NVIDIA Corp. (NASDAQ:NVDA)

Inventory Turnover

Inventory turnover exhibited a general downward trend from 2019 through early 2023, starting around 4.24 and declining to a low near 2.25 in early 2023. Following this decline, there was a gradual recovery through 2024, with turnover ratios returning to levels above 3.5, indicating improved inventory management or increased sales relative to inventory.

Receivables Turnover

Receivables turnover demonstrated volatility over the period. It initially decreased from 6.59 to about 5.4 in 2022 but showed improvement afterward, peaking at 7.05 in late 2022. This was followed by fluctuations, including a notable dip to 4.63 in mid-2023, and eventual recovery to around 6.7 by late 2024. These movements suggest variability in credit management and collection efficiency.

Payables Turnover

Payables turnover ratios showed considerable fluctuations. Early values ranged from around 6 down to just above 5. Mid-2022 experienced a spike with values exceeding 8, peaking near 9.91 in late 2022, before sharply declining again below 6 throughout 2023 and into 2024. This pattern indicates significant changes in the timing of supplier payments, possibly reflecting strategic payment deferral or operational shifts.

Working Capital Turnover

Working capital turnover generally increased throughout the period. Starting below 1.0 in 2019, it steadily rose, surpassing 2.0 in mid-2024. This upward trend indicates more efficient use of working capital to generate revenue, reflecting improved operational efficiency or better balance sheet management.

Average Inventory Processing Period

The average inventory processing period lengthened significantly over time, increasing from around 86 days in early 2020 to a peak of 162 days in early 2023. After this peak, the days in inventory declined to approximately 93 by mid-2024, suggesting efforts to reduce inventory holding times and improve turnover after a period of elongation.

Average Receivable Collection Period

The receivable collection period generally increased from about 55 days in early 2020 to a high near 79 days in mid-2023. Following this increase, collection periods shortened somewhat, declining toward mid-50 days by mid-2024. This variability suggests changing patterns in customer payment behaviors and efforts to accelerate cash inflows.

Operating Cycle

The operating cycle, which combines inventory and receivables periods, lengthened markedly over the years. It grew from approximately 141 days in early 2020 to a peak around 215 days in mid-2023, followed by a moderate decline to around 147 days by mid-2024. This trend reflects the earlier noted increase in inventory processing and receivables collection periods, impacting overall operational efficiency.

Average Payables Payment Period

The payables payment period initially increased from about 60 days in early 2020 to a peak near 75 days in 2022, followed by a substantial reduction to values near 37 days in early 2023. Subsequent periods showed increases again to approximately 70 days. This cycle of lengthening and shortening payment periods suggests strategic adjustments in supplier payment timing affecting cash outflows.

Cash Conversion Cycle

The cash conversion cycle lengthened significantly between 2020 and early 2023, rising from roughly 81 days to a peak near 177 days. After this peak, it declined to around 87 days by mid-2024. This overall pattern indicates that cash tied up in operational cycles increased substantially before being reduced, reflecting shifts in inventory, receivables, and payables management affecting liquidity.

Cost of Revenue

The cost of revenue exhibited a general upward trend from April 2019 through April 2025, beginning at $924 million and reaching as high as $17,394 million. There were periods of moderate growth initially, followed by a notable acceleration starting around mid-2021. Fluctuations were observed in late 2022 and early 2023, with a temporary decline before continuing a sharp increase from mid-2023 onward. The data indicates sustained increases in production or delivery costs over the analyzed timeframe.

Inventories

Inventories showed an increasing trend overall, rising from $1,426 million in April 2019 to $11,333 million by April 2025. Early periods saw steady inventory levels with some fluctuations, but a significant increase is visible starting around mid-2021. Despite occasional decreases, such as in early 2023, the general pattern is of accumulation, suggesting growing stock or work-in-progress assets likely in response to demand or supply chain strategies.

Inventory Turnover Ratio

The inventory turnover ratio demonstrates a declining trend from about 4.24 in January 2020 to a low of 2.25 by January 2023. After this trough, there is a gradual recovery to approximately 3.92 by April 2025. This indicates that for a period, inventory was being cycled less frequently, possibly reflecting slower sales or increased inventory build-up. The subsequent improvement in turnover ratio suggests enhanced efficiency in inventory management or stronger sales performance toward the end of the period.

