Analysis of Short-term (Operating) Activity Ratios
Quarterly Data
Activity ratios measure how efficiently a company performs day-to-day tasks, such us the collection of receivables and management of inventory.
Short-term Activity Ratios (Summary)
DexCom Inc., short-term (operating) activity ratios (quarterly data)
Based on: 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 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).
The analysis of the financial ratios over the observed periods reveals the following key trends and insights:
- Inventory Turnover
- The inventory turnover ratio exhibits a declining trend from 5.2 in early 2019 to a low around 2.03 by late 2021, indicating a slowing inventory movement. Following this, there is a gradual recovery reaching approximately 3.35 in early 2023, before a slight dip towards the end of the period. This suggests initial difficulties in inventory management or reduced sales velocity, followed by improved efficiency or better stock management in recent quarters.
- Receivables Turnover
- The receivables turnover ratio shows fluctuations but remains relatively stable around the mid-4 to mid-5 range. It peaks near 5.79 in late 2020, indicating faster collection of receivables at that time, but trends lower towards the end of the dataset, settling near 4.26-4.33. This pattern suggests modest variability in credit collection efficiency but no drastic changes in working capital credit policies.
- Working Capital Turnover
- This ratio generally trends upwards, starting from 0.7 and increasing steadily to peak at 1.59 during early and mid-2023 before a slight decline at the end. The upward trend indicates improving utilization of working capital to generate revenue, reflecting enhanced operational efficiency or better management of current assets and liabilities over time.
- Average Inventory Processing Period
- There is a lengthening trend in the average inventory processing period, from around 70 days in early 2019 to a peak of 180 days in late 2021, followed by a decline to 109 days in early 2023 and a subsequent rise to 148 days. This escalation points to slower inventory turnover up to 2021, followed by some recovery, but the rising days towards the end suggest possible stock accumulation or slower sales cycles.
- Average Receivable Collection Period
- The average collection period displays some volatility, initially decreasing from 80 days to roughly 63 days by late 2018, then gradually increasing back to the range of 80-89 days in recent quarters. This pattern indicates mixed performance in accounts receivable collection, with periods of improved cash collection interspersed with delayed collections.
- Operating Cycle
- The overall operating cycle, representing the sum of inventory processing and receivable collection periods, follows a rising trend from approximately 150 days to over 260 days by late 2021, reflecting extended time to convert inventory into cash. A subsequent decrease to near 190 days in mid-2022 suggests some operational improvements, but the cycle rises again to above 230 days towards the most recent quarter, indicating increased operational durations and potential challenges in working capital turnover.
In summary, the data indicates that the company experienced challenges with inventory turnover and lengthening operational cycles up to 2021, impacting efficiency. However, improvements in working capital turnover and some recovery in inventory processing periods after this point suggest management efforts to optimize resource use. Receivables management demonstrates moderate variability but remains relatively stable over the observed timeframe. The extended operating cycle in recent periods signals a need for continued focus on inventory and receivables management to maintain liquidity and operational efficiency.
