Booking Holdings Inc. (NASDAQ:BKNG)

Analysis of the quarterly financial ratios and periods reveals several observable patterns and shifts over the examined time frame.

Receivables Turnover

The receivables turnover ratio began at 12.85 in the earliest recorded period and showed a significant decline to a low near 5.57 shortly thereafter. Following this decrease, the ratio exhibited a pattern of fluctuation, generally oscillating between approximately 5.7 and 8.9 in subsequent quarters. The trend indicates variability in how efficiently the company collects its receivables, with a general weakening from the initial higher turnover toward a stabilized but lower turnover rate in later periods.

Payables Turnover

The payables turnover ratio experienced similar variability, starting around 9.25, with modest increases and decreases across quarters. Notably, there were dips into the mid-5 to 6 range in later periods, contrasting with peaks approaching or surpassing 9 in other quarters. This suggests fluctuations in the company's pace of settling its payables, with neither a consistent acceleration nor a steady decline.

Working Capital Turnover

This ratio showed a marked upward trend, beginning near 0.74 and advancing steadily over consecutive quarters. Early values indicated relatively low turnover, but over time, this increased significantly to peaks above 7.0, demonstrating improved efficiency in utilizing working capital to generate revenue. Despite some quarter-to-quarter fluctuations, the overall trend was positive and upward, signaling enhanced operational efficiency regarding working capital use.

Average Receivable Collection Period

Initially, the average number of days to collect receivables ranged around 28 to 38 days, then lengthened significantly to peaks above 60 days in some quarters. This increase corresponds with the declining trends seen in the receivables turnover ratio, indicating slower collection cycles. While there were occasional reductions in the collection period, the general tendency was toward longer collection times, reflecting potential challenges in receivables management.

Average Payables Payment Period

The average number of days to pay suppliers began at about 37 to 39 days, extending in excess of 50 days in many later periods, with peaks near or above 60 days. This suggests that the company has been extending its payment cycles over time, which could reflect either strategic payment management or liquidity considerations. The pattern is somewhat volatile but leans toward longer payment durations.

In summary, the data illustrates a company experiencing increased working capital turnover, indicating improved efficiency in using current assets relative to liabilities. However, this is coupled with longer receivable collection and payable payment periods over time, suggesting adjustments in cash conversion cycles. The fluctuations in payables and receivables turnover ratios underline variability in financial operations, necessitating close monitoring to optimize liquidity and operational performance.

Revenues

The revenues exhibit significant fluctuations on a quarterly basis. In 2020, the starting revenue was $2,288 million in the first quarter but dropped notably to $630 million in the second quarter, reflecting a sharp decline likely due to external factors impacting the business environment. Subsequently, revenues rebounded strongly over the later quarters of 2020, reaching $4,676 million by the third quarter of 2021. This period shows a recovery and growth trend. From 2022 onwards, revenues generally demonstrate a cyclical pattern with peaks in the third quarter and declines in the first quarter of each year, suggesting seasonality. The highest recorded revenue in this dataset appears in the third quarter of 2024 at $7,994 million. The most recent quarter, Q2 2025, shows a reduction to $6,798 million after an increase in Q1 2025.

Accounts receivable, net of allowance for expected credit losses

The accounts receivable values vary considerably across quarters, generally trending upwards from $667 million in the first quarter of 2020 to over $4,370 million in Q3 2024. The increase in receivables aligns with the growth in revenues, reflecting higher credit extended to customers as sales increase. Some fluctuations between quarters can be observed, but overall the trajectory suggests expanding credit sales or longer collection periods.

Receivables turnover ratio

Receivables turnover shows a range of values indicating variability in the efficiency of collecting receivables relative to credit sales. The ratio peaked at around 12.85 early in the data period provided (in Q3 2020), reflecting strong collection efficiency or lower receivables relative to revenues at that time. Subsequently, the ratio declines to a range between approximately 5.57 and 8.87 in various quarters from 2020 to 2025, without a clear upward or downward long-term trend. This suggests moderate consistency in receivables management relative to sales, despite significant increases in both absolute revenues and receivables balances.

Revenues

Revenues display considerable fluctuation on a quarterly basis, characterized by notable seasonality. A sharp decline is evident in the second quarter of 2020, likely linked to external disruptions, before rebounding substantially in the subsequent quarters. From mid-2020 through 2021, revenues steadily increased, peaking in the third quarter of 2021. This upward trend continued with significant gains in 2022 and 2023, achieving the highest recorded revenue in the third quarter of 2024. However, some quarters also show interim declines, suggesting cyclical variations or market influences affecting performance each period. Overall, the trajectory demonstrates substantial growth with periodic seasonal dips.

Accounts payable

Accounts payable similarly exhibit variability concurrent with the revenue patterns. There is an initial reduction through mid-2020, followed by a considerable increase by late 2020 into 2021. Throughout 2022 and 2023, payables maintain a generally higher level relative to the early periods, peaking near the end of 2023 and into 2024. The fluctuations in accounts payable align with changes in revenues, reflecting adjustments in operational or credit terms in response to the sales volume and procurement activities. The sustained high balances in recent periods may indicate extended payment terms or increased supplier purchases.

Payables turnover ratio

The payables turnover ratio shows a decreasing trend over the observed timeline, starting with relatively high ratios near 9.25–9.91 in late 2020 and mid-2021, dropping progressively to around 5.7–5.85 in the later quarters of 2024 and early 2025. This decline suggests a lengthening in the time taken to pay suppliers or slower turnover of payables relative to cost of goods or revenue. The decreasing trend in payables turnover ratio, combined with growing accounts payable balances, could imply a strategic alteration in payment policies or changes in working capital management aimed at optimizing cash flow.

