Intel Corp. (NASDAQ:INTC)

An examination of short-term operating activity ratios reveals several noteworthy trends over the five-year period. Generally, the company demonstrates fluctuating, but overall stabilizing, efficiency in managing its working capital. Inventory turnover remains relatively consistent, while receivables and payables turnover exhibit more pronounced shifts. The cash conversion cycle shows a significant improvement initially, followed by a recent lengthening.

Inventory Management

Inventory turnover decreased from 3.27 to 2.74 between 2021 and 2022, then stabilized around 2.9 to 2.97 for the subsequent three years. This suggests an initial slowdown in the rate at which inventory is sold, followed by a period of consistent performance. The average inventory processing period increased from 112 days in 2021 to 133 days in 2022, then decreased to a range of 123 to 125 days for the remaining years, mirroring the inventory turnover trend.

Receivables Management

Receivables turnover increased substantially from 8.36 in 2021 to 15.26 in 2022, and continued to rise to 15.94 in 2023. It then decreased to 15.27 in 2024 and further to 13.77 in 2025. This indicates a significant improvement in the speed of collecting receivables initially, followed by a gradual decline. Correspondingly, the average receivable collection period decreased from 44 days in 2021 to 23-24 days between 2022 and 2024, before increasing slightly to 27 days in 2025.

Payables Management

Payables turnover decreased from 6.13 in 2021 to 3.77 in 2022, and remained relatively stable at approximately 3.79 in 2023. It then declined to 2.85 in 2024 before increasing to 3.49 in 2025. This suggests a lengthening in the time taken to pay suppliers. The average payables payment period increased from 60 days in 2021 to 96-97 days in 2022-2023, peaking at 128 days in 2024, and decreasing to 105 days in 2025.

Overall Operating Cycle & Cash Conversion Cycle

The operating cycle remained relatively stable, fluctuating between 148 and 157 days. However, the cash conversion cycle experienced a significant improvement, decreasing from 96 days in 2021 to a low of 21 days in 2024. This indicates a more efficient management of working capital and a faster conversion of investments in inventory and receivables into cash. The cash conversion cycle increased to 45 days in 2025, suggesting a potential reversal of this trend.

Working Capital Turnover

Working capital turnover increased from 2.61 in 2021 to 3.45 in 2022 and 3.56 in 2023, reaching a peak of 4.55 in 2024 before decreasing substantially to 1.65 in 2025. This suggests an increasing efficiency in utilizing working capital to generate sales until 2024, followed by a significant decline in efficiency in the most recent year.

The analysis reveals fluctuations in inventory management performance over the five-year period. Cost of sales exhibits an initial increase followed by a decline, while inventory levels demonstrate a more consistent pattern of increase and subsequent stabilization. The inventory turnover ratio, calculated from these figures, provides a key indicator of how efficiently inventory is being converted into revenue.

Inventory Turnover Trend

The inventory turnover ratio decreased from 3.27 in 2021 to 2.74 in 2022, indicating a slowing in the rate at which inventory was sold and replenished. A modest recovery followed, with the ratio increasing to 2.92 in 2023 and further to 2.93 in 2024. The most recent year, 2025, shows a slight additional increase to 2.97. This suggests a gradual improvement in inventory management efficiency following the initial decline, but the ratio remains below the level observed in 2021.

Cost of Sales and Inventory Relationship

Cost of sales increased from US$35,209 million in 2021 to US$36,188 million in 2022, coinciding with the decrease in inventory turnover. The subsequent decrease in cost of sales to US$32,517 million in 2023, coupled with a slight decrease in inventory, contributed to the initial recovery in the turnover ratio. Cost of sales then increased again in 2024 to US$35,756 million, with a corresponding increase in inventory, resulting in a relatively stable turnover ratio. The final year shows a slight decrease in cost of sales to US$34,478 million and a slight decrease in inventory, leading to the highest turnover ratio in the period.

Inventory Level Observations

Inventory levels increased significantly from US$10,776 million in 2021 to US$13,224 million in 2022. This increase likely contributed to the lower inventory turnover observed in that year. Inventory levels then decreased to US$11,127 million in 2023, supporting the improvement in the turnover ratio. Subsequent years show inventory fluctuating between US$11,127 million and US$12,198 million, stabilizing around US$11,618 million in 2025. The stabilization of inventory levels, combined with relatively stable cost of sales, suggests a more consistent approach to inventory management in the later years of the period.

