Analysis of Short-term (Operating) Activity Ratios
Quarterly Data
Activity ratios measure how efficiently a company performs day-to-day tasks, such us the collection of receivables and management of inventory.
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Short-term Activity Ratios (Summary)
Old Dominion Freight Line Inc., short-term (operating) activity ratios (quarterly data)
Based on: 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
The analysis of the quarterly financial ratios reveals several notable trends over the observed periods.
- Receivables Turnover
- The receivables turnover ratio started at 9.46 in March 2019, experiencing minor fluctuations throughout the years. It dipped to its lowest at 8.31 in September 2021 but showed a gradual recovery afterwards, reaching 10.94 by June 2023. This trend indicates variations in the efficiency of collecting receivables, with recent quarters reflecting an improvement in this efficiency.
- Payables Turnover
- The payables turnover ratio showed significant volatility. Beginning at 51.5 in March 2019, it peaked sharply at 76.89 in September 2020 before declining to a low of 36.43 in December 2021. Subsequently, it rose again to 61.56 in June 2023. These fluctuations suggest changing dynamics in payment practices or supplier management, with periods of both quicker and slower payment turnovers.
- Working Capital Turnover
- This ratio presents a clear upward trend over the entire period. Starting at 11.57 in March 2019, it declined to a low of 4.61 in December 2020, indicating less efficient use of working capital during that time. However, from early 2021 onwards, there is a strong recovery and acceleration, reaching 26.15 by June 2023. This substantial increase signifies improving efficiency in the use of working capital to generate sales.
- Average Receivable Collection Period
- The average collection period ranged mostly between 33 and 44 days, with slight cyclical variations. The shortest periods were recorded in March and June 2023 at 33 days, reflecting faster collection of receivables in the most recent periods compared to earlier quarters in 2020 and 2021 where it reached 44 days. This indicates improved cash inflow timing from customers recently.
- Average Payables Payment Period
- The average payables period generally remained between 5 and 10 days throughout the observed period, with minor irregularities. The lowest average payment periods were 5 days recorded multiple times in mid-2020, and a higher period of 10 days noted in December 2021. Recent quarters tend to show payments around 6 to 7 days, reflecting relatively stable payment terms to suppliers.
In summary, the data depicts a company that experienced some efficiency challenges in receivables and working capital usage around 2020 but showed marked improvements in subsequent years, especially in working capital turnover and receivable collection speed. Payables turnover and payment periods were more volatile, suggesting adjustments in supplier payment strategies. The recent trends are positive with improvements in receivables turnover, reduced collection periods, and substantially increased working capital turnover, indicating better operational and financial management.
Turnover Ratios
Average No. Days
Receivables Turnover
Old Dominion Freight Line Inc., receivables turnover calculation (quarterly data)
| Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||||||||||
| Revenue from operations | |||||||||||||||||||||||||||||
| Customer receivables, less allowances | |||||||||||||||||||||||||||||
| Short-term Activity Ratio | |||||||||||||||||||||||||||||
| Receivables turnover1 | |||||||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||||||
| Receivables Turnover, Competitors2 | |||||||||||||||||||||||||||||
| FedEx Corp. | |||||||||||||||||||||||||||||
| Uber Technologies Inc. | |||||||||||||||||||||||||||||
| Union Pacific Corp. | |||||||||||||||||||||||||||||
| United Airlines Holdings Inc. | |||||||||||||||||||||||||||||
| United Parcel Service Inc. | |||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
1 Q2 2023 Calculation
Receivables turnover
= (Revenue from operationsQ2 2023
+ Revenue from operationsQ1 2023
+ Revenue from operationsQ4 2022
+ Revenue from operationsQ3 2022)
÷ Customer receivables, less allowances
= ( + + + )
÷ =
2 Click competitor name to see calculations.
- Revenue from Operations
- The revenue from operations exhibited a generally increasing trend from March 31, 2018, to June 30, 2023. Starting at approximately 925 million US dollars in early 2018, revenue fluctuated modestly throughout 2018 and 2019, maintaining a level near 1 billion US dollars per quarter. In 2020, revenue showed some volatility with a decline in the second quarter, likely reflecting external disruptions, but recovered in subsequent quarters. From 2021 onward, steady growth was observed, with revenue reaching a peak of approximately 1.67 billion US dollars in the second quarter of 2022. Revenue then showed a slight decline in the last three reported quarters but remained above 1.4 billion US dollars, indicating sustained high performance relative to earlier periods.
