NVIDIA Corp. (NASDAQ:NVDA)

The analysis of the quarterly financial metrics reveals several notable trends in operational efficiency and liquidity management over the examined periods.

Inventory Turnover

The inventory turnover ratio exhibited a gradual decline from 3.81 in April 2020 to a low of 2.25 by January 2023, indicating slower inventory movement. However, a recovery trend is observed following this period, with the ratio rising back above 3.3 by July 2025. This pattern suggests initial challenges in inventory management, followed by improved operational efficiency in later periods.

Receivables Turnover

The receivables turnover ratio shows fluctuations throughout the timeframe, with values mainly ranging between approximately 5.43 and 7.05. A peak is seen around January 2023 (7.05), indicating faster collection of receivables during that quarter, while some dips occur particularly around July 2023 (4.63), suggesting temporarily slower collections. Overall, the turnover ratio does not indicate a consistent trend, reflecting variability in credit policies or customer payment behaviors.

Payables Turnover

This ratio demonstrated a relatively stable range between 4.86 and 5.94 until October 2022, after which a sudden increase to above 9.7 is noted in subsequent quarters, indicating a significantly faster pace in paying suppliers. However, after peaking, the payables turnover retraced to values closer to the earlier range by mid-2025. Such volatility may indicate shifts in supplier payment terms or strategic payment scheduling.

Working Capital Turnover

The working capital turnover ratio depicts an overall improving trend, starting from 0.67 in April 2020 and advancing to above 2.1 by July 2025. This steady increase suggests enhanced utilization of working capital to generate sales, implying improved efficiency in managing current assets and liabilities over time.

Average Inventory Processing Period

The average days inventory is held increased notably from 96 days in April 2020 to a peak of 162 days by January 2023, which aligns with the declining inventory turnover ratio. Following this peak, the duration decreased gradually to 110 days by July 2025, showing improved inventory management and faster turnover in recent periods.

Average Receivable Collection Period

The average collection period fluctuated moderately, with lows around 52 days (January 2023) and highs near 79 days (July 2023). These variations indicate intermittent changes in the speed of receivable collections, possibly due to changes in credit policies or external economic factors impacting customer payment behavior.

Operating Cycle

The operating cycle, reflecting the total days needed to convert inventory and receivables into cash, rose from approximately 155 days in April 2020 to a peak of 215 days in July 2023. Subsequently, it declined to around 147 days by July 2025. This trend is consistent with the earlier observations about inventory processing and receivable collection, indicating periods of slower cash conversion followed by improvement.

Average Payables Payment Period

The average days taken to pay suppliers initially hovered between 61 and 75 days but sharply decreased to around 37 days in October 2022 and January 2023, indicating quicker payment to suppliers during this period. This shortened payment period reverted back to a range between 50 and 71 days afterward, suggesting a return to more extended payables management.

Cash Conversion Cycle

The cash conversion cycle showed a general upward trend from 90 days in April 2020 to a peak of 177 days in January 2023, highlighting increased delays in converting investments in inventory and receivables back to cash. The cycle then improved considerably, dropping to levels near 87 days by July 2025, which indicates enhanced operational efficiency and improved liquidity management in the most recent periods.

In summary, the data reflects a period of operational challenges marked by slower inventory turnover, extended receivable collection, and longer cash conversion cycles around 2022 and early 2023. These were followed by a phase of recovery and efficiency improvements toward mid-2024 and beyond, with working capital turnover improving and cash conversion cycles shortening, indicating strengthened liquidity and asset management practices.

Cost of Revenue

The cost of revenue exhibited a generally upward trend from April 2020 through July 2025, starting at approximately $1.08 billion and reaching a peak of around $17.39 billion in July 2025. However, the data shows some volatility with occasional quarters where the cost declined, such as a decrease from $8.93 billion in October 2024 to $10.61 billion in April 2025, before sharply increasing again. Notably, there was a significant increase observed between May 2022 and October 2023, reflecting rapidly growing expenses associated with revenue generation during that period.

Inventories

Inventories steadily increased over the entire period, starting at roughly $1.13 billion in April 2020 and climbing consistently to reach nearly $15 billion by July 2025. This indicates substantial buildup of inventory levels, particularly marked by accelerated growth after mid-2023. Inventory accumulation appears to have outpaced earlier periods, suggesting higher stock holdings possibly due to increased production or supply chain strategies to meet anticipated demand.

Inventory Turnover

Inventory turnover ratio displayed a generally declining trend from April 2020 through January 2023, falling from about 3.81 to a low of 2.25. This decrease suggests that inventory was being sold more slowly during this interval. From early 2023 onward, the ratio reversed its trend, gradually improving and reaching approximately 3.92 by July 2025. This recovery indicates greater efficiency in inventory management and faster sales relative to inventory levels in recent periods, potentially signaling improved demand or operational enhancements.

