Starbucks Corp. (NASDAQ:SBUX)

The analysis of the quarterly financial ratios over the observed periods reveals several notable trends and patterns related to the efficiency of asset utilization and working capital management.

Inventory Turnover

The inventory turnover ratio exhibited moderate fluctuations, starting at 12.45 and generally showing a gradual increase with peaks around 16.09 before settling around 13.14 in the latest period. This indicates an overall improvement in inventory management efficiency, suggesting that the company has been able to convert its inventory into sales more rapidly over time, especially noticeable around the central periods analyzed.

Receivables Turnover

The receivables turnover remained relatively stable and high, fluctuating between approximately 26 and 33. The data shows a slight upward trend, peaking at 32.9 and remaining close to this level thereafter. This reflects consistent efficiency in collecting receivables, with the company maintaining a good pace in converting credit sales to cash.

Payables Turnover

Payables turnover demonstrated some volatility with values ranging from around 14.25 to 18.13. There was a notable decline in turnover ratios during the later periods, suggesting a trend towards slower payment to suppliers which might be a strategic move to extend payment terms and manage cash flow.

Working Capital Turnover

The working capital turnover ratio showed extreme volatility early on, with a significant outlier at 205.59, but no further data after the initial periods. This anomaly could indicate a one-time event or data inconsistency, limiting the ability to assess longer-term trends for this measure.

Average Inventory Processing Period

The average number of days to process inventory initially decreased from 29 to as low as 23 days, followed by a slight rise to about 28 days in the most recent period. This downward trend, followed by stabilization, reinforces the improvements indicated by the inventory turnover ratio, reflecting effective inventory management practices.

Average Receivable Collection Period

This remained quite consistent, hovering around 11 to 14 days, with a slight decrease in latter periods. The stability indicates steady credit policy enforcement and efficient collections processes.

Operating Cycle

The operating cycle saw a gradual shortening from 43 days to about 35 days before slightly increasing again to 41 days by the end of the period. A shorter operating cycle generally suggests enhanced operational efficiency in managing inventory and receivables, although the later increase may warrant monitoring.

Average Payables Payment Period

The average period for paying payables increased from about 20 days to a range between 24 and 26 days in the last periods. This trend toward longer payment terms could suggest deliberate cash flow management strategies by the company.

Cash Conversion Cycle

The cash conversion cycle improved over time, decreasing from 22 to 13-17 days range. The lower cash conversion cycle indicates more efficient overall management of cash flows, reflecting quicker turnovers of inventory and receivables relative to payables.

In summary, the financial efficiency ratios indicate that the company has generally improved its operational and working capital management over time, as evidenced by better inventory turnover, stable receivables collection, and a reduced cash conversion cycle. However, the extension of the payables payment period suggests a strategy aimed at optimizing liquidity that should be balanced to maintain supplier relationships and credit terms.

The analysis of the quarterly financial data reveals notable trends in cost of revenues, inventories, and inventory turnover ratios over the observed periods.

Cost of Revenues

Cost of revenues exhibits a generally upward trajectory with some fluctuations. Starting at approximately 4.92 billion USD in late 2020, costs increased to a peak around late 2024 and early 2025, nearing 7.4 billion USD. Notable increases occurred particularly from early 2022 through the end of 2024. Despite minor periodic decreases, the overall pattern indicates rising costs, likely reflecting higher volume, price changes, or cost pressures in procurement and production.

Inventories

Inventories showed an increasing trend in the initial periods, rising from about 1.47 billion USD to a peak exceeding 2.17 billion USD in late 2022. Following this peak, inventory levels declined steadily, reaching a lower range near 1.65 billion USD by early 2024. Subsequently, a moderate increase occurred again approaching late 2024 and early 2025, with inventory values around 2.18 billion USD. These fluctuations could indicate adjustments in stock management, supply chain considerations, or seasonal demand variations.

