Intel Corp. (NASDAQ:INTC)

The analysis of key financial turnover and cycle metrics reveals notable trends over the five-year period.

Inventory Turnover and Processing Period

The inventory turnover ratio declined consistently from 4.06 in 2020 to 2.74 in 2022, followed by a slight stabilization around 2.92-2.93 in the subsequent years. Correspondingly, the average inventory processing period increased from 90 days in 2020 to 133 days in 2022, then moderately decreased and stabilized at 125 days in 2023 and 2024. This indicates a trend toward slower inventory movement and longer holding times, suggesting potential challenges in inventory management or changes in product mix.

Receivables Turnover and Collection Period

The receivables turnover ratio experienced a significant decline from 11.48 in 2020 to 8.36 in 2021, before markedly improving to around 15 in the following years. The average receivable collection period mirrored this behavior, increasing from 32 days in 2020 to 44 days in 2021 and then decreasing substantially to about 23-24 days from 2022 onward. This pattern suggests an initial deterioration in receivables collection efficiency, followed by a strong recovery and improved cash inflow management.

Payables Turnover and Payment Period

The payables turnover ratio remained fairly stable around 6.13-6.14 in 2020-2021 but dropped sharply to 3.77 in 2022 and continued declining to 2.85 by 2024. Inversely, the average payables payment period extended significantly from roughly 59-60 days up to 128 days over the same timeframe. This indicates the company is taking longer to pay its suppliers, potentially as a cash preservation strategy or due to changes in credit terms.

Working Capital Turnover

Working capital turnover decreased from 3.46 in 2020 to 2.61 in 2021 but then progressively increased, reaching 4.55 by 2024. This suggests that despite fluctuations, the company has improved its efficiency in generating sales from working capital in recent years.

Operating Cycle

The operating cycle lengthened from 122 days in 2020 to approximately 157 days in 2022 and then showed slight improvement to around 148-149 days in the last two years. This reflects a general increase in the time taken from inventory acquisition through receivables collection, with some signs of efficiency gains after 2022.

Cash Conversion Cycle

The cash conversion cycle increased sharply from 63 days in 2020 to 96 days in 2021, decreased substantially to 60 days in 2022, then improved continuously to 21 days by 2024. This positive trend highlights enhanced cash flow management, with the company effectively reducing the time lag between cash outflows and inflows.

Overall, the data indicates initial challenges in inventory turnover, receivables collection, and cash conversion in the early years, followed by operational improvements in these areas. The extension of the payables payment period suggests strategic supplier payment management, contributing to improved working capital turnover and reduced cash conversion cycle towards the end of the analyzed timeframe.

The financial data reveals several notable trends in the company's cost of sales, inventories, and inventory turnover ratios over the five-year period from the end of 2020 through the end of 2024.

Cost of Sales

The cost of sales shows an overall increasing pattern with fluctuations. Starting at $34,255 million in 2020, it rose slightly to $35,209 million in 2021 and further increased to $36,188 million in 2022. However, there was a decline in 2023 to $32,517 million, before rising again to $35,756 million in 2024. This indicates moderate variability but generally a high level of cost of sales, with a dip in 2023 potentially reflecting operational adjustments or market conditions.

Inventories

Inventories increased significantly from $8,427 million in 2020 to $13,224 million in 2022, which shows considerable accumulation of stock during this period. Following this peak, inventories decreased to $11,127 million in 2023 but then rose again to $12,198 million in 2024. The fluctuations suggest changes in inventory management or supply chain dynamics, with the highest inventory levels recorded in 2022.

Inventory Turnover Ratio

The inventory turnover ratio declined consistently from 4.06 in 2020 to 2.74 in 2022, indicating that inventory was being sold and replaced less frequently during this period. There is a slight improvement after 2022 with ratios of 2.92 in 2023 and 2.93 in 2024, but these remain well below the 2020 level. The initial decline in turnover ratio suggests slower movement of inventory relative to sales, potentially pointing to either overstocking or decreased demand, while the later minor recovery could indicate some improvement in sales efficiency or inventory management.

Overall, the combined analysis shows that while the cost of sales experienced mild fluctuations, the inventory levels increased markedly until 2022 and then partially adjusted. The declining inventory turnover ratio over most of the period indicates a trend towards slower inventory movement, which may require attention to optimize inventory control and capital use.

The annual financial data reveals notable trends in revenue generation and receivables management over the five-year period.

Net Revenue

There is a consistent decline in net revenue from 2021 onward, dropping from $79,024 million in 2021 to $53,101 million in 2024. The highest revenue was recorded in 2021, with a subsequent sharp decrease by nearly 33% over the following three years. This downward trend indicates potential challenges in sales or market conditions impacting overall income.