The revenue of the company exhibits a generally strong upward trend over the observed periods. Beginning at approximately 3,080 million USD, revenue steadily increases with occasional fluctuations, reaching a peak exceeding 46,000 million USD by the latest quarter. Notable acceleration in revenue growth is observed starting around mid-2023, with several quarters reflecting substantial jumps, indicating either an expansion in sales volume, pricing, or market demand.

Accounts receivable, net, similarly shows a rising trend consistent with increasing revenue, moving from about 1,907 million USD to over 27,800 million USD by the end of the timeline. The rise in receivables is substantial and suggests that sales on credit have expanded alongside revenue growth. However, the growth rate in accounts receivable appears to accelerate more sharply in the later periods, pointing to either longer credit terms extended to customers or potential collection challenges as the balance grows faster than earlier.

Receivables turnover ratio fluctuates throughout the periods, generally staying within a range of about 4.63 to 7.05 times per year. Early values hover close to 6, indicating moderate efficiency in collecting receivables. A notable dip to 4.63 occurs around mid-2023, which correlates with the period of rapid revenue and receivables growth, suggesting a temporary slowdown in collection efficiency. Subsequent recovery to levels above 6 in the following quarters signifies improvement in collection processes or adjustments in credit management.

Revenue Trend

Consistent and accelerating growth over the period, with a marked increase in magnitude starting mid-2023.

Accounts Receivable, Net

Increasing in line with revenue but with sharper growth later, indicating amplified credit sales and potential risk in collection.

Receivables Turnover Ratio

Fluctuates moderately, with a decrease during periods of rapid business expansion, followed by improvements, reflecting changes in collection effectiveness.

Overall, the financial data indicates robust business expansion as reflected in revenue growth. The parallel rise in accounts receivable and variations in turnover ratio emphasize the need for ongoing assessment of credit policies and collection efficiency to maintain liquidity and minimize credit risk.

The analysis of the quarterly financial data reveals several notable trends and patterns related to the cost of revenue, accounts payable, and payables turnover ratios over the observed periods.

Cost of Revenue

The cost of revenue demonstrates a generally increasing trend from the beginning of the period through to recent quarters, with some fluctuations. Starting at approximately $1,076 million, it rises steadily to reach peaks beyond $17,000 million before showing some declines in the most recent quarters. The upward trajectory reflects expansion or increased production costs, possibly driven by higher sales volumes or inflationary effects on input costs. The sharpest spikes occur around the middle and later parts of the timeline, indicating periods of accelerated growth or increased activity.

Accounts Payable

Accounts payable follow a broadly increasing pattern with some volatility. The figures increase from around $761 million initially to over $9,000 million at the later stage, demonstrating that the company has been accruing larger amounts of obligations to suppliers or vendors over time. This growth parallels the rise in cost of revenue, which is consistent with increased operational scale. There are intermittent periods where accounts payable decrease or stabilize slightly, which could be related to payment cycle adjustments or strategic management of supplier credit.

Payables Turnover Ratio

The payables turnover ratio exhibits variability but remains mostly within a range of approximately 4.8 to 9.9 over the quarters. Early in the data, the ratio tends to be slightly above 5, indicating a moderate frequency of paying off suppliers. Midway through the timeline, the ratio spikes significantly, reaching close to 10, which suggests faster payments or shorter credit terms during those periods. Following these peaks, the ratio generally trends downward again, indicating a return to a longer payment cycle or slower turnover of payables. The fluctuations in this ratio may reflect changes in working capital management policies or responses to external financial conditions.

Overall, the data indicates that while the company’s operational scale and associated costs have increased substantially, the management of payables has varied, with periods of aggressive payment behavior contrasted by intervals of slower turnover. These patterns provide insights into both the operational growth dynamics and financial management strategies employed throughout the observed timeframe.

The financial data indicates significant developments in working capital, revenue, and their relationship over multiple quarters.

Working Capital

Working capital exhibits an overall upward trend across the periods analyzed. Beginning around 17.7 billion USD, it experienced fluctuations in the initial quarters, including a decline to approximately 10.7 billion USD. From early 2021 onwards, working capital showed sustained growth, accelerating markedly from early 2023, rising from about 16.5 billion USD to nearly 78.0 billion USD by mid-2025. This sharp increase suggests enhanced liquid asset availability or improved management of current liabilities over time.