Overall, the observed trends indicate a period of initial inefficiency in inventory management, followed by a gradual recovery and stabilization. While the inventory turnover ratio has not returned to its 2021 level, the recent increases suggest positive developments in the company’s ability to manage its inventory effectively.

The receivables turnover ratio exhibits considerable fluctuation over the observed period. Initially, a substantial increase is noted, followed by relative stabilization and a subsequent decline.

Overall Trend

The receivables turnover ratio increased significantly from 8.36 in 2021 to 15.26 in 2022. This was followed by a slight increase to 15.94 in 2023, a minor decrease to 15.27 in 2024, and then a more pronounced decrease to 13.77 in 2025. This suggests an initial improvement in the efficiency of collecting receivables, which then leveled off before declining.

2021 to 2022

The marked increase in the receivables turnover ratio from 2021 to 2022 indicates a more efficient conversion of accounts receivable into cash during this period. This improvement could be attributed to changes in credit policies, more aggressive collection efforts, or a shift in the customer base towards faster-paying entities. This occurred alongside a significant decrease in net revenue.

2022 to 2024

From 2022 to 2024, the receivables turnover ratio remained relatively stable, fluctuating between 15.26 and 15.94. This suggests that the company maintained a consistent level of efficiency in managing its receivables during this timeframe, despite a continued decline in net revenue. Accounts receivable also remained relatively stable.

2024 to 2025

The decrease in the receivables turnover ratio from 15.27 in 2024 to 13.77 in 2025 suggests a potential slowdown in the collection of receivables. This could be due to extended credit terms offered to customers, a change in the customer mix towards slower-paying clients, or increased difficulties in collecting outstanding balances. This decline occurred alongside a slight increase in accounts receivable.

In summary, while the company initially demonstrated improved efficiency in receivables collection, the latter part of the period shows a weakening trend, potentially indicating emerging challenges in managing its accounts receivable.

The analysis reveals fluctuating trends in payables turnover over the five-year period. Initially, a significant decline is observed, followed by relative stabilization and a subsequent decrease before a final partial recovery.

Payables Turnover Trend

The payables turnover ratio decreased substantially from 6.13 in 2021 to 3.77 in 2022. This indicates a lengthening of the time it takes the company to pay its suppliers. The ratio remained relatively stable between 2022 and 2023, at 3.79. A further decline to 2.85 occurred in 2024, suggesting a continued slowdown in payment activity. Finally, the ratio increased to 3.49 in 2025, representing a partial recovery but remaining below the level observed in 2021.

Cost of Sales Relationship

Cost of sales experienced an increase from 2021 to 2022, followed by a decrease in 2023, and then an increase again in 2024 before decreasing slightly in 2025. This fluctuation in cost of sales does not directly correlate with the payables turnover trend, suggesting factors beyond purchasing volume are influencing payment patterns.

Accounts Payable Relationship

Accounts payable increased significantly from 2021 to 2022, coinciding with the initial drop in payables turnover. Accounts payable decreased in 2023, but then increased substantially in 2024, contributing to the lowest payables turnover ratio during the period. A decrease in accounts payable occurred in 2025, aligning with the partial recovery in the payables turnover ratio. The changes in accounts payable appear to be a primary driver of the observed fluctuations in payables turnover.

In summary, the company’s ability to efficiently manage and pay its suppliers has varied over the observed period. The most pronounced change occurred between 2021 and 2022, with subsequent years showing a complex interplay between accounts payable levels and turnover rates.

The working capital turnover ratio exhibited considerable fluctuation over the five-year period. Initially, the ratio increased from 2021 to 2023, then rose sharply in 2024, before declining significantly in 2025.

Working Capital Turnover Trend

The working capital turnover ratio began at 2.61 in 2021. It increased to 3.45 in 2022, and continued to rise to 3.56 in 2023, indicating increasing efficiency in utilizing working capital to generate revenue. A substantial increase was observed in 2024, with the ratio reaching 4.55. However, this was followed by a marked decrease to 1.65 in 2025.

The increase in the ratio from 2021 through 2024 suggests improved management of working capital, potentially through more efficient inventory control, faster collection of receivables, or optimized payment terms with suppliers. The substantial drop in 2025, however, indicates a significant decrease in the efficiency of working capital utilization. This could be due to a build-up in working capital components, such as increased inventory or slower collection of receivables, relative to revenue.