Turnover Ratios
Average No. Days
Inventory Turnover
DexCom Inc., inventory turnover calculation (quarterly data)
| Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | 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 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||||||||||||||||||||||||||
| Cost of sales | 351,700) | 324,900) | 278,900) | 273,900) | 275,400) | 246,700) | 230,700) | 225,600) | 203,300) | 178,000) | 161,100) | 169,800) | 160,500) | 167,700) | 148,600) | 153,500) | 149,400) | 129,900) | 111,700) | 115,200) | 98,100) | 88,900) | 65,500) | |||||||
| Inventory | 498,600) | 421,100) | 366,000) | 306,700) | 311,000) | 339,500) | 342,200) | 357,300) | 351,300) | 319,300) | 289,700) | 234,700) | 200,700) | 165,300) | 141,900) | 119,800) | 120,400) | 117,900) | 101,100) | 70,700) | 55,200) | 46,200) | 51,600) | |||||||
| Short-term Activity Ratio | ||||||||||||||||||||||||||||||
| Inventory turnover1 | 2.47 | 2.74 | 2.94 | 3.35 | 3.15 | 2.67 | 2.45 | 2.15 | 2.03 | 2.10 | 2.28 | 2.76 | 3.14 | 3.75 | 4.10 | 4.55 | 4.20 | 3.86 | 4.09 | 5.20 | — | — | — | |||||||
| Benchmarks | ||||||||||||||||||||||||||||||
| Inventory Turnover, Competitors2 | ||||||||||||||||||||||||||||||
| Abbott Laboratories | 2.71 | 2.62 | 2.77 | 3.10 | 3.37 | 3.24 | 3.36 | 3.59 | 3.47 | 3.27 | 2.99 | 2.99 | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Intuitive Surgical Inc. | 1.99 | 2.21 | 2.25 | 2.27 | 2.36 | 2.62 | 2.82 | 2.98 | 2.90 | 2.84 | 2.64 | 2.49 | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Medtronic PLC | 1.92 | 2.00 | 2.09 | 2.20 | 2.26 | 2.38 | 2.47 | 2.43 | 2.24 | 2.20 | 2.10 | 2.23 | — | — | — | — | — | — | — | — | — | — | — | |||||||
Based on: 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 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).
1 Q3 2023 Calculation
Inventory turnover
= (Cost of salesQ3 2023
+ Cost of salesQ2 2023
+ Cost of salesQ1 2023
+ Cost of salesQ4 2022)
÷ Inventory
= (351,700 + 324,900 + 278,900 + 273,900)
÷ 498,600 = 2.47
2 Click competitor name to see calculations.
The quarterly financial data for the analyzed period reveals several noteworthy trends in cost of sales, inventory levels, and inventory turnover ratios.
- Cost of Sales
- The cost of sales shows a general upward trajectory over the examined quarters, starting from approximately $65.5 million in March 2018 and rising to over $350 million by September 2023. Notable increments occur around late 2020 and throughout 2021, with the figure increasing steadily into 2022 and 2023. Despite some fluctuations, costs broadly trend higher, which may reflect increasing production volumes, inflationary pressures, or changes in product mix.
- Inventory Levels
- Inventory values also exhibit a significant increase over the same timeframe. From about $51.6 million in March 2018, inventory rises steadily, peaking near $498.6 million by September 2023. The growth in inventory is relatively consistent, with a marked acceleration starting in early 2020 and continuing onward. This ascent could indicate either accumulation of stock in anticipation of higher sales or slower inventory turnover.
- Inventory Turnover Ratio
- The inventory turnover ratio, available from late 2018 onward, demonstrates a declining trend initially, dropping from a high of 5.2x around the end of 2018 down to approximately 2.0x by the end of 2021. This decline suggests that inventory is being held longer, which aligns with the rising inventory levels. However, beginning in early 2022, the ratio begins to recover, increasing gradually to around 3.35x by the first half of 2023 before slightly declining towards September 2023. This recovery might indicate improvements in sales efficiency or inventory management.
In summary, the data depicts increasing cost of sales and inventory holdings over the years, with an initially slowing inventory turnover that shows signs of improvement more recently. Such patterns could reflect growth-related inventory buildup followed by attempts to optimize inventory utilization.
