Activity ratios measure how efficiently a company performs day-to-day tasks, such us the collection of receivables and management of inventory.
Paying user area
Try for free
Biogen Inc. pages available for free this week:
- Balance Sheet: Assets
- Common-Size Income Statement
- Common-Size Balance Sheet: Assets
- Analysis of Liquidity Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Common Stock Valuation Ratios
- Enterprise Value to FCFF (EV/FCFF)
- Present Value of Free Cash Flow to Equity (FCFE)
- Operating Profit Margin since 2005
- Debt to Equity since 2005
The data is hidden behind: . Unhide it.
Get full access to the entire website from $10.42/mo, or
get 1-month access to Biogen Inc. for $22.49.
This is a one-time payment. There is no automatic renewal.
We accept:
Short-term Activity Ratios (Summary)
Based on: 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31).
The analysis of the financial ratios over the observed quarters reveals several key trends and fluctuations across various liquidity and operational efficiency measures.
- Inventory Turnover
-
The inventory turnover ratio demonstrated an overall decline from early 2019 through the end of 2021, decreasing from a peak near 2.66 down to approximately 1.44. A slight recovery is seen in 2022, but the values remain below earlier highs. This suggests a gradual slowing in the rate at which inventory is sold and replaced, potentially indicating either slower sales or increased inventory levels.
- Receivables Turnover
-
This ratio remained relatively stable throughout the periods analyzed, consistently fluctuating around 5.3 to 5.8. Such consistency implies steady efficiency in collecting receivables, with little significant change in credit policy or collection effectiveness.
- Payables Turnover
-
The payables turnover ratio exhibited notable variability, peaking above 6.0 in late 2022 after experiencing lower values around 3.6 in early 2022. This indicates changes in payment patterns, with periods of faster payment to suppliers followed by some slower payment intervals.
- Working Capital Turnover
-
This ratio showed considerable fluctuations without a clear long-term trend. Values ranged from as low as 1.42 to highs around 3.44, with some of the higher values occurring in 2019 and 2020. This variability could reflect changes in working capital management or business activity levels impacting asset and liability balances.
- Average Inventory Processing Period
-
The average inventory processing period increased notably from around 137 days in late 2018 to a peak exceeding 254 days in late 2021, before decreasing somewhat in 2022. The lengthening period corresponds with the observed decline in inventory turnover and suggests a slowdown in inventory movement or accumulation of stock.
- Average Receivable Collection Period
-
This metric held steady between approximately 60 and 70 days across all quarters, indicating consistent payment behavior from customers and stable credit terms.
- Operating Cycle
-
The operating cycle lengthened from around 200 days in 2018 to over 320 days by late 2021, before shorter durations reappeared in 2022. This trend reflects the combined effects of slower inventory processing and stable receivable collection, implying a slower overall turnover of cash tied up in operating assets during peak periods.
- Average Payables Payment Period
-
The average payables payment period showed significant fluctuations, ranging from roughly 59 days to over 102 days. Longer payment periods in certain quarters suggest strategic use of credit terms to manage cash flow, while shorter periods may indicate accelerated payments possibly to maintain supplier relations or benefit from early payment discounts.
- Cash Conversion Cycle
-
The cash conversion cycle varied substantially, with values as low as 111 days in late 2019 and as high as 244 days in late 2021. This highlights changing efficiency in converting resources into cash, influenced mainly by variations in inventory management and payment scheduling. The extended cycles during 2020 and 2021 may have put pressure on liquidity, while the partial improvement in 2022 points to better working capital control.
Overall, the data reflect periods of operational slowdown, particularly in inventory management, accompanied by variable supplier payment policies and consistent receivables collection. The fluctuations in working capital efficiency and cash conversion cycle underscore dynamic financial management adaptation to internal or external conditions over time.