Relationship to Net Revenue

Net revenue decreased from US$79,024 million in 2021 to US$52,853 million in 2025. The initial increases in the working capital turnover ratio occurred alongside decreasing net revenue, suggesting that working capital management was initially improving despite the revenue decline. The sharp increase in the ratio in 2024 occurred with relatively stable net revenue. The significant decline in the ratio in 2025, coinciding with continued stable net revenue, highlights a substantial change in the relationship between working capital and sales.

The volatility in the working capital turnover ratio warrants further investigation. Understanding the underlying drivers of the 2025 decline is crucial, as it suggests a potential inefficiency in the company’s short-term asset management. A detailed analysis of individual working capital components – accounts receivable, inventory, and accounts payable – is recommended to pinpoint the cause of this shift.

The period under review demonstrates fluctuations in inventory management efficiency. Specifically, the average inventory processing period exhibited initial lengthening followed by stabilization and a slight improvement. Inventory turnover showed a decline initially, followed by relative stability.

Average Inventory Processing Period

The average inventory processing period increased from 112 days in 2021 to 133 days in 2022, indicating a longer time to convert inventory into sales. This represents a deterioration in inventory management efficiency during that period. However, from 2022 onward, the period stabilized, remaining at 125 days in both 2023 and 2024. A slight decrease to 123 days is observed in 2025, suggesting a modest improvement in the speed of inventory conversion towards the end of the analyzed timeframe. The overall trend suggests a peak inefficiency in 2022, followed by a return towards more efficient levels.

Inventory Turnover

Inventory turnover decreased from 3.27 in 2021 to 2.74 in 2022, which aligns with the increased average inventory processing period. This indicates that inventory was sold and replenished less frequently in 2022. From 2022 to 2025, the inventory turnover ratio remained relatively stable, fluctuating between 2.92 and 2.97. This suggests that, after the initial decline, the rate at which inventory was sold and replaced remained consistent. The stability in turnover, coupled with the slight decrease in processing period in 2025, may indicate some improvement in inventory management practices in the latter years.

The observed trends suggest that 2022 was a period of reduced efficiency in inventory management. Subsequent years show a stabilization and a minor positive shift, indicating potential corrective actions or external factors contributing to improved performance. Further investigation into the underlying causes of the 2022 changes and the factors driving the slight improvement in 2025 would be beneficial.

The average receivable collection period exhibited a generally decreasing trend from 2021 to 2023, followed by a stabilization and slight increase in subsequent years. This indicates changes in the efficiency with which the company converts its receivables into cash.

Average Receivable Collection Period

In 2021, the average receivable collection period was 44 days. A significant decrease was observed in 2022, falling to 24 days. This downward trend continued into 2023, with the period reaching a low of 23 days. The period remained stable at 24 days in 2024 before increasing slightly to 27 days in 2025.

The initial decline in the collection period from 2021 to 2023 suggests improved efficiency in collecting receivables, potentially due to stricter credit policies, more effective collection efforts, or a change in customer payment terms. The stabilization in 2024 and the slight increase in 2025 could indicate a loosening of credit standards, slower payment behavior from customers, or a shift in the customer mix. Further investigation would be needed to determine the underlying causes of these changes.

Receivables Turnover

The receivables turnover ratio generally increased from 8.36 in 2021 to 15.94 in 2023, mirroring the decrease in the average collection period. A slight decrease to 15.27 was noted in 2024, followed by a further decrease to 13.77 in 2025. This inverse relationship between the turnover ratio and the collection period is expected, as a faster collection period typically results in a higher turnover ratio.

The combined trends suggest that the company experienced a period of improved receivables management between 2021 and 2023. However, the recent stabilization and slight deterioration in these metrics warrant monitoring to ensure continued efficient management of working capital.

The operating cycle exhibited relative stability over the five-year period, with minor fluctuations. Analysis of the component ratios reveals differing trends in inventory management and receivables collection, contributing to the overall cycle length.

Average Inventory Processing Period

The average inventory processing period increased from 112 days in 2021 to 133 days in 2022, representing a significant lengthening of the time required to convert inventory into finished goods. This was followed by a decrease to 125 days in 2023, where it remained constant through 2024. A slight reduction to 123 days is observed in 2025. The initial increase suggests potential inefficiencies in production or inventory management, while the subsequent stabilization and minor decrease may indicate corrective actions or a normalization of operations.

