Micron Technology Inc. (NASDAQ:MU)

The analysis of the financial data over multiple quarters reveals several notable trends in turnover ratios and cycle periods.

Inventory Turnover

The inventory turnover ratio showed an initial improvement from 2.74 to a peak of 3.85 within the first year. However, it then experienced a decline, reaching a low point of 1.91 before gradually increasing again to 2.82 by the latest period. This suggests fluctuations in the efficiency of inventory management, with a period of slower inventory movement followed by some recovery.

Receivables Turnover

Receivables turnover demonstrated volatility across the periods. It increased sharply from 5.98 to 7.01, then declined and rose again to a high of 10.12, indicating variations in the rate at which receivables are collected. After this peak, turnover decreased steadily to values around 4.0-5.0, which may reflect changing credit policies or customer payment behaviors.

Working Capital Turnover

The working capital turnover ratio remained relatively stable around 2.0 in the early periods but declined significantly to below 1.0 by mid-records. Following this trough, there was a consistent recovery trend, rising beyond previous levels to about 2.4 by the end. This oscillation suggests shifts in how effectively the company utilized its working capital over time.

Average Inventory Processing Period

The number of days to process inventory decreased from 133 to 95 days initially, indicating improved inventory efficiency. Subsequently, the period extended dramatically to 192 days, pointing to slower inventory turnover. In the most recent quarters, this metric showed improvement again, reducing to 129 days. This reflects variability in inventory management and possible adjustments in supply chain or sales conditions.

Average Receivable Collection Period

The receivable collection period initially declined from 61 to 52 days but then increased to as much as 96 days in later periods, indicating slower collection of receivables over time. The extended collection period may suggest relaxed credit terms or difficulties in customer payments during certain quarters.

Operating Cycle

The operating cycle shortened initially from 194 to 158 days, representing enhanced operational efficiency. However, it then lengthened significantly, reaching 262 days at one point, before gradually decreasing to 217 days toward the end. These changes correspond to the variations observed in inventory and receivables metrics, collectively impacting the overall cash-to-cash cycle.

Overall, the data display cyclical trends in turnover ratios and cycle times, reflecting periods of operational improvements and subsequent slowdowns. The recent quarters suggest moderate recovery and improved management of working capital elements, although receivable collection periods remain elevated compared to earlier levels. Continuous monitoring and strategic adjustments may be necessary to sustain efficiency and optimize cash flow management.

Cost of Goods Sold (COGS)

COGS exhibited notable fluctuations over the analyzed periods. Initially, the cost rose from approximately $4.0 billion to a peak near $4.6 billion, followed by a decline around late 2021 to near $3.2 billion. Subsequently, there was a resurgence, with values generally trending upward, reaching above $6.2 billion by mid-2025. This pattern suggests episodic increases in production or sales-related expenses, with a pronounced cost escalation beginning in 2023 and continuing through 2025.

Inventories

Inventories experienced a general upward trend over the timeframe. Beginning at about $5.5 billion, inventory levels initially decreased until mid-2021, then rose steadily, with a marked increase around late 2021 and early 2022. Inventories peaked near $8.9 billion in mid-2024 before a slight decline toward mid-2025. The rising inventory levels imply an accumulation of stock, possibly reflecting either strategic buildup in anticipation of demand or slower turnover rates.

Inventory Turnover Ratio

The inventory turnover ratio showed significant variability, starting at a lower level of approximately 2.74 and improving to 3.85 by late 2021. After this peak, the ratio declined steadily to a low near 1.91 at the end of 2022, indicating slower inventory movement. From 2023 onward, turnover generally improved, reaching 2.82 by mid-2025. The initial increase followed by decline and subsequent recovery suggests changing efficiency in inventory management or shifts in demand dynamics.

Combined Insights

The inverse relationship between inventories and inventory turnover ratio is evident, particularly from late 2021 to 2023, where rising inventories corresponded with falling turnover, indicating slower inventory liquidation. The rising COGS alongside increasing inventories and improving turnover in later periods suggests ramped production and sales activity with enhanced inventory management. The data points to periods of both stock buildup and improved operational efficiency, reflecting a dynamic market environment and adaptive supply chain management.