Working Capital

The working capital exhibited fluctuations across the reported periods. Initially, it increased from $5,124 million at March 31, 2020, to a peak of $8,781 million at December 31, 2020. Subsequently, it declined to $3,867 million by September 30, 2022. After this trough, working capital rose again to $7,324 million by December 31, 2022, then generally decreased over the following quarters, reaching $3,556 million by March 31, 2025, with a slight recovery to $4,627 million at June 30, 2025.

Revenues

Revenues showed significant volatility. Early in the reporting period, revenues were low, with $630 million at June 30, 2020, before surging to $4,676 million in September 30, 2021. The trend continued upward, with revenues peaking at $7,994 million at September 30, 2024. Temporary dips and recoveries were observed, such as a decline to $4,294 million at June 30, 2022, followed by substantial subsequent increases. Overall, the revenue trend reflects periods of rapid growth intermixed with fluctuations.

Working Capital Turnover

The working capital turnover ratio demonstrated a general upward trajectory. Starting at 0.77 at March 31, 2021, the ratio increased consistently, reaching a high of 7.26 at September 30, 2024. Some volatility appeared subsequently, with values declining to 4.9 at March 31, 2025, and rising again to 6.77 at June 30, 2025. This upward trend indicates improving efficiency in utilizing working capital to generate revenue over the period.

Summary of Financial Position and Operational Efficiency

Overall, the analysis suggests that while working capital levels demonstrated significant fluctuations and an overall decline from peak values, revenue generation steadily improved, indicating growing business activity. The increasing working capital turnover ratio supports the interpretation of enhanced efficiency in converting working capital into revenues. Periods of high turnover ratio correspond with lower working capital levels and higher revenue, signaling a more effective asset utilization or possibly tighter management of current assets and liabilities.

Receivables Turnover Ratio

The receivables turnover ratio displayed a notable fluctuation over the observed periods. Starting from a high point of 12.85, the ratio declined significantly to 5.57 by September 2020, indicating a reduction in the efficiency of collecting receivables. Following this low, some recovery was evident as the ratio climbed to 8.07 by March 2022. However, this improvement was not sustained, as the ratio exhibited variability, ranging generally between approximately 5.7 and 8.9 in subsequent quarters. Toward the most recent periods, the ratio showed mixed trends, ending at 5.73 in June 2025, suggesting persistent challenges in accelerating receivable turnover.

Average Receivable Collection Period (Days)

The average receivable collection period mirrored the inverse trend of the turnover ratio, as expected. Initially, the collection period was relatively short, at 28 days, but it extended sharply to 66 days by September 2020. This increase indicates a slower collection process, correlating with the decreased turnover ratio. Subsequent quarters showed some improvement, reducing the collection period to 45 days by March 2022, aligning with the partial recovery in receivables turnover. Nonetheless, the days outstanding fluctuated in later periods, generally oscillating between roughly 48 and 64 days. This sustained variability points to ongoing inefficiencies and inconsistent collection speeds. The most recent quarter recorded 64 days, denoting a lengthening in the time taken to collect receivables compared to earlier periods.

Overall Insights

The analysis highlights a clear inverse relationship between receivables turnover and average collection period, with both metrics showing significant volatility throughout the periods. The dramatic changes in 2020 likely reflect external factors impacting collection efficiency. Although some recovery is observed post-2020, the metrics suggest that the company continues to face challenges in maintaining consistent and rapid collections. The extended collection periods and reduced turnover ratios in recent quarters emphasize the need for improved credit management practices or changes in customer payment behavior to enhance liquidity and cash flow management.

Payables Turnover

The payables turnover ratio exhibits notable fluctuations over the observed period. Starting around 9.25 in March 2021, it initially increases to 9.91 in June 2021, indicating a stronger ability to pay off suppliers quickly. However, the ratio declines subsequently, falling to approximately 6.29 by December 2021. Throughout 2022 and into early 2023, the ratio fluctuates between roughly 6.5 and 8.5, suggesting variability in payment velocity. There is a brief resurgence to a peak value of 9.11 in June 2023, followed by another decrease. Towards the end of the timeline, from March 2024 onward, the ratio generally trends downward, ending near 5.85 by June 2025. This indicates a slowing pace in settling payables in the most recent quarters.

Average Payables Payment Period

The average payables payment period, expressed in days, moves inversely to the payables turnover, as expected. Initially recorded at 39 days in March 2021, the payment period shortens to 37 days by June 2021, reflecting quicker payments to suppliers. Following this, the period lengthens consistently, peaking at 59 days in December 2021. In 2022, the days payable fluctuate between approximately 43 and 56 days, showing some inconsistency but a general tendency toward longer payment durations. The payment period momentarily decreases to 40 days in June 2023, then increases again, reaching highs of 64 days in mid-2024. By June 2025, the payment period stands at around 62 days, suggesting that the company has generally extended the time taken to pay its creditors in recent periods.

Trend and Insight Summary

The analysis reveals an overall trend of increasing payment periods and declining payables turnover over the later periods. This could suggest shifting company policies or cash management strategies that favor extended payment terms with suppliers. The earlier higher payables turnover and shorter payment periods may reflect a phase of more rapid settling of obligations. Variability in both metrics throughout the periods indicates operational or market influences impacting supplier payments. The extension in payment periods seen in the latter part of the series may affect supplier relationships and working capital management.