Overall Insights

Over the examined period, the company experienced substantial growth in both cost of revenue and inventory levels, with notable volatility in inventory turnover. The rising costs and inventory imply scaling operations or increased production capacity. However, the decreasing inventory turnover until early 2023 may highlight challenges in inventory management or demand fluctuations during that phase. The recovery of turnover ratio suggests corrective measures or a rebound in demand were implemented successfully. This combination of rising costs and inventories coupled with variable turnover ratios indicates dynamic operational adjustments and potential shifts in market conditions.

Analyzing the quarterly data reveals several notable trends in revenue, accounts receivable, and receivables turnover ratios over the observed periods.

Revenue

Revenue shows a general upward trajectory from US$2,220 million in April 2019 to a peak of US$39,331 million projected for April 2025. This growth, although consistent, presents periods of varying momentum. For example, from April 2019 to January 2022, revenue increases steadily, reaching US$7,643 million. A temporary decline occurs in the second half of 2022 with revenue reducing to US$5,931 million in October 2022 but bounces back thereafter. The data from May 2023 onwards indicates a sharp acceleration in revenue growth, culminating in very strong projections for 2024 and early 2025, with values more than doubling compared to earlier years.

Accounts Receivable, Net

Accounts receivable generally trend upward over the same period, increasing from US$1,242 million in April 2019 to a projection of US$22,132 million by April 2025. This rise is mostly proportional to revenue increases, although some fluctuations are observed. Notably, receivables peaked at US$7,066 million in May 2023, then continued to increase alongside the sharp revenue growth towards 2024 and 2025. A slight decrease in receivables occurred in April 2023 to US$3,827 million, despite a rise in revenue, potentially suggesting improved collections or changes in credit terms during that interval.

Receivables Turnover Ratio

The receivables turnover ratio exhibits moderate variability, fluctuating mostly between 5.4 and 7.05. Early data is missing, but from October 2019 onward, ratios suggest a relatively stable efficiency in collecting receivables. Between July 2023 and April 2024, turnover ratios display some decline, dipping to levels around 4.63, coinciding with rapid revenue expansion and increased receivables. This could indicate slower collection periods or extended credit terms amid high growth phases. However, turnover ratios rebound in subsequent periods, implying adjustments in collection efficiency.

In summary, the data indicates robust revenue growth accompanied by corresponding increases in accounts receivable, with the efficiency of receivables collection fluctuating but generally stable. Recent periods show accelerated revenue growth accompanied by slight decreases in turnover ratios, which may reflect operational adjustments to manage working capital amid expanding sales.

Cost of Revenue

The cost of revenue exhibits a generally increasing trend over the observed periods, rising from 924 million US dollars in April 2019 to a peak of 17,394 million US dollars in April 2025. Notable within this trend are significant increments during mid-2022 and the subsequent quarters, when costs surged markedly from 2,754 million in October 2022 to 10,609 million in October 2024. This pattern suggests increased operational scale or rising input costs, with some fluctuations such as the decline observed between October 2022 (2,754 million) and April 2023 (2,218 million), indicating possible operational adjustments or seasonal effects.

Accounts Payable

Accounts payable follows an upward trajectory from 368 million in April 2019 to 7,331 million in April 2025. The growth is mostly steady, punctuated by periods of more rapid increases, particularly from mid-2023 onward, aligning with the increasing cost of revenue. There is a decrease noted between May 2022 (2,421 million) and January 2023 (1,491 million), which may indicate payment acceleration or vendor negotiations. Post this decline, payable levels recovered and surged significantly toward 2025, reflecting possibly extended credit terms or increased procurement.

Payables Turnover Ratio

The payables turnover ratio displays variability but remains mostly within the range of approximately 4.86 to 9.91 times. Early data points are missing, however, from January 2020 onward there is an observable moderate decline from about 6.04 to 4.86 by mid-2022, followed by sharp fluctuations that peak at 9.91 in July 2023. The ratio declines again thereafter, settling near 5.17 by April 2025. These fluctuations in payables turnover suggest periods of changing payment velocity to suppliers; a higher ratio indicates faster payment cycles, while a lower ratio could indicate more extended payment terms or slower payments.

Overall Interpretation

The combined trends suggest a company experiencing substantial growth in operational scale and associated costs, particularly accelerating from 2022 forward. The increasing accounts payable alongside rising costs likely reflects expanded purchasing activity. Variability in payables turnover indicates evolving supplier payment practices, possibly influenced by strategic financial management or market conditions. The observed data highlight dynamic operational and financial management in response to growth pressures and market conditions over the analyzed time frame.

The analysis of the quarterly financial data reveals several notable trends and dynamics over the examined periods.