Revenue

Revenue consistently increased throughout the examined timeline, starting at roughly 3.1 billion USD and culminating near 46.7 billion USD. Notable growth periods include mid-2023 onward, where revenue surged sharply, more than doubling from approximately 7.2 billion USD in early 2023 to over 46.7 billion USD by mid-2025. The revenue trajectory reflects strong business expansion or increased market demand.

Working Capital Turnover

The working capital turnover ratio, defined as revenue divided by working capital, displays a pattern of improvement over time, indicating progressively efficient utilization of working capital to generate sales. The ratio increased from below 1.0 initially (0.67 at the start) to values exceeding 2.0 in the most recent quarters. Although some minor dips occurred, the upward trend predominantly shows better operational efficiency relative to available working capital.

Summary of Relationships and Insights

Despite the increasing working capital, revenue growth outpaces it consistently, which is reflected in the improvement of the working capital turnover ratio. This implies that the company is leveraging its working capital more effectively to support expanding revenue. The marked acceleration in both working capital and revenue starting around early 2023 may be indicative of strategic initiatives, investment influx, or expansion into new markets contributing to enhanced financial performance.

Inventory Turnover Ratio

The inventory turnover ratio demonstrates moderate fluctuations over the observed periods. Initially, it starts relatively strong around 3.81 in April 2020, followed by a slight decline and stabilization between 3.44 to 3.87 through early 2022. Beginning mid-2022, there is a notable dip reaching a low of 2.25, indicating slower inventory turnover. However, from early 2023 onward, an increasing trend emerges with intermittent rises and dips, peaking again at 3.92 before falling to 3.33 by mid-2025. This suggests variability in inventory management efficiency but a general recovery trend toward improved turnover.

Average Inventory Processing Period (Days)

Inversely related to the turnover ratio, the average inventory processing period shows an increasing trend up to early 2023, rising from 96 days in April 2020 to a peak of 162 days. This indicates a lengthening of the time inventory is held, consistent with the lower inventory turnover observed. Post-peak, the number of days gradually decreases to around 93 days by mid-2025, reflecting improved inventory processing speed. Despite some minor fluctuations, the overall trend points toward a recovery in inventory management efficiency after a period of slower turnover.

Overall Insights

The trends in inventory turnover and processing period collectively indicate an initial period of relatively efficient inventory management, followed by a phase of deceleration during 2022 to early 2023. This deceleration is characterized by slower inventory turnover and an increasing duration of holding inventory. The subsequent period shows a reversal to more efficient inventory handling, with turnover ratios increasing and processing periods decreasing. This cyclical behavior may be influenced by external factors affecting supply chain or demand, but recent trends suggest a positive trajectory in inventory management effectiveness.

Receivables Turnover

The receivables turnover ratio exhibits moderate fluctuations over the observed quarters. Initially, it remains within a range of approximately 5.8 to 6.9, indicating relatively consistent efficiency in collecting receivables during the early periods. A notable peak occurs around January 2023, where the ratio attains a value of 7.05, suggesting an improved collection efficiency at that time. However, in subsequent quarters, the ratio declines, reaching a low in July 2023 at 4.63, the lowest point in the dataset, indicating a temporary slowdown in receivables collection. Thereafter, turnover recovers somewhat, oscillating closer to mid-range values around 6.0 to 6.8, though it again dips in July 2025 to 5.94. Overall, the trend points to periods of both strengthening and weakening in receivables efficiency, without a clear sustained upward or downward trajectory.

Average Receivable Collection Period

The average receivable collection period shows an inverse relationship to the receivables turnover trend, as expected. Early periods exhibit collection durations generally between 53 to 67 days. A significant improvement in collection efficiency is observed around January 2023 when the average days drop to 52, indicating faster collection. This is followed by a sharp increase to 79 days in July 2023, which corresponds to the lowest turnover ratio documented. This increase indicates a slower collection process during that quarter. After this peak, days to collect receivables again decline towards the mid-50s range, with minor fluctuations across subsequent quarters. These shifts highlight volatility in the collection process, with intermittent challenges extending the period needed to collect receivables, balanced by intervals of more expedited collections.

The analysis of the quarterly data reveals dynamic changes in the company's working capital management over the observed periods, as indicated by key operational metrics: the average inventory processing period, the average receivable collection period, and the overall operating cycle.

Average Inventory Processing Period

The average inventory processing period exhibits significant variability, initially starting at 96 days and rising to a peak of 162 days in January 2023. This indicates a lengthening in the time inventory remains on hand before being sold or processed, suggesting potential slowdowns in inventory turnover during this peak.

Following the peak, there is a gradual reduction in inventory processing time, falling to 93 days by July 2025, which may reflect improvements in inventory management or faster product turnover. Despite some fluctuations, the general trend from early 2023 through mid-2025 points to enhanced efficiency in handling inventory.

