Stock Analysis on Net

Gilead Sciences Inc. (NASDAQ:GILD)

Analysis of Short-term (Operating) Activity Ratios 

Microsoft Excel

Short-term Activity Ratios (Summary)

Gilead Sciences Inc., short-term (operating) activity ratios

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Turnover Ratios
Inventory turnover 3.66 3.64 3.75 4.08 2.72
Receivables turnover 6.47 5.78 5.65 6.01 4.98
Payables turnover 7.50 11.81 6.25 9.36 5.42
Working capital turnover 3.99 5.61 8.42 8.54 5.30
Average No. Days
Average inventory processing period 100 100 97 89 134
Add: Average receivable collection period 56 63 65 61 73
Operating cycle 156 163 162 150 207
Less: Average payables payment period 49 31 58 39 67
Cash conversion cycle 107 132 104 111 140

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).


The analyzed data indicates several meaningful trends in the company's operational efficiency and working capital management over the five-year period.

Inventory Turnover
The inventory turnover ratio improved significantly from 2.72 in 2020 to a peak of 4.08 in 2021, suggesting enhanced inventory management or faster sales. However, it declined gradually thereafter to stabilize around 3.64-3.66 in 2023 and 2024, indicating a slight easing in inventory movement.
Receivables Turnover
This ratio showed an overall upward trajectory, increasing from 4.98 in 2020 to 6.47 in 2024. This improvement suggests the company has been more effective in collecting receivables more quickly over time, although a minor dip in 2022 indicates some temporary slowdown.
Payables Turnover
The payables turnover ratio exhibited substantial volatility. It rose sharply from 5.42 in 2020 to 9.36 in 2021, fell to 6.25 in 2022, surged again to 11.81 in 2023, then declined to 7.5 in 2024. These fluctuations imply varying strategies or conditions affecting payment timing, with periods of quicker payments interspersed with slower payment intervals.
Working Capital Turnover
The working capital turnover ratio increased strongly from 5.3 in 2020 to 8.54 in 2021 and stayed near that level in 2022, before falling considerably to 5.61 in 2023 and further to 3.99 in 2024. This decline could indicate reduced efficiency in generating sales relative to working capital invested, possibly due to increased capital demands or slower sales growth.
Average Inventory Processing Period
The average time to process inventory shortened significantly from 134 days in 2020 to 89 days in 2021, reflecting improved inventory management. It then increased slightly to a fairly stable period around 97-100 days in subsequent years, indicating a plateau in processing speed.
Average Receivable Collection Period
This measure decreased steadily from 73 days in 2020 to 56 days in 2024, supporting the observed increase in receivables turnover and reinforcing that collection efficiency has improved over time.
Operating Cycle
The operating cycle shortened markedly from 207 days in 2020 to 150 days in 2021 and remained relatively stable around 156-163 days thereafter. This suggests the company succeeded in reducing the total duration from inventory acquisition to cash collection, enhancing operational cash flow timing.
Average Payables Payment Period
The payment period shortened sharply from 67 days in 2020 to 31 days in 2023, indicating faster payment to suppliers, before lengthening again to 49 days in 2024. This could reflect strategic adjustments balancing cash outflows and supplier relationships.
Cash Conversion Cycle
The cash conversion cycle improved from 140 days in 2020 down to 104 days in 2022, signaling enhanced cash flow efficiency. However, it increased to 132 days in 2023 before decreasing again to 107 days in 2024, indicating some fluctuations in working capital effectiveness but generally better than earlier years.

Overall, the data reveals improvements in receivables management and inventory processing efficiency, leading to a generally shorter operating cycle and cash conversion cycle. However, payables turnover and working capital turnover show irregular trends, suggesting variable supplier payment policies and working capital usage that may warrant further examination. The company appears to have optimized its cash flow cycles compared to 2020, despite some recent volatility.