Receivables Turnover
DexCom Inc., receivables turnover calculation (quarterly data)
| Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||||||||||||||||||||||||||
| Revenue | 975,000) | 871,300) | 741,500) | 815,200) | 769,600) | 696,200) | 628,800) | 698,200) | 650,200) | 595,100) | 505,000) | 568,900) | 500,900) | 451,800) | 405,100) | 462,800) | 396,300) | 336,400) | 280,500) | 338,000) | 266,700) | 242,500) | 184,400) | |||||||
| Accounts receivable, net | 785,700) | 750,600) | 636,800) | 713,300) | 564,100) | 560,800) | 544,500) | 514,300) | 529,100) | 483,500) | 443,400) | 428,500) | 370,000) | 296,500) | 300,700) | 286,300) | 234,900) | 217,300) | 204,700) | 226,700) | 169,800) | 162,000) | 123,900) | |||||||
| Short-term Activity Ratio | ||||||||||||||||||||||||||||||
| Receivables turnover1 | 4.33 | 4.26 | 4.75 | 4.08 | 4.95 | 4.77 | 4.72 | 4.76 | 4.38 | 4.49 | 4.57 | 4.50 | 4.92 | 5.79 | 5.32 | 5.16 | 5.75 | 5.62 | 5.51 | 4.55 | — | — | — | |||||||
| Benchmarks | ||||||||||||||||||||||||||||||
| Receivables Turnover, Competitors2 | ||||||||||||||||||||||||||||||
| Abbott Laboratories | 6.15 | 6.52 | 6.89 | 7.02 | 7.03 | 6.33 | 6.20 | 6.64 | 6.61 | 6.58 | 6.13 | 5.40 | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Elevance Health Inc. | 17.93 | 18.82 | 16.53 | 18.81 | 19.51 | 18.80 | 16.67 | 20.66 | 18.93 | 18.81 | 17.39 | 19.72 | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Intuitive Surgical Inc. | 7.12 | 7.37 | 6.95 | 6.60 | 7.20 | 7.11 | 6.52 | 7.30 | 7.90 | 7.38 | 6.96 | 6.75 | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Medtronic PLC | 5.23 | 5.48 | 5.85 | 5.71 | 5.84 | 5.79 | 5.82 | 5.51 | 5.35 | 5.21 | 5.73 | 6.22 | — | — | — | — | — | — | — | — | — | — | — | |||||||
| UnitedHealth Group Inc. | 17.23 | 19.23 | 14.88 | 18.22 | 18.37 | 16.27 | 15.65 | 20.07 | 19.60 | 18.53 | 16.35 | 19.86 | — | — | — | — | — | — | — | — | — | — | — | |||||||
Based on: 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 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).
1 Q3 2023 Calculation
Receivables turnover
= (RevenueQ3 2023
+ RevenueQ2 2023
+ RevenueQ1 2023
+ RevenueQ4 2022)
÷ Accounts receivable, net
= (975,000 + 871,300 + 741,500 + 815,200)
÷ 785,700 = 4.33
2 Click competitor name to see calculations.
The revenue exhibits a generally increasing trend over the analyzed periods, with notable seasonal fluctuations. Starting from $184.4 million in the first quarter of 2018, revenue grew consistently, reaching a peak of $815.2 million in the fourth quarter of 2022 before slightly declining to $741.5 million in the first quarter of 2023 and then rising again to $975 million in the third quarter of 2023. This pattern suggests steady growth with intra-year variability typical in the business cycle.
Accounts receivable, net, also increased over time, mirroring the upward trend in revenue but with more variability. Beginning at $123.9 million in the first quarter of 2018, receivables rose substantially to $713.3 million by the first quarter of 2023. There are noticeable increases in certain quarters, with some fluctuations likely reflecting changes in credit terms or collection processes. The substantial rise in accounts receivable towards the later periods corresponds with the strong revenue growth but may indicate an increasing credit risk or extended collection period.
The receivables turnover ratio shows some variability but generally hovers within a range of approximately 4 to 5.8. It peaked near the end of 2018 at 5.75 and again mid-2020 at 5.79, indicating periods of relatively efficient collections. More recent values tend to be lower, around 4.2 to 4.8, suggesting a slight decrease in the speed at which receivables are converted into cash. This decline could suggest either elongation in payment terms or challenges in collection efficiency as the volume of receivables grows.
Overall, the data reflect robust revenue growth alongside increasing accounts receivable balances, with a modest decline in receivables turnover ratio in recent quarters. This combination implies expanding business volume accompanied by some potential moderation in cash collection efficiency, warranting ongoing monitoring to ensure working capital management remains effective.
