Expedia Group Inc. (NASDAQ:EXPE)

Receivables Turnover

The receivables turnover ratio exhibits a fluctuating trend over the evaluated periods. Starting at 5.39 in 2017, the ratio decreased steadily to 4.78 in 2019, indicating a slower collection of receivables. However, in 2020, there was a marked improvement to 7.42, followed by a slight decline to 6.8 in 2021. This suggests an enhancement in the efficiency of collecting receivables during the pandemic year, which partially moderated in the subsequent year.

Payables Turnover

The payables turnover ratio shows considerable volatility. Beginning at 0.96 in 2017, the ratio increased modestly to 1.1 in 2018 and slightly declined to 1.08 in 2019. A significant spike to 2.79 is observed in 2020, implying much faster payments to suppliers, followed by a drop to 1.14 in 2021. The sharp increase in 2020 could reflect changes in payment policies or operational adjustments related to the unique challenges of that year.

Working Capital Turnover

Working capital turnover data is largely missing but shows an exceptionally high ratio of 22.8 in 2020. Given the absence of data in other years, it is difficult to ascertain a trend. Nonetheless, the 2020 figure suggests a very efficient use of working capital during that year.

Average Receivable Collection Period

The average collection period for receivables increased from 68 days in 2017 to 76 days in 2019, indicating slower collection processes. A sharp reduction to 49 days occurred in 2020, paralleling the improved receivables turnover ratio, and then increased slightly to 54 days in 2021. This pattern reflects a significant acceleration in collecting receivables during 2020, with some relaxation in the following year.

Average Payables Payment Period

The average payment period to suppliers shows a decreasing trend from 382 days in 2017 to 333 and 338 days in 2018 and 2019 respectively, indicating gradually faster payments. A substantial reduction to 131 days occurred in 2020, followed by an increase to 320 days in 2021. This pattern aligns with the fluctuations seen in payables turnover, suggesting that payments were expedited in 2020 and then slowed down again in 2021.

The financial data reveals several notable trends over the five-year period analyzed. Revenue exhibited steady growth from 2017 to 2019, increasing from 10,060 million US dollars to 12,067 million US dollars. However, a sharp decline occurred in 2020, where revenue dropped to 5,199 million US dollars, followed by a partial recovery to 8,598 million US dollars in 2021, still below the pre-2020 levels.

Accounts receivable, net of allowance, followed a similar trajectory in absolute terms. There was consistent growth from 1,866 million US dollars in 2017 to 2,524 million US dollars in 2019. In 2020, the figure decreased significantly to 701 million US dollars, then rebounded to 1,264 million US dollars in 2021. The reduction in 2020 aligns with the decline in revenue during the same period, indicating lower sales or cash collections.

Receivables Turnover Ratio

This ratio declined steadily from 5.39 in 2017 to 4.78 in 2019, suggesting a gradual slowdown in the efficiency of collecting receivables during that period. In contrast, 2020 saw a marked improvement to 7.42, implying a faster collection process possibly due to stronger credit control or changing sales mix despite lower revenues. The ratio then slightly declined to 6.8 in 2021, still above the earlier years, indicating maintained relatively higher efficiency compared to pre-2020 periods.

Overall, the data suggests that the company experienced growth until 2019, faced significant operational or market challenges in 2020 causing a decline in revenues and accounts receivable, but managed to improve receivables collection efficiency during that period. The partial recovery in revenue and receivables in 2021 indicates a rebound, though the levels have not yet returned to those seen before 2020.

Cost of Revenue (exclusive of depreciation and amortization)

The cost of revenue showed an increasing trend from 2017 to 2019, rising from 1,757 million USD to 2,077 million USD. However, in 2020, there was a notable decline to 1,680 million USD, followed by a further decrease to 1,522 million USD in 2021. This pattern suggests a peak in operational costs before a reduction during and after 2020.

Accounts Payable, Merchant

The accounts payable figures fluctuated, starting at 1,838 million USD in 2017 and slightly decreasing to 1,699 million USD in 2018. In 2019, it increased again to 1,921 million USD but experienced a significant drop to 602 million USD in 2020. By 2021, accounts payable partially recovered to 1,333 million USD. This volatility may reflect changes in purchasing patterns or creditor payment strategies, particularly around 2020.

