NVIDIA Corp. (NASDAQ:NVDA)

The analysis of the quarterly financial ratios reveals significant fluctuations and distinct trends across different components of the company's operational efficiency.

Inventory Turnover

The inventory turnover ratio shows a general decline from around 3.8 times in early 2020 to a low of about 2.25 in early 2023, indicating a slowing rate of inventory movement. Following this trough, a gradual recovery occurs, reaching around 3.57 by late 2024, before a slight dip occurs. This pattern suggests periods of inventory buildup and subsequent improvement in stock management efficiency.

Receivables Turnover

The receivables turnover ratio experiences moderate variability, fluctuating mostly between 5.5 and 7.0, with a notable peak above 7.0 in early 2023. This indicates that the company generally maintains a consistent ability to collect receivables, with occasional improvements in collection speed.

Payables Turnover

Payables turnover exhibits a volatile pattern, with values ranging from about 4.9 to nearly 10 times, the latter observed around late 2022 to early 2023. This implies a shift toward faster payment to suppliers during this peak period. Subsequently, the ratio decreases and stabilizes somewhat, indicating adjustments in payment policies or supplier terms.

Working Capital Turnover

This ratio generally trends upwards from below 1.0 to over 2.3 across the observed periods, suggesting an improving efficiency in using working capital to generate sales. However, some fluctuations indicate varying operational dynamics or changes in asset and liability management.

Average Inventory Processing Period

Mirroring the inventory turnover trend, the average inventory period extends from around 96 days in early 2020 up to a peak of 162 days in early 2023. Following this, it reduces gradually, indicating initial inventory holding challenges that improve over time.

Average Receivable Collection Period

The collection period mostly remains between approximately 50 and 70 days, with an evident spike to close to 80 days during mid-2023. This suggests occasional delays in receivables collection impacting cash inflows temporarily.

Operating Cycle

The operating cycle extends from roughly 155 days to over 210 days, peaking around early 2023. The elongation reflects combined increases in inventory holding and receivables collection times, potentially exerting pressure on cash flows.

Average Payables Payment Period

The payment period generally ranges from 37 to 75 days, with a notable decrease to around 37 days around early 2023, followed by an increase and then variable adjustments. Shortened payment terms during this period could hint at strategic supplier payments or improved cash availability.

Cash Conversion Cycle

The cash conversion cycle shows an overall increasing trend from 90 days to as high as 177 days in early 2023, indicating longer cash tied up in the operating cycle. While the cycle shortens somewhat afterward, it remains elevated relative to early periods, highlighting ongoing cash management challenges.

In summary, the financial data reflects a period of rising operational cycle lengths and cash conversion challenges peaking in early 2023, followed by gradual improvements in inventory management, receivables collection, and working capital utilization. Despite recovery signs, the company appears to still face volatility in payables turnover and cash cycle metrics, suggesting caution in short-term liquidity and operational efficiency management.

Cost of Revenue

The cost of revenue shows a general upward trend over the observed periods, increasing from 1,076 million USD in April 2020 to a peak above 17,000 million USD in mid-2025. This trend, despite some fluctuations, indicates a growing scale of operations or increased production costs. Notably, the cost exhibits significant spikes around late 2024 and mid-2025, suggesting either increased sales volume or rising input costs during these quarters.

Inventories

Inventories have also steadily increased from 1,128 million USD in April 2020 to nearly 20,000 million USD by late 2025. The growth in inventory levels is consistent and pronounced, pointing toward either stockpiling of goods in anticipation of higher demand or challenges in inventory turnover. Inventory growth appears to be outpacing cost of revenue growth in several quarters, especially toward the end of the data timeline.

Inventory Turnover Ratio

The inventory turnover ratio generally reflects the efficiency of inventory management and the rate at which inventory is sold and replaced. It begins at 3.81 in early 2020, declines steadily with some variability to as low as 2.25 in early 2023, indicating slower rotation of inventory, and then recovers somewhat to 3.92 in mid-2025 before declining again. This pattern suggests intermittent challenges in inventory management or sales velocity, with periods where inventory accumulates faster than it is sold, impacting overall efficiency negatively.

Summary

The data indicates a marked increase in both cost of revenue and inventories over the period, which reflects business expansion or increased operational scale. However, the decreasing trend in inventory turnover during several periods implies some inefficiencies or slower movement of inventory, which may compress margins if sustained. The fluctuations in turnover ratio highlight potential periods of excess inventory or demand variability. Monitoring and managing inventory levels in alignment with sales trends will be crucial to maintain operational efficiency going forward.

