DoorDash, Inc. (NASDAQ:DASH)

The analysis of the financial ratios over the five-year period reveals several important trends concerning the company's operational efficiency and management of working capital.

Receivables Turnover

The receivables turnover ratio increased significantly from 9.92 in 2020 to a peak of 16.46 in 2022, before slightly declining to 14.65 by 2024. This overall upward movement suggests an improvement in the company's ability to collect receivables more frequently throughout the year, reflecting enhanced credit management or stronger cash inflows from customers.

Payables Turnover

The payables turnover ratio exhibits more volatility, starting at 17.1 in 2020, dropping to 14.52 in 2021, then rising sharply to 22.85 in 2022, followed by a gradual descent to 17.26 in 2024. The fluctuations indicate changing dynamics in the company's payment practices to suppliers, with phases of both quicker and slower payments.

Working Capital Turnover

Working capital turnover has steadily increased from 0.7 in 2020 to a high of 3.95 in 2023, slightly tapering to 3.64 in 2024. This trend demonstrates a growing efficiency in using working capital to generate sales, suggesting better management of current assets and liabilities over time.

Average Receivable Collection Period

The average collection period has decreased markedly from 37 days in 2020 to 22 days in 2022, then slightly increased to 25 days by 2024. Shorter collection periods represent faster cash recovery from customers, consistent with the improvement observed in receivables turnover.

Average Payables Payment Period

This metric fluctuates over the years, rising from 21 days in 2020 to 25 days in 2021, then declining to 16 days in 2022, before increasing again to 21 days in 2024. The variable payment period indicates shifting strategies in managing payments to suppliers, oscillating between delaying outflows to preserve cash and faster payments possibly aimed at maintaining good supplier relationships.

In summary, the company has generally enhanced its efficiency in managing receivables and working capital, while showing a more variable approach towards payable management. The increased receivables turnover and reduced collection periods are positive indications of improved liquidity. However, the fluctuations in payables turnover and payment periods suggest an adaptive but somewhat inconsistent supplier payment policy that may be responsive to changing market conditions or internal cash management priorities.

The financial data over the examined period reveals consistent growth in revenue, accounts receivable, and changes in receivables turnover ratio, indicating evolving operational efficiency and credit management practices.

Revenue

The revenue demonstrates a robust upward trend from approximately US$2,886 million in 2020 to US$10,722 million in 2024. This continuous increase suggests significant business expansion and successful revenue generation strategies. The annual increments are substantial and imply effective market penetration or increased demand for the company’s offerings.

Accounts Receivable, Net

Accounts receivable shows a steady increase, rising from US$291 million in 2020 to US$732 million in 2024. While growth in receivables aligns with increasing revenue, the rate of increase in receivables appears somewhat proportional to revenue growth, indicating the company is scaling credit sales in line with overall sales growth. This may also reflect consistent credit policies or customer payment behaviors over time.

Receivables Turnover Ratio

The receivables turnover ratio moves from 9.92 in 2020, climbing to a peak of 16.46 in 2022, then declining slightly to 16.2 in 2023, and further to 14.65 in 2024. The initial growth in the turnover ratio indicates improved efficiency in collecting receivables, which may reflect tighter credit terms or effective collection processes. The subsequent decrease starting in 2023 suggests a modest decline in collection speed relative to sales, potentially due to relaxed credit terms or slower customer payments, though it remains at a relatively high level compared to 2020.

Overall, the company shows strong revenue growth accompanied by a corresponding rise in accounts receivable. The receivables turnover ratio's fluctuation suggests phases of improved and slightly diminished efficiency in receivables collection. This information can be interpreted as the company balancing growth ambitions with credit risk management and operational capabilities in receivables management.

Cost of Revenue, Exclusive of Depreciation and Amortization

The cost of revenue showed a consistent and significant upward trend over the analyzed periods. It increased from $1,368 million in 2020 to $5,542 million in 2024. This represents a more than fourfold increase over five years, indicating considerable growth in operational costs directly related to the delivery of services or goods. Such a rise could reflect expansion in volume, pricing pressures, or changes in the cost structure.

Accounts Payable

Accounts payable also increased over the period, rising from $80 million in 2020 to $321 million in 2024. While the increase is notable, it is proportionally smaller relative to the growth in cost of revenue. This might suggest a shift in payment terms, changes in supplier relationships, or different credit policies. However, the upward movement aligns generally with the expanding business scale.

Payables Turnover Ratio

The payables turnover ratio exhibits variability during the period. Starting at 17.1 in 2020, it decreased to 14.52 in 2021, followed by a sharp increase to 22.85 in 2022. Subsequently, it declined to 21.25 in 2023 and further to 17.26 in 2024. This fluctuating pattern indicates changes in the speed at which the company settles its payables. Higher turnover ratios in 2022 and 2023 suggest faster payment cycles, whereas the decline toward 2024 may indicate extended payment terms or slower settlement with suppliers in the latest year.

