Starbucks Corp. (NASDAQ:SBUX)

Inventory Turnover

The inventory turnover ratio fluctuated over the years, starting at 11.9 and reaching a peak of 14.89 before decreasing to 13.14. This indicates periods of both improved and slightly reduced efficiency in inventory management, with an overall trend of maintaining a relatively high turnover rate.

Receivables Turnover

The receivables turnover ratio showed a generally stable pattern with mild fluctuations. It increased from 26.62 to a high of 30.92, then slightly declined and stabilized around 29. This suggests consistent effectiveness in collecting receivables over the analyzed periods.

Payables Turnover

The payables turnover ratio exhibited a gradual decline from 18.5 to 15.5, indicating a slower rate of paying suppliers over time. This trend may reflect extended payment terms or changes in working capital management policies.

Working Capital Turnover

Data on working capital turnover was available only for two periods, showing a sharp decrease from 51.17 to 18.11. The absence of subsequent data prevents a full assessment of this metric over time.

Average Inventory Processing Period

This metric varied within a range of 25 to 33 days, with a decrease observed in the middle periods followed by a slight increase towards the end. The fluctuations indicate some variability in the time inventory remains on hand before being sold.

Average Receivable Collection Period

The average collection period consistently remained between 12 and 14 days, highlighting a stable and efficient process in receivables management without significant deviation.

Operating Cycle

The operating cycle, measuring the time between inventory acquisition and cash collection, showed a decline from 45 to around 37 days, followed by a slight increase to 41 days. This points to improved operational efficiency in earlier periods, with some moderation subsequently.

Average Payables Payment Period

The average payables payment period increased steadily from 20 to 24 days, indicating a tendency to extend payment terms or delay payments to suppliers incrementally over the years.

Cash Conversion Cycle

The cash conversion cycle improved significantly, decreasing from 25 to 15 days before a minor rise to 17 days. This trend reflects better overall cash flow management, with faster conversion of resources into cash, though slight recent deceleration is evident.

The financial data reveals several key trends regarding cost of revenues, inventories, and inventory turnover ratios over the reporting periods from 2020 to 2025.

Cost of Revenues

The cost of revenues shows a consistent upward trend over the entire period. Starting at approximately 18.46 billion US dollars in 2020, it increased steadily each year, reaching nearly 28.72 billion US dollars by 2025. This represents a significant increase of over 55% across the six-year span, indicative of rising expenses associated with producing goods or services. The year-over-year growth appears steady, with no periods of decline or stagnation, suggesting expanding operational scale or increased input costs.

Inventories

Inventory values present more variability compared to cost of revenues. Beginning at about 1.55 billion US dollars in 2020, inventories rose to a peak of roughly 2.18 billion US dollars in 2022, then decreased to approximately 1.81 billion in 2023. This decline was followed by a slight dip in 2024 and a subsequent recovery back to the peak range (2.19 billion) in 2025. The fluctuations suggest adjustments in inventory management or purchasing strategies possibly reacting to demand changes, supply chain conditions, or operational efficiency efforts.

Inventory Turnover Ratio

The inventory turnover ratio, which measures how many times inventory is sold and replaced over a period, displays some variability but overall shows an increase from 11.9 in 2020 to a high of 14.89 in 2024. After peaking, it slightly declined to 13.14 in 2025. This trend suggests improving inventory efficiency and faster asset utilization up to 2024, likely reflecting better inventory control or higher sales velocity. The slight decrease in the final year may indicate a minor loosening in inventory management or changes in sales patterns.

Overall, the data shows growing costs aligned with revenue-related activities, moderate inventory fluctuations with periods of tightening and loosening, and generally improving inventory turnover efficiency through the middle of the period, followed by a slight reversal at the end. These patterns could reflect adapting operational and supply chain strategies in response to evolving market conditions.

The analysis focuses on the net revenues, accounts receivable, and receivables turnover of the company over a six-year period.

Net Revenues

The net revenues demonstrate a consistent upward trend from approximately $23.5 billion in 2020 to nearly $37.2 billion in 2025. The year-on-year growth, though variable, indicates steady expansion with the largest increment occurring between 2020 and 2021. Growth appears to moderate slightly in the later years, particularly between 2023 and 2024.

Accounts Receivable, Net

The accounts receivable balance also increases over the period, moving from $883.4 million in 2020 to $1.2775 billion in 2025. This rising trend is generally in line with the growth in net revenues, suggesting that receivables volume expands as sales increase.

Receivables Turnover Ratio

The receivables turnover ratio exhibits some fluctuations but generally remains within a range indicative of efficient collection practices. It peaked at 30.92 in 2021, followed by a dip in 2022 to 27.44, and subsequently reverts to the high 29s in the last three years. These fluctuations may point to occasional changes in collection speed or credit terms but overall reflect stable management of receivables relative to revenue.