Working Capital Turnover
DexCom Inc., working capital turnover calculation (quarterly data)
| Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||||||||||||||||||||||||||
| Current assets | 4,698,400) | 5,002,900) | 3,767,400) | 3,668,800) | 3,398,500) | 3,808,700) | 3,746,600) | 3,684,400) | 3,656,200) | 3,474,200) | 3,445,100) | 3,424,800) | 3,237,100) | 3,033,000) | 1,995,700) | 1,969,400) | 1,815,700) | 1,744,200) | 1,690,800) | 1,699,500) | 914,100) | 836,000) | 729,300) | |||||||
| Less: Current liabilities | 1,678,600) | 2,069,700) | 1,865,000) | 1,839,300) | 900,500) | 807,000) | 711,400) | 720,800) | 734,900) | 600,700) | 604,100) | 614,100) | 506,400) | 400,100) | 342,800) | 360,200) | 322,400) | 288,200) | 235,400) | 222,400) | 193,900) | 170,800) | 125,100) | |||||||
| Working capital | 3,019,800) | 2,933,200) | 1,902,400) | 1,829,500) | 2,498,000) | 3,001,700) | 3,035,200) | 2,963,600) | 2,921,300) | 2,873,500) | 2,841,000) | 2,810,700) | 2,730,700) | 2,632,900) | 1,652,900) | 1,609,200) | 1,493,300) | 1,456,000) | 1,455,400) | 1,477,100) | 720,200) | 665,200) | 604,200) | |||||||
| Revenue | 975,000) | 871,300) | 741,500) | 815,200) | 769,600) | 696,200) | 628,800) | 698,200) | 650,200) | 595,100) | 505,000) | 568,900) | 500,900) | 451,800) | 405,100) | 462,800) | 396,300) | 336,400) | 280,500) | 338,000) | 266,700) | 242,500) | 184,400) | |||||||
| Short-term Activity Ratio | ||||||||||||||||||||||||||||||
| Working capital turnover1 | 1.13 | 1.09 | 1.59 | 1.59 | 1.12 | 0.89 | 0.85 | 0.83 | 0.79 | 0.76 | 0.71 | 0.69 | 0.67 | 0.65 | 0.97 | 0.92 | 0.90 | 0.84 | 0.77 | 0.70 | — | — | — | |||||||
| Benchmarks | ||||||||||||||||||||||||||||||
| Working Capital Turnover, Competitors2 | ||||||||||||||||||||||||||||||
| Abbott Laboratories | 4.15 | 4.39 | 4.21 | 4.48 | 3.92 | 3.63 | 4.13 | 3.87 | 3.98 | 4.02 | 3.99 | 4.06 | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Elevance Health Inc. | 7.92 | 7.69 | 7.60 | 8.37 | 9.11 | 8.85 | 8.65 | 7.23 | 6.79 | 6.67 | 5.38 | 6.39 | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Intuitive Surgical Inc. | 0.95 | 1.03 | 1.15 | 1.29 | 1.21 | 1.17 | 1.26 | 1.22 | 1.17 | 1.03 | 0.88 | 0.77 | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Medtronic PLC | 2.81 | 2.82 | 3.84 | 2.97 | 2.21 | 2.13 | 2.15 | 2.15 | 2.02 | 2.00 | 2.44 | 2.48 | — | — | — | — | — | — | — | — | — | — | — | |||||||
| UnitedHealth Group Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
Based on: 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 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).
1 Q3 2023 Calculation
Working capital turnover
= (RevenueQ3 2023
+ RevenueQ2 2023
+ RevenueQ1 2023
+ RevenueQ4 2022)
÷ Working capital
= (975,000 + 871,300 + 741,500 + 815,200)
÷ 3,019,800 = 1.13
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals distinct trends in key metrics over the observed periods.
- Working Capital
- Working capital exhibited a general upward trend from March 2018 through June 2021, increasing from approximately 604.2 million USD to over 2.87 billion USD. This rise suggests a growing buffer of current assets over current liabilities, indicating improved liquidity and operational efficiency during this period. However, starting in March 2022, working capital declined sharply, falling from roughly 3.04 billion USD to a low of about 1.83 billion USD by December 2022. This decrease, followed by a recovery to around 3.02 billion USD in September 2023, may indicate periods of increased short-term obligations or asset restructuring, warranting further investigation into underlying causes.
