Broadcom Inc. (NASDAQ:AVGO) 

Inventory Turnover

The inventory turnover ratio demonstrates a declining trend over the observed periods, falling from 11.57 in early 2019 to a low near 5.77-6.10 between mid-2022 and early 2023. However, a recovery phase is noted starting mid-2023, with the ratio increasing back to levels above 9 by late 2024. This indicates cycles of inventory management efficiency, with a period of slower inventory movement followed by improvement.

Receivables Turnover

The receivables turnover ratio fluctuates notably. It increased from 6.93 to peak around 13.25 in early 2021, reflecting improved collection efficiency during that time. Subsequently, it experienced some volatility with a decrease to around 7.75 in early 2024, before recovering again to values near 11 by mid-2025. Such variation suggests changes in credit policies or customer payment behavior.

Payables Turnover

The payables turnover ratio varies moderately, with values ranging roughly between 8.33 and 15.27. An especially high figure was recorded mid-2022 at 15.27, which may indicate faster payment to suppliers. Other periods show fluctuations around the 9-13 range, reflecting varied supplier payment strategies or terms over time.

Working Capital Turnover

A significant volatility pattern is evident in working capital turnover. Initial values were moderate, between 3.0 and 7.5, but starting mid-2023, there are extreme spikes, notably reaching 64.48, 681.61, and 36.01 in sequential quarters. Such outliers likely reflect extraordinary financial events, data anomalies, or changes in working capital structure during those quarters. Excluding these spikes, turnover tends to remain below 10 over the period.

Average Inventory Processing Period

The average inventory processing period steadily increased from 32 days in early 2019 to a peak around 63 days by late 2022, indicating slower inventory turnover. After this peak, a gradual decrease to about 38-40 days by 2025 suggests improvement in inventory management efficiency.

Average Receivable Collection Period

The average receivable collection period shows an initial drop, falling from 53 days in early 2019 to a low of around 28-30 days in 2021, reflecting improved collection speed. From 2022 onward, the period fluctuates between 30 and 40 days, suggesting a relatively stable collection process with minor variations.

Operating Cycle

The operating cycle ranges from about 70 to just over 100 days, with an initial decline from 85 days in early 2019 to approximately 70 days through 2020 and 2021. It subsequently increased, peaking at 102 days in late 2022, before declining again to around 65-74 days in 2024 and 2025, indicating varying efficiency in managing inventory and receivables collectively.

Average Payables Payment Period

The average payables payment period fluctuates between roughly 24 and 44 days. It shows an increase through 2019 and early 2020, reaching 44 days, followed by periodic declines and rises. Notably, a shorter payment period around 24-26 days is observed in several late periods, which could imply more prompt payments to suppliers during certain quarters.

Cash Conversion Cycle

The cash conversion cycle generally fluctuates between 33 and 69 days. It began near 54 days in early 2019, declined to around 36-41 days through 2020 and 2021, then increased to peak near 69 days in mid-2022, signaling longer cash tied in operations. A subsequent decline to about 33-39 days is noted in late 2023 and early 2024, suggesting improved liquidity management, though it again rises toward 50–54 days in recent quarters.

The analyzed data reveals several notable trends in the quarterly financial performance over the examined period.

Cost of Revenue

The cost of revenue exhibits a general upward trend with fluctuations throughout the entire period. Initially, it moves moderately between approximately 2,400 and 2,700 million US dollars. Beginning in early 2024, a pronounced increase is observed, with costs rising sharply from around 2,888 million to over 5,200 million US dollars by the latter quarters. This doubling of cost levels towards the end of the period indicates either expanded operations, increased costs, or both.

Inventory

Inventory levels show a consistent and steady increase over time. Starting below 1,100 million US dollars, inventory grows progressively each quarter, reaching over 2,100 million US dollars by the latest period. This sustained build-up of inventory could suggest increased production capacity, preparation for greater sales volume, or slower inventory turnover.

Inventory Turnover Ratio

The inventory turnover ratio reflects a declining trend from early 2019 through approximately early 2023, falling from figures above 10 to a low of around 5.77. This indicates a slower pace of inventory movement, implying products remain longer in stock before sale. However, after this low point, the ratio begins to recover gradually, rising back to approximately 10.83 by late 2024. This recovery suggests an improvement in inventory management or stronger sales driving faster inventory turnover.