Turnover Ratios
Average No. Days
Inventory Turnover
Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | ||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Selected Financial Data (US$ in thousands) | ||||||||||||||||||||||||||||||
Cost of sales, excluding amortization and impairment of acquired intangible assets | ||||||||||||||||||||||||||||||
Inventory | ||||||||||||||||||||||||||||||
Short-term Activity Ratio | ||||||||||||||||||||||||||||||
Inventory turnover1 | ||||||||||||||||||||||||||||||
Benchmarks | ||||||||||||||||||||||||||||||
Inventory Turnover, Competitors2 | ||||||||||||||||||||||||||||||
AbbVie Inc. | ||||||||||||||||||||||||||||||
Amgen Inc. | ||||||||||||||||||||||||||||||
Bristol-Myers Squibb Co. | ||||||||||||||||||||||||||||||
Danaher Corp. | ||||||||||||||||||||||||||||||
Eli Lilly & Co. | ||||||||||||||||||||||||||||||
Gilead Sciences Inc. | ||||||||||||||||||||||||||||||
Johnson & Johnson | ||||||||||||||||||||||||||||||
Merck & Co. Inc. | ||||||||||||||||||||||||||||||
Pfizer Inc. | ||||||||||||||||||||||||||||||
Regeneron Pharmaceuticals Inc. | ||||||||||||||||||||||||||||||
Thermo Fisher Scientific Inc. | ||||||||||||||||||||||||||||||
Vertex Pharmaceuticals Inc. |
Based on: 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31).
1 Q3 2022 Calculation
Inventory turnover
= (Cost of sales, excluding amortization and impairment of acquired intangible assetsQ3 2022
+ Cost of sales, excluding amortization and impairment of acquired intangible assetsQ2 2022
+ Cost of sales, excluding amortization and impairment of acquired intangible assetsQ1 2022
+ Cost of sales, excluding amortization and impairment of acquired intangible assetsQ4 2021)
÷ Inventory
= ( + + + )
÷ =
2 Click competitor name to see calculations.
Analysis of the quarterly financial data reveals several notable trends and patterns in key operating metrics over the observed periods.
- Cost of Sales
- The cost of sales, excluding amortization and impairment of acquired intangible assets, exhibits significant fluctuations across the quarters. Initially, values range from approximately $366 million to $509 million in 2017. Thereafter, the cost generally rises, peaking at $753.9 million in the third quarter of 2022. However, intermittent decreases are observed, such as the decline from $602 million in the first quarter of 2019 to $430 million in the third quarter of the same year, and another drop from over $660 million in the last quarter of 2021 to about $484 million in the third quarter of 2022. Overall, the trend indicates increasing costs with occasional volatility, suggesting variability in production or operational expenses.
- Inventory
- Inventory levels demonstrate a clear upward trend throughout the timeframe. Starting at approximately $922 million in the first quarter of 2017, inventory progressively rises with minor fluctuations to reach about $1.375 billion by the third quarter of 2022. The growth is steady, with occasional plateaus but no significant declines, reflecting increased stockholding or accumulation of goods over time. The rise in inventory may indicate preparation for higher sales volume or slower inventory turnover.
- Inventory Turnover Ratio
- Inventory turnover ratios are only available commencing from the fourth quarter of 2017. Early values show turnover rates around 1.81 to 2.00, indicating relatively efficient management of inventory relative to sales during this period. However, from 2019 onward, a discernible declining trend appears, with turnover falling from 2.56 in the first quarter of 2019 to lows near 1.44 in the third quarter of 2021. Some recovery to around 1.96 is noted by the second quarter of 2022, though it declines again shortly after. This decline suggests a decreasing efficiency in converting inventory into sales, possibly due to increasing inventory levels outpacing sales growth or slower market demand.
In summary, the data suggests increasing cost pressures and inventory accumulation with a concurrent reduction in inventory turnover efficiency over the periods analyzed. These patterns could imply challenges in working capital management, potential shifts in market demand, or changes in supply chain dynamics that merit further investigation to optimize operational performance.
Receivables Turnover
Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | ||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Selected Financial Data (US$ in thousands) | ||||||||||||||||||||||||||||||
Product, net | ||||||||||||||||||||||||||||||
Accounts receivable, net | ||||||||||||||||||||||||||||||
Short-term Activity Ratio | ||||||||||||||||||||||||||||||
Receivables turnover1 | ||||||||||||||||||||||||||||||
Benchmarks | ||||||||||||||||||||||||||||||
Receivables Turnover, Competitors2 | ||||||||||||||||||||||||||||||
AbbVie Inc. | ||||||||||||||||||||||||||||||
Amgen Inc. | ||||||||||||||||||||||||||||||
Danaher Corp. | ||||||||||||||||||||||||||||||
Eli Lilly & Co. | ||||||||||||||||||||||||||||||
Gilead Sciences Inc. | ||||||||||||||||||||||||||||||
Johnson & Johnson | ||||||||||||||||||||||||||||||
Merck & Co. Inc. | ||||||||||||||||||||||||||||||
Pfizer Inc. | ||||||||||||||||||||||||||||||
Regeneron Pharmaceuticals Inc. | ||||||||||||||||||||||||||||||
Thermo Fisher Scientific Inc. | ||||||||||||||||||||||||||||||
Vertex Pharmaceuticals Inc. |
Based on: 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31).