Turnover Ratios


Average No. Days


Inventory Turnover

Gilead Sciences Inc., inventory turnover calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Selected Financial Data (US$ in millions)
Cost of goods sold 6,251 6,498 5,657 6,601 4,572
Inventories 1,710 1,787 1,507 1,618 1,683
Short-term Activity Ratio
Inventory turnover1 3.66 3.64 3.75 4.08 2.72
Benchmarks
Inventory Turnover, Competitors2
AbbVie Inc. 4.04 4.98 4.87 5.58 4.65
Amgen Inc. 1.84 0.89 1.30 1.58 1.58
Bristol-Myers Squibb Co. 5.46 4.02 4.33 4.74 5.68
Danaher Corp. 4.15 3.80 4.03 4.16 4.28
Eli Lilly & Co. 1.11 1.23 1.54 1.88 1.38
Johnson & Johnson 2.21 2.37 2.49 2.87 3.04
Merck & Co. Inc. 2.49 2.54 2.95 2.29 2.45
Pfizer Inc. 1.65 2.45 3.82 3.40 1.08
Regeneron Pharmaceuticals Inc. 0.64 0.70 0.65 1.25 0.58
Thermo Fisher Scientific Inc. 5.06 5.06 4.60 3.88 4.02
Vertex Pharmaceuticals Inc. 1.27 1.71 2.35 2.56 2.62
Inventory Turnover, Sector
Pharmaceuticals, Biotechnology & Life Sciences 2.46 2.55 3.06 3.11 2.63
Inventory Turnover, Industry
Health Care 9.50 9.18 9.22 9.17 8.17

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

1 2024 Calculation
Inventory turnover = Cost of goods sold ÷ Inventories
= 6,251 ÷ 1,710 = 3.66

2 Click competitor name to see calculations.


Cost of Goods Sold
Over the analyzed five-year period, the cost of goods sold (COGS) displayed a fluctuating pattern. Starting at 4,572 million US dollars in 2020, it rose significantly to 6,601 million in 2021, followed by a decrease to 5,657 million in 2022. It increased again to 6,498 million in 2023, then slightly decreased to 6,251 million in 2024. This volatility suggests variability in production or procurement costs potentially influenced by external market factors or internal operational changes.
Inventories
Inventory levels showed a general downward trend with some variability. Beginning at 1,683 million US dollars in 2020, inventories marginally declined to 1,618 million in 2021 and continued to 1,507 million in 2022. A reversal occurred in 2023 with an increase to 1,787 million, followed by a slight decrease to 1,710 million in 2024. This overall reduction, punctuated by the 2023 uptick, may indicate efforts toward inventory optimization or changes in demand forecasting.
Inventory Turnover Ratio
The inventory turnover ratio demonstrated a sizeable improvement from 2020 to 2021, increasing from 2.72 to 4.08, signaling faster inventory movement and potentially enhanced efficiency in inventory management. Afterwards, this ratio slightly declined to 3.75 in 2022 and remained relatively stable around 3.64 and 3.66 in 2023 and 2024, respectively. The peak in 2021 followed by a moderate decline suggests that while inventory efficiency improved significantly early in the period, it stabilized at a lower yet steady level subsequently.

Receivables Turnover

Gilead Sciences Inc., receivables turnover calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Selected Financial Data (US$ in millions)
Product sales 28,610 26,934 26,982 27,008 24,355
Accounts receivable, net 4,420 4,660 4,777 4,493 4,892
Short-term Activity Ratio
Receivables turnover1 6.47 5.78 5.65 6.01 4.98
Benchmarks
Receivables Turnover, Competitors2
AbbVie Inc. 5.16 4.87 5.16 5.63 5.19
Amgen Inc. 4.72 3.70 4.46 4.96 5.36
Bristol-Myers Squibb Co. 5.19 4.93 5.48 5.65 5.72
Danaher Corp. 6.75 6.09 6.40 6.36 5.51
Eli Lilly & Co. 4.09 3.75 4.14 4.24 4.18
Johnson & Johnson 5.98 5.73 5.88 6.14 6.08
Merck & Co. Inc. 6.24 5.81 6.27 5.28 6.11
Pfizer Inc. 5.55 5.33 9.24 7.16 5.38
Regeneron Pharmaceuticals Inc. 2.29 2.31 2.28 2.66 2.07
Thermo Fisher Scientific Inc. 5.23 5.21 5.53 4.92 5.61
Vertex Pharmaceuticals Inc. 6.85 6.31 6.19 6.66 7.01
Receivables Turnover, Sector
Pharmaceuticals, Biotechnology & Life Sciences 5.26 4.96 5.76 5.54 5.34
Receivables Turnover, Industry
Health Care 8.42 8.15 8.84 8.65 8.64

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

1 2024 Calculation
Receivables turnover = Product sales ÷ Accounts receivable, net
= 28,610 ÷ 4,420 = 6.47

2 Click competitor name to see calculations.


The financial data reveals distinct trends in product sales, accounts receivable, and receivables turnover for the company over the five-year period from 2020 to 2024.

