Paramount Global (NASDAQ:PARA)

The financial ratios exhibit several notable trends over the periods analyzed. The receivables turnover ratio begins at 3.59 in the first available quarter, rising to a peak of 6.77 by the end of 2019, before declining and stabilizing around the low 4s in recent quarters. This suggests an initial improvement in the efficiency of collecting receivables, followed by a reduction in collection velocity potentially due to external or internal factors affecting accounts receivable management.

The payables turnover ratio shows considerable volatility, starting at 45.33, fluctuating significantly with a high of 60.68 toward the end of 2019, and then falling steadily to 14.14 by early 2023. This marked decrease in payables turnover implies that the company is taking longer to pay its suppliers over time, which could indicate either strategic extension of payment terms or liquidity constraints.

Working capital turnover displays a dynamic pattern, initially increasing from 6.66 to an impressive 14.51 around mid-2020 before experiencing a strong decline to approximately 3.86 by early 2021. Subsequently, it rises substantially, reaching 22.09 in the most recent quarter. This trend reflects fluctuations in operational efficiency and asset utilization, with a recent significant enhancement in generating revenue from working capital.

The average receivable collection period correlates inversely with the receivables turnover, starting at 102 days, decreasing to a low of 54 days by the end of 2018, and then increasing and stabilizing near 90-100 days in subsequent quarters. The reduction during 2018 suggests improved cash conversion cycles, which later elongated again, indicating a possible slowdown in customer payments or changes in credit policies.

The average payables payment period initially remains low, between 6 and 9 days, during 2018, before increasing substantially to over 20 days from 2021 onward, peaking at 26 days. This supports the observation from the payables turnover ratio about an elongating payment cycle, further confirming changes in supplier payment behavior or company liquidity management strategies.

Receivables Turnover

Rose from 3.59 to 6.77 by late 2019, then declined and stabilized around 4.0 in recent periods.

Payables Turnover

Highly variable, peaked at 60.68 in 2019, then steadily decreased to 14.14 by early 2023, indicating slower payments to suppliers.

Working Capital Turnover

Increased up to 14.51 in mid-2020, declined significantly afterward, then rose sharply to 22.09 most recently, suggesting varying operational efficiency.

Average Receivable Collection Period

Dropped from 102 to 54 days by end of 2018, then lengthened again and stabilized around 90-100 days in later periods.

Average Payables Payment Period

Maintained between 6 and 9 days in 2018, then increased progressively beyond 20 days from 2021, reaching 26 days at peak.

The financial data reveals several notable trends in the company's quarterly performance over the observed period.

Revenues

Revenues show a pattern of fluctuation with an overall increasing trend from 2018 to 2023. Initial values in early 2018 start around 3,761 million USD, with a dip during parts of 2018 and early 2020, potentially indicating some volatility. A significant jump is observed starting in March 2019, reaching beyond 7,000 million USD in several quarters thereafter, with peaks recorded in December 2021 at 8,000 million USD and again in December 2022 at 8,131 million USD. This suggests growing sales or service income over time despite temporary declines.

Receivables, Net

Receivables exhibit a somewhat volatile trend. Starting at 3,820 million USD in March 2018, the figure rises sharply to over 7,200 million USD by December 2019 and remains around this elevated level through 2022 and into early 2023. This increase may indicate either extended credit terms or higher outstanding amounts due from customers. Although the receivables remain high, some moderation is observed in late 2022 and early 2023, but the overall level remains substantially greater than the initial periods.

Receivables Turnover Ratio

The turnover ratio, available from the third quarter of 2018 onward, displays a generally improving efficiency trend with some fluctuations. Early ratios in 2018 were relatively low; however, they improved significantly by the end of 2019, peaking at 6.77 times in the fourth quarter of 2019, indicating faster collection cycles. This was followed by a decrease in 2020 with ratios near 3.6 times, suggesting slower receivables collection during that period. From 2021 onwards, the ratio gradually improves again, stabilizing around 4.0 to 4.5 times, reflecting moderately efficient credit management.

Operating Costs and Expenses

The operating costs and expenses exhibit notable volatility over the examined quarters. Initially, the values fluctuate between 1,922 million and 2,605 million US dollars in 2018, followed by a substantial surge beginning in early 2019. From March 2019 to December 2019, expenditures increased significantly, peaking at 4,806 million in the last quarter of 2019. This elevated level remains largely sustained throughout 2020 and 2021, with some oscillations. Notably, there were declines in mid-2020 and mid-2021; however, by the end of 2021 and into 2022 and early 2023, the expenses again increased, reaching values above 5,000 million in several quarters. This pattern indicates an overall trend of rising operational outlays with intermittent downturns.

Accounts Payable

Accounts payable display a generally increasing trend over the outlined periods. Beginning at 230 million in the first quarter of 2018, the payable amount experiences minor fluctuations before escalating notably from mid-2019 onward. From a range of approximately 214 to 308 million in early 2019, the balance grows substantially, exceeding 800 million in many quarters during 2021 and further reaching above 1,200 million by early 2023. This steady increase in accounts payable suggests extended credit terms or accumulation of liabilities with suppliers and creditors over time.

Payables Turnover Ratio

The payables turnover ratio demonstrates considerable variability with an overall downward trend. Starting from high turnover rates around 45.33 in March 2019, it declines strategically in following quarters, showing values such as 25.16 and 26.42 mid-2019 to higher ratios in some quarters but mostly decreasing to percentages in the teens and low twenties through 2021 to early 2023. A marked decrease to as low as 14.14 is noted in the first quarter of 2023, indicating slower payment to suppliers or longer credit periods being negotiated or imposed. This decline aligns with rising accounts payable, reinforcing the trend of increasing payables duration over the period.

