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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Short-term Activity Ratios (Summary)
Meta Platforms Inc., short-term (operating) activity ratios (quarterly data)
Based on: 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 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).
- Receivables Turnover
- The receivables turnover ratio demonstrates a fluctuating pattern over the observed periods. Starting around 7.58 in March 2020, the ratio rises to a peak level above 10 during the mid-periods, reflecting an improved efficiency in collecting receivables. It then oscillates in the range of approximately 8 to 11 from 2022 through 2025, indicating consistent collection performance with some variability across quarters. The ratio’s tendency to stay around or above 9 for most recent periods suggests stable operational effectiveness in accounts receivable management.
- Payables Turnover
- The payables turnover ratio exhibits considerable volatility throughout the timeline. Initially absent, the ratio appears around 12.54 and sharply increases to over 20 in mid-2020, indicating faster payments to suppliers. However, after this peak, the ratio significantly declines with notable troughs around 3.5 to 4 in late 2024 and early 2025. This decrease implies a lengthening of the payment period to suppliers or less frequent payments in recent periods. The pattern suggests varying supplier payment policies or changes in cash management strategy, with a marked trend toward slower payables turnover in the latter years.
- Working Capital Turnover
- The working capital turnover ratio shows a generally upward trend from early 2020 through the middle of 2023, rising from approximately 1.42 to peaks above 4. This increase reflects an enhanced ability to generate sales relative to working capital invested. Although a mild decline is evident following the peak, the ratio remains above 2.5 in recent years, suggesting effective use of working capital despite some weakening in operational efficiency at the latest periods.
- Average Receivable Collection Period
- The average number of days to collect receivables decreases from nearly 48 days in early 2020 to about 31 days by March 2025. Periodic fluctuations exist, but the overall decline indicates a trend towards faster collections and improved cash conversion cycles. The trend points to enhanced credit management and possibly tightened credit terms or more effective collections.
- Average Payables Payment Period
- The average days to pay suppliers varies substantially during the observed period. Starting near 29 days in early 2020, the figure rises sharply to over 70 days at times and reaches values above 90 days in late 2024 and early 2025. This significant increase denotes a lengthening of payment terms or delay in payments to suppliers, consistent with the declining payables turnover ratio. The extended payment periods might reflect strategic cash preservation, increased negotiation leverage with suppliers, or changes in working capital management policies.
Turnover Ratios
Average No. Days
Receivables Turnover
Meta Platforms Inc., receivables turnover calculation (quarterly data)
| Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | 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 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||||||
| Revenue | ||||||||||||||||||||||||||||
| Accounts receivable, net | ||||||||||||||||||||||||||||
| Short-term Activity Ratio | ||||||||||||||||||||||||||||
| Receivables turnover1 | ||||||||||||||||||||||||||||
| Benchmarks | ||||||||||||||||||||||||||||
| Receivables Turnover, Competitors2 | ||||||||||||||||||||||||||||
| Alphabet Inc. | ||||||||||||||||||||||||||||
| Comcast Corp. | ||||||||||||||||||||||||||||
| Take-Two Interactive Software Inc. | ||||||||||||||||||||||||||||
| Walt Disney Co. | ||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 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).
1 Q1 2025 Calculation
Receivables turnover
= (RevenueQ1 2025
+ RevenueQ4 2024
+ RevenueQ3 2024
+ RevenueQ2 2024)
÷ Accounts receivable, net
= ( + + + )
÷ =
2 Click competitor name to see calculations.
- Revenue Trends
- Revenue exhibited a general upward trajectory over the periods analyzed, with noticeable fluctuations. Starting at $17,737 million in March 2020, it increased steadily through 2021, peaking at $33,671 million in December 2021. However, revenue declined in early 2022, reaching approximately $27,714 million by September 2022 before recovering again in the subsequent quarters. The peak revenue was observed in March 2025 at $48,386 million, indicating strong growth momentum towards the end of the period.