Overall Analysis

The financial data highlight substantial growth in cost of revenue, signaling expanding business operations. Accounts payable increased but at a relatively lesser rate, while the payables turnover ratio’s fluctuations suggest varying payment strategies or supplier terms over time. The patterns imply that while operational scale expanded significantly, the company's management of payables has been dynamic, possibly adapting to changing business or market conditions.

Working Capital

The working capital experienced a decline from US$4,115 million in 2020 to US$2,176 million in 2022, indicating a reduction in the company's short-term liquidity during this period. From 2022 onward, working capital stabilized somewhat, with a slight increase to US$2,187 million in 2023 and further improvement to US$2,948 million in 2024. Despite the recovery, working capital in 2024 remains below the 2020 level.

Revenue

Revenue demonstrated a strong upward trajectory across the entire period. Starting at US$2,886 million in 2020, it rose significantly to US$10,722 million by 2024. This reflects a compound year-over-year growth, with especially notable increases in 2021 and continuing robust growth through 2023 and 2024.

Working Capital Turnover Ratio

The working capital turnover ratio improved substantially, increasing from 0.7 times in 2020 to a peak of 3.95 times in 2023. This indicates that the company became increasingly efficient in generating revenue from its working capital over the period. A slight decrease to 3.64 times in 2024 suggests a minor reduction in efficiency, although the ratio remains significantly higher than in earlier years.

Summary of Trends

Overall, the financial data reveal a company experiencing rapid revenue growth while managing working capital levels more tightly. The decreasing working capital figures until 2022, combined with rising revenue, led to much higher working capital turnover ratios, emphasizing improved operational efficiency. The rebound in working capital from 2023 suggests a cautious approach to liquidity, potentially to support ongoing growth. The slight dip in turnover ratio in 2024 may reflect this shift toward increased working capital holdings despite continued revenue growth.

The data indicates that the receivables turnover ratio experienced a consistent upward trend from 2020 to 2022, increasing from 9.92 to 16.46, which signifies improved efficiency in collecting receivables during this period. In 2023, there was a slight decrease to 16.2, followed by a more marked decline to 14.65 in 2024. Despite this recent reduction, the turnover ratio remains significantly higher than the 2020 level.

Correspondingly, the average receivable collection period shows an inverse trend compared to the receivables turnover. It decreased steadily from 37 days in 2020 to 22 days by the end of 2022, reflecting quicker collection of receivables. However, in 2023 and 2024, the collection period slightly increased to 23 and then 25 days respectively, which aligns with the downward adjustment in the turnover ratio. Nonetheless, the collection period remains substantially lower than the initial 2020 figure, indicating relatively efficient receivables management overall.

Receivables Turnover Ratio

Increased significantly from 2020 through 2022, indicating improved receivables collection efficiency.

Mild decline observed in 2023 and more notably in 2024, though values remain above 2020 levels.

Average Receivable Collection Period

Decreased consistently from 37 days in 2020 to 22 days in 2022, reflecting faster collections.

Subsequent slight increases to 23 days in 2023 and 25 days in 2024 suggest a modest slowdown in collections but still better than early periods.

Overall, the trends reveal that the efficiency in managing receivables improved considerably up to 2022, followed by a minor reversal in the next two years. The recent changes may warrant monitoring to ensure that the collection practices remain robust and effective.

Payables Turnover

The payables turnover ratio displayed significant fluctuations over the analyzed periods. Initially, the ratio decreased from 17.1 in 2020 to 14.52 in 2021, indicating a slower rate of payment to suppliers during that year. Following this drop, there was a sharp increase to 22.85 in 2022, suggesting a quicker settlement of payables. This elevated level slightly declined to 21.25 in 2023 and further reduced to 17.26 in 2024, albeit remaining above the 2021 level. Overall, the trend suggests volatility in the company's ability or strategy to manage its payables with a peak in 2022.

Average Payables Payment Period

The average payables payment period, measured in days, exhibited an inverse pattern relative to the payables turnover. The number of days extended from 21 in 2020 to 25 in 2021, reflecting a longer duration taken to pay suppliers. In 2022, this period shortened markedly to 16 days, consistent with the peak in payables turnover for the same year. Subsequent years showed a gradual increase in payment days to 17 in 2023 and 21 in 2024, indicating a trend toward longer payment periods compared to the low point recorded in 2022.

Overall Insights

The relationship between the payables turnover and the average payables payment period demonstrates a clear inverse correlation, as expected. The company appears to have varied its payment timing strategy notably across the five-year span, reaching the lowest payment period and highest turnover in 2022, perhaps to optimize cash flow or supplier relations during that specific year. In the following years, it adjusted back toward a more moderate payment approach. These fluctuations suggest responsiveness to operational or market conditions influencing payment policies over time.