1 Q3 2022 Calculation
Receivables turnover
= (Product, netQ3 2022
+ Product, netQ2 2022
+ Product, netQ1 2022
+ Product, netQ4 2021)
÷ Accounts receivable, net
= ( + + + )
÷ =
2 Click competitor name to see calculations.
The company's net product revenue exhibited fluctuations over the observed quarterly periods. Starting at approximately $2.38 billion in the first quarter of 2017, revenues generally increased reaching a peak around the fourth quarter of 2019 at approximately $2.92 billion. However, from 2020 onward, a declining trend is evident with revenues dropping each quarter to approximately $1.96 billion by the third quarter of 2022. This represents a notable decrease in product sales over the last two years of the data.
Accounts receivable, net, similarly showed variability but with a somewhat less pronounced decline compared to net product revenue toward the latter periods. The balance increased from about $1.5 billion in early 2017 up to approximately $2.1 billion by early 2020. Subsequently, it trended downward to around $1.57 billion by the third quarter of 2022. Despite the decline, the level of receivables remained relatively elevated compared to the beginning of the period, indicating ongoing collections from sales at higher levels than initially.
The receivables turnover ratio, available from the third quarter of 2017, remained fairly stable throughout the periods, fluctuating modestly between approximately 5.2 and 6.05. This suggests that the efficiency in collecting receivables relative to sales volume remained consistent, without significant deterioration or improvement over time.
- Net Product Revenue
- Increased moderately from early 2017 through late 2019, followed by a continuous decline through 2022.
- Accounts Receivable, Net
- Rose between 2017 and early 2020, then declined gradually through 2022, yet staying above early 2017 levels.
- Receivables Turnover Ratio
- Remained relatively stable, indicating steady collection efficiency despite fluctuations in revenue and receivables.
Overall, while the company managed to maintain collection efficiency, the reduction in net product revenue in the recent years is accompanied by decreasing accounts receivable balances, signalling a contraction in sales scale. This may have implications for cash flow and warrant further examination of factors impacting sales performance.
Payables Turnover
Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | ||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Selected Financial Data (US$ in thousands) | ||||||||||||||||||||||||||||||
Cost of sales, excluding amortization and impairment of acquired intangible assets | ||||||||||||||||||||||||||||||
Accounts payable | ||||||||||||||||||||||||||||||
Short-term Activity Ratio | ||||||||||||||||||||||||||||||
Payables turnover1 | ||||||||||||||||||||||||||||||
Benchmarks | ||||||||||||||||||||||||||||||
Payables Turnover, Competitors2 | ||||||||||||||||||||||||||||||
Amgen Inc. | ||||||||||||||||||||||||||||||
Bristol-Myers Squibb Co. | ||||||||||||||||||||||||||||||
Danaher Corp. | ||||||||||||||||||||||||||||||
Eli Lilly & Co. | ||||||||||||||||||||||||||||||
Gilead Sciences Inc. | ||||||||||||||||||||||||||||||
Johnson & Johnson | ||||||||||||||||||||||||||||||
Merck & Co. Inc. | ||||||||||||||||||||||||||||||
Pfizer Inc. | ||||||||||||||||||||||||||||||
Regeneron Pharmaceuticals Inc. | ||||||||||||||||||||||||||||||
Thermo Fisher Scientific Inc. | ||||||||||||||||||||||||||||||
Vertex Pharmaceuticals Inc. |
Based on: 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31).