In summary, the company shows robust revenue growth alongside a proportional increase in accounts receivable, while maintaining a relatively stable receivables turnover ratio. This suggests effective credit and collections management despite increasing business scale.

The financial data reveals several noteworthy trends related to cost management and supplier payments over the analyzed periods.

Cost of Revenues

There is a consistent upward trend in the cost of revenues, increasing from approximately $18.46 billion in 2020 to about $28.72 billion in 2025. This represents a substantial growth, indicating rising expenses directly associated with producing goods and services over the years.

Accounts Payable

Accounts payable balances have also increased steadily, from nearly $998 million in 2020 to approximately $1.85 billion in 2025. This rise suggests the company is incurring more short-term obligations towards its suppliers, which could be related to the increased cost of revenue and possibly expanded business operations.

Payables Turnover Ratio

The payables turnover ratio shows a gradual decline over the period, moving from 18.5 in 2020 to 15.5 in 2025. A lower ratio implies that the company is taking longer to pay off its suppliers, reflecting potentially extended payment terms or cash flow management strategies. Despite the decline, the ratio remains relatively stable, indicating the company maintains a consistent approach to managing its payables despite growth pressures.

In summary, the data indicates that while the company’s cost of revenues and accounts payable have increased significantly, it is managing its supplier payments with a slight trend towards longer payment durations. This may suggest efforts to optimize cash flows while accommodating growing operational costs.

The financial data reveals several significant trends related to working capital, net revenues, and working capital turnover over the reported periods.

Working Capital

Working capital demonstrates a notable shift from a positive value of 459,600 thousand USD in 2020 to a peak positive value of 1,605,000 thousand USD in 2021. However, from 2022 onward, working capital turns negative, with values of -2,133,100 thousand USD in 2022, continuing in a negative trend through 2023, 2024, and reaching -2,828,100 thousand USD in 2025. This transition from positive to increasingly negative working capital may indicate growing short-term liquidity challenges or increased current liabilities exceeding current assets.

Net Revenues

Net revenues consistently increase each year, rising from 23,518,000 thousand USD in 2020 to 37,184,400 thousand USD in 2025. The growth, though steady, shows a deceleration in later years, with the increase from 2020 to 2021 being approximately 5,509,600 thousand USD, while the increment from 2024 to 2025 is smaller at approximately 1,208,200 thousand USD. This sustained revenue growth reflects ongoing business expansion or successful sales efforts despite the deterioration in working capital.

Working Capital Turnover

The working capital turnover ratio dropped significantly from 51.17 in 2020 to 18.11 in 2021. This sharp decline suggests a reduction in efficiency regarding how working capital supports revenue generation. Data for subsequent years is unavailable, which limits trend analysis over the full period; however, the initial decline may align with the observed worsening working capital figures.

Overall, the juxtaposition of robust revenue growth against declining and increasingly negative working capital highlights potential concerns in managing short-term assets and liabilities. The reduced working capital turnover ratio further suggests efficiency challenges in utilizing working capital to support sales. Attention to liquidity management may be warranted to address these trends in forthcoming periods.

Inventory Turnover

The inventory turnover ratio demonstrates fluctuations over the observed periods. Beginning at 11.9 in 2020, there was an increase to 12.89 in 2021, indicating a faster movement of inventory. However, a decline occurred in 2022 to 10.97, suggesting slower inventory turnover that year. Subsequently, the ratio increased significantly to 14.46 in 2023 and continued to rise slightly to 14.89 in 2024, indicating improved efficiency in inventory management. In 2025, a moderate decrease to 13.14 was noted, which still reflects a relatively high turnover compared to earlier years.

Average Inventory Processing Period

The average inventory processing period, measured in days, exhibited an inverse pattern relative to the inventory turnover ratio. Starting from 31 days in 2020, the period shortened to 28 days in 2021, implying quicker processing of inventory. The duration then extended to 33 days in 2022, aligning with the reduced turnover ratio in that year. Thereafter, a marked improvement is evident with the processing period dropping to 25 days in both 2023 and 2024, suggesting heightened operational efficiency. In 2025, a slight increase to 28 days occurred, though the period remains shorter than in the initial years.

Overall Insight

The data reveals an overall trend toward improved inventory management efficiency, especially notable from 2022 onwards. Despite some variability, the increased turnover rates coupled with shorter processing periods in recent years suggest stronger inventory control and potentially better alignment with demand. The moderate decreases noted in 2025 warrant attention to monitor if these represent temporary fluctuations or the beginning of a declining efficiency trend.

The analysis of the receivables turnover ratio and the average receivable collection period over the observed years indicates moderate fluctuations in the company's efficiency in managing its receivables.