Product Sales
Product sales demonstrated an overall upward trajectory, increasing from $24,355 million in 2020 to $28,610 million in 2024. The growth was more pronounced between 2020 and 2021, with a notable jump from $24,355 million to $27,008 million. Sales stabilized during 2022 and 2023, showing minor fluctuations around the $26,900 million mark. By 2024, sales recovered and reached their highest level over the period analyzed.
Accounts Receivable, Net
Accounts receivable decreased from $4,892 million in 2020 to $4,420 million in 2024. The most significant reduction occurred between 2020 and 2021, where receivables declined by approximately $400 million. The subsequent years saw minor variations, with a slight increase in 2022 and small declines thereafter. This decreasing trend suggests improved collection or credit policies over time.
Receivables Turnover
Receivables turnover, which measures the efficiency of collecting receivables, improved steadily from 4.98 in 2020 to 6.47 in 2024. The ratio spike in 2021 to 6.01 highlights enhanced collection performance or reduced receivables relative to sales. Following a slight dip in 2022, efficiency continued to improve through 2023 and 2024, reaching the highest turnover ratio in the period analyzed. This indicates faster conversion of receivables into cash, consistent with the downward trend in accounts receivable.

Overall, the analysis suggests that the company has experienced stable revenue growth while simultaneously enhancing its credit management and collection processes. The rising receivables turnover alongside decreasing accounts receivable, despite increasing sales, indicate an effective balance between sales expansion and receivables management.


Payables Turnover

Gilead Sciences Inc., payables turnover calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Selected Financial Data (US$ in millions)
Cost of goods sold 6,251 6,498 5,657 6,601 4,572
Accounts payable 833 550 905 705 844
Short-term Activity Ratio
Payables turnover1 7.50 11.81 6.25 9.36 5.42
Benchmarks
Payables Turnover, Competitors2
AbbVie Inc. 5.74 5.54 5.94 6.05 6.76
Amgen Inc. 6.74 5.32 4.08 4.72 4.33
Bristol-Myers Squibb Co. 3.88 3.28 3.33 3.37 4.34
Danaher Corp. 5.52 5.58 5.45 4.48 4.79
Eli Lilly & Co. 2.61 2.73 3.43 4.38 3.41
Johnson & Johnson 2.66 2.76 2.66 2.70 2.99
Merck & Co. Inc. 3.72 4.11 4.08 2.96 3.37
Pfizer Inc. 3.17 3.72 5.04 5.53 2.02
Regeneron Pharmaceuticals Inc. 2.50 2.99 2.65 4.32 2.36
Thermo Fisher Scientific Inc. 8.18 8.97 7.67 6.83 7.45
Vertex Pharmaceuticals Inc. 3.71 3.46 3.55 4.64 4.75
Payables Turnover, Sector
Pharmaceuticals, Biotechnology & Life Sciences 4.08 4.25 4.28 4.23 3.86
Payables Turnover, Industry
Health Care 8.12 7.96 7.50 7.61 7.48

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

1 2024 Calculation
Payables turnover = Cost of goods sold ÷ Accounts payable
= 6,251 ÷ 833 = 7.50

2 Click competitor name to see calculations.


The financial data indicates fluctuating patterns in key expense and liability metrics over the five-year period.

Cost of Goods Sold (COGS)

COGS exhibited variability with an initial increase from 4572 million USD in 2020 to a peak of 6601 million USD in 2021. Subsequently, it declined to 5657 million USD in 2022, rose again in 2023 to 6498 million USD, and then decreased slightly to 6251 million USD in 2024. The oscillations suggest variable production or procurement costs possibly influenced by operational factors or market conditions.

