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.
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- Balance Sheet: Assets
- Common-Size Balance Sheet: Assets
- Analysis of Long-term (Investment) Activity Ratios
- Common Stock Valuation Ratios
- Enterprise Value to EBITDA (EV/EBITDA)
- Present Value of Free Cash Flow to Equity (FCFE)
- Total Asset Turnover since 2015
- Price to Earnings (P/E) since 2015
- Price to Operating Profit (P/OP) since 2015
- Analysis of Revenues
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Short-term Activity Ratios (Summary)
Etsy Inc., short-term (operating) activity ratios (quarterly data)
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 key financial turnover ratios and average collection/payment periods over the observed quarters reveals notable trends and fluctuations.
- Receivables Turnover
- The receivables turnover ratio generally exhibits an upward trend from 13.1 in the first available quarter to a peak of 119.9, with some oscillation between quarters. This suggests improved efficiency in collecting receivables over time, especially marked by a significant increase starting from 2019. High values indicate faster conversion of receivables to cash.
- Payables Turnover
- The payables turnover ratio shows substantial variability, with values fluctuating widely between quarters. Initial ratios range around 11 to 19, dropping to as low as 7.19 at one point, and reaching highs over 44.61 in later quarters. These fluctuations imply irregular payment patterns to suppliers, with occasional periods of faster payment contrasting with slower payment cycles.
- Working Capital Turnover
- This ratio reflects operational efficiency in using working capital to generate sales. Early values are relatively stable, generally below 1.5, but starting around 2021, there is a marked increase with peaks above 3.5. This indicates a significant improvement in working capital utilization efficiency in recent periods, although some decline is evident after the peak.
- Average Receivable Collection Period (Days)
- The average collection period displays a clear decreasing trend, dropping from the mid-20s range early in the dataset to consistently very low values around 3 to 5 days in the most recent quarters. This trend aligns with the rising receivables turnover ratio, confirming faster collection of receivables over time.
- Average Payables Payment Period (Days)
- The payment period is more variable, fluctuating between approximately 8 and 51 days, with no consistent upward or downward trend. The company alternates between paying suppliers quickly and extending payment periods, possibly reflecting strategic cash flow management or varying supplier terms.
In summary, the financial data indicates substantial improvements in receivables management and working capital efficiency, as reflected by increasing receivables and working capital turnover ratios and decreasing average collection periods. Payables management is less consistent, showing significant date-to-date variability in payment periods and turnover, suggesting flexible vendor payment practices. Overall, the trends point to enhanced liquidity and asset management capabilities in recent periods, supporting stronger operational performance.
Turnover Ratios
Average No. Days
Receivables Turnover
Etsy Inc., receivables turnover calculation (quarterly data)
| 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) | ||||||||||||||||||||||||||||||
| Revenue | ||||||||||||||||||||||||||||||
| Accounts receivable, net of expected credit losses | ||||||||||||||||||||||||||||||
| Short-term Activity Ratio | ||||||||||||||||||||||||||||||
| Receivables turnover1 | ||||||||||||||||||||||||||||||
| Benchmarks | ||||||||||||||||||||||||||||||
| Receivables Turnover, Competitors2 | ||||||||||||||||||||||||||||||
| Home Depot Inc. | ||||||||||||||||||||||||||||||
| TJX Cos. 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
= (RevenueQ3 2022
+ RevenueQ2 2022
+ RevenueQ1 2022
+ RevenueQ4 2021)
÷ Accounts receivable, net of expected credit losses
= ( + + + )
÷ =
2 Click competitor name to see calculations.
The data reveals several key trends in revenue, accounts receivable, and receivables turnover ratios over multiple quarters from March 2017 through September 2022.
- Revenue
-
Revenue exhibits a general upward trajectory across the entire period, with some seasonal fluctuations and notable acceleration during specific intervals. Initially, revenue increased steadily from approximately $96.9 million in March 2017 to about $136.3 million by December 2017. This growth continued through 2018 and 2019 with some quarters exceeding previous peaks, reaching around $270.0 million by December 2019.
A substantial surge is observed starting in the first quarter of 2020, with revenue rising markedly to $228.1 million and continuing to escalate through the subsequent quarters, culminating at $717.1 million by December 2021. The increase during 2020 and 2021 suggests strong business expansion or increased demand possibly influenced by external market conditions.
In 2022, revenue appears to have stabilized somewhat, with quarterly values ranging from $579.3 million to $594.5 million, indicating a plateau following the prior period's steep rises.
- Accounts Receivable, Net of Expected Credit Losses
-
Accounts receivable values demonstrate variability without a clear upward or downward long-term trend. Starting near $25.1 million in March 2017, the figures fluctuate mildly around a range of $20 million to $36 million in the initial years, with a temporary dip in December 2018 to $12.2 million.
The post-2020 data shows moderate increases in accounts receivable values, reaching peaks around $27.3 million in March 2022. Nevertheless, these changes are less pronounced relative to the revenue increases seen in the same period, reflecting possible improvements in collections or credit management.