- Accounts Receivable, Net
- The net accounts receivable balance demonstrated a pattern somewhat aligned with revenue but with greater volatility. Beginning at $7,289 million in March 2020, receivables increased sharply to $14,039 million by December 2021. Following a dip in early 2022, there was another increase reaching a new high of $16,994 million in December 2024 before slightly declining to $14,514 million in March 2025. This variability suggests fluctuations in credit terms or collection efficiency over the periods.
- Receivables Turnover Ratio
- The receivables turnover ratio, available from December 2020 onward, fluctuated between approximately 7.58 and 11.74 times per year. Generally, the ratio oscillated around 9 to 11 times, with some dips such as 8.34 in March 2024 and 8.40 in December 2020 and a peak of 11.74 in March 2025. The ratio's increases suggest periods of improved collections efficiency, while decreases might indicate slower receivables turnover. The variability in turnover aligns with the observed changes in accounts receivable balances and revenue.
- Overall Analysis
- Overall, the financial data reveal steady revenue growth over the multi-year period, punctuated by periodic declines likely reflecting external or internal factors affecting sales. The accounts receivable balances tend to rise with revenue but show increased volatility, implying changes in credit policies or customer payment behaviors. The receivables turnover ratio's range suggests that, despite fluctuations, the company maintained relatively efficient collection practices, although some quarters indicated slower collections. The combination of rising revenue and manageable turnover ratios suggests a generally healthy balance between sales growth and receivables management.
Payables Turnover
Meta Platforms Inc., payables turnover calculation (quarterly data)
| Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||||||
| Cost of revenue | ||||||||||||||||||||||||||||
| Accounts payable | ||||||||||||||||||||||||||||
| Short-term Activity Ratio | ||||||||||||||||||||||||||||
| Payables turnover1 | ||||||||||||||||||||||||||||
| Benchmarks | ||||||||||||||||||||||||||||
| Payables Turnover, Competitors2 | ||||||||||||||||||||||||||||
| Alphabet Inc. | ||||||||||||||||||||||||||||
| Comcast Corp. | ||||||||||||||||||||||||||||
| Netflix Inc. | ||||||||||||||||||||||||||||
| Take-Two Interactive Software Inc. | ||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 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).
1 Q1 2025 Calculation
Payables turnover
= (Cost of revenueQ1 2025
+ Cost of revenueQ4 2024
+ Cost of revenueQ3 2024
+ Cost of revenueQ2 2024)
÷ Accounts payable
= ( + + + )
÷ =
2 Click competitor name to see calculations.
- Cost of Revenue
- The cost of revenue shows a general upward trend from March 31, 2020, to March 31, 2025, with fluctuations along the timeline. Starting at 3,459 million US dollars in March 2020, it gradually increased to 6,348 million by December 2021. There was a notable spike to 8,336 million in December 2022, followed by some oscillations. Throughout 2023, the cost fluctuated between 5,945 million and 7,696 million, and by the end of the projection period in March 2025, the cost had risen again to 7,572 million. These variations indicate periods of cost volatility, with a general rising cost base over the five years.
- Accounts Payable
- Accounts payable exhibited a significant overall increase across the reported quarters. Beginning at 829 million US dollars in March 2020, it increased sharply to 4,083 million by December 2021. After this peak, the payable amounts fluctuated between approximately 3,093 million and 7,687 million through 2023 and into 2025. The period ending March 2025 shows accounts payable at 8,512 million, continuing the upward trajectory. This pattern suggests an increasing reliance on payables, with periods of volatility but overall growth in liabilities to suppliers or creditors.
- Payables Turnover Ratio
- The payables turnover ratio fluctuates considerably over time with a clear pattern of variation between higher and lower values. Early in the series, the ratio was high (12.54 to 20.92) around March to June 2021, which indicates faster payment to suppliers or quicker clearing of payables. Thereafter, a marked decline occurred through late 2021, dropping near 5.06 by March 2022, signifying slower payment cycles. Through 2023 and into 2025, the ratio oscillates mostly between approximately 3.65 and 8.78, showing variable but generally slower turnover compared to earlier periods. The lowest values toward the end of the timeline suggest longer payment terms or slower payables processing in those quarters.