Inventory Turnover

The inventory turnover ratio generally trended upward over the full span, starting from approximately 12.45 times in late 2020 and reaching a high of roughly 16.1 times in early 2024. This increase indicates an improvement in the efficiency of inventory management and faster conversion of inventory into sales. After peaking, the ratio experienced a decline, dipping below 13 times by mid-2025. The ratio's rise aligns with initial inventory declines, suggesting effective inventory control, while the later decrease may reflect slower sales or increased inventory holdings.

In summary, cost of revenues showed growth consistent with expanding operations or inflationary pressures. Inventory levels fluctuated with notable peaks and troughs, correlated inversely with changes in inventory turnover ratios. The improved turnover ratio up to early 2024 signals enhanced operational efficiency, although the subsequent decline suggests potential challenges or strategic adjustments in inventory management.

The analysis of the quarterly financial data reveals several key trends in the company's operations over the observed periods.

Net Revenues

The net revenues exhibit a generally increasing trend with some fluctuations. From the initial figure of approximately 6.75 billion USD, revenues rose steadily, peaking around the 9.4 billion USD mark in early 2024 and late 2024. Notable dips are observed in the quarters ending March 2024 and March 2025, where revenues decreased to roughly 8.56 billion USD and 8.76 billion USD respectively, suggesting potential seasonality or external market factors influencing sales. Despite these variations, the overall trajectory remains positive, with the latest figures reaching approximately 9.57 billion USD.

Accounts Receivable, Net

The net accounts receivable values have shown a gradual increase over the quarters. Starting at 888 million USD, this figure grew to approximately 1.28 billion USD by the end of the reported timeline. The increase appears relatively consistent, reflecting expanding credit extended to customers or changes in credit policies. Slight fluctuations are present, but no substantial decreases occur, implying stable collection practices despite the growth in receivables.

Receivables Turnover Ratio

The receivables turnover ratio, indicative of the efficiency in collecting receivables, demonstrates variability over time. Beginning at about 26.09, the ratio climbed to a peak near 32.90 in early 2024, indicating improved collection efficiency. However, a decline followed, with ratios moving back towards approximately 29.11 by the latest dates. This cycle suggests a period of enhanced collections possibly due to stricter credit terms or improved operations, followed by a slight easing or longer collection periods in subsequent quarters.

In summary, the company's net revenues generally increase with some seasonal or cyclic declines, while accounts receivable steadily grow, possibly due to increased sales volume or extended credit. The receivables turnover ratio indicates fluctuations in collection efficiency, peaking in early 2024 before moderating in later periods. These patterns reflect growing business activity tempered by variations in credit management and market conditions.

The financial data reflects several notable trends in costs, payables, and efficiency metrics over the series of quarterly periods presented.

Cost of Revenues

The cost of revenues exhibits a generally upward trajectory with some fluctuations. Initial quarters start around 4.9 billion USD, increasing steadily to peak levels around 7.4 billion USD towards the later periods. Some interim decreases are observed, particularly around the period ending in March 2024, where costs dip slightly before resuming an upward trend. This suggests increasing operational scale or input cost pressures over time.

Accounts Payable

Accounts payable amounts show a consistent increasing trend from roughly 1.05 billion USD initially to a higher range near 1.9 billion USD towards the latter quarters. There are no reversals in the trend, indicating growing outstanding liabilities possibly correlating with the increased cost of revenues and volume of purchases on credit.

Payables Turnover Ratio

The payables turnover ratio, a measure of how frequently the company pays off its suppliers during the period, displays some variability but generally trends downward over time, beginning near 17.4 and declining toward the 15.5 mark in the last quarter. This decreasing ratio suggests that the company is taking longer to pay its suppliers as time progresses. This could reflect changes in payment terms negotiation, working capital management strategies, or shifts in cash flow timing.

Overall Analysis

The combination of rising costs and accounts payable, alongside a declining payables turnover ratio, indicates possible elongation of supplier payment periods to manage liquidity in the face of increasing operational expenses. While the company's purchases and operational scale are increasing, the efficiency in clearing payables appears to be decreasing slightly over time.

The financial data reveals several notable trends in key operational metrics over the observed periods.