Payables Turnover Ratio

The payables turnover ratio was relatively stable between 2017 and 2019, maintaining values around 1.0 to 1.1. In 2020, the ratio surged dramatically to 2.79, indicating a much faster rate of payments to suppliers or creditors during that year. In 2021, the ratio decreased back to 1.14, closer to the historical range but still elevated compared to earlier years. This suggests a temporary intensification in payment velocity during 2020, possibly in response to economic conditions or operational adjustments.

The financial data over the five-year period reveals several noteworthy trends in operational performance and liquidity metrics.

Working Capital

Working capital figures show a consistently negative value from 2017 through 2019, indicating that current liabilities exceeded current assets in those years by significant margins, reaching as low as -2,979 million US dollars in 2019. However, there is a marked improvement in 2020, where working capital turns positive to 228 million US dollars, suggesting a temporary strengthening in short-term liquidity. This improvement is reversed in 2021, with working capital declining again to -1,269 million US dollars, which indicates a deterioration but not to the past magnitude.

Revenue

Revenue demonstrates a generally upward trajectory from 2017 through 2019, increasing from 10,060 million US dollars to 12,067 million US dollars. In 2020, there is a sharp decline to 5,199 million US dollars, amounting to less than half of the previous year's revenue, which likely reflects significant external challenges impacting the business environment. There is a recovery in 2021 when revenue rises to 8,598 million US dollars, indicating a partial rebound though still below the pre-2020 levels.

Working Capital Turnover

The working capital turnover ratio is only provided for 2020 with a notably high value of 22.8. This large figure may be linked to the positive value of working capital in that year combined with the lowered revenue, suggesting relatively high sales relative to working capital for that specific period. However, absence of comparable data for other years limits trend analysis on efficiency based on this ratio.

Overall, the data reflect a business experiencing substantial operational challenges in 2020, with a significant impact on revenue and liquidity. Despite some recovery in 2021, working capital remained negative, pointing to ongoing short-term financial pressures. The temporary positive working capital in 2020 with a high turnover ratio could indicate an unusual business condition or working capital management response to external circumstances during that year.

The financial data for the company over the five-year period reveals notable trends in its receivables management efficiency.

Receivables Turnover

The receivables turnover ratio shows a decrease from 5.39 in 2017 to 4.78 in 2019, indicating a declining efficiency in collecting receivables during this period. However, there is a significant improvement in 2020 when the ratio rises sharply to 7.42, followed by a slight decrease to 6.80 in 2021. This pattern may suggest enhanced collection efforts or changes in credit policies during and after 2020.

Average Receivable Collection Period

Consistent with the turnover ratio, the average receivable collection period increased from 68 days in 2017 to 76 days in 2019, implying slower collections. This trend reverses dramatically in 2020, with the period dropping to 49 days, the lowest in the observed timeframe, before increasing moderately to 54 days in 2021. These fluctuations reinforce the observation of improved efficiency in receivable collections starting in 2020.

Overall, the data indicates a period of slower receivables collection efficiency from 2017 to 2019, followed by a marked improvement from 2020 onwards, potentially influenced by changes in operational or credit management strategies during that period.

Payables Turnover

The payables turnover ratio demonstrates a fluctuating trend over the analyzed periods. Starting at 0.96 in 2017, it showed a moderate increase to 1.10 in 2018, followed by a slight decline to 1.08 in 2019. There is a notable spike in 2020 to 2.79, indicating a significantly faster turnover of payables during that year. However, in 2021 the ratio decreased to 1.14, suggesting a return towards the earlier levels but still above the initial years.

Average Payables Payment Period

The average payables payment period, expressed in days, exhibits an inverse movement relative to the payables turnover. The period decreased from a high of 382 days in 2017 to 333 days in 2018 and remained relatively stable at 338 days in 2019. A sharp decrease occurred in 2020, down to 131 days, aligning with the increased payables turnover observed that year. In 2021, the payment period expanded again to 320 days, moving closer to the earlier period durations though still shorter than in 2017.

Insights

The data reflect a significant change in the firm's payables management during 2020, with a considerably quicker turnover and shorter payment periods, which could be indicative of altered operational or financial strategies in response to that year's economic conditions. The subsequent partial reversal in 2021 suggests a return to more normalized payment behaviors, yet still maintaining somewhat improved efficiency compared to the earliest years.