- Receivables Turnover Ratio
-
The receivables turnover ratio, provided from December 2017 onwards, indicates the speed at which the company collects its accounts receivable. The ratio generally trends upward over time, suggesting improved efficiency in credit and collections management.
Early values hover between 13.1 and 16.2, but there is a notable jump starting in March 2019, where ratios sharply increase to values in the upper 40s and beyond, even peaking at approximately 120 by mid-2022. This trajectory implies that the company is accelerating collections and converting receivables into cash more rapidly, which can contribute positively to liquidity and working capital management.
Payables Turnover
Etsy Inc., payables turnover calculation (quarterly data)
| Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||||||||||||||||||||||||||
| Cost of revenue | ||||||||||||||||||||||||||||||
| Accounts payable | ||||||||||||||||||||||||||||||
| Short-term Activity Ratio | ||||||||||||||||||||||||||||||
| Payables turnover1 | ||||||||||||||||||||||||||||||
| Benchmarks | ||||||||||||||||||||||||||||||
| Payables Turnover, Competitors2 | ||||||||||||||||||||||||||||||
| Amazon.com Inc. | ||||||||||||||||||||||||||||||
| Home Depot Inc. | ||||||||||||||||||||||||||||||
| Lowe’s Cos. Inc. | ||||||||||||||||||||||||||||||
| TJX Cos. 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 revenueQ3 2022
+ Cost of revenueQ2 2022
+ Cost of revenueQ1 2022
+ Cost of revenueQ4 2021)
÷ Accounts payable
= ( + + + )
÷ =
2 Click competitor name to see calculations.
The analysis of the financial metrics from the provided quarterly data reveals several key observations regarding cost management and payables efficiency over time.
- Cost of Revenue Trends
-
The cost of revenue exhibits a general upward trajectory from March 2017 through September 2022. Starting at approximately 34.7 million USD in the first quarter of 2017, costs increased steadily with some accelerated growth after 2019. Notably, from 2019 to 2021, costs rose markedly from around 52.7 million USD to over 208 million USD at the peak in the first quarter of 2022. This represents more than a sixfold increase over five years, driven by substantial quarterly increments especially in the latter half of the data period. The sharp spike in costs in 2021 and early 2022 suggests heightened operational activity or increased expenses related to product/service delivery.
- Accounts Payable Behavior
-
Accounts payable also present a general increasing pattern but with more volatility relative to cost of revenue. Initial values ranged around 6.3 to 7.6 million USD in 2017, rising to peaks above 40 million USD in December 2020. Subsequently, the figure fluctuates between roughly 13 million and 28 million USD, ending near 16.8 million USD by September 2022. The notable peak in December 2020 may indicate a temporal accumulation of liabilities or extended payment terms during that period, which then normalized in following quarters.
- Payables Turnover Ratio Insights
-
The accounts payables turnover ratio demonstrates substantial variability over the observed quarters, with values ranging from 7.19 to an exceptionally high 44.61. This indicates fluctuating efficiency in managing the payment of suppliers. Generally, higher turnover ratios imply faster payments. For instance, the peak value above 44 occurs in December 2021, suggesting very rapid settlement of payables during that quarter. Conversely, lower values near 7 or 10 indicate slower payments.
The irregular pattern of this ratio, including multiple sharp spikes and drops, suggests periods with changing supplier payment strategies or varying cash flow conditions. Despite the volatility, turnover ratios above 10 predominate throughout, reflecting a tendency toward maintaining relatively prompt payment cycles.
In summary, the data illustrates an expanding scale of operations with rising costs of revenue and an increase in accounts payable levels accompanied by fluctuating payment speeds. The significant growth in cost of revenue, particularly from 2019 onward, aligns with an overall increase in business activity or cost intensity, while the variable turnover ratios underscore shifts in payables management and liquidity positioning over time.
Working Capital Turnover
Etsy Inc., working capital turnover calculation (quarterly data)
| 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 | ||||||||||||||||||||||||||||||
| Revenue | ||||||||||||||||||||||||||||||
| Short-term Activity Ratio | ||||||||||||||||||||||||||||||
| Working capital turnover1 | ||||||||||||||||||||||||||||||
| Benchmarks | ||||||||||||||||||||||||||||||
| Working Capital Turnover, Competitors2 | ||||||||||||||||||||||||||||||
| Amazon.com Inc. | ||||||||||||||||||||||||||||||
| Home Depot Inc. | ||||||||||||||||||||||||||||||
| Lowe’s Cos. Inc. | ||||||||||||||||||||||||||||||
| TJX Cos. 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
= (RevenueQ3 2022
+ RevenueQ2 2022
+ RevenueQ1 2022
+ RevenueQ4 2021)
÷ Working capital
= ( + + + )
÷ =
2 Click competitor name to see calculations.
The financial data exhibits notable shifts in working capital, revenue, and working capital turnover over the analyzed periods. A detailed examination of these trends reveals several key insights regarding liquidity management and operational efficiency.