1 Q3 2022 Calculation
Payables turnover
= (Cost of sales, excluding amortization and impairment of acquired intangible assetsQ3 2022
+ Cost of sales, excluding amortization and impairment of acquired intangible assetsQ2 2022
+ Cost of sales, excluding amortization and impairment of acquired intangible assetsQ1 2022
+ Cost of sales, excluding amortization and impairment of acquired intangible assetsQ4 2021)
÷ Accounts payable
= ( + + + )
÷ =
2 Click competitor name to see calculations.
The cost of sales, excluding amortization and impairment of acquired intangible assets, shows a fluctuating pattern over the observed periods. Starting at $384.6 million in March 2017, it experienced a noticeable peak in December 2017 reaching $509.2 million. This was followed by a gradual decline until mid-2018 before increasing again toward the end of 2018. A significant surge is observed in March 2019, with values rising above $600 million, although subsequent quarters show a decline and fluctuation around the $430 million to $490 million range through 2020 and early 2021. From March 2021, the cost of sales again rises significantly, peaking at $753.9 million in March 2022, followed by a sharp decline towards September 2022.
Accounts payable values display irregular movements over time. Beginning at approximately $316.4 million in March 2017, the balance increased to around $395.5 million by December 2017. After this peak, it declined notably by mid-2018 and fluctuated slightly towards the end of 2018. There was a steep increase in December 2019, reaching $530.8 million before falling back in early 2020. The values rose again considerably, reaching nearly $590 million in March 2022, followed by a decline in the subsequent quarters.
The payables turnover ratio exhibits variations revealing changes in the frequency of accounts payable settlements. Early 2018 shows a ratio around 4.12, increasing to a peak of 5.91 by September 2018, indicating faster turnover of payables. This ratio then fluctuates through 2019 and 2020, with a notable dip to 3.68 in March 2020, followed by recovery and moderate fluctuations up to 5.98 in June 2022. The latest figure in September 2022 rises further to 6.18, suggesting an acceleration in payable turnover rate.
Overall, the data indicate periods of increased cost of sales with corresponding rises in accounts payable, while turnover ratios suggest variability in payment processing speed. The spikes in both cost and payables in early 2019 and early 2022 warrant attention as they reflect significant operational or purchasing activities. The increasing trend in payables turnover ratio towards the later periods implies enhanced efficiency in settling payables despite the volatility in cost of sales and accounts payable balances.
- Cost of Sales Trends
- Exhibited significant volatility with peaks in December 2017, March 2019, and March 2022, interspersed with periods of decline or stabilization.
- Accounts Payable Trends
- Mirrored some fluctuations of cost of sales but with distinct spikes in December 2019 and March 2022, indicating varying payment obligations.
- Payables Turnover Ratio
- Varied between approximately 3.5 and 6.2; recent increases suggest improved payment frequency and potential liquidity management adjustments.
Working Capital Turnover
Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | ||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Selected Financial Data (US$ in thousands) | ||||||||||||||||||||||||||||||
Current assets | ||||||||||||||||||||||||||||||
Less: Current liabilities | ||||||||||||||||||||||||||||||
Working capital | ||||||||||||||||||||||||||||||
Product, net | ||||||||||||||||||||||||||||||
Short-term Activity Ratio | ||||||||||||||||||||||||||||||
Working capital turnover1 | ||||||||||||||||||||||||||||||
Benchmarks | ||||||||||||||||||||||||||||||
Working Capital Turnover, Competitors2 | ||||||||||||||||||||||||||||||
AbbVie Inc. | ||||||||||||||||||||||||||||||
Amgen Inc. | ||||||||||||||||||||||||||||||
Bristol-Myers Squibb Co. | ||||||||||||||||||||||||||||||
Danaher Corp. | ||||||||||||||||||||||||||||||
Eli Lilly & Co. | ||||||||||||||||||||||||||||||
Gilead Sciences Inc. | ||||||||||||||||||||||||||||||
Johnson & Johnson | ||||||||||||||||||||||||||||||
Merck & Co. Inc. | ||||||||||||||||||||||||||||||
Pfizer Inc. | ||||||||||||||||||||||||||||||
Regeneron Pharmaceuticals Inc. | ||||||||||||||||||||||||||||||
Thermo Fisher Scientific Inc. | ||||||||||||||||||||||||||||||
Vertex Pharmaceuticals Inc. |
Based on: 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31).
1 Q3 2022 Calculation
Working capital turnover
= (Product, netQ3 2022
+ Product, netQ2 2022
+ Product, netQ1 2022
+ Product, netQ4 2021)
÷ Working capital
= ( + + + )
÷ =
2 Click competitor name to see calculations.
The analysis of the available financial data reveals distinct trends in working capital, net product revenue, and working capital turnover ratios over the observed periods.