- Revenue
- Revenue showed a consistent increasing pattern across most quarters, rising from 184.4 million USD in March 2018 to a peak of 975 million USD in September 2023. Notable growth phases include steady quarterly increments throughout 2018 to 2021, with occasional fluctuations such as a decline in the first quarter of 2019 and a dip in the first quarter of 2022. Despite these fluctuations, the overall trajectory is positive, indicating expanding sales or service income and suggesting successful market penetration or product demand over time.
- Working Capital Turnover
- Working capital turnover ratios are incomplete for the early periods but show values beginning in March 2019 at 0.70 and generally increasing through subsequent quarters to 1.59 by mid-2023. This rising trend indicates improving efficiency in using working capital to generate revenue, reflecting a more productive asset base relative to short-term financing. The ratio peaked at 1.59 in both June and September 2023, corresponding to periods of lower working capital but high revenue, implying optimized use of current assets and liabilities.
In summary, the financial data suggest that although working capital fluctuated significantly, particularly with a dip in late 2022, revenue demonstrated sustained growth with increasing market activity. The improving working capital turnover ratios imply enhanced operational efficiency, especially in the period leading up to 2023. Such patterns indicate a generally positive business momentum, albeit with caution advised regarding liquidity swings observed in 2022.
Average Inventory Processing Period
DexCom Inc., average inventory processing period calculation (quarterly data)
| Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | 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 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||||||||||||||||||||||||||
| Inventory turnover | 2.47 | 2.74 | 2.94 | 3.35 | 3.15 | 2.67 | 2.45 | 2.15 | 2.03 | 2.10 | 2.28 | 2.76 | 3.14 | 3.75 | 4.10 | 4.55 | 4.20 | 3.86 | 4.09 | 5.20 | — | — | — | |||||||
| Short-term Activity Ratio (no. days) | ||||||||||||||||||||||||||||||
| Average inventory processing period1 | 148 | 133 | 124 | 109 | 116 | 137 | 149 | 170 | 180 | 174 | 160 | 132 | 116 | 97 | 89 | 80 | 87 | 95 | 89 | 70 | — | — | — | |||||||
| Benchmarks (no. days) | ||||||||||||||||||||||||||||||
| Average Inventory Processing Period, Competitors2 | ||||||||||||||||||||||||||||||
| Abbott Laboratories | 135 | 139 | 132 | 118 | 108 | 113 | 109 | 102 | 105 | 111 | 122 | 122 | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Intuitive Surgical Inc. | 183 | 166 | 162 | 161 | 155 | 139 | 130 | 122 | 126 | 129 | 138 | 147 | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Medtronic PLC | 190 | 183 | 174 | 166 | 161 | 153 | 148 | 150 | 163 | 166 | 174 | 164 | — | — | — | — | — | — | — | — | — | — | — | |||||||
Based on: 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 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).
1 Q3 2023 Calculation
Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ 2.47 = 148
2 Click competitor name to see calculations.
- Inventory Turnover Ratio
- The inventory turnover ratio exhibits a downward trend from March 2019 through December 2021, starting at 5.2 and declining steadily to a low of approximately 2.03. This suggests a gradual slowdown in the rate at which inventory is sold and replaced during this period. However, beginning in early 2022, the ratio shows a recovery, increasing from around 2.15 to peaks above 3.3 by the end of 2022, before experiencing a slight decline again in 2023, settling close to 2.47 by September 2023. Overall, the data indicate fluctuating inventory management efficiency with an extended period of deceleration followed by some improvement and subsequent stabilization at lower levels than earlier years.
