Qualcomm Inc. (NASDAQ:QCOM)

The analysis of the financial ratios and periods over multiple quarters reveals notable trends and fluctuations in operational efficiency and working capital management.

Inventory Turnover

The inventory turnover ratio displays a significant declining trend from the initial observed values onwards. Starting at 6.14, the ratio steadily drops over the quarters, reaching a low point around 2.47 before slightly recovering to about 3.02 towards the latest periods. This decline suggests a gradual slowdown in the pace at which inventory is sold and replenished, indicating potential issues with inventory management or changes in sales volume impacting inventory levels.

Payables Turnover

The payables turnover ratio shows considerable volatility. Initially around 6.29, it decreases to approximately 4.12-4.21 and then fluctuates moderately before spiking sharply to 7.17 and even higher to 12.5 in one quarter, thereafter gradually stabilizing around 6.37-8.20 in recent periods. This pattern may reflect varying payment strategies, possibly indicating periods where payables are settled more rapidly, followed by a normalization phase.

Working Capital Turnover

This ratio exhibits an uneven but generally declining trend after peaking at 5.88. The working capital turnover increases initially, signaling efficient use of working capital to generate sales, but after peaking, it gradually trends downwards to about 2.5 in recent quarters. This decline may suggest reduced efficiency in managing current assets and liabilities to support sales activity.

Average Inventory Processing Period

The inventory processing period in days shows an upward trend, increasing steadily from around 59 days to a peak exceeding 148 days. Following the peak, there is a moderate downward adjustment to approximately 121 days. This lengthening period aligns inversely with the inventory turnover ratio and indicates that inventory is being held longer before sale, which may affect liquidity and increase holding costs.

Average Payables Payment Period

The average period for paying suppliers initially increases from 58 days to a high of 89 days but then sharply decreases to around 29 days before recovering moderately to about 55 days in the later periods. This fluctuation indicates varying payment terms or cash management approaches, with some quarters involving faster payments and others extending payment periods.

Overall, the data indicates a trend toward slower inventory movement and longer holding periods, with fluctuating payment patterns to suppliers. The working capital turnover ratio's decline underscores challenges in efficiently utilizing working capital resources. These dynamics suggest the need for ongoing attention to inventory management practices and accounts payable strategies to optimize cash flow and operational performance.

The cost of revenues demonstrates notable fluctuations over the analyzed periods. Initially, values hover near the 2100 million US dollars level with minor variations until early 2020. From that point, a clear upward trend is observable with peaks reaching approximately 4800 to 5100 million US dollars between late 2021 and mid-2025. This suggests an overall increase in the company's expense related to production or procurement, potentially indicating expansion, increased sales volume, or rising costs.

Inventories show a consistent upward trajectory throughout the timeline. Beginning around 1700 million US dollars, the inventory levels generally rise quarter-over-quarter, culminating near 6300 million US dollars in the latest periods. This steady inventory accumulation might reflect strategic stockpiling, growth in the scale of operations, or slower turnover rates. The increasing inventory base can also imply expectations for future demand or potential inefficiencies in inventory management.

The inventory turnover ratio, which is a measure of how efficiently inventory is managed by comparing cost of revenues to average inventory, decreases significantly over the course of the data provided. Early values around 6 suggest high efficiency with rapid inventory movement. However, from late 2019 onwards, the ratio consistently declines, reaching values near 2.5 to 3 in the most recent quarters. This declining trend may indicate that inventory is being held longer before sale, which could be attributed to slower market demand, overstocking, or shifts in product mix. It denotes a reduction in operational efficiency related to inventory management.

In summary, the financial data indicates that while the cost of revenues has increased markedly, inventory levels have also risen, accompanied by a declining inventory turnover ratio. This combination suggests expansion with potential challenges in inventory management efficiency and possibly changing market dynamics affecting sales velocity.

The cost of revenues exhibited notable fluctuations over the observed periods. Initially, values hovered around the 2100 to 2200 million US dollars range from late 2018 through early 2020. A sharp increase is observable starting in the third quarter of 2020, peaking near 4300 to 4800 million US dollars through 2021 and 2022, followed by some decline yet remaining elevated relative to the earlier periods, with figures oscillating between approximately 3800 to 5100 million US dollars in the latest quarters.

Trade accounts payable showed a general upward trajectory until late 2021, with an increase from approximately 1400 million US dollars at the beginning of the timeline to beyond 3700 million US dollars by late 2021. Subsequent to this peak, there was a marked decline, dropping sharply to slightly above 1400 million US dollars by early 2023. From there, accounts payable gradually rose again, reaching the 2500 to 2600 million US dollars range in the most recent quarters.

The payables turnover ratio reveals further insights into the payment dynamics. Starting from the third quarter of 2019, the ratio was between 4.0 and 5.0, indicating slower turnover. During late 2021 and early 2022, the turnover ratio decreased somewhat, indicating a lengthening of payable payment periods. Notably, the ratio spiked sharply to over 7.0, reaching peaks above 12.5 in early 2023, then decreased again but remained elevated relative to initial levels. This variability suggests changing payment patterns and possibly shifting credit terms or operational adjustments over the time frame.

Cost of Revenues

Relatively stable near 2100 million US dollars initially.

Significant rise from late 2020, peaking above 4800 million US dollars.

Moderate decline but staying elevated beyond 3800 million US dollars in recent periods.

Trade Accounts Payable

Gradual increase through 2021, reaching a peak near 3750 million US dollars.

Sharp decrease in early 2023 to approximately 1400 million US dollars.