Revenue Trends

Revenue has exhibited a strong upward trajectory over the periods analyzed. Starting at $3,080 million, it rose steadily to reach significant peaks in recent quarters, with the highest values recorded in the last four quarters, culminating in $57,006 million in October 2025. Notable acceleration in revenue growth is observed beginning in mid-2023, with a marked jump from $7,192 million in April 2023 to $13,507 million by July 2023, followed by consecutive quarterly increases. This suggests rapid expansion or increased sales possibly driven by market demand or product performance.

Accounts Receivable, Net Trends

Accounts receivable, net, shows an overall increasing trend in line with revenue growth. Beginning at $1,907 million, the figures generally climb throughout the periods, reaching $33,391 million by October 2025. The receivables growth appears consistent and reflective of increased sales volumes. However, some fluctuations are evident; for example, in early 2023 receivables decreased from $4,908 million in October 2022 to $3,827 million in January 2023 before rising sharply again. The sharp increase in later quarters correlates with the spike in revenue, indicating expanding credit sales or delayed collections relative to sales growth.

Receivables Turnover Ratio Trends

The receivables turnover ratio demonstrates some variability over time, oscillating mostly between approximately 5.4 and 6.8. Early periods display moderate stability, with values near 6.1, but more recent quarters, especially from mid-2023 onwards, show fluctuations including a notable dip to 4.63 in July 2023, coinciding with rapid increases in accounts receivable. Subsequent quarters recover, reaching values above 6.0. Despite the fluctuations, turnover ratios remain within a reasonable range, suggesting that while the company has extended credit in line with increased sales, it maintains a relatively consistent collection efficiency overall.

Summary Insights

The financial data indicates robust revenue growth accompanied by an expanding accounts receivable balance, which reflects increased sales on credit. Although the receivables turnover ratio fluctuates, it remains relatively stable, implying the company is managing its credit and collections effectively despite significant scale increases. Sharp revenue surges and corresponding accounts receivable growth in the most recent quarters could warrant monitoring for potential collection risks, although historical turnover ratios suggest ongoing operational efficiency in receivables management.

Cost of Revenue

The cost of revenue exhibited an overall increasing trend from April 2020 through October 2025, rising from 1,076 million USD to a projected 15,157 million USD. Periods of accelerated growth are observable, notably between July 2022 and October 2023, where costs surged significantly from 2,754 million USD to 4,720 million USD. Another notable increase occurred from January 2024 to October 2025, where costs rose sharply from 5,312 million USD to a peak of 17,394 million USD, followed by a decline to 12,890 million USD before increasing again to 15,157 million USD. These fluctuations suggest variability in production or procurement expenses, potentially influenced by market conditions or operational scaling.

Accounts Payable

Accounts payable values increased steadily across the period under review, starting at 761 million USD in April 2020 and reaching a high of 9,064 million USD in October 2025, before a slight decrease to 8,624 million USD. The pattern shows consistent growth, signaling increasing short-term liabilities to suppliers or creditors, which aligns with the rise in cost of revenue. The upward trajectory suggests expanding purchasing or delayed payments, reflecting possibly strategic credit terms or increased operational scale.

Payables Turnover Ratio

This ratio, which measures how many times payables are paid within a period, showed variability without a clear linear trend. Starting at 5.65 in April 2020, it generally hovered between approximately 5.0 and 7.3, with some outliers reaching as high as 9.91 in April 2023 and 8.08 in October 2022. Spikes in the ratio indicate periods when payables were settled more rapidly, suggesting temporary improvements in liquidity or changes in payment policies. Conversely, lower values around 4.86 to 5.13 in 2022 imply slower turnover, indicating longer payment cycles or possible cash flow management strategies.

Overall Insights

The financial data reveals a company experiencing rapid growth in cost of revenue and accounts payable, likely driven by increased business volume or rising input costs. Despite fluctuations, payables turnover remains relatively stable, with intermittent peaks pointing to fluctuating payment timings. The pattern suggests active management of supplier credit and cash flows amid expanding operations. Such trends are important for monitoring working capital health and operational efficiency over time.

Working Capital

The working capital exhibits an overall increasing trend throughout the periods analyzed. Starting from approximately 17.7 billion USD, it experienced fluctuations in the initial quarters, dipping to a low near 10.7 billion USD before entering a phase of steady growth. From the fiscal year beginning around early 2023, the working capital increased more sharply, reaching upwards of 90 billion USD by the last quarter in the dataset. This suggests growing net short-term assets available to cover current liabilities, potentially reflecting either increased current assets or controlled liabilities.