- Working Capital
- Working capital values exhibit notable fluctuations across the quarters. Initially, there is a moderate increase from 3,867,200 thousand USD in March 2017 to 4,505,100 thousand USD in December 2017. The figure peaks significantly at 7,043,300 thousand USD in March 2018 before dropping sharply to 4,275,700 thousand USD in June 2018 and showing intermittent rises and falls thereafter.
- Throughout 2019, working capital decreased steadily from approximately 5,793,900 thousand USD in March to 3,518,000 thousand USD in December. In 2020, it fluctuated with a peak in June (5,046,700 thousand USD) followed by a decline towards the end of the year (3,144,900 thousand USD). The data from 2021 onwards indicates a somewhat recovering trend with values rising from around 3,553,700 thousand USD in March to 5,839,400 thousand USD in September 2022.
- Product, Net Revenue
- Net product revenue maintains a relatively stable trend, generally oscillating within a tighter range compared to working capital. Starting at 2,380,100 thousand USD in March 2017, it peaks around 2,925,800 thousand USD in December 2019 before trending downward thereafter.
- From 2020 through September 2022, net product revenue shows a gradual declining trend, decreasing from 2,904,600 thousand USD in March 2020 to 1,962,100 thousand USD by September 2022. The results indicate possible challenges in sustaining product revenue levels over the period.
- Working Capital Turnover Ratio
- The working capital turnover ratio, available from December 2017 onward, fluctuates significantly. Early values show lower ratios such as 1.49, rising to above 3.4 by June 2021, indicating periods of increased efficiency in using working capital to generate revenue.
- Subsequently, turnover ratios decline steadily, reaching as low as 1.42 in September 2022. This decreasing trend may suggest diminishing effectiveness in working capital utilization relative to net product sales over recent periods.
In summary, the data reveals an overall volatile working capital position with periods of sharp increases followed by declines. Net product revenue remains relatively stable initially but demonstrates a downward trajectory in later periods. Correspondingly, the working capital turnover ratio reflects oscillations in operational efficiency, with recent trends indicating decreased turnover performance. These patterns imply a tightening in resource management or shifts in operational dynamics impacting liquidity and sales efficiency.
Average Inventory Processing Period
Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | ||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Selected Financial Data | ||||||||||||||||||||||||||||||
Inventory turnover | ||||||||||||||||||||||||||||||
Short-term Activity Ratio (no. days) | ||||||||||||||||||||||||||||||
Average inventory processing period1 | ||||||||||||||||||||||||||||||
Benchmarks (no. days) | ||||||||||||||||||||||||||||||
Average Inventory Processing Period, Competitors2 | ||||||||||||||||||||||||||||||
AbbVie Inc. | ||||||||||||||||||||||||||||||
Amgen Inc. | ||||||||||||||||||||||||||||||
Bristol-Myers Squibb Co. | ||||||||||||||||||||||||||||||
Danaher Corp. | ||||||||||||||||||||||||||||||
Eli Lilly & Co. | ||||||||||||||||||||||||||||||
Gilead Sciences Inc. | ||||||||||||||||||||||||||||||
Johnson & Johnson | ||||||||||||||||||||||||||||||
Merck & Co. Inc. | ||||||||||||||||||||||||||||||
Pfizer Inc. | ||||||||||||||||||||||||||||||
Regeneron Pharmaceuticals Inc. | ||||||||||||||||||||||||||||||
Thermo Fisher Scientific Inc. | ||||||||||||||||||||||||||||||
Vertex Pharmaceuticals Inc. |
Based on: 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31).
1 Q3 2022 Calculation
Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ =
2 Click competitor name to see calculations.
The inventory turnover ratio exhibits noticeable fluctuations over the analyzed periods. Starting at 1.81 in the first reported quarter of 2018, the ratio generally increased, reaching a peak of 2.66 in the fourth quarter of 2019. This upward trend indicates more efficient inventory management during this timeframe, suggesting the company was able to convert its inventory into sales more rapidly. However, from 2020 onward, the ratio shows a declining trend, decreasing to 1.44 by the third quarter of 2021. Subsequently, a moderate recovery is observed, reaching 1.96 in the first quarter of 2022, followed by a slight decline towards the end of the period, ending at 1.72 in the third quarter of 2022.