Subsequent steady increase to levels above 2500 million US dollars by late 2024.

Payables Turnover

Moderate turnover (~4-5 times) in initial observation window.

Notable spikes reaching above 12.5 in early 2023, indicating faster turnover.

Fluctuations suggest dynamic changes in payable settlement timing and operational controls.

Overall, the data suggest an initial phase of relative stability followed by increased revenue costs and fluctuating payment dynamics. The peak in cost of revenues corresponds with the highest levels of trade payables and sharp fluctuations in turnover ratio, likely reflecting operational scaling or market conditions affecting procurement, payment terms, and cost management. The recent moderation in these patterns may indicate strategic adjustments or normalization of conditions.

Working Capital

The working capital values show a general upward trend from December 2018 through June 2025. Starting from 5,738 million USD at the end of 2018, the figure experiences fluctuations but predominantly increases, reaching 17,113 million USD by June 2025. Notable increases are observed particularly in the periods around Q3 2020 to Q4 2021 and again from Q4 2023 to Q2 2025. There are intermittent declines, such as from December 2020 to March 2021 and from March 2024 to September 2024, but the overall movement is positive, indicating improved net short-term liquidity over time.

Revenues

Revenues demonstrate volatility across the quarters with some sharp rises and falls. Starting at 4,842 million USD in December 2018, revenues dip slightly by March 2019 but then nearly double to 9,635 million USD by June 2019, indicating a significant spike. Afterward, revenues fluctuate between approximately 4,800 and 11,000 million USD, with peaks evident around Q4 2021 (10,705 million USD) and Q2 2025 (11,669 million USD). There are episodic declines such as the fall post-Q4 2021 to Q1 2023, where revenues slip below 10,000 million USD. The pattern suggests seasonal or event-driven variability with no consistent linear trend.

Working Capital Turnover Ratio

The working capital turnover ratio, calculated for the periods when revenue and working capital data overlap, exhibits a decreasing pattern overall. Starting with a relatively high ratio of 3.1 around mid-2019, the turnover spikes briefly to 5.88 in mid-2021, reflecting a period where revenues grew more proportionately to working capital. However, following this peak, the ratio declines steadily to values near 2.53 by mid-2025. This downward trend in turnover ratio implies that although working capital has increased, the growth in revenues has been less robust in relation to this capital, which may point to decreasing efficiency in using working capital to generate sales.

The Inventory Turnover ratio exhibits a downward trend from December 2018 through to the most recent quarter in June 2025. Starting at a high point of 6.14 in late 2018, the ratio steadily declines over time, reaching a low near 2.47 by the end of 2022. Following this period, a subtle recovery is noticeable, with the ratio gradually increasing to approximately 3.02 by mid-2025. This overall decreasing trend indicates a slowing rate at which inventory is sold and replaced, which may reflect changes in demand, inventory management, or supply chain factors.

Correspondingly, the Average Inventory Processing Period, measured in days, moves in the opposite direction. It escalates from 59 days in late 2018 to a peak of around 148 days near the end of 2022. This rise signifies that inventory remains on hand for longer periods before being processed or sold. Post-2022, a gradual reduction in processing time occurs, dropping to roughly 121 days by mid-2025. This shift complements the slight improvement seen in Inventory Turnover in the recent quarters.

Overall, the data suggests a period of inventory accumulation and slower movement through late 2019 to 2022, followed by moderate improvements in inventory efficiency approaching 2025. The inverse relationship between the two metrics is consistent and highlights the dynamics in inventory management performance during the observed timeframe.

The payables turnover ratio exhibits a notable trend over the observed periods. Initially, starting from a ratio of 6.29, there is a gradual decline reaching its lowest point around 4.12 to 4.21 between late 2019 and early 2020, indicating a slower rate of paying off suppliers. Subsequently, a recovery phase is evident as the ratio increases steadily, peaking at 12.5 in early 2023, which suggests a significant improvement in payment efficiency, with the company settling its payables more frequently within the period. After this peak, the turnover ratio declines again but remains above the earlier low levels, fluctuating between 6.37 and 8.20 towards the end of the timeline.

Correspondingly, the average payables payment period in days provides an inverse pattern relative to the payables turnover. During the periods of lower turnover (2019-2020), the payment period lengthened, reaching approximately 89 days, indicating slower payments to suppliers. As the payables turnover ratio increases sharply around 2023, the payment period shortens dramatically to as low as 29 days, demonstrating more prompt payments. Following this sharp decrease, the payment period slightly lengthens again but maintains a more moderate range between 44 and 57 days through 2024 and into mid-2025.

Payables Turnover Ratio

Decreased from 6.29 to about 4.12 in late 2019, indicating slower payments.

Progressively increased, peaking at 12.5 in early 2023, reflecting improved payment efficiency.

Declined moderately afterward, stabilizing between 6.37 and 8.20 through mid-2025.

Average Payables Payment Period (Days)

Increased to around 89 days in late 2019, corresponding to slower payments.

Sharp reduction to as low as 29 days by early 2023, indicating faster settlement of payables.

Lengthened moderately thereafter, remaining between 44 and 57 days through the latest periods.

Overall, these metrics suggest that the company experienced a phase of elongated payment cycles up to the end of 2019, followed by a substantial enhancement in payables management reflected in quicker payment cycles from early 2023 onwards. This may signal strategic efforts to improve supplier relationships or optimize working capital. The partial reversal of these gains in the subsequent periods indicates a potential moderation or stabilization in payment policies.