- Customer Receivables, Less Allowances
- The customer receivables balance displayed a rising trend with some fluctuations over the period. Starting at about 413 million US dollars at the beginning of 2018, receivables increased overall to exceed 680 million by mid-2022. This increase was particularly noticeable from 2020 onwards, reflecting growing sales volume. In 2023, however, receivables decreased gradually each quarter to approximately 544 million by June 30, 2023, indicating potential improvement in collections or tighter credit management. The pattern suggests alignment with revenue growth, but also highlights variability that could impact cash flow management.
- Receivables Turnover Ratio
- The receivables turnover ratio, available only from the first quarter of 2019, demonstrated modest fluctuations but remained within a relatively stable range. Early values started around 9.5 and showed slight decreases through 2020 and 2021, reaching lows below 8.5 at times, which may indicate a lengthening of the collection period during those years. From 2022 onwards, the ratio improved, increasing to above 10 times per year by mid-2023, suggesting enhanced efficiency in collecting receivables. This improvement potentially reflects stronger credit control or customer payment behavior, which might positively impact working capital and liquidity.
- Overall Analysis
- The financial data reflects robust revenue growth over the analyzed period, particularly accelerating after 2020. Customer receivables grew in tandem with revenue but showed signs of improvement in collection efficiency more recently. The variation in receivables turnover ratio corroborates this observation, with an initial decline followed by a recovery and strengthening trend. These trends collectively suggest effective revenue expansion supported by increasingly efficient receivables management, which are critical for sustaining operational liquidity and financial health.
Payables Turnover
Old Dominion Freight Line Inc., payables turnover calculation (quarterly data)
| Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||||||||||
| Revenue from operations | |||||||||||||||||||||||||||||
| Accounts payable | |||||||||||||||||||||||||||||
| Short-term Activity Ratio | |||||||||||||||||||||||||||||
| Payables turnover1 | |||||||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||||||
| Payables Turnover, Competitors2 | |||||||||||||||||||||||||||||
| FedEx Corp. | |||||||||||||||||||||||||||||
| Uber Technologies Inc. | |||||||||||||||||||||||||||||
| United Airlines Holdings Inc. | |||||||||||||||||||||||||||||
| United Parcel Service Inc. | |||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
1 Q2 2023 Calculation
Payables turnover
= (Revenue from operationsQ2 2023
+ Revenue from operationsQ1 2023
+ Revenue from operationsQ4 2022
+ Revenue from operationsQ3 2022)
÷ Accounts payable
= ( + + + )
÷ =
2 Click competitor name to see calculations.
- Revenue from operations
- The revenue exhibits a generally upward trend over the analyzed periods, starting at approximately 925 million USD in the first quarter of 2018 and rising to over 1.4 billion USD by the second quarter of 2023. There are noticeable seasonal fluctuations, with several instances of quarterly revenue decline, such as in early 2020 coinciding with the onset of the pandemic, where revenue dropped from about 987 million USD in March 2020 to around 896 million USD in June 2020. Following this dip, a recovery phase is observable throughout 2021 and into 2022, with revenues increasing substantially, peaking at approximately 1.67 billion USD in June 2022. The most recent quarters show a slight decrease again but still maintain elevated levels relative to earlier years.
- Accounts payable
- Accounts payable figures display considerable variability without a clear long-term upward or downward trajectory, fluctuating between roughly 55 million USD and 135 million USD. Peaks are observed intermittently, for instance, a sharp rise to approximately 135 million USD in September 2021 and again in June 2022. Notably, these spikes occasionally correspond with quarters showing strong revenue, suggesting possible linkage to operational activities and procurement cycles. Periods such as mid-2020 exhibit lower accounts payable balances aligning with lower revenue, reinforcing a correlation. Recent quarters indicate a reduction in accounts payable despite relatively high revenue, which may imply improved payment efficiency or changes in supplier terms.
- Payables turnover ratio
- The payables turnover ratio exhibits marked fluctuations, with values ranging from the mid-30s to over 76 on a quarterly basis. A broad trend of decreasing turnover ratio is identifiable from 2018 through 2021, moving from the high 50s to as low as approximately 36 during late 2021, indicating a slower rate of payment to suppliers over time. However, in 2022 and into 2023, the turnover ratio rebounds and increases, reaching above 60 in June 2023. This denotes a period of faster payables turnover more recently, potentially reflecting a tighter management of payment cycles or shifts in working capital strategy. The ratio's volatility implies responsiveness to operational and market conditions.