Accounts Payable

Accounts payable showed decreases and increases without a clear upward or downward trend. Starting at 844 million USD in 2020, it decreased to 705 million USD in 2021, increased to a high of 905 million USD in 2022, dropped sharply to 550 million USD in 2023, and then rose again to 833 million USD in 2024. This fluctuation may reflect changes in payment policies, supplier terms, or purchasing volumes.

Payables Turnover Ratio

The payables turnover ratio demonstrated considerable volatility. It increased significantly from 5.42 in 2020 to 9.36 in 2021, decreased to 6.25 in 2022, surged to a high of 11.81 in 2023, and then fell to 7.5 in 2024. Higher turnover ratios indicate faster payment to suppliers, whereas lower ratios imply slower payment cycles. The sharp increases followed by declines suggest inconsistent payment tempo or changes in managing supplier obligations over the periods.


Working Capital Turnover

Gilead Sciences Inc., working capital turnover calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Selected Financial Data (US$ in millions)
Current assets 19,173 16,085 14,443 14,772 15,996
Less: Current liabilities 12,004 11,280 11,237 11,610 11,397
Working capital 7,169 4,805 3,206 3,162 4,599
 
Product sales 28,610 26,934 26,982 27,008 24,355
Short-term Activity Ratio
Working capital turnover1 3.99 5.61 8.42 8.54 5.30
Benchmarks
Working Capital Turnover, Competitors2
AbbVie Inc.
Amgen Inc. 5.40 2.25 3.82 3.37 2.55
Bristol-Myers Squibb Co. 7.79 4.60 8.30 3.95 3.72
Danaher Corp. 8.85 4.22 4.20 8.40 3.48
Eli Lilly & Co. 10.32 31.84 8.33 4.93
Johnson & Johnson 15.94 11.81 5.95 9.44
Merck & Co. Inc. 6.19 9.29 5.16 7.62 109.83
Pfizer Inc. 8.64 11.09 4.83 4.67
Regeneron Pharmaceuticals Inc. 0.97 0.82 0.96 1.59 1.20
Thermo Fisher Scientific Inc. 4.87 4.05 5.46 5.87 2.76
Vertex Pharmaceuticals Inc. 1.83 0.93 0.85 1.02 0.99
Working Capital Turnover, Sector
Pharmaceuticals, Biotechnology & Life Sciences 7.86 6.68 7.25 5.87 5.34
Working Capital Turnover, Industry
Health Care 19.80 16.59 15.34 11.93 11.78

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

1 2024 Calculation
Working capital turnover = Product sales ÷ Working capital
= 28,610 ÷ 7,169 = 3.99

2 Click competitor name to see calculations.


Working Capital
The working capital exhibited a fluctuating trend over the observed periods. Beginning at 4,599 million US dollars in 2020, it decreased significantly to 3,162 million in 2021 and showed a marginal increase to 3,206 million in 2022. In the subsequent years, the working capital grew noticeably, reaching 4,805 million in 2023 and further increasing to 7,169 million in 2024, marking a substantial overall growth from 2020 to 2024.
Product Sales
Product sales demonstrated a generally stable to moderately increasing trend. Sales rose from 24,355 million US dollars in 2020 to 27,008 million in 2021, remained almost flat at 26,982 million in 2022, and slightly declined to 26,934 million in 2023. However, there was a recovery with an increase to 28,610 million in 2024. Overall, product sales have shown resilience with minor fluctuations, culminating in a moderate growth over the five-year period.
Working Capital Turnover
The working capital turnover ratio, which measures how efficiently the company utilizes its working capital to generate sales, exhibited a decreasing trend after an initial peak. It increased from 5.3 in 2020 to a peak of 8.54 in 2021, indicating improved efficiency. Afterwards, it slightly decreased to 8.42 in 2022, followed by a sharper decline to 5.61 in 2023 and further to 3.99 in 2024. This decline suggests that despite growing working capital levels, the rate at which working capital is being converted into product sales has diminished significantly in the later years.
Overall Insights
The data reveals that while the company has substantially increased its working capital by 2024, product sales have experienced relatively modest changes. The increasing working capital, paired with a declining turnover ratio, may indicate less efficient use of current assets in generating sales. This could suggest a more conservative financial stance or potential overcapitalization in working assets. Further analysis could explore the underlying causes, such as inventory buildup, changes in accounts receivable, or other current asset and liability components affecting working capital.