Overall, the cost of revenue and inventory levels grow significantly over the period, with inventory buildup outpacing turnover early on, as seen from the declining turnover ratio. Later, turnover efficiency improves, suggesting a potential balancing of inventory management with revenue generation. The sharp rise in cost of revenue in the most recent periods merits further investigation to understand the drivers behind such accelerated expenses.

The quarterly financial data indicates several notable trends in revenue, receivables, and turnover ratios over the observed periods.

Net Revenue

The net revenue exhibits a generally increasing trend throughout the period. Starting from approximately 5,789 million US dollars, revenue remained relatively stable with minor fluctuations in 2019 and early 2020, ranging between 5,500 and 6,500 million. From 2021 onwards, revenue shows a clear upward trajectory, reaching a peak of around 15,952 million US dollars in August 2025. This substantial growth over the five-year period signals overall business expansion and increasing sales volume or pricing power.

Trade Accounts Receivable, Net

The trade accounts receivable demonstrate fluctuations with a downward trend in the earlier years followed by an upward reversal. Initially, receivables decreased from 3,677 million to a low near 2,071 million between 2019 and late 2021. This decline could reflect improved collection efficiency or reduced credit sales. However, after early 2022, receivables began rising again, reaching approximately 6,494 million by August 2025. This rise coincides with the increase in net revenues, suggesting expanded credit sales or possibly changes in credit policy or market conditions that increased receivable balances.

Receivables Turnover Ratio

The receivables turnover ratio fluctuates noticeably over time. Initially, ratio values around 6.93 to 8.64 indicate moderate to good collection efficiency. Between 2020 and 2021, the turnover ratio peaks significantly, exceeding 13 at its highest, which suggests accelerated collections relative to receivables outstanding. However, starting from early 2024, the ratio declines to around 7.75 to 9.23 by August 2025. This decline may reflect the rapid growth in receivables outpacing collections or looser credit terms, reducing collection efficiency.

In summary, while net revenue demonstrates strong and consistent growth, trade receivables have experienced both reductions and sharp increases, with turnover ratios peaking and then decreasing. The overall pattern suggests a phase of tightening and efficiency in receivables management followed by expansion of credit sales or changing collection dynamics aligned with rising revenues in recent years.

The cost of revenue exhibits fluctuations over the quarters, with values ranging roughly between 2,400 and 5,200 million US dollars. From early 2019 to late 2023, the cost generally remains within the 2,400 to 3,000 million range, showing moderate variability without a clear upward or downward trend. However, starting in early 2024, a notable increase is observed, with costs rising sharply to around 4,500 million US dollars and reaching peaks above 5,000 million by late 2024 and mid-2025. This uptick indicates an elevated level of cost of revenue in recent quarters compared to the prior periods.

Accounts payable values display somewhat irregular movements over the reported quarters. Initially, the amounts vary around 700 to 1,200 million US dollars, with some quarters showing increases followed by declines. From 2023 onward, there is a tendency toward higher accounts payable figures, peaking near 1,900 million in early 2025 before a slight decline by mid-2025. These changes suggest alterations in the company's outstanding payables, potentially reflecting evolving operational or procurement dynamics.

The payables turnover ratio shows considerable fluctuations across the reported periods. It ranges from approximately 8.3 up to 15.3, without a definitive trend of consistent increase or decrease. Some quarters experience sharp rises in turnover, indicating faster payment cycles, whereas others show declines, pointing to slower payments. Notably, the turnover ratio spikes around late 2020, mid-2022, and mid-2025, suggesting intermittent improvements in payment efficiency or changes in supplier terms during those times.

Overall, the data reflects a period of relative stability in earlier years, followed by significant increases in cost of revenue and accounts payable amounts in recent quarters. The variability in payables turnover ratio indicates changing payment behaviors, which may be driven by operational adjustments, supplier negotiations, or market conditions. The recent escalation in cost of revenue alongside higher accounts payable could imply expanding business activity or increased procurement costs, warranting further investigation into its root causes and potential impacts on liquidity and profitability.

The working capital exhibits a fluctuating pattern over the observed periods, with initial moderate values around the 2,000 to 3,000 million USD range, followed by a significant increase peaking around late 2020 and early 2021, where it reached over 11,000 million USD. After this peak, values gradually declined, hitting a low point below 1,000 million USD in late 2024 before demonstrating some recovery towards the latter periods, rising back above 8,000 million USD by mid-2025. This indicates periods of both expansion and contraction in short-term liquidity management.