Conversely, the average inventory processing period exhibits an inverse pattern relative to inventory turnover, as expected. Beginning at 202 days in the first quarter of 2018, this measure steadily decreased to a low of 137 days by the fourth quarter of 2019, reflecting faster inventory turnover and enhanced operational efficiency. Following this period, there is a marked increase in the average processing time, peaking at 254 days in the third quarter of 2021, indicating slower inventory movement and potential challenges in inventory management. Afterwards, the period declines again, reaching 212 days by the third quarter of 2022, yet it remains elevated compared to the early quarters.
The inverse relationship between these two metrics is consistent across the timeframe, confirming the reliability of inventory turnover and processing period as complementary indicators of inventory performance. The initial improvement in inventory turnover up to late 2019 likely reflects optimized supply chain or sales conditions, while the subsequent decline and rise in processing period may suggest operational disruptions or changes in demand patterns, particularly evident during 2020 and 2021. The partial recovery in early 2022, as evidenced by a moderate increase in turnover and decline in processing days, may indicate a period of adjustment or strategic shifts aimed at improving inventory efficiency.
Average Receivable Collection Period
Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | ||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Selected Financial Data | ||||||||||||||||||||||||||||||
Receivables turnover | ||||||||||||||||||||||||||||||
Short-term Activity Ratio (no. days) | ||||||||||||||||||||||||||||||
Average receivable collection period1 | ||||||||||||||||||||||||||||||
Benchmarks (no. days) | ||||||||||||||||||||||||||||||
Average Receivable Collection Period, Competitors2 | ||||||||||||||||||||||||||||||
AbbVie Inc. | ||||||||||||||||||||||||||||||
Amgen Inc. | ||||||||||||||||||||||||||||||
Danaher Corp. | ||||||||||||||||||||||||||||||
Eli Lilly & Co. | ||||||||||||||||||||||||||||||
Gilead Sciences Inc. | ||||||||||||||||||||||||||||||
Johnson & Johnson | ||||||||||||||||||||||||||||||
Merck & Co. Inc. | ||||||||||||||||||||||||||||||
Pfizer Inc. | ||||||||||||||||||||||||||||||
Regeneron Pharmaceuticals Inc. | ||||||||||||||||||||||||||||||
Thermo Fisher Scientific Inc. | ||||||||||||||||||||||||||||||
Vertex Pharmaceuticals Inc. |
Based on: 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31).
1 Q3 2022 Calculation
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ =
2 Click competitor name to see calculations.
- Receivables Turnover Ratio
-
The receivables turnover ratio data becomes available starting from March 31, 2017, and extends through September 30, 2022. Over this period, the ratio shows relatively stable activity with minor fluctuations. Initially, the ratio is around 5.79 in March 2017, followed by a gradual decrease to approximately 5.29 by June 2019. Subsequently, the ratio exhibits slight oscillations, increasing to above 6.0 by December 2019 before falling again to the mid-5 range in the subsequent years. By the last recorded period in September 2022, the ratio stands near 5.28. Overall, the trend suggests consistent receivables management with no significant long-term increase or decrease in turnover rates.
- Average Receivable Collection Period (Days)
-
The average receivable collection period, inversely related to the turnover ratio, also displays consistent behavior over the recorded timeframe. Beginning at 63 days in March 2017, this metric extends slightly to around 67-68 days in various quarters, with minor peaks and troughs. For example, the period increases from 67 days in September 2017 to 70 days in March 2021 and fluctuates around the mid-to-high 60s in other intervals. This consistency in collection days implies stable credit and collection policies without significant deterioration in payment terms.
- Summary of Trends
-
The analysis of both financial ratios suggests a steady approach to receivables management with no major variations indicating changes in credit policy or collection efficiency. The minor fluctuations observed align with typical operational and seasonal factors influencing receivables. The close correlation between the turnover ratio and collection period reflects expected financial dynamics, reinforcing the interpretation of consistent performance over the examined quarters.