The revenue trend exhibits significant fluctuations over the periods analyzed. Initially, revenue increased steadily from 5,773 million US dollars in the first period to a peak of 8,274 million by the fourth quarter. This was followed by a moderate decline and then a pronounced drop, reaching a low of 3,693 million in the tenth quarter. Subsequently, revenue demonstrated a robust recovery, rising continuously and culminating in a new peak of 13,643 million by the twenty-first quarter, indicating strong growth momentum in the most recent periods.

Accounts receivable values show a pattern somewhat correlated with revenue but with notable variations. Starting at 3,691 million US dollars, receivables fluctuated with rises and falls that generally tracked revenue changes but with some lag and deviations. A pronounced decline occurred between the eighth and tenth periods, coinciding with revenue decreases. Following this, receivables rose sharply, reaching the highest level of 10,184 million by the final period, suggesting expanding credit sales or longer collection periods in recent quarters.

The receivables turnover ratio reflects the efficiency with which the company collects its receivables. This ratio started at 5.98 times and showed variability throughout the periods. An initial increase peaked at 7.01 times in the second quarter, then decreased and oscillated around 5 to 6 times during the middle periods. With the drop in revenue and corresponding fluctuations in receivables, the turnover ratio rose sharply to 10.12 times, indicating more efficient collection or faster turnover at that time. However, it then declined steadily, reaching a low near 3.8 to 4.2 times in the final quarters, consistent with the significant growth in receivables. This decline suggests a slowing in the collection process or an increase in receivables relative to sales volume.

Overall, the data suggests a dynamic operating environment with periods of both strong growth and contraction. The recent trend of rising revenue accompanied by increasing receivables and declining receivables turnover ratio highlights potential liquidity management challenges. The company appears to be extending more credit or facing delays in collecting receivables despite increasing sales, which may warrant closer monitoring to manage working capital effectively.

The financial data reveals several key trends related to working capital, revenue, and working capital turnover over multiple quarterly periods.

Working Capital

Working capital generally increased from December 3, 2020, at 10,841 million USD to a peak around March 2, 2023, at approximately 16,643 million USD. Following this peak, it exhibited some fluctuations, declining in some quarters such as November 30, 2023 (15,096 million USD) and August 31, 2023 (16,479 million USD), while rising again to peak levels by May 29, 2025, at 17,784 million USD. The overall trend is upward with periods of volatility, indicating an accumulation of current assets over current liabilities but with some variability.

Revenue

Revenue displayed significant variability throughout the periods. Starting at 5,773 million USD in December 2020, it increased steadily through September 2021, reaching a high point of 8,274 million USD. However, it then sharply declined to 4,085 million USD by December 1, 2022, representing a notable downturn. Post this dip, revenue recovered consistently, accelerating to 13,643 million USD by November 27, 2025. This pattern suggests a temporary but pronounced contraction in revenue followed by a robust recovery and growth phase exceeding previous highs.

Working Capital Turnover

This ratio, calculated as revenue divided by working capital, indicates efficiency in using working capital to generate sales. Initially, the ratio remained relatively stable around 2.0 from December 2020 through September 2021. Subsequently, it started to decline, hitting a trough of 0.94 by August 31, 2023, corresponding with the period of lowest revenue and relatively high working capital. This decline suggests a period of reduced operational efficiency. However, from that point onward, the ratio improved steadily, reaching 2.4 by November 27, 2025, implying enhanced utilization of working capital relative to sales performance.

In summary, the data indicates a cyclical pattern of growth and contraction. Initially, revenue growth was accompanied by moderate increases in working capital and stable turnover ratios. A subsequent downturn led to a significant drop in both revenue and turnover ratio, highlighting inefficiencies. The recovery phase shows strong revenue growth outpacing working capital accumulation, resulting in improved working capital turnover and suggesting a return to more efficient operations.

Inventory Turnover

The inventory turnover ratio demonstrated an overall declining trend from late 2020 through the end of 2022, decreasing from a high of approximately 3.85 to a low near 1.91. This indicates a slowdown in the rate at which inventory was sold and replaced during this period. Starting in early 2023, the ratio showed a gradual recovery, steadily increasing through mid-2025 to reach about 2.82, suggesting improving efficiency in inventory management and sales velocity in the more recent quarters.