Net revenue shows a generally upward trend across the quarters analyzed. Starting near 5,500 million USD, revenues steadily increase over time, moving past notable milestones of 7,000 million USD and 10,000 million USD, and eventually reaching above 15,000 million USD by the most recent quarter. This consistent growth suggests strengthening top-line performance and market demand over the timeframe.

The working capital turnover ratio displays considerable variability and irregularity. It remains undefined or unreported in the earlier periods, then appears with values indicating moderately efficient use of working capital initially. The ratio tends to fluctuate, moving between roughly 2.5 and 4 during most periods, demonstrating relatively stable operating efficiency. However, in the last several quarters, extreme values emerge, including a peak ratio exceeding 681 and markedly high ratios in the range of tens to hundreds, which may indicate either substantial reductions in working capital or exceptional revenue figures impacting the turnover calculation. These aberrations suggest unusual conditions affecting working capital management or reporting in recent quarters.

Inventory Turnover Ratio

The inventory turnover ratio exhibits a declining trend from February 2019 through October 2022, starting around 11.57 and gradually decreasing to approximately 5.77. This suggests a slowdown in the frequency at which inventory is sold and replaced during this period. However, beginning in January 2023, the ratio improves, climbing back to 10.83 by November 2024. Following this peak, a slight decline is observed through August 2025, ending near 9.12. The overall pattern indicates an initial weakening in inventory efficiency, followed by a notable recovery and stabilization at a higher turnover rate.

Average Inventory Processing Period

The average inventory processing period, measured in days, moves inversely relative to the inventory turnover ratio. Starting from 32 days in early 2019, this period lengthens continuously and peaks at 63 days around October 2022. This increase indicates that inventory remains on hand longer before being sold, reflecting slower inventory movement. From early 2023 onwards, the processing period shortens sharply, dropping back to 34 days in November 2024. A moderate increase follows, reaching about 40 days by August 2025. This trend correlates with the inventory turnover improvements, showing a return to more efficient inventory management after a period of deceleration.

Overall Insights

The data suggest a cycle of inventory performance with an initial phase of declining turnover and increasing processing times, potentially indicative of operational or demand challenges. The reversal starting in 2023 points to improved inventory control or stronger sales activity, enhancing turnover rates and reducing the time inventory is held. The latter period shows a stabilization with some fluctuations, highlighting ongoing adjustments in inventory management practices.

The Receivables Turnover ratio exhibits a fluctuating pattern over the analyzed periods. Starting from a value of 6.93, it initially decreases to 6.21, followed by a steady increase reaching a peak value of 13.25. After this peak, the turnover ratio experiences some variability, generally maintaining levels around 10 to 12, before declining towards the later periods to values nearer 9.23. This suggests periods of improved efficiency in collecting receivables, especially noted during the middle periods, and some subsequent easing in collection efficiency more recently.

The Average Receivable Collection Period, expressed in number of days, shows an inverse trend compared to the Receivables Turnover ratio. It begins near 53 days, increasing slightly to 59 days, which corresponds with the initial decrease in turnover. As the turnover improves, the collection period shortens significantly to around 28 days, indicating faster receivables collection. However, this metric also demonstrates variability later on, extending to ranges between 30 and 40 days, with a noticeable spike to 47 days in two separate periods. The increase in days at these points indicates a delay or reduced efficiency in collecting receivables during those times.

Overall, the trends in these two metrics suggest a general improvement in receivables management and collection speed during the middle part of the timeline, followed by some periods of increased collection days and a decrease in turnover ratio in the most recent data points. This variability might indicate fluctuations in credit policy effectiveness, customer payment behavior, or external market conditions impacting receivable management.

Receivables Turnover Ratio

Shows an overall improvement from initial values, peaking mid-periods, with fluctuations and a recent declining tendency.

Average Receivable Collection Period

Decreases as turnover improves, reaching lowest days, but later periods show increased collection days and inconsistency.

Implications

Indicates cycles of efficient receivables collection interrupted by episodes of slower collections, reflecting possible shifts in operational or market factors.

Average Inventory Processing Period

The average inventory processing period exhibits a clear upward trend from early 2020 through early 2023, increasing from 32 days to a peak of 63 days. Following this peak, the period begins to decline gradually, falling to 36-40 days by mid to late 2025. This pattern suggests a lengthening in inventory holding times over the initial years, potentially indicating challenges in inventory turnover or supply chain delays, followed by an improvement or optimization in inventory management in the more recent periods.