- Working Capital
- Working capital displays a general upward trajectory from March 2017 through December 2021, increasing from approximately $274 million to a peak near $2.28 billion in December 2021. This substantial growth indicates an expansion in current assets relative to current liabilities, suggesting improved short-term financial stability and potential for scaling operations. However, after December 2021, a marked decrease is observed, with working capital falling to approximately $854 million by September 2022. This decline may reflect changes in asset utilization, increased liabilities, or other operational factors impacting liquidity.
- Revenue
- Revenue trends show a consistent increase over the reported periods, rising from about $97 million in March 2017 to a peak of approximately $717 million in March 2022. This steady growth highlights strong sales performance and successful market penetration. Post-March 2022, revenue experiences a decline to roughly $594 million by September 2022. The reduction in revenue towards the later periods may warrant investigation into market conditions, customer demand fluctuations, or competitive pressures.
- Working Capital Turnover
- The working capital turnover ratio exhibits variability across the quarters. Early in the series, the ratio fluctuates around values between 0.78 and 1.23, indicating moderate efficiency in using working capital to generate revenue. A notable increase occurs starting in March 2022, with the ratio surging to 3.68 and maintaining elevated levels above 2.7 through September 2022. This sharp increase suggests a substantial improvement in the efficiency of working capital utilization, likely driven by the reduction in working capital alongside relatively stable revenue levels. High turnover may reflect more effective management of current assets and liabilities or a leaner operational approach.
In summary, the data depict a company experiencing robust revenue growth accompanied by increasing working capital up to late 2021, after which both working capital and revenue decline. The late surge in working capital turnover ratio reflects increased operational efficiency during a period of reduced working capital. This analysis points to significant changes in financial management and business dynamics during the examined timeframe.
Average Receivable Collection Period
Etsy Inc., average receivable collection period calculation (quarterly data)
| 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 | ||||||||||||||||||||||||||||||
| Home Depot Inc. | ||||||||||||||||||||||||||||||
| TJX Cos. 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.
The receivables turnover ratio exhibits a general increasing trend from March 2017 through September 2022, indicating progressively more efficient collection of receivables over time. Initially, the ratio begins in the low teens and increases substantially, reaching values above 100 in the period starting March 2021. This upward movement suggests a notable improvement in the frequency of receivables collection.
Correspondingly, the average receivable collection period, expressed in number of days, demonstrates a decreasing trend, inversely related to the turnover ratio. The collection period reduces from around 28 days in early 2017 to a consistent range of approximately 3 to 5 days by late 2021 and into 2022. This contraction in collection days further supports the interpretation of enhanced efficiency in credit management.
- Receivables Turnover Ratio
- Rises steadily over the analyzed periods, starting near 13 and escalating past 100 by early 2021, with some fluctuations but overall upward growth.
- Average Receivable Collection Period
- Decreases from roughly 28 days down to 3 days, indicating faster conversion of receivables to cash.
These patterns point towards a strengthening in the company's credit and collections processes, likely resulting in improved cash flow timing. The notably high turnover ratios and correspondingly low collection periods in recent years may reflect refined operational efficiencies or changes in credit policy.
Average Payables Payment Period
Etsy Inc., average payables payment period calculation (quarterly data)
| 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 | ||||||||||||||||||||||||||||||
| Amazon.com Inc. | ||||||||||||||||||||||||||||||
| Home Depot Inc. | ||||||||||||||||||||||||||||||
| Lowe’s Cos. Inc. | ||||||||||||||||||||||||||||||
| TJX Cos. 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 payables turnover ratio exhibits notable fluctuations over the periods analyzed. Initially, the ratio was relatively stable around the low double digits in 2017 and 2018, with values such as 11.08 in March 2017 and fluctuating between 10 and 12 in subsequent quarters. From 2019 onwards, the ratio experiences pronounced volatility, reaching a peak of 28.49 in March 2020 and 44.61 in September 2021. Such peaks indicate periods of more frequent payables turnover, suggesting faster payment cycles or changes in procurement patterns. Despite interim declines, the overall trend points toward increased turnover rates over time, with recent quarters displaying higher ratios near or above 40.
Inversely, the average payables payment period, expressed in days, complements this observation. Early in the timeline, the payment period mostly ranged from around 29 to 51 days. However, starting in 2020, there is a visible contraction in the average payment period, dipping to as low as 8 days in several quarters (notably in September 2021, June 2022, and September 2022). This reduction signifies more rapid settlement of payables, aligning with the higher payables turnover ratios noted. The decline from over 30 days down to single-digit days indicates substantial improvement or strategic change in payment management.
- Payables Turnover Ratio
- Demonstrates an upward and volatile trend over the years, increasing frequency of payable cycles.
- Average Payables Payment Period
- Shows a decreasing trend in days to pay suppliers, indicating faster payments and possibly improved liquidity management.
Overall, the data suggest a shift toward more efficient working capital management with quicker payments to suppliers and a higher turnover of payables. This could reflect changes in operational strategies, supplier agreements, or cash flow optimization efforts. The variability in the payables turnover ratio implies that while improvements are evident, there are cyclical or seasonal factors influencing payables behavior that merit further monitoring and analysis.