Average Inventory Processing Period

Gilead Sciences Inc., average inventory processing period calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Selected Financial Data
Inventory turnover 3.66 3.64 3.75 4.08 2.72
Short-term Activity Ratio (no. days)
Average inventory processing period1 100 100 97 89 134
Benchmarks (no. days)
Average Inventory Processing Period, Competitors2
AbbVie Inc. 90 73 75 65 79
Amgen Inc. 199 411 281 231 231
Bristol-Myers Squibb Co. 67 91 84 77 64
Danaher Corp. 88 96 91 88 85
Eli Lilly & Co. 329 298 237 194 265
Johnson & Johnson 165 154 147 127 120
Merck & Co. Inc. 147 144 124 159 149
Pfizer Inc. 222 149 95 107 338
Regeneron Pharmaceuticals Inc. 572 519 562 292 625
Thermo Fisher Scientific Inc. 72 72 79 94 91
Vertex Pharmaceuticals Inc. 287 214 156 143 139
Average Inventory Processing Period, Sector
Pharmaceuticals, Biotechnology & Life Sciences 149 143 119 117 139
Average Inventory Processing Period, Industry
Health Care 38 40 40 40 45

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

1 2024 Calculation
Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ 3.66 = 100

2 Click competitor name to see calculations.


Inventory Turnover
The inventory turnover ratio demonstrates an overall upward trend from 2020 through 2021, increasing significantly from 2.72 to 4.08. This suggests an improvement in the efficiency of inventory management during that period. However, subsequent years reflect a slight decline and stabilization, with turnover ratios of 3.75, 3.64, and 3.66 for 2022, 2023, and 2024 respectively. The decrease after 2021 indicates a modest reduction in the speed of inventory movement but remains substantially higher than the initial 2020 figure.
Average Inventory Processing Period
The average number of days inventory is held before processing inversely correlates with the inventory turnover ratio. It decreases sharply from 134 days in 2020 to 89 days in 2021, consistent with the increased turnover ratio observed. Following this sharp decline, the processing period slightly rises and stabilizes around 97 to 100 days from 2022 through 2024. This plateau suggests a consistent inventory holding period during these years.
Summary of Trends
The data indicates a marked improvement in inventory management efficiency between 2020 and 2021, as evidenced by a notable increase in inventory turnover and a simultaneous reduction in the average inventory processing period. After this improvement, the efficiency metrics show stabilization with minor regression but remain better compared to the 2020 baseline. This suggests that the company has maintained relatively consistent inventory handling practices over the latter years after achieving initial gains in operational efficiency.

Average Receivable Collection Period

Gilead Sciences Inc., average receivable collection period calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Selected Financial Data
Receivables turnover 6.47 5.78 5.65 6.01 4.98
Short-term Activity Ratio (no. days)
Average receivable collection period1 56 63 65 61 73
Benchmarks (no. days)
Average Receivable Collection Period, Competitors2
AbbVie Inc. 71 75 71 65 70
Amgen Inc. 77 99 82 74 68
Bristol-Myers Squibb Co. 70 74 67 65 64
Danaher Corp. 54 60 57 57 66
Eli Lilly & Co. 89 97 88 86 87
Johnson & Johnson 61 64 62 59 60
Merck & Co. Inc. 58 63 58 69 60
Pfizer Inc. 66 69 40 51 68
Regeneron Pharmaceuticals Inc. 160 158 160 137 177
Thermo Fisher Scientific Inc. 70 70 66 74 65
Vertex Pharmaceuticals Inc. 53 58 59 55 52
Average Receivable Collection Period, Sector
Pharmaceuticals, Biotechnology & Life Sciences 69 74 63 66 68
Average Receivable Collection Period, Industry
Health Care 43 45 41 42 42

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

1 2024 Calculation
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ 6.47 = 56