Working Capital Turnover
Old Dominion Freight Line Inc., working capital turnover calculation (quarterly data)
| Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||||||||||
| Current assets | |||||||||||||||||||||||||||||
| Less: Current liabilities | |||||||||||||||||||||||||||||
| Working capital | |||||||||||||||||||||||||||||
| Revenue from operations | |||||||||||||||||||||||||||||
| Short-term Activity Ratio | |||||||||||||||||||||||||||||
| Working capital turnover1 | |||||||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||||||
| Working Capital Turnover, Competitors2 | |||||||||||||||||||||||||||||
| FedEx Corp. | |||||||||||||||||||||||||||||
| Uber Technologies Inc. | |||||||||||||||||||||||||||||
| Union Pacific Corp. | |||||||||||||||||||||||||||||
| United Airlines Holdings Inc. | |||||||||||||||||||||||||||||
| United Parcel Service Inc. | |||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
1 Q2 2023 Calculation
Working capital turnover
= (Revenue from operationsQ2 2023
+ Revenue from operationsQ1 2023
+ Revenue from operationsQ4 2022
+ Revenue from operationsQ3 2022)
÷ Working capital
= ( + + + )
÷ =
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals several key trends in working capital, revenue from operations, and working capital turnover over the observed period.
- Working Capital
- The working capital demonstrates a fluctuating yet generally downward trend in more recent quarters. It initially shows growth from approximately 270 million US dollars in early 2018 to a peak around 919 million US dollars by the end of 2021. However, starting from 2022, there is a consistent decline, reaching close to 228 million US dollars by mid-2023. This suggests a reduction in the net short-term assets relative to liabilities over the latest periods evaluated.
- Revenue from Operations
- Revenue exhibits a pattern of growth with some seasonal fluctuations. From just over 900 million US dollars in the first quarter of 2018, revenue rises steadily, peaking at approximately 1.41 billion US dollars in the fourth quarter of 2021. Following this peak, revenue appears to plateau and then slightly decline during 2022 and the first half of 2023, settling around 1.41 billion US dollars by mid-2023. This indicates a maturing revenue base with some recent downward pressure or stabilization in growth.
- Working Capital Turnover
- Working capital turnover starts from a value of 11.57 in the first quarter of 2019 and exhibits variability throughout the periods reviewed. After decreasing during the earlier years, it shows a sharp increase from below 6 in 2020 to surpassing 18 by the second quarter of 2023, peaking at 26.15 in the first quarter of 2023. An increasing working capital turnover ratio indicates enhanced efficiency in utilizing working capital to generate revenue, particularly notable in the latest quarters, which corresponds with the declining working capital and relatively stable revenues.
In summary, the company has experienced fluctuations in working capital with a peak followed by a marked reduction in the recent years. Simultaneously, revenue growth has shown signs of plateauing after several years of expansion. The surge in working capital turnover suggests improved operational efficiency in the use of working capital, likely driven by tighter management of current assets or liabilities amid stable revenue levels. These insights collectively point towards strategic adjustments or operational changes focusing on capital efficiency in response to evolving business conditions.
Average Receivable Collection Period
Old Dominion Freight Line Inc., average receivable collection period calculation (quarterly data)
| Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||||||||||||||||||||||||
| Receivables turnover | |||||||||||||||||||||||||||||
| Short-term Activity Ratio (no. days) | |||||||||||||||||||||||||||||
| Average receivable collection period1 | |||||||||||||||||||||||||||||
| Benchmarks (no. days) | |||||||||||||||||||||||||||||
| Average Receivable Collection Period, Competitors2 | |||||||||||||||||||||||||||||
| FedEx Corp. | |||||||||||||||||||||||||||||
| Uber Technologies Inc. | |||||||||||||||||||||||||||||
| Union Pacific Corp. | |||||||||||||||||||||||||||||
| United Airlines Holdings Inc. | |||||||||||||||||||||||||||||
| United Parcel Service Inc. | |||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
1 Q2 2023 Calculation
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ =
2 Click competitor name to see calculations.
The analysis of the financial ratios over the observed periods reveals several notable trends in the management of receivables.