- Overall Insights
- The financial data indicates an expanding scale of operations reflected in rising costs of revenue and growing accounts payable balances. The volatility in cost of revenue, especially the steep increase by late 2022, could imply changes in production, supply chain costs, or business activities. Concurrently, accounts payable growth suggests increasing supplier credit or delays in settling obligations. The declining and fluctuating payables turnover ratio reveals a lengthening time to clear payables, potentially impacting liquidity management. The interplay of these factors points to dynamic operational challenges and evolving financial management strategies over the reported periods.
Working Capital Turnover
Meta Platforms Inc., working capital turnover calculation (quarterly data)
| Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | 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 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||||||
| Current assets | ||||||||||||||||||||||||||||
| Less: Current liabilities | ||||||||||||||||||||||||||||
| Working capital | ||||||||||||||||||||||||||||
| Revenue | ||||||||||||||||||||||||||||
| Short-term Activity Ratio | ||||||||||||||||||||||||||||
| Working capital turnover1 | ||||||||||||||||||||||||||||
| Benchmarks | ||||||||||||||||||||||||||||
| Working Capital Turnover, Competitors2 | ||||||||||||||||||||||||||||
| Alphabet Inc. | ||||||||||||||||||||||||||||
| Comcast Corp. | ||||||||||||||||||||||||||||
| Netflix Inc. | ||||||||||||||||||||||||||||
| Take-Two Interactive Software Inc. | ||||||||||||||||||||||||||||
| Walt Disney Co. | ||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 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).
1 Q1 2025 Calculation
Working capital turnover
= (RevenueQ1 2025
+ RevenueQ4 2024
+ RevenueQ3 2024
+ RevenueQ2 2024)
÷ Working capital
= ( + + + )
÷ =
2 Click competitor name to see calculations.
- Working Capital
- The working capital exhibited fluctuations over the analyzed periods. Starting at 54,280 million US dollars in the first quarter of 2020, it increased slightly through the first half of 2021, reaching a peak of 65,823 million in June 2021. Following this, it experienced a notable decline until December 2022, bottoming at 32,523 million. Subsequently, a recovery trend occurred, with working capital rising again to 53,405 million by December 2023. The data for 2024 shows some variability, with values oscillating between approximately 47,229 and 66,449 million, ending with a slight decrease to 56,337 million by the first quarter of 2025.
- Revenue
- The revenue figures demonstrated a general upward trajectory across the timeline, despite some periods of decline. Beginning at 17,737 million US dollars in March 2020, revenue increased steadily and peaked at 33,671 million by December 2020. After a dip in early 2022 reaching around 27,714 million in September, revenue rebounded and showed a strong upward movement, peaking at 48,386 million in December 2024. The first quarter of 2025 reported a decrease to 42,314 million, indicating some recent softness following the highs of the preceding quarter.
- Working Capital Turnover Ratio
- The working capital turnover ratio, initially unsupplied for the early periods, begins at 1.42 in March 2021 and shows a marked increase through subsequent quarters, reaching a high of 4.33 by June 2023. This suggests more efficient utilization of working capital in generating revenue during that time frame. Post mid-2023, the ratio declines to around the 2.48 to 3.02 range, suggesting a moderation in turnover efficiency. This fluctuation indicates periods of both heightened and moderated operational efficiency in converting working capital into revenue.
- Overall Trends and Insights
- The data reflects a company experiencing growth in revenue with some volatility, complemented by fluctuating working capital levels. Periods of declining working capital do not uniformly correspond with decreases in revenue, which may suggest shifts in operational or financial strategies affecting liquidity management. The working capital turnover ratio increase through 2023 indicates improved efficiency in asset use, though the decline observed in late 2023 and into 2024 signals potential challenges or strategic adjustments in capital utilization. The recent decline in revenue after a peak at the end of 2024 invites monitoring in subsequent periods to determine if this represents a temporary adjustment or a more sustained trend.