Revenue

Revenue demonstrates consistent expansion over the analyzed timeframe. Initially, it rose steadily from roughly 3.1 billion USD to peaks exceeding 8 billion USD by mid-2022. After a minor decline in late 2022, it rebounded strongly and accelerated significantly from early 2023 onward, reaching over 57 billion USD by the latest period. This considerable increase indicates rapid growth in sales or services rendered, pointing to strong demand or successful market penetration.

Working Capital Turnover

The working capital turnover ratio shows variability but outlines a notable improving trend overall. Initially, the ratio was below 1, suggesting relatively low efficiency in utilizing net working capital to generate revenue. After some oscillations, the ratio generally improved, surpassing 2 in the later quarters. This upward movement indicates enhanced efficiency in converting working capital into revenue, implying better management of short-term assets and liabilities relative to sales growth.

Summary

The data reveals a company experiencing robust financial growth, with increasing revenue accompanied by expansion in working capital levels. The working capital turnover improvement suggests that growth is supported by efficient asset utilization rather than merely accumulating current assets. Together, these trends imply strong operational performance and potentially effective working capital management practices over the fiscal periods presented.

The analysis of the quarterly inventory management metrics reveals distinct trends in inventory turnover and average inventory processing period over the observed periods.

Inventory Turnover

The inventory turnover ratio generally fluctuates within a moderate range. Starting at 3.81, the ratio shows a declining tendency through 2020 and into early 2023, reaching a low of 2.25 in the quarter ending January 29, 2023. This decline indicates a slowdown in the efficiency with which inventory is sold and replaced during this timeframe.

Following this low point, an improvement is observed through mid to late 2024, with the ratio rising back to values around 3.57, suggesting a recovery in inventory movement efficiency. However, towards the latest periods recorded, the turnover ratio decreases again to approximately 2.83 by the quarter ending October 26, 2025.

Average Inventory Processing Period

The average inventory processing period, expressed in days, exhibits an inverse relationship with the inventory turnover ratio. It begins at 96 days, progressively increasing to a peak of 162 days in the quarter ending January 29, 2023. This increase indicates that inventory remains in stock for a longer period before being sold, reflecting reduced turnover efficiency.

After this peak, the period shortens steadily to 102 days around October 27, 2024, corresponding with the earlier noted recovery in inventory turnover. Nonetheless, in the final quarters reported, the processing period lengthens again, reaching 129 days by the quarter ending October 26, 2025.

The cyclical pattern observed suggests periods of constrained inventory movement followed by phases of operational improvement. The fluctuations in these two metrics could result from various factors including changes in demand, supply chain dynamics, or inventory management practices. Monitoring these ratios is essential for understanding working capital efficiency and identifying potential operational adjustments to optimize inventory levels and turnover rates in future periods.

Receivables Turnover Ratio

The receivables turnover ratio exhibits moderate fluctuations over the analyzed periods. Initially, it ranged around 6.18 to 6.86, with a modest dip occurring between mid-2021 and mid-2022, where values declined towards 5.43 to 5.82.

A notable peak was recorded at 7.05 during early 2023, indicating an efficient collection period during that quarter. However, this was followed by a decline to around 4.63 in mid-2023, signaling slower receivables turnover.

Subsequent quarters show a recovery trend, with turnover ratios generally rising to between 5.6 and 6.81. Despite periodic volatility, the turnover ratio tended to stabilize above 5.5 across the later periods.

Average Receivable Collection Period (Days)

The average receivable collection period inversely mirrors the trends observed in the receivables turnover ratio, varying between approximately 52 to 79 days.

During the initial quarters, the collection period hovered around 57 to 63 days, indicating consistent credit management. The longest durations were seen in mid-2023 (up to 79 days), which aligns with the lowest turnover ratio, implying delayed collections.

Following this peak, the collection period displayed signs of improvement, decreasing to mid-50s in several quarters, matching the recovery in receivables turnover.

Despite some oscillations, the collection period remained generally within the 50 to 65 days range, suggesting moderate stability with occasional lapses in cash collection efficiency.

Overall Analysis

The receivables management reflects periods of both efficiency and strain, with turnover ratios and collection periods showing an expected inverse relationship. Peaks in turnover ratio correspond to lower collection days and vice versa.

Effective collection seems to fluctuate, possibly impacted by seasonal or market factors. The highest efficiency was observed in early 2023, though this was short-lived before experiencing some subsequent decline.

The general pattern indicates ongoing efforts to maintain receivables within acceptable timeframes, despite occasional challenges extending collection periods.