Average Inventory Processing Period

The average inventory processing period, expressed in days, exhibited an inverse pattern compared to the inventory turnover ratio. From December 2020 to December 2022, the processing period expanded significantly, moving from roughly 95-133 days up to a peak of around 192 days. This reflects slower inventory movement and extended holding periods during that timeframe. Beginning in early 2023, there was a consistent decrease in the number of days required to process inventory, declining to approximately 129 days by mid-2025. This improvement aligns with the rising inventory turnover ratio and indicates enhanced operational efficiency in managing and clearing inventory.

Insights

The inverse correlation between the inventory turnover and average processing period is evident, as expected, with higher turnover corresponding to shorter processing times. The period from late 2020 through 2022 suggests challenges in inventory management, possibly due to market conditions, supply chain issues, or demand fluctuations. The subsequent recovery phase starting in 2023 points to positive adjustments in inventory control or improved sales dynamics. The overall trend suggests a move toward more efficient inventory utilization in the later periods.

The receivables turnover ratio and the average receivable collection period exhibit inversely related trends over the analyzed quarterly periods, reflecting changes in the efficiency of the company's credit and collection policies.

Receivables Turnover Ratio

The receivables turnover ratio showed significant fluctuation throughout the timeline. Starting at 5.98 in December 2020, it increased to a peak of 10.12 in March 2023, indicating improved efficiency in collecting receivables during that period. However, post-March 2023, the ratio steadily declined, reaching approximately 4.15 by November 2025. This downward trend suggests a gradual decrease in the speed with which receivables are converted to cash in the later quarters.

Average Receivable Collection Period

Correspondingly, the average receivable collection period began at 61 days in December 2020. It decreased to a low of 36 days in March 2023, consistent with the peak in turnover ratio, indicating quicker collection of receivables. After this point, the collection period increased substantially, peaking around 96 days in August 2024. By the end of the analyzed period, the collection period settled to roughly 88 days, indicating a lengthening in the time taken to collect receivables.

Overall Pattern and Insights

The data suggest a period of improved receivables management up to early 2023, where the company was able to shorten its collection cycle and improve cash flow efficiency. However, thereafter, there is a notable deterioration in these metrics, implying either a shift in credit policy, worsening customer payment behavior, or external economic factors impacting collection efficiency. The longer collection periods and reduced turnover ratios in the later periods highlight potential liquidity challenges or increased credit risk exposure.

Average Inventory Processing Period

The average inventory processing period demonstrates a fluctuating trend over the analyzed timeframe. Beginning at 133 days, it generally decreased to a low point of 95 days by September 2021. From that point onward, the duration increased significantly, peaking at 192 days in December 2022. Following this peak, a gradual decline is observed, reaching 129 days by November 2025. This pattern suggests initial improvements in inventory turnover, followed by a period of inventory accumulation or slower processing, and eventually a return toward more efficient inventory management.

Average Receivable Collection Period

The average receivable collection period shows variability with no clear linear trend but with notable fluctuations. Starting at 61 days, there is an initial decrease to 52 days in March 2021, followed by an increase peaking at 70 days in June 2021. Subsequently, it dips again to a low of 36 days by March 2023. From this low point, a steady rise ensues, reaching a maximum of 96 days by February 2024. After that, it declines modestly, ending at 88 days in November 2025. This indicates periods of improved collections interspersed with intervals of slower cash realization from receivables, reflecting varying efficiency in credit management.

Operating Cycle

The operating cycle, representing the total duration from inventory acquisition to cash collection, reveals a general rising trend with some periodic fluctuations. It commences at 194 days in December 2020, declines to approximately 158-159 days by early 2021, and then progressively increases to a peak of 262 days by February 2024. After peaking, it declines gradually, settling at 217 days by November 2025. These changes are primarily influenced by the previously noted variations in inventory processing and receivables collection periods, with the extended cycle indicating a longer cash conversion process and potential working capital challenges during certain periods.