- Average Inventory Processing Period
- The average inventory processing period, denoting the number of days inventory remains before being processed or sold, demonstrates an inverse pattern to the inventory turnover ratio. Starting at 70 days in March 2019, it lengthens consistently through December 2021, reaching a peak of approximately 180 days. This elongation reflects slower inventory movement and possibly increased stock holding. After peaking at the end of 2021, the period begins to shorten through 2022, declining to about 116 days by the end of that year. Nonetheless, in 2023, the period again trends upward, increasing to 148 days by September 2023. This trend highlights periods of both inventory turnover efficiency challenges and partial improvements, with recent data suggesting rising inventory holding durations.
- Overall Trend and Insights
- The inverse relationship between inventory turnover ratio and average inventory processing period is consistent and expected, as slower turnover corresponds with longer holding periods. The extended period of declining turnover and increasing processing days from 2019 to 2021 may indicate supply chain inefficiencies, demand fluctuations, or strategic inventory accumulation during that timeframe. The subsequent recovery of turnover and reduction in processing days throughout 2022 suggests operational improvements or changes in inventory management strategies. However, the resurgence in the processing period and slight decrease in turnover in 2023 may point to renewed challenges in inventory management or changing market conditions affecting sales velocity.
Average Receivable Collection Period
DexCom Inc., average receivable collection period calculation (quarterly data)
| Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | 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 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||||||||||||||||||||||||||
| Receivables turnover | 4.33 | 4.26 | 4.75 | 4.08 | 4.95 | 4.77 | 4.72 | 4.76 | 4.38 | 4.49 | 4.57 | 4.50 | 4.92 | 5.79 | 5.32 | 5.16 | 5.75 | 5.62 | 5.51 | 4.55 | — | — | — | |||||||
| Short-term Activity Ratio (no. days) | ||||||||||||||||||||||||||||||
| Average receivable collection period1 | 84 | 86 | 77 | 89 | 74 | 77 | 77 | 77 | 83 | 81 | 80 | 81 | 74 | 63 | 69 | 71 | 63 | 65 | 66 | 80 | — | — | — | |||||||
| Benchmarks (no. days) | ||||||||||||||||||||||||||||||
| Average Receivable Collection Period, Competitors2 | ||||||||||||||||||||||||||||||
| Abbott Laboratories | 59 | 56 | 53 | 52 | 52 | 58 | 59 | 55 | 55 | 55 | 60 | 68 | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Elevance Health Inc. | 20 | 19 | 22 | 19 | 19 | 19 | 22 | 18 | 19 | 19 | 21 | 19 | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Intuitive Surgical Inc. | 51 | 50 | 53 | 55 | 51 | 51 | 56 | 50 | 46 | 49 | 52 | 54 | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Medtronic PLC | 70 | 67 | 62 | 64 | 63 | 63 | 63 | 66 | 68 | 70 | 64 | 59 | — | — | — | — | — | — | — | — | — | — | — | |||||||
| UnitedHealth Group Inc. | 21 | 19 | 25 | 20 | 20 | 22 | 23 | 18 | 19 | 20 | 22 | 18 | — | — | — | — | — | — | — | — | — | — | — | |||||||
Based on: 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 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).
1 Q3 2023 Calculation
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ 4.33 = 84
2 Click competitor name to see calculations.
The analysis of the receivables turnover ratio and the average receivable collection period over the observed quarters reveals several notable trends and variations.
- Receivables Turnover Ratio
-
This ratio, which measures how efficiently the company collects its receivables, showed an increase from 4.55 in March 2019 to a peak of 5.79 in September 2020. This upward trend indicates improved efficiency in receivables collection during that period.
However, following the peak, the ratio generally declined, reaching a low of 4.08 in March 2023, suggesting a decrease in collection efficiency or possible leniency in credit terms or billing processes.
The ratio fluctuated moderately thereafter, ending at 4.33 in September 2023, indicating some recovery but remaining below earlier peak levels.
- Average Receivable Collection Period
-
This metric, indicating the average number of days to collect receivables, complements the turnover ratio. It decreased from 80 days in March 2019 to 63 days in September 2020, corresponding with the increase in turnover ratio and underscoring enhanced collection efficiency.
