capital utilization.
- Overall Analysis
- Overall, the company has expanded both its working capital and net sales substantially over the five-year period. However, the less stable working capital turnover ratio suggests varying periods of operational efficiency, with some years showing more effective management of working capital relative to sales generation than others. The combination of strong sales growth and fluctuating capital efficiency warrants further examination to optimize the company's resource management strategies.
Average Inventory Processing Period
Axon Enterprise Inc., average inventory processing period calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Inventory turnover | ||||||
| Short-term Activity Ratio (no. days) | ||||||
| Average inventory processing period1 | ||||||
| Benchmarks (no. days) | ||||||
| Average Inventory Processing Period, Competitors2 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| Eaton Corp. plc | ||||||
| GE Aerospace | ||||||
| Honeywell International Inc. | ||||||
| Lockheed Martin Corp. | ||||||
| RTX Corp. | ||||||
| Average Inventory Processing Period, Sector | ||||||
| Capital Goods | ||||||
| Average Inventory Processing Period, Industry | ||||||
| Industrials | ||||||
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ =
2 Click competitor name to see calculations.
- Inventory Turnover
- The inventory turnover ratio exhibited a fluctuating but overall declining trend over the five-year period. Starting at 4.78 in 2018, it increased to a peak of 5.76 in 2019, indicating improved efficiency in managing inventory that year. However, from 2019 onwards, the ratio declined continuously, dropping to 2.94 in 2020 and remaining relatively stable at 2.97 in 2021 before further decreasing to 2.28 in 2022. This downward trend suggests a consistent reduction in the frequency with which inventory is sold and replaced, possibly indicating slower sales or increased stock levels.
- Average Inventory Processing Period
- The average inventory processing period, expressed in days, showed an inverse pattern relative to inventory turnover, as expected. It decreased from 76 days in 2018 to 63 days in 2019, demonstrating faster inventory movement. However, beginning in 2020, the metric increased sharply to 124 days and remained relatively stable around 123 days in 2021 before extending significantly to 160 days in 2022. This increase implies that inventory is being held for longer periods, reflecting potential challenges in inventory management or slower market demand.
Average Receivable Collection Period
Axon Enterprise Inc., average receivable collection period calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Receivables turnover | ||||||
| Short-term Activity Ratio (no. days) | ||||||
| Average receivable collection period1 | ||||||
| Benchmarks (no. days) | ||||||
| Average Receivable Collection Period, Competitors2 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| Eaton Corp. plc | ||||||
| GE Aerospace | ||||||
| Honeywell International Inc. | ||||||
| Lockheed Martin Corp. | ||||||
| RTX Corp. | ||||||
| Average Receivable Collection Period, Sector | ||||||
| Capital Goods | ||||||
| Average Receivable Collection Period, Industry | ||||||
| Industrials | ||||||
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ =
2 Click competitor name to see calculations.
- Receivables Turnover
- The receivables turnover ratio exhibits variability over the observed period. Initially, it increased from 3.22 in 2018 to 3.61 in 2019, indicating improved efficiency in collecting receivables. However, this was followed by a decline to 2.97 in 2020 and further to 2.69 in 2021, suggesting a slowdown in turnover. In 2022, the ratio rebounded to 3.32, approaching the 2018 level but remaining below the peak of 2019.
- Average Receivable Collection Period
- The average receivable collection period inversely reflects the receivables turnover trend. It decreased from 113 days in 2018 to 101 days in 2019, signaling a quicker collection of receivables. Subsequently, the period lengthened to 123 days in 2020 and further to 136 days in 2021, indicating a slowdown in collections. In 2022, the collection period shortened again to 110 days, aligning closely with the 2018 figure but still exceeding the shortest period achieved in 2019.
- Overall Insights
- The data indicate a period of strengthened receivables management in 2019, as evidenced by higher turnover and shorter collection periods. This positive trend reversed in the subsequent two years, with efficiency declining considerably by 2021. The recovery noted in 2022 suggests measures to improve receivables management were effective, though the company's performance had not fully returned to the previous best levels. The fluctuations may reflect operational or market factors impacting customer payment behavior or credit policies during the period.
Operating Cycle
Axon Enterprise Inc., operating cycle calculation, comparison to benchmarks
No. days
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Average inventory processing period | ||||||
| Average receivable collection period | ||||||
| Short-term Activity Ratio | ||||||
| Operating cycle1 | ||||||
| Benchmarks | ||||||
| Operating Cycle, Competitors2 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| Eaton Corp. plc | ||||||
| GE Aerospace | ||||||
| Honeywell International Inc. | ||||||
| Lockheed Martin Corp. | ||||||
| RTX Corp. | ||||||
| Operating Cycle, Sector | ||||||
| Capital Goods | ||||||
| Operating Cycle, Industry | ||||||
| Industrials | ||||||
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Operating cycle = Average inventory processing period + Average receivable collection period
= + =
2 Click competitor name to see calculations.
- Average Inventory Processing Period
- The average inventory processing period exhibited a fluctuating trend over the analyzed years. It decreased from 76 days in 2018 to 63 days in 2019, indicating improved inventory turnover efficiency during that period. However, starting in 2020, there was a marked increase to 124 days, which remained relatively stable in 2021 at 123 days before further rising to 160 days in 2022. This upward movement suggests a slowdown in inventory processing efficiency, potentially indicating increased inventory holding times or challenges in inventory management.