The analysis of the quarterly financial data reveals several notable trends and fluctuations over the reported periods in key financial metrics.

Working Capital

Working capital exhibits significant variability across the periods. Initial values around 2,100 to 2,800 million US dollars from early 2018 through 2019 show moderate fluctuations. However, there is a sharp increase in working capital during the mid to late 2020 period, peaking at approximately 5,483 to 6,786 million US dollars between the first quarter of 2020 and the first quarter of 2021. Subsequently, the working capital experiences a clear downward trend from mid-2021 onwards, declining steadily from about 7,197 million in the last quarter of 2021 to 1,362 million US dollars by the first quarter of 2023.

Revenues

Revenues display a varying but generally upward trend with some periods of decline. Starting at approximately 3,700 million US dollars in the first quarter of 2018, revenues jump notably in the first quarter of 2019 to over 7,100 million US dollars, likely influenced by significant events or business activities during that period. The subsequent quarters through 2020 show moderate declines followed by recovery, with revenues oscillating between 5,800 and 6,800 million US dollars. From 2021 onwards, revenues generally maintain levels above 6,500 million US dollars, peaking multiple times, such as 8,000 million in the fourth quarter of 2021 and 8,131 million by the fourth quarter of 2022, although there is slight variability quarter-to-quarter. By the first quarter of 2023, revenues slightly decrease to approximately 7,265 million US dollars.

Working Capital Turnover

Working capital turnover exhibits considerable fluctuation, indicating changes in operational efficiency and asset management. Values remain absent for early periods but are reported starting late 2018. In this instance, turnover ratios start at around 6.66 increasing to 11.61 by the last quarter of 2019, indicating more effective use of working capital relative to revenues. Notably, there is a sharp spike to 14.51 in the first quarter of 2020, followed by a substantial decline thereafter, reaching as low as 3.86 - 4.00 during 2020 and early 2021. This drop coincides with the period of high working capital balances. From mid-2021, the turnover ratios gradually recover, rising to very high levels by 2023, with a dramatic increase to 22.09 in the first quarter of 2023, indicating a substantially higher efficiency in generating revenues per unit of working capital during this period.

Overall, the data reveals a dynamic operational environment with periods of elevated working capital followed by significant drawdowns. Revenue levels generally trend upward with quarter-to-quarter volatility, while working capital turnover undergoes wide fluctuations, highlighting varying efficiency in asset utilization over time. The sharp increases in working capital turnover toward the end of the dataset suggest improved working capital management or shifts in revenue composition relative to working capital investments.

The analysis of the receivables turnover ratio and the average receivable collection period over the quarterly intervals indicates notable fluctuations and trends.

Receivables Turnover Ratio

The receivables turnover ratio shows an increasing trend from March 31, 2019, to December 31, 2019, rising from 3.59 to 6.77. This increase suggests an improvement in the efficiency of collecting receivables during this period. However, starting from March 31, 2020, there is a marked decline, with the ratio dropping to 3.64 by December 31, 2020. This decrease may indicate challenges in receivables collection efficiency during the year 2020. From March 31, 2021, onwards, the ratio begins to recover gradually, reaching 4.19 by September 30, 2021, and further peaking at 4.56 as of September 30, 2022. The ratio, however, slightly dips thereafter to 4.07 and 4.04 in the final two recorded quarters. Overall, the ratio demonstrates volatility with a strong dip in 2020 but shows signs of stabilization and modest improvement in the subsequent period.

Average Receivable Collection Period

This metric inversely corresponds with the receivables turnover ratio and reflects the number of days required to collect receivables. From March 31, 2019, through December 31, 2019, the collection period decreases from 102 to 54 days, indicating enhanced collection efficiency. In 2020, however, the period lengthens significantly, reaching 100 days by the end of the year, which aligns with the decreased turnover ratio during the same period, suggesting operational or external challenges affecting collections. Between March 31, 2021, and September 30, 2021, there is an improvement as the collection period shortens to 87 days, consistent with the improvement seen in receivables turnover. In 2022, the collection period experiences some variability but generally trends downward, reaching 80 days by September 30, 2022, before settling at 90 days by March 31, 2023. These changes reflect periodic fluctuations in collection effectiveness but no dramatic changes relative to the baseline at the start of the observed period.

Payables Turnover Ratio

The payables turnover ratio demonstrates significant fluctuations over the observed quarters. Starting from a ratio of 45.33, it decreased to 40.14, then sharply increased to 60.68 before declining again to 48.77. In 2020, the ratio dropped further to lower levels around the mid-20s and mid-30s but exhibited a downward trend from 26.26 in early 2021 to a low of 14.14 by March 2023. This overall decline suggests a slower rate of payments to suppliers over time.

Average Payables Payment Period

The average payables payment period, expressed in days, moved inversely to the payables turnover ratio, as expected. Initially, values ranged between 6 to 9 days, then increased sharply to a peak of around 14 to 15 days during the mid to late 2019 period. This period lengthened further to 18 days by late 2021, maintaining an upward trajectory with some fluctuations, reaching a peak of 26 days in early 2023 before slightly decreasing to 23 days. The extended payment period indicates that the company has been taking longer to settle its payables over the time span reviewed.

Overall Insights

The data indicates a clear trend towards slower payment cycles from approximately 2018 through early 2023, as shown by the steady decline in payables turnover ratio and simultaneous increase in average payment period. This pattern may reflect changes in working capital management or vendor negotiation strategies, potentially aimed at conserving cash or adjusting to market conditions. The noticeable variation in earlier years signals potential operational or strategic shifts before settling into a longer payment period strategy in recent years.