Average Receivable Collection Period
Meta Platforms Inc., average receivable collection period calculation (quarterly data)
| Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | 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 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||||||||||||||||||||||||
| Receivables turnover | ||||||||||||||||||||||||||||
| Short-term Activity Ratio (no. days) | ||||||||||||||||||||||||||||
| Average receivable collection period1 | ||||||||||||||||||||||||||||
| Benchmarks (no. days) | ||||||||||||||||||||||||||||
| Average Receivable Collection Period, Competitors2 | ||||||||||||||||||||||||||||
| Alphabet Inc. | ||||||||||||||||||||||||||||
| Comcast Corp. | ||||||||||||||||||||||||||||
| Take-Two Interactive Software Inc. | ||||||||||||||||||||||||||||
| Walt Disney Co. | ||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 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).
1 Q1 2025 Calculation
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ =
2 Click competitor name to see calculations.
- Receivables Turnover
- The receivables turnover ratio exhibits noticeable fluctuations across the reported periods starting from March 31, 2020. The ratio initially rises from 7.58 to a peak of 9.29 by December 31, 2020, indicating a more efficient collection of receivables relative to sales during this period. Following a slight dip to 8.4 in March 31, 2022, the ratio climbs consistently with minor variations, reaching the highest recorded value of 11.74 by March 31, 2025. This long-term upward trend suggests improving effectiveness in credit management and receivables collection over time.
- Average Receivable Collection Period
- The average collection period in days inversely mirrors the receivables turnover trend. Initially, it decreases from 48 days to 39 days between March 31, 2020, and December 31, 2020, reflecting faster collection of receivables. Thereafter, the collection period varies slightly, increasing to 43 days in March 31, 2022, indicating some moderation in collection efficiency. Despite these fluctuations, the trend largely moves downward over the long term, settling at 31 days by March 31, 2025. This reduction in collection period complements the increasing turnover ratio, confirming an overall enhancement in the speed of receivables conversion to cash.
- Overall Analysis
- The combined review of the receivables turnover ratio and the average collection period reveals an overall positive trend in receivables management. Over the evaluated timeframe, there is evidence of improved operational efficiency in collecting outstanding payments. Periodic fluctuations suggest some variability in collection practices or external factors impacting receivables; however, the general direction toward quicker collection and higher turnover rate is apparent. This improvement can contribute favorably to the company's liquidity and working capital management.
Average Payables Payment Period
Meta Platforms Inc., average payables payment period calculation (quarterly data)
| Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | 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 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||||||||||||||||||||||||
| Payables turnover | ||||||||||||||||||||||||||||
| Short-term Activity Ratio (no. days) | ||||||||||||||||||||||||||||
| Average payables payment period1 | ||||||||||||||||||||||||||||
| Benchmarks (no. days) | ||||||||||||||||||||||||||||
| Average Payables Payment Period, Competitors2 | ||||||||||||||||||||||||||||
| Alphabet Inc. | ||||||||||||||||||||||||||||
| Comcast Corp. | ||||||||||||||||||||||||||||
| Netflix Inc. | ||||||||||||||||||||||||||||
| Take-Two Interactive Software Inc. | ||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 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).
1 Q1 2025 Calculation
Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ =
2 Click competitor name to see calculations.
- Payables Turnover Ratio
- The payables turnover ratio demonstrated significant fluctuation over the periods examined. Starting at 12.54 and peaking at 20.92 in mid-2020, the ratio subsequently experienced a marked decline, reaching lows around the 3.65 to 3.92 range towards the end of the time frame in early to mid-2025. This indicates a trend of slower payments to creditors over time, as the turnover ratio inversely reflects the number of payment cycles within a period.
- Average Payables Payment Period
- Corresponding with the changes in payables turnover, the average payment period in days increased notably. Initially recorded at 29 days, this metric dropped to as low as 17 days during mid-2020, indicating faster payments during that interval. However, following this period, the payment duration increased substantially, reaching a peak of 100 days by March 2025. This suggests a growing tendency to extend the time taken to settle payables, which could reflect changes in cash management strategy or supplier negotiation.
- Overall Trends and Insights
- The inverse relationship between the payables turnover and average payment period is evident and consistent throughout the timeline. Early in the dataset, the company maintained a relatively quicker payment cycle, which then transitioned into a notably slower payment approach. The trend towards longer payment cycles in recent periods could impact supplier relationships and working capital management. Monitoring this trend is advisable for assessing liquidity and operational efficiency.