- Average Receivable Collection Period
- The average receivable collection period demonstrated variability throughout the examined timeframe. It decreased from 113 days in 2018 to 101 days in 2019, signifying improved collection efficiency. However, the period then extended to 123 days in 2020 and peaked at 136 days in 2021. A decline to 110 days occurred in 2022, indicating some recovery in collection performance. Overall, the collection period was longer in the latter years compared to the initial period, which may point to slower cash inflows from customers during certain years.
- Operating Cycle
- The operating cycle lengthened progressively across the five years. Starting at 189 days in 2018, it decreased slightly to 164 days in 2019, but then experienced a significant increase to 247 days in 2020 and continued to rise to 259 days in 2021 and 270 days in 2022. This trend suggests that the combined duration of converting inventory to cash through sales and collections has extended notably, which may implicate increased working capital requirements or reduced operational efficiency.
Average Payables Payment Period
Axon Enterprise Inc., average payables payment period calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Payables turnover | ||||||
| Short-term Activity Ratio (no. days) | ||||||
| Average payables payment period1 | ||||||
| Benchmarks (no. days) | ||||||
| Average Payables Payment Period, Competitors2 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| Eaton Corp. plc | ||||||
| GE Aerospace | ||||||
| Honeywell International Inc. | ||||||
| Lockheed Martin Corp. | ||||||
| RTX Corp. | ||||||
| Average Payables Payment Period, Sector | ||||||
| Capital Goods | ||||||
| Average Payables Payment Period, Industry | ||||||
| Industrials | ||||||
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ =
2 Click competitor name to see calculations.
- Payables Turnover
- The payables turnover ratio exhibited fluctuations over the five-year period. It started at 10.65 in 2018, declined to 8.64 in 2019, rebounded to 10.96 in 2020, then slightly decreased to 10.01 in 2021, and finally dropped to its lowest point of 7.7 in 2022. This pattern suggests variability in the company's efficiency in paying its suppliers, with a notable decrease in turnover in the most recent year.
- Average Payables Payment Period
- The average payables payment period inversely mirrors the payables turnover trend. Initially, it was 34 days in 2018, increased to 42 days in 2019 indicating slower payments, then improved to 33 days in 2020, followed by a minor increase to 36 days in 2021. In 2022, there was a significant increase to 47 days, indicating a longer duration to settle payables. This extended payment period in 2022 aligns with the decreased payables turnover ratio for the same year, suggesting the company took longer to pay its suppliers compared to previous years.
Cash Conversion Cycle
Axon Enterprise Inc., cash conversion cycle calculation, comparison to benchmarks
No. days
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Average inventory processing period | ||||||
| Average receivable collection period | ||||||
| Average payables payment period | ||||||
| Short-term Activity Ratio | ||||||
| Cash conversion cycle1 | ||||||
| Benchmarks | ||||||
| Cash Conversion Cycle, Competitors2 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| Eaton Corp. plc | ||||||
| GE Aerospace | ||||||
| Honeywell International Inc. | ||||||
| Lockheed Martin Corp. | ||||||
| RTX Corp. | ||||||
| Cash Conversion Cycle, Sector | ||||||
| Capital Goods | ||||||
| Cash Conversion Cycle, Industry | ||||||
| Industrials | ||||||
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Cash conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= + – =
2 Click competitor name to see calculations.
- Inventory Processing Period
- The average inventory processing period exhibited a decreasing trend from 76 days in 2018 to 63 days in 2019. However, this was followed by a significant increase, rising to 124 days in 2020, remaining nearly stable at 123 days in 2021, and then further extending to 160 days in 2022. This pattern suggests growing inefficiencies or slower turnover in inventory management over the latter years.
- Receivable Collection Period
- The average receivable collection period decreased from 113 days in 2018 to 101 days in 2019, indicating improved receivable management. Subsequently, it increased to 123 days in 2020 and continued to rise to 136 days in 2021, before declining again to 110 days in 2022. This fluctuation reflects variability in the efficiency of collecting receivables, with a recent improvement in the final recorded year.
- Payables Payment Period
- The average payables payment period initially increased from 34 days in 2018 to 42 days in 2019, followed by a reduction to 33 days in 2020. It then slightly rose to 36 days in 2021 and increased more noticeably to 47 days in 2022. This indicates a tendency toward delaying payments to suppliers in more recent years, potentially as a cash management strategy.
- Cash Conversion Cycle
- The cash conversion cycle decreased from 155 days in 2018 to 122 days in 2019, signaling more efficient working capital management during that period. However, it sharply increased to 214 days in 2020, continued to rise to 223 days in 2021, and remained at 223 days in 2022. This trend implies a deterioration in the efficiency of converting inputs into cash flow from operations, influenced significantly by longer inventory holding and receivables collection periods.