Working Capital

The working capital values exhibit an overall upward trajectory from April 2019 to April 2025. Starting at approximately $9,446 million in April 2019, working capital rose steadily, with some fluctuations, to reach a peak of $63,393 million in April 2025. There are noticeable jumps in certain quarters, particularly from May 2021 onwards, indicating improving liquidity or changes in current asset and liability management.

Revenue

Revenue demonstrates a consistent growth pattern across the periods. Beginning at $2,220 million in April 2019, revenue increased gradually with some quarters showing more pronounced growth, especially from mid-2021 onwards. By April 2025, revenue exceeds $44,000 million, reflecting strong sales expansion. A significant acceleration can be observed starting around May 2021, with revenues approximately doubling by July 2023, and continuing to rise sharply thereafter.

Working Capital Turnover Ratio

The working capital turnover ratio, which measures efficiency in using working capital to generate revenue, shows a positive trend over time. Initial values around 0.92 in early 2020 rise progressively, reaching peaks above 2.3 in early 2025. This indicates increasing effectiveness in managing working capital relative to the revenues generated, suggesting improvements in operational efficiency or asset utilization.

Relationships and Insights

The data suggest that while working capital increased substantially over the periods, revenue growth outpaced working capital growth given the rising turnover ratios. This indicates enhanced efficiency in the use of current assets and liabilities to support higher sales volumes. The upward trend in both revenue and working capital turnover ratio is a strong indicator of improving operational performance and scalability.

Fluctuations and Notable Periods

Some periods show declines or slower growth in revenue, such as around July and October 2022; however, these appear temporary as growth resumes subsequently. Working capital also shows periods of contraction, but the overall long-term movement remains upward. These short-term variations may reflect market conditions or strategic adjustments.

In summary, the financial data point to a consistent and robust expansion in revenue accompanied by enhanced working capital management, which together underscore an improving business operational environment over the examined time frame.

Inventory Turnover

The inventory turnover ratio shows a general downward trend from the earliest available data in April 2020 through a low point around January 2023. Starting at 4.24 in April 2020, the ratio gradually decreased to a minimum of 2.25 in October 2022. After this low, a recovery is observed with the ratio increasing back up to 3.92 by April 2025. This pattern suggests a period of declining efficiency in inventory management followed by a gradual improvement.

Average Inventory Processing Period

The average inventory processing period exhibits an inverse trend relative to the inventory turnover ratio, as expected. It increased steadily from 86 days in April 2020 to a peak of 162 days in January 2023, indicating that inventory was held longer over this interval. Following this peak, the period began to decline, falling to 93 days by April 2025. This reduction signals improving inventory turnover efficiency in the latter periods.

Overall Analysis

The inverse relationship between inventory turnover and the average inventory processing period is consistent and evident throughout the periods analyzed. The initial rising inventory days combined with falling turnover ratio may reflect operational challenges, supply chain delays, or demand fluctuations affecting inventory management negatively. The subsequent improvement from early 2023 onward suggests a positive response, possibly through optimized inventory controls or better alignment of supply and demand.

Receivables Turnover Ratio

The receivables turnover ratio data starts from April 2020, initially at 6.59. The ratio then shows a gradual decline until around April 2023, hitting a low of approximately 4.63. After this low point, the ratio increases again, reaching between 6.0 and 7.0 by April 2025, indicating a partial recovery. Overall, the ratio exhibits a fluctuating trend with a notable dip followed by a rebound over the observed period.

Average Receivable Collection Period

The average collection period, representing the number of days, begins at 55 days in April 2020 and generally trends upward over time, peaking around 79 days in October 2023. This suggests a lengthening of receivable collection periods, implying slower collections during that interval. Post-peak, there is a noticeable improvement as the collection period declines to about 54 days by April 2025. Thus, the data reflects a deterioration in collection efficiency followed by a recovery toward more favorable collection times.

Relationship Between Metrics

As expected, the trends in the receivables turnover ratio and the average collection period are inversely related. When the turnover ratio decreased, the collection period increased, indicating slower payments by customers. Conversely, when the turnover ratio improved, the collection period shortened, reflecting faster collections. This correlation is consistent throughout the observed period.

Implications

The initial increase in the average collection period and corresponding decline in turnover ratio could point to challenges in receivables management or external factors affecting customer payment behavior during that period. The subsequent recovery suggests effective corrective measures or improvements in the collection process. Monitoring these metrics continuously is essential for managing working capital efficiently.