Average Receivable Collection Period

The average receivable collection period shows a more variable trend over the same timeframe. Starting at 53 days in early 2020, it first increases to a peak of 59 days, then generally decreases to a low of around 28-30 days by early 2021 and fluctuates moderately thereafter. There is a notable spike up to 47 days in early 2024, followed by a reduction and a moderate rise toward 40 days by late 2025. These fluctuations indicate variations in credit collection efficiency, with periods of slower collections interspersed with improvements.

Operating Cycle

The operating cycle, which combines the average inventory processing and receivable collection periods, correlates with the observed trends in the two components. It rises from 85 days in early 2020 to a high near 102 days in early 2024, indicating an elongation of the total time taken to convert inventory and receivables into cash. After peaking, the cycle shortens, dropping to 65-74 days toward late 2025. This suggests that the company experienced increasing working capital cycle durations in the early to mid period analyzed, potentially impacting liquidity, followed by an improvement in the efficiency of managing working capital more recently.

Payables Turnover Ratio Trends

The payables turnover ratio data begins with values only from February 2020 onward. Initially, the ratio is 11.83, representing a relatively efficient rate of payables turnover. Over subsequent quarters, the ratio declines to a low of 8.33 by August 2020, indicating a slowdown in the frequency of payables turnover. This is followed by a moderate recovery, peaking at 15.27 in January 2023, the highest level within the dataset, suggesting an acceleration in payables payments during that period. After this peak, the ratio experiences fluctuations, with values ranging mostly between 9 and 14, showing some volatility but a general tendency to maintain a moderate to high payables turnover rate. The last three reported quarters (August 2024 to August 2025) see notably elevated ratios of 14.92 and 13.88, indicating improved payables management and potentially quicker settlement of liabilities.

Average Payables Payment Period Trends

The average payables payment period demonstrates an inverse pattern relative to the payables turnover ratio since they represent related metrics. The initial period in February 2020 shows an average payment duration of 31 days. This duration increases steadily to a peak of 44 days in August 2020, corresponding with the lowest payables turnover ratio during the same timeframe. Subsequently, there is a general downward trend toward shorter payment periods, reaching a minimum of 24 days in October 2022, coinciding with the peak payables turnover ratio. Post-peak, the payment period fluctuates moderately between approximately 24 and 43 days, indicating variable payment behaviors. Notably, the most recent quarters show a shortened payment period, with values around 24 to 26 days, which is indicative of faster payment processing.

Summary and Insights

The analysis reveals a cyclical pattern in payables management over the observed periods. Periods of accelerated payment (high turnover ratio and low payment days) alternate with phases of slower payables turnover (low turnover ratio and high payment days). The peaks in payables turnover ratio and troughs in payment period suggest active efforts at times to improve liquidity or take advantage of favorable credit terms. Conversely, increased payment durations and reduced turnover ratios may reflect strategic cash management or operational delays. The recent trend towards a higher payables turnover ratio coupled with a reduced payment period suggests an emphasis on quicker settlement of obligations, potentially improving supplier relationships or taking advantage of early payment discounts.

Inventory Processing Period

The average inventory processing period exhibits an overall increasing trend from early 2020 through mid-2023, starting around 32 days and peaking at approximately 63 days in late 2022. Following this peak, there is a gradual decline observed towards 38-40 days by mid-2025. This pattern suggests lengthening inventory turnover times initially, possibly indicating slower inventory movement, followed by an improvement in recent quarters.

Receivable Collection Period

The average receivable collection period displays fluctuations within a moderate range. After rising to nearly 59 days in mid-2020, it declines steadily to around 28-35 days through late 2021 and early 2022. A modest increase occurs again in late 2023 before a decline towards the end of the series, settling near 33-40 days. This indicates varied efficiency in collecting receivables over time, with periods of improvement and minor reversals.

Payables Payment Period

The average payables payment period shows volatility over the examined timeline. Initially increasing from approximately 31 days to a peak of around 44 days in mid-2020, it then dips to about 24 days in late 2022. Subsequent quarters reveal intermittent rises and falls, ending near 24-26 days by mid-2025. This variability reflects changing payment practices to suppliers, suggesting periods of extended payment and later tightening of payment terms.

Cash Conversion Cycle

The cash conversion cycle (CCC) fluctuates significantly, generally remaining within a 33 to 69-day range. Initially increasing to nearly 69 days in late 2022, it then decreases to below 40 days by early 2024, before rising again towards 50-54 days in mid-2025. These shifts correspond with changes in inventory, receivables, and payables periods, revealing cycles of cash flow tightening and relaxation over the period under review.