- Receivables Turnover
- The receivables turnover ratio remained relatively stable from early 2019 through 2023, fluctuating mostly between approximately 8.3 and 11. The ratio showed a slight decrease starting in the first quarter of 2020, reaching a low around 8.3 in late 2020 and early 2021, before gradually increasing again in subsequent periods. Notably, the turnover peaked near 10.99 in mid-2023, indicating improved efficiency in collecting receivables towards the end of the data set.
- Average Receivable Collection Period
- The collection period, measured in days, inversely relates to receivables turnover. It initially hovered around 39-40 days in early 2019, then showed an increase during 2020 and 2021, reaching a peak of 44 days for multiple quarters. This indicates a slower collection process during that time frame. From late 2021 onward, the period shortened steadily, dropping to 33 days by mid-2023, reflecting enhanced collection efficiency and faster conversion of receivables to cash.
Overall, the data suggests that after a period of some slowing in receivables collection efficiency during 2020 and 2021, there has been a marked improvement in 2022 and 2023. The company appears to have strengthened its receivables management, leading to higher turnover ratios and reduced collection periods, which likely contribute positively to its liquidity and working capital position.
Average Payables Payment Period
Old Dominion Freight Line Inc., average payables payment period calculation (quarterly data)
| Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||||||||||||||||||||||||
| Payables turnover | |||||||||||||||||||||||||||||
| Short-term Activity Ratio (no. days) | |||||||||||||||||||||||||||||
| Average payables payment period1 | |||||||||||||||||||||||||||||
| Benchmarks (no. days) | |||||||||||||||||||||||||||||
| Average Payables Payment Period, Competitors2 | |||||||||||||||||||||||||||||
| FedEx Corp. | |||||||||||||||||||||||||||||
| Uber Technologies Inc. | |||||||||||||||||||||||||||||
| United Airlines Holdings Inc. | |||||||||||||||||||||||||||||
| United Parcel Service Inc. | |||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
1 Q2 2023 Calculation
Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ =
2 Click competitor name to see calculations.
- Payables Turnover Ratio
- The payables turnover ratio data is available starting from March 31, 2018. From that point onward, the ratio exhibits fluctuations across the periods. In 2018 and 2019, the ratio generally remains around the high 40s to mid-50s, with a noticeable increase towards the end of 2019, peaking at 58.49. In 2020, the ratio experiences a sharp increase, rising significantly to a high of 76.89 in the third quarter, before declining steadily through the end of 2020 into early 2021.
- In 2021, the ratio dips to its lowest point at 36.43 by the fourth quarter, indicating a slowdown in payables turnover. However, starting from early 2022, the ratio recovers and again fluctuates between the mid-40s to high 60s. The most recent quarters in 2023 show the ratio stabilizing around the low 50s to low 60s. Overall, the trend suggests periods of volatility with peaks mainly observed during economic or operational shifts, followed by contractions and subsequent recovery phases.
- Average Payables Payment Period (in number of days)
- The average number of days taken to pay payables generally ranges between 5 and 10 days over the observed periods. Early in 2019, the average payment period hovers around 7 to 8 days, decreasing slightly in mid to late 2019 down to 5 days, which corresponds inversely to the increase in payables turnover ratio during that time.
- Through 2020, the payment period remains relatively stable at 5 to 6 days, reflecting faster payment cycles. In 2021, there is a gradual increase, reaching a peak of 10 days in the fourth quarter, aligning with the lowest payables turnover ratio observed in that quarter. This indicates that the company took longer to pay payables during that time. Following this, during 2022 and early 2023, the average payment period fluctuates between 6 and 8 days, indicating moderate payment speed with some variability but no extreme shifts.
- Overall Analysis
- The inverse relationship between payables turnover ratio and average payment period is evident, as expected; higher turnover ratios correspond with shorter payment periods and vice versa. The fluctuations suggest changing payment practices possibly influenced by operational efficiency, liquidity management, or external economic factors.
- Periods of higher payables turnover (notably in 2020) imply more rapid payments to suppliers, which could indicate strong liquidity or strategic positioning. Conversely, the elongated payment period in late 2021, coupled with a low turnover ratio, suggests more extended credit utilization or possible cash management strategies to preserve liquidity during that period.
- In summary, the data reveals cyclical patterns in payables management over the analyzed periods with no consistent long-term trend towards either faster or slower payments, but notable short-term fluctuations reflecting operational and financial strategy adjustments.