Average inventory processing period

The average inventory processing period exhibits a general upward trend from April 2020 through January 2024, starting at 86 days and peaking at 162 days in January 2023. This indicates that the time taken to process inventory increased notably during this timeframe. Following this peak, there is a gradual decline, with the period reducing to 93 days by July 2024, suggesting improved inventory turnover or management in the most recent quarters.

Average receivable collection period

The receivable collection period fluctuates across the periods observed, ranging between 52 and 79 days. It shows moderate variability with no clear sustained upward or downward trend over the entire timeframe. A peak of 79 days occurs in October 2023, indicating a temporary extension in the time taken to collect receivables, but this subsequently decreases to 54 days by July 2024, reflecting potentially more efficient receivables management recently.

Operating cycle

The operating cycle mirrors the trend seen in inventory processing, increasing from 141 days in April 2020 to a high of 215 days in October 2023, implying an overall lengthening of the combined inventory and receivables period. This suggests that the company’s cash conversion cycle was extended during this period. Subsequently, the operating cycle declines to 147 days in July 2024, indicating improvement in the speed of converting resources into cash flows.

Payables Turnover Ratio

The payables turnover ratio data begins from April 2020 and extends through April 2025. Initially, the ratio shows a gradual decline from 6.04 in April 2020 to 5.03 in January 2021, indicating that the company was taking longer to pay its suppliers during this period. After January 2021, the ratio fluctuates moderately between approximately 5.13 and 5.94 until April 2022, suggesting relatively stable payment practices. From May 2022 onwards, there is a sharp increase in the ratio, peaking at 9.91 in October 2022. This rise implies a significant acceleration in paying suppliers during that timeframe. However, subsequent quarters reveal a substantial decrease back into the 5.99 to 5.11 range by the end of 2024, demonstrating a return to earlier payment patterns. The overall pattern shows periods of both slower and faster payables turnover, with a notable spike during the mid-2022 to late-2022 period.

Average Payables Payment Period (Number of Days)

Corresponding changes in the average payables payment period align inversely with the payables turnover ratio trends. Starting from April 2020, the payment period increases from 60 days to a peak of 75 days by July 2022, indicating the company was taking more time to settle its payables. This prolonged payment period abruptly declines sharply to 37 days in both October 2022 and January 2023, reflecting much faster payments to suppliers, consistent with the earlier observed spike in payables turnover ratio. After this rapid payment interval, the payment period lengthens again to around 60–71 days through the subsequent quarters until April 2025. The fluctuations suggest dynamic changes in the company’s cash management or supplier payment strategies, alternating between extending and shortening the payment duration over the analyzed period.

Overall Observations

There is a clear inverse relationship between the payables turnover ratio and the average payables payment period, which is expected given these metrics measure the frequency and timing of payments to suppliers. Periods of elevated payables turnover coincide with shorter payment periods, and vice versa. The most notable period occurred around mid-2022 to early 2023, when the company drastically reduced the average payment period while increasing turnover ratio sharply, potentially reflecting changes in operational liquidity goals, supplier negotiations, or external financial pressures. Outside of this period, the trends tend to show a more moderate and stable payment behavior. This variability underscores a flexible approach to managing payables, possibly influenced by broader business cycles or strategic cash flow management considerations.

Inventory Processing Period

The average inventory processing period displays a clear increasing trend from the earliest available data, moving from 86 days to a peak of 162 days. After this peak, the period gradually declines to 93 days by the latest quarter. This pattern suggests a phase of lengthening inventory turnover time followed by improved efficiency in managing inventory.

Receivable Collection Period

The receivable collection period shows fluctuations throughout the timeline. Starting around 55 days, it rises to a high of 79 days, then declines again toward the mid-50s by the end of the observed period. The variability indicates inconsistent collection efficiency, with a notable peak indicating slower receivable turnover at one point.

Payables Payment Period

The payables payment period generally trends upward initially, reaching a peak around 75 days, followed by a significant drop to as low as 37 days. This is succeeded by moderate fluctuations before stabilizing in the 50 to 70 day range. The early extension suggests the company delayed payments longer in some periods, improving cash retention, but later shortened payment terms considerably, potentially to maintain supplier relations or reduce liabilities.

Cash Conversion Cycle

The cash conversion cycle exhibits a pronounced increase from roughly 81 days to a maximum of 177 days, indicating a longer duration to convert investment in inventory and receivables back into cash. Subsequently, this cycle decreases significantly to around 87 days by the final quarters. The initial rise points to elongation in working capital cycle, which later improves, signaling enhanced operational efficiency and cash flow management.