Average Inventory Processing Period

The average inventory processing period exhibits moderate fluctuations over the observed timeframe. Initially, it increased from 96 days to a peak of 105 days within the first two quarters, then experienced some declines and rises, reaching a significant peak at 162 days around early 2023. Following this peak, a general downward trend is observed, moving from 149 days down to 93 days by mid-2025. Some volatility remains near the end of the period with values rising again to 129 days. This pattern suggests periods of inventory buildup and subsequent optimization over time.

Average Receivable Collection Period

The average receivable collection period remains relatively stable with values fluctuating mostly between the high 50s and mid-60s days. There is a notable spike to 79 days around mid-2023, representing a temporary elongation in receivable collection time. After this spike, the period tends to return towards previous levels, indicating transient factors impacting collections during that quarter but a likely return to normal efficiency thereafter.

Operating Cycle

The operating cycle shows a general upward trend from 155 days to a high of 214 days in early 2023, aligning with the increases previously observed in inventory processing and the spike in receivable collection. After reaching this peak, the cycle gradually shortens, descending back to a range around the mid-150 to low-160 days by mid-2025, though it increases again near the end of the data range to 194 days. This behavior reflects the combined effects of inventory management and receivables collection trends, highlighting periods of less efficient operations followed by recovery phases.

The analysis of the payables-related financial ratios reveals notable fluctuations in both the payables turnover and the average payables payment period over the observed periods.

Payables Turnover

The payables turnover ratio experienced moderate variation, initially decreasing from 5.65 to 5.03 over the first three quarters. This was followed by a rebound to 5.94, then a general decline towards 4.86 by mid-2022. A sudden and significant increase to a peak of 9.91 occurred in late 2022, which suggests a sharp acceleration in payables turnover during that period. Following this spike, the ratio reverted to lower levels fluctuating between approximately 5.5 and 7.3 in subsequent quarters, indicating a return to more typical working capital management practices.

Average Payables Payment Period

The average payables payment period inversely mirrors the pattern of the payables turnover ratio. Starting at 65 days, it gradually increased to a peak of 75 days before dramatically decreasing to 37 days in late 2022, coinciding with the peak in the payoff turnover ratio. This indicates a significant reduction in the time taken by the company to settle its payables at that point. Following the dip, the payment period gradually extended again, stabilizing roughly between 56 and 71 days, reflecting a reversion towards longer payment terms.

Insights and Implications

The inverse movement in the two metrics is consistent with standard financial theory, where higher turnover ratios correspond with shorter payment periods. The sharp changes in late 2022 suggest a strategic or operational shift impacting supplier payments, potentially aimed at improving supplier relationships or taking advantage of early payment discounts. Stability in these ratios before and after this period indicates routine payables management practices with moderate adjustments over time.

Average Inventory Processing Period

The average inventory processing period fluctuated initially between 94 and 106 days from April 2020 to January 2022, displaying some variability but remaining relatively stable. From May 2022 onward, there was a noticeable upward trend peaking at 162 days in January 2023, indicating an elongation in the time inventory remained on hand. Following this peak, a gradual decline occurred through July 2025, settling at 93 days, which is below initial period values, suggesting improved inventory turnover efficiency in the most recent periods.

Average Receivable Collection Period

The receivable collection period remained relatively consistent around the high 50s to mid-60s range during the early periods. A significant spike is observed in July 2023 reaching 79 days, indicating slower collection at this point. After this peak, the period generally declined, moving towards the mid-50s by April 2025, illustrating an improvement in collection efficiency post-peak. The recent periods showed some moderate fluctuations but stayed lower than the mid-2023 high.

Average Payables Payment Period

This period showed moderate variability across all quarters. From April 2020 to July 2022, the days generally ranged between 61 and 75, with a sharp decrease to 37 days in both October 2022 and January 2023. Subsequently, the payment period increased again to the low 60s before declining to 56 days by October 2025. This indicates intermittent changes in the company's payment management, with a brief phase of quicker payments followed by moderate lengthening towards more recent times.

Cash Conversion Cycle

The cash conversion cycle demonstrated relative stability initially, fluctuating near the high 80s to mid-90s range until mid-2022. Starting in October 2022, the cycle dramatically lengthened, reaching a peak of 177 days in January 2023, which corresponds with the rises in inventory and receivables periods and the compressed payables period. After this peak, the cycle began to shorten consistently, reaching 87 days by July 2025. This trend reflects a period of operational strain likely related to inventory and collections, followed by recovery towards more efficient cash flow management in recent quarters.