Average Receivable Collection Period

The average receivable collection period shows fluctuations with periods of increase and decrease over time. Early observations range from 59 to 63 days; however, a notable increase occurs around July 2023, reaching a high of 79 days, indicating a slower collection of receivables during that interval.

This peak is followed by a declining trend, with collection periods falling back to 54 days by July 2025, indicating improved efficiency in collecting receivables and potentially stronger cash flow management in the later periods.

Operating Cycle

The operating cycle, which combines inventory and receivable periods, follows a general upward trend from 155 days up to a high of 214 days around January 2023. This expansion points to a lengthening of the overall time span from inventory acquisition to cash collection, potentially impacting liquidity.

Post-peak, the operating cycle shortens steadily, dropping to 147 days by July 2025, suggesting enhanced operational efficiency, quicker cash conversion, or better synchronization of inventory and receivables turnover in recent periods.

Overall, the data indicates that the company experienced increasing durations in inventory holding and receivable collection up to early 2023, leading to a longer operating cycle and potentially tighter working capital conditions. Subsequent improvements in these metrics suggest a strategic focus on optimizing inventory management and receivables collection, resulting in a more efficient operating cycle and potentially improved liquidity management in the latest periods.

The analysis of the payables turnover ratio and the average payables payment period reveals notable fluctuations and trends over the observed quarters.

Payables Turnover Ratio

The payables turnover ratio initially showed a moderate decline from 5.65 in April 2020 to around 5.03 by October 2020, indicating a slower rate of paying off suppliers. Subsequently, the ratio recovered somewhat, fluctuating around the 5.1 to 5.9 range through May 2022. A sharp increase occurred in October 2022 and January 2023, with the ratio rising significantly to 8.08 and then peaking at 9.91, which indicates faster payment to suppliers during this period. Afterward, the ratio decreased and stabilized in the 5.5 to 7.3 range through mid-2025, showing moderately quicker payments compared to the early 2020 levels.

Average Payables Payment Period

The average payables payment period (the number of days taken to pay suppliers) exhibited an inverse pattern relative to the turnover ratio. It started at 65 days in April 2020, increased to 72-75 days by mid-2022, suggesting slower payments. Then, a sharp reduction occurred during late 2022 and early 2023, with the period dropping to a low of 37 days, indicating significantly faster supplier payments. After this trough, the payment period lengthened again, fluctuating between 50 and 71 days through July 2025, denoting a return towards longer payment cycles, though still somewhat shorter than the peak periods before late 2022.

Overall, the data suggests a period of progressively slower payments to suppliers from early 2020 until mid-2022, followed by a phase in late 2022 and early 2023 with markedly faster payments. Subsequent quarters show a normalization with moderate payment speed, balancing between the extremes observed earlier. The sharp changes occurring around late 2022 may reflect strategic shifts in working capital management or responses to external financial conditions impacting payment practices.

Inventory Processing Period

The average inventory processing period exhibited fluctuations throughout the observed quarters. Initially, it was 96 days, increasing to a peak of 162 days around early 2023, indicating a longer duration to process inventory. Subsequently, a downward trend is noted, with the period decreasing to 93 days by mid-2025, suggesting improvements in inventory turnover.

Receivable Collection Period

The average receivable collection period showed moderate variability. Starting near 59 days, it experienced both increases and decreases, peaking at 79 days in mid-2023 before declining towards 54 days by mid-2025. This pattern suggests some challenges in collecting receivables timely around 2023, followed by an improvement in collection efficiency later.

Payables Payment Period

The payables payment period varied notably, with a general range between 37 and 75 days. A significant dip occurred in late 2022 and early 2023, with the period dropping to as low as 37 days, indicating faster payments to suppliers. Afterwards, the period increased again, stabilizing near 60-70 days in the subsequent quarters, reflecting a return to a more extended payment cycle.

Cash Conversion Cycle

The cash conversion cycle followed a pattern closely linked to the other periods. It started around 90 days, rose to a maximum of 177 days in early 2023, reflecting considerable cash tied up in operations, then showed improvement by gradually decreasing to approximately 87 days by mid-2025. This indicates enhanced operational efficiency and cash flow management over time after a peak period of elongation.

Overall Trends and Insights

The data indicates a period of operational stress or inefficiency around early 2023, marked by extended inventory processing, longer receivable collection, and a notably longer cash conversion cycle. Payment to payables temporarily accelerated during this time, possibly as an effort to maintain supplier relationships. Following this phase, improvements are evident across all key cycle metrics, suggesting successful initiatives to optimize working capital and enhance liquidity management.