2 Click competitor name to see calculations.


Receivables Turnover
The receivables turnover ratio shows an overall upward trend from 2020 through 2024, increasing from 4.98 to 6.47. This indicates an improvement in the efficiency of collecting receivables over the analyzed period. The ratio experienced a significant increase from 2020 to 2021, rising to 6.01, followed by a slight decline to 5.65 in 2022. Subsequently, the ratio gradually recovered, reaching 5.78 in 2023 and then rising further to 6.47 in 2024. Such trends suggest the company has generally enhanced its ability to convert receivables into cash, with minor fluctuations in the middle years.
Average Receivable Collection Period
The average receivable collection period, expressed in days, exhibits a declining trend over the five-year span, decreasing from 73 days in 2020 to 56 days in 2024. This reduction corresponds inversely to the increase in the receivables turnover ratio, confirming faster recovery of receivables. After an initial sharp decline from 73 days to 61 days between 2020 and 2021, there was a slight increase to 65 days in 2022, indicating a temporary elongation in collection time. However, the period shortened again in the following years, reaching 63 days in 2023 and further decreasing to 56 days in 2024. The overall trend reflects an improvement in the company's credit and collection policies or better customer payment behavior.

Operating Cycle

Gilead Sciences Inc., operating cycle calculation, comparison to benchmarks

No. days

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Selected Financial Data
Average inventory processing period 100 100 97 89 134
Average receivable collection period 56 63 65 61 73
Short-term Activity Ratio
Operating cycle1 156 163 162 150 207
Benchmarks
Operating Cycle, Competitors2
AbbVie Inc. 161 148 146 130 149
Amgen Inc. 276 510 363 305 299
Bristol-Myers Squibb Co. 137 165 151 142 128
Danaher Corp. 142 156 148 145 151
Eli Lilly & Co. 418 395 325 280 352
Johnson & Johnson 226 218 209 186 180
Merck & Co. Inc. 205 207 182 228 209
Pfizer Inc. 288 218 135 158 406
Regeneron Pharmaceuticals Inc. 732 677 722 429 802
Thermo Fisher Scientific Inc. 142 142 145 168 156
Vertex Pharmaceuticals Inc. 340 272 215 198 191
Operating Cycle, Sector
Pharmaceuticals, Biotechnology & Life Sciences 218 217 182 183 207
Operating Cycle, Industry
Health Care 81 85 81 82 87

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

1 2024 Calculation
Operating cycle = Average inventory processing period + Average receivable collection period
= 100 + 56 = 156

2 Click competitor name to see calculations.


Average Inventory Processing Period
The average inventory processing period showed a significant decline from 134 days in 2020 to 89 days in 2021, indicating improved efficiency in inventory turnover. This was followed by a moderate increase to 97 days in 2022, with a slight rise to 100 days maintained in both 2023 and 2024, suggesting stabilization in inventory management after initial improvements.
Average Receivable Collection Period
The average receivable collection period exhibited a consistent downward trend from 73 days in 2020 to 56 days in 2024. Despite minor fluctuations in 2022 and 2023, the overall decrease implies enhanced effectiveness in collecting receivables, which might positively impact cash flow.
Operating Cycle
The operating cycle declined markedly from 207 days in 2020 to 150 days in 2021, reflecting gains in operational efficiency. Subsequently, it experienced a slight upward trend to 163 days in 2022 and 2023, before decreasing again to 156 days in 2024. This pattern aligns with changes in both inventory processing and receivables collection, indicating the company's focus on optimizing working capital management.

Average Payables Payment Period

Gilead Sciences Inc., average payables payment period calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Selected Financial Data
Payables turnover 7.50 11.81 6.25 9.36 5.42
Short-term Activity Ratio (no. days)
Average payables payment period1 49 31 58 39 67
Benchmarks (no. days)
Average Payables Payment Period, Competitors2
AbbVie Inc. 64 66 61 60 54
Amgen Inc. 54 69 90 77 84
Bristol-Myers Squibb Co. 94 111 109 108 84
Danaher Corp. 66 65 67 82 76
Eli Lilly & Co. 140 134 106 83 107
Johnson & Johnson 137 132 137 135 122
Merck & Co. Inc. 98 89 89 123 108
Pfizer Inc. 115 98 72 66 181
Regeneron Pharmaceuticals Inc. 146 122 138 84 155
Thermo Fisher Scientific Inc. 45 41 48 53 49
Vertex Pharmaceuticals Inc. 98 106 103 79 77
Average Payables Payment Period, Sector
Pharmaceuticals, Biotechnology & Life Sciences 90 86 85 86 95
Average Payables Payment Period, Industry
Health Care 45 46 49 48 49

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

1 2024 Calculation
Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ 7.50 = 49