Operating Cycle
Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | ||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Selected Financial Data | ||||||||||||||||||||||||||||||
Average inventory processing period | ||||||||||||||||||||||||||||||
Average receivable collection period | ||||||||||||||||||||||||||||||
Short-term Activity Ratio | ||||||||||||||||||||||||||||||
Operating cycle1 | ||||||||||||||||||||||||||||||
Benchmarks | ||||||||||||||||||||||||||||||
Operating Cycle, Competitors2 | ||||||||||||||||||||||||||||||
AbbVie Inc. | ||||||||||||||||||||||||||||||
Amgen Inc. | ||||||||||||||||||||||||||||||
Danaher Corp. | ||||||||||||||||||||||||||||||
Eli Lilly & Co. | ||||||||||||||||||||||||||||||
Gilead Sciences Inc. | ||||||||||||||||||||||||||||||
Johnson & Johnson | ||||||||||||||||||||||||||||||
Merck & Co. Inc. | ||||||||||||||||||||||||||||||
Pfizer Inc. | ||||||||||||||||||||||||||||||
Regeneron Pharmaceuticals Inc. | ||||||||||||||||||||||||||||||
Thermo Fisher Scientific Inc. | ||||||||||||||||||||||||||||||
Vertex Pharmaceuticals Inc. |
Based on: 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31).
1 Q3 2022 Calculation
Operating cycle = Average inventory processing period + Average receivable collection period
= + =
2 Click competitor name to see calculations.
The financial data indicates notable trends in inventory processing, receivable collection, and the overall operating cycle over the analyzed periods.
- Inventory Processing Period
- The average inventory processing period demonstrates a fluctuating but generally upward trend from 2018 onwards. Initial figures in early 2018 ranged around 182 to 195 days, subsequently decreasing to the mid-130s by mid-2019. After this dip, there was a steady increase through 2020 and 2021, peaking near 254 days by late 2021. The period appears to slightly contract again in 2022, dropping to the mid-180s before slightly rising towards the end of the period. This pattern could indicate variability in inventory turnover efficiency, with potential operational challenges or strategic shifts affecting inventory management during the later years.
- Receivable Collection Period
- The average receivable collection period remains relatively stable throughout the entire timeframe. Beginning at around 63 to 68 days, it exhibits minor fluctuations but no significant upward or downward trend. The duration remains within a narrow range of approximately 60 to 70 days, suggesting consistent credit and collection policies and stable customer payment behaviors.
- Operating Cycle
- The operating cycle closely mirrors the trends observed in the inventory processing period, as expected. Starting near 250-265 days in early 2018, it decreases notably through 2019, reaching lows around 200 days. Subsequently, it increases substantially from 2020 through 2021, with the cycle extending to over 320 days by late 2021. Similar to the inventory period, there is some contraction towards mid-2022 followed by a modest rise at the end of the dataset. This extended operating cycle could reflect extended inventory holding times or delays in turning over stock, impacting overall operational efficiency.
In summary, the data highlights a stable receivable collection process but reveals volatility and an overall increase in both inventory processing and operating cycle durations in recent years. These trends could signal evolving operational challenges that may require further investigation or strategic adjustments to optimize working capital management.
Average Payables Payment Period
Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | ||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Selected Financial Data | ||||||||||||||||||||||||||||||
Payables turnover | ||||||||||||||||||||||||||||||
Short-term Activity Ratio (no. days) | ||||||||||||||||||||||||||||||
Average payables payment period1 | ||||||||||||||||||||||||||||||
Benchmarks (no. days) | ||||||||||||||||||||||||||||||
Average Payables Payment Period, Competitors2 | ||||||||||||||||||||||||||||||
Amgen Inc. | ||||||||||||||||||||||||||||||
Bristol-Myers Squibb Co. | ||||||||||||||||||||||||||||||
Danaher Corp. | ||||||||||||||||||||||||||||||
Eli Lilly & Co. | ||||||||||||||||||||||||||||||
Gilead Sciences Inc. | ||||||||||||||||||||||||||||||
Johnson & Johnson | ||||||||||||||||||||||||||||||
Merck & Co. Inc. | ||||||||||||||||||||||||||||||
Pfizer Inc. | ||||||||||||||||||||||||||||||
Regeneron Pharmaceuticals Inc. | ||||||||||||||||||||||||||||||
Thermo Fisher Scientific Inc. | ||||||||||||||||||||||||||||||
Vertex Pharmaceuticals Inc. |
Based on: 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31).
1 Q3 2022 Calculation
Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ =
2 Click competitor name to see calculations.
The analysis of the payables turnover ratio and the average payables payment period reveals notable variations over the observed quarterly periods.