Receivables Turnover Ratio

This ratio exhibits variability across the periods, starting at 26.62 in 2020, increasing to a peak of 30.92 in 2021, then declining to 27.44 in 2022. It rose again to 30.38 in 2023 before experiencing a gradual decline in the subsequent years to 29.8 in 2024 and 29.11 in 2025. The overall pattern suggests periods of improved receivables management alternating with slight decreases, reflecting efforts to optimize collection efficiency but also potential challenges in maintaining peak turnover consistently.

Average Receivable Collection Period

The average collection period generally remained stable, fluctuating within a narrow range from 12 to 14 days. It began at 14 days in 2020, then decreased to 12 days in 2021, indicating quicker collections. During 2022 to 2024, the figure oscillated between 12 and 13 days, concluding at 13 days in 2025. This stability reflects a consistent approach to gathering receivables, aligned with the turnover ratio trends.

In summary, the company shows a concerted effort to maintain an effective receivables management system. While there are some year-to-year variations, the turnover ratios and collection periods suggest the firm is capable of timely collections, with only minor fluctuations that may be due to changes in operational conditions or credit policies.

The analysis of the operational efficiency metrics over the annual periods reveals several notable trends in inventory management, receivable collection, and overall operating cycle duration.

Average Inventory Processing Period

The average inventory processing period shows variability across the years. Starting at 31 days, there is a decline to 28 days in the following year, indicating improved inventory turnover. However, this is followed by an increase to 33 days, the highest in the observed period. Subsequently, the period decreases significantly to 25 days and remains relatively stable, with a minor increase to 28 days by the latest year. This suggests an overall effort to maintain leaner inventory levels with some fluctuations potentially due to operational adjustments or market conditions.

Average Receivable Collection Period

The receivable collection period remains relatively stable throughout the years. It starts at 14 days and sees a slight improvement to 12 days, maintaining this level with minimal variation except for a slight increase to 13 days in the most recent period. This consistency implies that the company has effectively managed its credit policies and customer payments without significant deterioration or improvement.

Operating Cycle

The operating cycle, which combines inventory processing and receivable collection periods, exhibits a general downward trend initially, decreasing from 45 days to 37 days. This reduction indicates improved overall operational efficiency through faster inventory turnover and quicker receivables collection. Despite this improvement, the cycle increases modestly to 41 days in the final period, which may reflect the inventory fluctuations noted earlier or other operational factors.

In summary, the operational metrics suggest that the company has managed to enhance its efficiency in inventory processing and receivables collection over the observed period, leading to a reduced operating cycle. However, some fluctuations in inventory turnover indicate potential areas to monitor for sustained improvements. The receivables collection period stability points to consistent credit management practices.

The analysis of the payables turnover and average payables payment period over the reported years reveals a clear trend in the management of accounts payable.

Payables Turnover

The payables turnover ratio has exhibited a gradual decline from 18.5 in 2020 to 15.5 in 2025. This decreasing trend indicates that the company is turning over its payables less frequently over time. A lower turnover ratio generally suggests that payments to suppliers are being made at a slower pace, which may affect supplier relations or reflect intentional management of working capital.

Average Payables Payment Period

The average payables payment period has increased from 20 days in 2020 to 24 days in 2025. The lengthening of the payment period corresponds with the decline in the payables turnover ratio, confirming that the company has extended the time it takes to settle its accounts payable over these years.

In summary, the company's payment behavior towards its creditors is trending towards longer payment cycles. This shift may be part of a working capital optimization strategy, allowing the company to retain cash longer. However, it may also carry risks related to supplier satisfaction and potential impacts on credit terms if prolonged excessively.

The analysis of key operational efficiency metrics over the annual periods reveals several trends regarding inventory, receivables, payables, and overall cash conversion cycles.

Average Inventory Processing Period

This metric fluctuated over the years, starting at 31 days in 2020, decreasing to 28 days in 2021, then increasing to 33 days in 2022. In the most recent years, it stabilized at a lower level of 25 days in both 2023 and 2024 before slightly rising to 28 days in 2025. The recent downward trend followed by minor increase suggests efforts to optimize inventory turnover with some variability possibly due to operational or market factors.

Average Receivable Collection Period

Receivables collection exhibited relative stability, ranging narrowly between 12 and 14 days. The period started at 14 days in 2020, decreased to 12 days in 2021, and mostly remained around 12-13 days through 2025. This steadiness implies consistent credit and collection policies maintaining efficient receivables management.

Average Payables Payment Period

The payment period for payables showed a gradual increase from 20 days in 2020 to 24 days in 2025. This elongation indicates a trend towards extending payables turnover, which may be a strategic approach to improve liquidity by deferring cash outflows without significant risk to supplier relationships.

Cash Conversion Cycle

The cash conversion cycle has demonstrated a notable improvement, decreasing from 25 days in 2020 to a low of 15 days in both 2023 and 2024, with a minor increase to 17 days in 2025. Shorter cash conversion cycles signify enhanced operational efficiency in managing the time between outlay of cash and cash recovery, reflecting positively on working capital management.