2 Click competitor name to see calculations.


Payables Turnover
The payables turnover ratio exhibited considerable fluctuations over the five-year period. Beginning at 5.42 in 2020, the ratio increased sharply to 9.36 in 2021, suggesting an improvement in the company's efficiency in managing payables and settling obligations more quickly. In 2022, the ratio declined to 6.25, indicating a temporary deceleration in turnover speed. This was followed by a significant rise to 11.81 in 2023, the highest level in the observed period, before decreasing to 7.5 in 2024. The overall pattern reflects volatility in payables management, with alternating periods of faster and slower turnover.
Average Payables Payment Period
The average payables payment period in days displayed a pattern inverse to the turnover ratio, consistent with expectations. Starting at 67 days in 2020, there was a substantial reduction to 39 days in 2021, implying that the company was paying its suppliers more promptly. The payment period then lengthened to 58 days in 2022, suggesting a slower payment cycle. This was followed by a further decrease to 31 days in 2023, the shortest period in the dataset, indicating a notably accelerated payment process. In 2024, the period lengthened again to 49 days, signaling a moderate extension in payment terms or timing compared to the previous year.
Overall Insights
The data reveal a cyclical pattern in the company’s payables management, alternating between periods of accelerated payments and longer payment cycles. These shifts may reflect strategic adjustments, negotiations with suppliers, or changes in liquidity management practices. The pronounced peaks and troughs in both the payables turnover ratio and the average payment period highlight the company’s dynamic approach to supplier payments over the examined timeframe.

Cash Conversion Cycle

Gilead Sciences Inc., cash conversion cycle calculation, comparison to benchmarks

No. days

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Selected Financial Data
Average inventory processing period 100 100 97 89 134
Average receivable collection period 56 63 65 61 73
Average payables payment period 49 31 58 39 67
Short-term Activity Ratio
Cash conversion cycle1 107 132 104 111 140
Benchmarks
Cash Conversion Cycle, Competitors2
AbbVie Inc. 97 82 85 70 95
Amgen Inc. 222 441 273 228 215
Bristol-Myers Squibb Co. 43 54 42 34 44
Danaher Corp. 76 91 81 63 75
Eli Lilly & Co. 278 261 219 197 245
Johnson & Johnson 89 86 72 51 58
Merck & Co. Inc. 107 118 93 105 101
Pfizer Inc. 173 120 63 92 225
Regeneron Pharmaceuticals Inc. 586 555 584 345 647
Thermo Fisher Scientific Inc. 97 101 97 115 107
Vertex Pharmaceuticals Inc. 242 166 112 119 114
Cash Conversion Cycle, Sector
Pharmaceuticals, Biotechnology & Life Sciences 128 131 97 97 112
Cash Conversion Cycle, Industry
Health Care 36 39 32 34 38

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

1 2024 Calculation
Cash conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= 100 + 5649 = 107

2 Click competitor name to see calculations.


Average Inventory Processing Period
The average inventory processing period exhibited a notable decline from 134 days in 2020 to 89 days in 2021, indicating improved inventory turnover efficiency. However, it slightly increased in subsequent years to 97 days in 2022 and stabilized around 100 days in 2023 and 2024. This suggests some challenges in further reducing inventory holding times after the initial improvement.
Average Receivable Collection Period
There was a steady decrease in the average receivable collection period from 73 days in 2020 to 56 days by 2024. This trend reflects enhanced effectiveness in credit and collections management, leading to faster cash inflows from receivables over the five-year period.
Average Payables Payment Period
The average payables payment period showed considerable fluctuations. It dropped sharply from 67 days in 2020 to 39 days in 2021, indicating quicker payment to suppliers. Following this, it rose to 58 days in 2022, then decreased again to 31 days in 2023 before rising to 49 days in 2024. These variations may reflect changing supplier payment strategies or shifts in working capital management policies.
Cash Conversion Cycle
The cash conversion cycle improved significantly from 140 days in 2020 to 111 days in 2021, signaling better overall working capital management. It continued to decline to 104 days in 2022 but then increased to 132 days in 2023, before dropping again to 107 days in 2024. This volatility suggests intermittent challenges in synchronizing inventory, receivables, and payables management, impacting the company's cash flow efficiency.