- Payables Turnover Ratio
-
This ratio demonstrates fluctuations between approximately 3.58 and 6.18 during the periods for which data is available. It generally shows an oscillating pattern rather than a consistent upward or downward trend.
Initially, after missing early data, the ratio rises from 4.12 to 5.91 from March to September 2017, then declines to 3.68 by March 2020. Subsequently, it recovers moderately, with values around or above 4.0 till December 2021, and reaches its peak of 6.18 in September 2022.
Such variability indicates changes in the frequency of settling payables, likely reflecting shifts in payment policies, supplier negotiations, or cash flow management strategies over time.
- Average Payables Payment Period (Number of Days)
-
The average payment period inversely correlates with the turnover ratio, ranging from a high of 102 days to a low of 59 days.
The payment period starts at 89 days in March 2017, decreases to as low as 62 days in September 2017, and then rises again to a peak of 102 days by March 2022, before dropping to 59 days in the final period.
This suggests periods of both quicker and slower payments to suppliers. The increase in payment days indicates a tendency to delay payments, potentially to preserve cash or reflect extended credit terms, whereas reductions suggest an acceleration in settlement.
- Overall Observations
-
The data displays a cyclical pattern in both metrics. Notably, while the turnover ratio and payment period typically move in opposite directions, large deviations occur at certain intervals, implying strategic shifts in payable management.
For example, the significant increase in the payment period to 102 days in early 2022, alongside a drop in turnover to 3.58, may indicate a strategic extension of payables possibly due to liquidity considerations. Conversely, the increase in turnover to 6.18 and corresponding decrease in payment period to 59 days in late 2022 suggest a return to a more rapid payment cycle.
Cash Conversion Cycle
Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | ||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
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 | ||||||||||||||||||||||||||||||
Amgen Inc. | ||||||||||||||||||||||||||||||
Danaher Corp. | ||||||||||||||||||||||||||||||
Eli Lilly & Co. | ||||||||||||||||||||||||||||||
Gilead Sciences Inc. | ||||||||||||||||||||||||||||||
Johnson & Johnson | ||||||||||||||||||||||||||||||
Merck & Co. Inc. | ||||||||||||||||||||||||||||||
Pfizer Inc. | ||||||||||||||||||||||||||||||
Regeneron Pharmaceuticals Inc. | ||||||||||||||||||||||||||||||
Thermo Fisher Scientific Inc. | ||||||||||||||||||||||||||||||
Vertex Pharmaceuticals Inc. |
Based on: 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31).
1 Q3 2022 Calculation
Cash conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= + – =
2 Click competitor name to see calculations.
The average inventory processing period exhibits a fluctuating yet generally increasing trend over the observed quarters. Beginning from 202 in early 2018, it declined to a low of approximately 137 days by late 2019, indicating improved inventory turnover during that period. However, from 2020 onwards, the inventory period increases steadily, reaching a peak of 254 days in late 2021 before showing a mild improvement toward the third quarter of 2022. This suggests a recent elongation in inventory holding time, potentially indicating slower movement of inventory or buildup of stock.
The average receivable collection period remains relatively stable throughout the timeframe, oscillating mainly between 60 and 70 days. There is no significant upward or downward trend, which suggests consistency in the company’s efficiency in collecting receivables from customers. Occasional minor increases appear but they do not form a clear directional trend.
In contrast, the average payables payment period shows notable variability. It starts at 89 days in early 2018, decreases sharply to about 62 days by late 2018, then rises again close to 100 days in early 2020. After that, this period experiences fluctuations, including a significant peak above 100 days in early 2022, followed by a marked reduction toward the third quarter of 2022. These variations imply changing supplier payment behaviors, which might reflect strategic shifts in managing payables to optimize cash flow or changes in vendor terms.
The cash conversion cycle shows clear fluctuations influenced by the patterns observed in inventory, receivables, and payables periods. Initially, it remains in the range of approximately 176 to 200 days in 2018, then improves to around 111 days by late 2019, indicating enhanced operational efficiency during that period. Subsequently, it worsens significantly from 2020 to 2021, reaching a peak around 244 days, which correlates with the rise in inventory processing and receivables periods. Towards 2022, the cash conversion cycle shows a decline but remains relatively elevated compared to earlier years. This overall pattern indicates variable efficiency in managing working capital, with recent years portraying increased operational hold times and cash tied up in the cycle.