Accounts Receivable, Net

Accounts receivable showed an initial increase from $6,782 million in 2020 to $9,457 million in 2021, possibly reflecting extended credit sales or delayed collections. After 2021, the figure significantly decreases to approximately $3,478 million by 2024, indicating improved collection efficiency or reduced credit sales over recent years.

Receivables Turnover Ratio

The receivables turnover ratio declined substantially from 11.48 in 2020 to 8.36 in 2021, suggesting slower collection of receivables during that year. However, the ratio improved markedly thereafter, rising to around 15.27 by 2024. This improvement implies accelerated collection processes relative to credit sales, consistent with the observed decrease in accounts receivable.

Overall, while net revenue demonstrates a negative growth trajectory, the efficiency in managing receivables has improved significantly after 2021. The company appears to have strengthened its collection discipline, as shown by the rising receivables turnover ratio and declining accounts receivable balance, which could help mitigate cash flow risks despite the decline in revenue.

Cost of Sales

The cost of sales demonstrated a generally increasing trend from 2020 through 2022, rising from 34,255 million USD to 36,188 million USD. However, a notable decline occurred in 2023, with the figure decreasing to 32,517 million USD, followed by a rebound to 35,756 million USD in 2024. This fluctuation suggests a potential variability in production costs or sales volume during the period.

Accounts Payable

The accounts payable balance showed a consistent increase over the five years, escalating from 5,581 million USD in 2020 to 12,556 million USD in 2024. The most marked rise occurred between 2021 and 2022, jumping from 5,747 million USD to 9,595 million USD. This trend may indicate growing credit purchases or extended payment terms with suppliers.

Payables Turnover Ratio

This ratio experienced a steady decline throughout the period, falling from 6.14 in 2020 to 2.85 in 2024. Such a decreasing ratio implies that the company is taking longer to settle its payables, reflecting a slower turnover and potentially extended credit periods or liquidity management strategies.

The financial data reveals notable patterns and shifts in key operational metrics over the five-year period.

Working Capital

There is a clear downward trend in working capital, starting at 22,495 million US dollars in the first period and declining steadily each year to reach 11,658 million US dollars in the final period. This represents a nearly 48% reduction over the span, highlighting a significant decrease in the company's short-term liquidity or current assets relative to current liabilities.

Net Revenue

Net revenue shows a declining trajectory as well. It peaks initially at 79,024 million US dollars and then decreases substantially to 53,101 million US dollars by the last period observed. This indicates a drop of about 33% in revenue, suggesting challenges in sales or shifts in market demand impacting the company's top line.

Working Capital Turnover

The working capital turnover ratio fluctuates across the years but ultimately increases to 4.55 in the final period from 3.46 at the outset. After a dip to 2.61 in the second year, it gradually rises, signaling improving efficiency in using working capital to generate revenue. Despite the decrease in absolute working capital and revenue, the company appears to enhance its turnover ratio, managing to produce more sales per unit of working capital over time.

In summary, the company experiences a marked decline in both working capital and net revenue, which could be a concern for liquidity and growth. However, the improving working capital turnover ratio suggests an operational adjustment or increased efficiency in utilizing available capital, potentially offsetting some negative impacts from falling revenue and liquidity metrics.

Inventory Turnover

The inventory turnover ratio has shown a declining trend from 4.06 in the period ending December 26, 2020, to 2.74 by December 31, 2022. This ratio slightly improved in subsequent years, reaching 2.92 at December 30, 2023, and stabilizing around 2.93 by December 28, 2024. Overall, the reduction in inventory turnover indicates that the company has been turning over its inventory less frequently over time, although there is a slight recent improvement.

Average Inventory Processing Period

The average inventory processing period, expressed in number of days, has lengthened consistently from 90 days at the end of 2020 to 133 days by the end of 2022. After this peak, the period decreased to 125 days by the end of 2023 and remained stable into the end of 2024. This trend suggests that inventory is being held for longer periods, which could indicate slower sales or increased stock levels, but some operational adjustments may have contributed to an improvement after 2022.

Overall Insights

The inverse relationship between inventory turnover and average inventory processing period is evident, with turnover decreasing as the processing period increases. This pattern highlights a shift towards slower inventory movement, which could have implications for working capital management and operational efficiency. The modest recovery in the latest periods suggests efforts to optimize inventory management and reduce holding times, though the levels remain higher than those at the start of the analyzed timeframe.

Receivables Turnover

The receivables turnover ratio demonstrates notable fluctuations over the five-year period. Starting at 11.48 in 2020, it significantly decreases to 8.36 in 2021, indicating a slower collection efficiency during that year. However, from 2021 onward, there is a marked improvement as the ratio rises sharply to 15.26 in 2022, reaching its peak at 15.94 in 2023 before slightly declining to 15.27 in 2024. This overall upward trend after 2021 suggests enhanced effectiveness in credit and collections management in the later years.