Average Receivable Collection Period

A substantial decrease in the average receivable collection period occurred between 2021 and 2022, falling from 44 days to 24 days. This indicates improved efficiency in collecting payments from customers. The period remained relatively stable at 23 and 24 days in 2023 and 2024, respectively. A slight increase to 27 days is noted in 2025, potentially signaling a minor slowdown in collections, but remaining well below the 2021 level.

Operating Cycle

The operating cycle initially increased from 156 days in 2021 to 157 days in 2022, reflecting the combined effect of the increased inventory processing period and decreased receivable collection period. A decrease to 148 days occurred in 2023, driven by improvements in both inventory and receivables management. The cycle length then stabilized at 149 days in 2024 and increased slightly to 150 days in 2025. The overall trend suggests a generally efficient operating cycle, with the 2023 value representing the most favorable outcome within the observed period.

The interplay between inventory processing and receivable collection significantly influences the overall operating cycle. While inventory processing times remain elevated compared to 2021, improvements in receivable collection have partially offset this, resulting in a relatively stable and manageable operating cycle length.

The average payables payment period exhibited a notable increase over the observed five-year period, while the payables turnover ratio demonstrated a decreasing trend with some fluctuation. These movements suggest a shift in the company’s management of its short-term liabilities and supplier relationships.

Payables Turnover

The payables turnover ratio decreased from 6.13 in 2021 to 3.77 in 2022, representing a significant decline. The ratio remained relatively stable at 3.79 in 2023 before decreasing further to 2.85 in 2024. A slight recovery to 3.49 was observed in 2025. This overall downward trend indicates that the company is taking longer to pay its suppliers, or is purchasing less on credit, or both. The 2024 value represents the lowest turnover observed within the period.

Average Payables Payment Period

Corresponding with the payables turnover, the average payables payment period increased from 60 days in 2021 to 97 days in 2022. The period remained high at 96 days in 2023, then increased substantially to 128 days in 2024. A decrease to 105 days was noted in 2025. This increase suggests the company is utilizing more extended payment terms with its suppliers, potentially to improve cash flow or capitalize on early payment discounts. The 2024 value represents the longest payment period observed within the period.

Relationship between Ratios

The inverse relationship between the payables turnover and the average payables payment period is evident. As the turnover ratio declines, the payment period increases, and vice versa. This confirms that the company’s ability to efficiently manage and pay its suppliers has changed over the period. The fluctuations in 2024 and 2025 suggest potential adjustments in payment strategies or supplier negotiations.

The observed trends warrant further investigation into the company’s supply chain management practices and its relationships with key suppliers. Understanding the reasons behind these changes is crucial for assessing the company’s financial health and operational efficiency.

The short-term operating activity of the company, as measured by key ratios, demonstrates a significant shift over the five-year period. A notable trend is the reduction in the cash conversion cycle, followed by a recent increase. Individual components contributing to this cycle – inventory processing, receivable collection, and payable payment – exhibit distinct patterns.

Average Inventory Processing Period

The average time to process inventory fluctuated around 125-133 days. It began at 112 days in 2021, increased to 133 days in 2022, then decreased to 125 days in 2023 and remained stable at 125 days in 2024, before slightly decreasing to 123 days in 2025. This suggests a generally stable inventory management process with a minor initial increase followed by a return to previous levels.

Average Receivable Collection Period

The average number of days to collect receivables decreased substantially from 44 days in 2021 to 24 days in 2022, and remained relatively stable at 23-24 days through 2023 and 2024. A slight increase to 27 days is observed in 2025. This indicates improved efficiency in collecting payments from customers, with a recent slight reversal of that trend.

Average Payables Payment Period

The average time taken to pay suppliers increased considerably from 60 days in 2021 to 97 days in 2022, and remained high at 96 days in 2023. A further increase to 128 days occurred in 2024, followed by a decrease to 105 days in 2025. This suggests a lengthening of payment terms to suppliers, potentially to improve cash flow, with a recent partial reduction in that extended timeframe.

Cash Conversion Cycle

The cash conversion cycle decreased significantly from 96 days in 2021 to a low of 21 days in 2024. This improvement was driven by faster receivable collection and, to a lesser extent, stable inventory processing. However, the cycle increased to 45 days in 2025, primarily due to the combined effect of a slight increase in the receivable collection period and a decrease in the payables payment period. This recent increase warrants further investigation to determine its sustainability and potential impact on liquidity.

Overall, the company demonstrated improved efficiency in its operating cycle through 2024. The increase in the cash conversion cycle in 2025 suggests a potential shift in working capital management or changes in business conditions that require monitoring.