From late 2020, there was a gradual increase in the collection period to a peak of 89 days in March 2023, reflecting slower collection processes or changes in customer payment behavior.
Subsequently, this period shortened slightly to 84 days by September 2023, aligning with the slight improvement observed in the turnover ratio.
Overall, the data demonstrates an initial period of improved receivables management up to late 2020, followed by a phase where collection efficiency declined. The recent modest recovery in both metrics may indicate management actions to address receivables performance or changing market conditions affecting customer payments.
Operating Cycle
DexCom Inc., operating cycle calculation (quarterly data)
No. days
| Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | 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 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||||||||||||||||||||||||||
| Average inventory processing period | 148 | 133 | 124 | 109 | 116 | 137 | 149 | 170 | 180 | 174 | 160 | 132 | 116 | 97 | 89 | 80 | 87 | 95 | 89 | 70 | — | — | — | |||||||
| Average receivable collection period | 84 | 86 | 77 | 89 | 74 | 77 | 77 | 77 | 83 | 81 | 80 | 81 | 74 | 63 | 69 | 71 | 63 | 65 | 66 | 80 | — | — | — | |||||||
| Short-term Activity Ratio | ||||||||||||||||||||||||||||||
| Operating cycle1 | 232 | 219 | 201 | 198 | 190 | 214 | 226 | 247 | 263 | 255 | 240 | 213 | 190 | 160 | 158 | 151 | 150 | 160 | 155 | 150 | — | — | — | |||||||
| Benchmarks | ||||||||||||||||||||||||||||||
| Operating Cycle, Competitors2 | ||||||||||||||||||||||||||||||
| Abbott Laboratories | 194 | 195 | 185 | 170 | 160 | 171 | 168 | 157 | 160 | 166 | 182 | 190 | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Intuitive Surgical Inc. | 234 | 216 | 215 | 216 | 206 | 190 | 186 | 172 | 172 | 178 | 190 | 201 | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Medtronic PLC | 260 | 250 | 236 | 230 | 224 | 216 | 211 | 216 | 231 | 236 | 238 | 223 | — | — | — | — | — | — | — | — | — | — | — | |||||||
Based on: 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 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).
1 Q3 2023 Calculation
Operating cycle = Average inventory processing period + Average receivable collection period
= 148 + 84 = 232
2 Click competitor name to see calculations.
The analysis of the quarterly financial indicators reveals several notable trends over the examined period.
- Average Inventory Processing Period
-
This metric displays a general upward trend from March 2019 through December 2021, increasing from 70 days to a peak of 180 days. Following this peak, there is a gradual decline in the inventory processing duration lasting until the third quarter of 2023, ending at 133 days. This trend suggests an initial lengthening in the time inventory stays in the system, which could indicate changes in inventory management, supply chain delays, or demand fluctuations. The subsequent reduction from this peak implies some recovery or improved efficiency.
- Average Receivable Collection Period
-
The collection period exhibits fluctuations throughout the timeframe with less pronounced directional movement compared to inventory. It starts at 80 days in March 2019, decreases to lows in the mid-60s by late 2019, then experiences a rise to over 80 days during late 2020 and early 2021. From 2022 onward, the collection period stabilizes somewhat in the high 70s to low 80s range, before showing a slight increase again towards 84 days by the third quarter of 2023. These variations may reflect changing credit policies, customer payment behavior, or billing cycle adjustments.
- Operating Cycle
-
The operating cycle, representing the combined duration of inventory processing and receivable collection, follows a pattern similar to inventory processing but is slightly smoothed due to receivables influence. It rises steadily from 150 days in March 2019 to a maximum of 263 days in December 2021. After this peak, a consistent downward trend appears, with the cycle shortening to 219 days by September 2023. The elongation in the operating cycle suggests that the company initially faced longer periods to turn over inventory and collect receivables, potentially impacting working capital efficiency. The subsequent reduction points to an improvement in overall operational efficiency or adjustments in business cycle management.