Average Receivable Collection Period

The average receivable collection period shows an inverse movement compared to the receivables turnover, consistent with expectations. It begins at 32 days in 2020 and worsens to 44 days in 2021, reflecting a delay in collecting receivables. From 2022 forward, the collection period improves substantially, dropping to 24 days in 2022 and stabilizing around 23 to 24 days in 2023 and 2024. This improvement indicates a faster conversion of receivables into cash, aligning with the increased turnover ratios observed in the same timeframe.

Overall Insights

The data suggests a period of diminished collection efficiency in 2021, potentially due to external factors or internal operational changes. This period is followed by a sustained recovery and stabilization in subsequent years, marked by a higher receivables turnover ratio and a reduced collection period. Such trends indicate strengthening credit management and improved cash flow dynamics from receivables during the later part of the observed timeframe.

The data reflects key operational efficiency metrics over a five-year period, focusing on inventory management and receivables collection.

Average Inventory Processing Period

This metric shows an increasing trend from 90 days in 2020 up to a peak of 133 days in 2022. A slight improvement follows with a decrease to 125 days in both 2023 and 2024. The initial increase suggests growing inventory holding times, which could imply challenges in inventory turnover or changes in stock management strategy. The subsequent stabilization indicates some corrective measures or adjustments to operational processes.

Average Receivable Collection Period

The receivable collection period starts at 32 days in 2020 and sees an increase to 44 days in 2021, indicating slower collections. However, there is a significant improvement in 2022, with the period dropping sharply to 24 days, and maintaining around 23-24 days through 2023 and 2024. This improvement suggests enhanced credit management or more efficient collections over the latter years.

Operating Cycle

The operating cycle increases notably from 122 days in 2020 to a peak of 157 days in 2022, aligning with the rise in inventory processing period and the earlier increase in receivable days. Subsequently, it decreases slightly to 148 days in 2023 and stabilizes at 149 days in 2024. This pattern broadly corresponds to changes in inventory and receivables, indicating that extended inventory processing has a stronger influence on the operating cycle duration.

Overall, the data reflects a period of increasing operational cycle length up to 2022 driven primarily by rising inventory processing times. However, efficiency in receivable collections improved markedly after 2021, which may help mitigate some liquidity concerns. The stabilization of the operating cycle in 2023 and 2024 suggests a possible balance being achieved between inventory management and receivable collections.

The payables turnover ratio demonstrates a declining trend over the analyzed periods, starting at 6.14 in December 2020 and decreasing progressively to 2.85 by December 2024. This decline suggests a slowing rate at which the company is paying off its suppliers relative to its accounts payable balance, indicating potentially longer payment durations or changes in purchasing patterns.

Correspondingly, the average payables payment period shows an increasing trend, rising from 59 days in December 2020 to 128 days in December 2024. This confirms that the company is taking more time to settle its payables, which may reflect a strategic decision to improve cash flow, renegotiated payment terms with suppliers, or slower operational cash cycles.

Payables turnover ratio

Consistently decreased from 6.14 in 2020 to 2.85 in 2024.

Average payables payment period

Increased from 59 days in 2020 to 128 days in 2024, roughly doubling over the five-year span.

Overall, the data indicates a clear shift toward lengthier payment obligations, which could impact supplier relationships and working capital management. The trends imply a potential strategic approach to extend payment terms or manage liquidity, but may also expose the company to risks associated with delayed supplier payments.

Average Inventory Processing Period

The average inventory processing period shows an increasing trend from 90 days in 2020 to 133 days in 2022, indicating that inventory is held for longer durations over these years. However, there is a slight improvement in 2023, with a decrease to 125 days, which remains stable through 2024.

Average Receivable Collection Period

The receivable collection period exhibits variability, rising sharply from 32 days in 2020 to 44 days in 2021, suggesting slower collections. This is followed by a significant improvement in 2022, dropping to 24 days, and stabilizes around 23-24 days in the subsequent years.

Average Payables Payment Period

The payables payment period generally increases across the timeframe, moving from 59 days in 2020 to 97 days in 2022. It remains steady in 2023 but then extends further to 128 days by 2024, reflecting a lengthening in the time taken to settle payables.

Cash Conversion Cycle

The cash conversion cycle demonstrates notable fluctuations, starting at 63 days in 2020 and rising significantly to 96 days in 2021. It then sharply declines to 60 days in 2022 and continues to improve, reaching 21 days by 2024. This indicates enhanced efficiency in managing working capital over time, with the cycle becoming substantially shorter.