Working Capital

Working capital demonstrated substantial volatility across the reported quarters. Starting with a positive balance around 474 million USD in late 2020 and early 2021, it showed a sharp increase to approximately 1.6 billion USD by the third quarter of 2021. Subsequently, the working capital turned negative beginning in early 2022, indicating potential liquidity challenges or increased current liabilities exceeding current assets. This negative trend intensified over time, reaching a low exceeding -3.7 billion USD in the first quarter of 2025, followed by a slight recovery but remaining substantially negative thereafter.

Net Revenues

Net revenues exhibited a generally positive trajectory with some fluctuations. Initially, revenues decreased slightly from about 6.7 billion USD in the last quarter of 2020 to roughly 6.6 billion USD in the first quarter of 2021. Thereafter, a strong upward trend was observed through to the end of 2023, peaking near 9.4 billion USD by the fourth quarter of 2023. Post-2023, revenues showed some volatility but largely remained close to or above 9.0 billion USD, with minor dips in early 2024 and early 2025 followed by rebounds.

Working Capital Turnover

This ratio displayed significant variability in the earlier periods, peaking at over 200 in the second quarter of 2021 before declining sharply to 18 by the fourth quarter of 2021. No further data points were provided for this metric in subsequent periods, limiting the ability to analyze its progression alongside the negative working capital trends observed.

Overall, while net revenues generally increased over time, the marked deterioration of working capital into negative territory and the absence of updated working capital turnover data suggest potential liquidity or operational efficiency challenges that may require attention. The decoupling of increasing revenues with worsening working capital metrics points to changes in the company's short-term asset and liability management strategies or business environment factors impacting its working capital cycle.

The analysis of the inventory turnover ratio and average inventory processing period reveals several notable patterns over the observed quarters.

Inventory Turnover Ratio

The inventory turnover ratio exhibits variability across the time frame. Starting at 12.45, there is an initial slight decline followed by fluctuations until a significant rise occurs around October 2023, reaching a peak of 16.09. This is the highest observed ratio, indicating improved efficiency in inventory management during that quarter. Subsequently, the ratio decreases gradually but remains above early period levels, suggesting a stabilization at a relatively higher turnover rate compared to the beginning of the period.

Average Inventory Processing Period

This metric shows an inverse relationship with the turnover ratio, as expected, since a higher turnover generally corresponds to a shorter inventory holding period. The average inventory days start at 29 and remain fairly constant with minor fluctuations until late 2021 when the period increases slightly to 33 days, indicating slower inventory movement. Following this, there is a pronounced decrease to 23 days during December 2023, coinciding with the peak turnover ratio, reflecting more rapid inventory processing. After this low point, the processing period trends upward moderately, stabilizing around 27-29 days towards the end of the observed term.

Overall Trends and Insights

The data suggests a period of relative inventory management stability initially, with some temporary declines in turnover and increases in processing days around mid-2022. The company appears to have enhanced its inventory efficiency significantly entering late 2023, as evidenced by the peak turnover and minimum processing period values. This improvement could be indicative of optimized supply chain practices or inventory policies during that timeframe. The subsequent slight regression and stabilization imply that the company may have adjusted to a new operational equilibrium that supports a generally more efficient inventory cycle than in earlier years.

Receivables Turnover

The receivables turnover ratio demonstrates a fluctuating yet generally upward trend over the observed periods. Starting at 26.09 in late 2020, it increased to peaks above 31 multiple times, reaching as high as 32.90 around the first quarter of 2024. This indicates an improvement in the frequency of collecting receivables, suggesting enhanced efficiency in credit management or faster cash conversion cycles during some intervals. However, occasional declines, such as the dip from 31.83 to 29.80 towards late 2024, highlight periods where collection efficiency may have eased slightly. Overall, the receivables turnover remains relatively strong, oscillating mostly within the 27 to 32 range.

Average Receivable Collection Period

The average collection period has remained fairly stable throughout the timeframe, fluctuating between 11 and 14 days. Initial figures around 14 days decreased to 12 days in several quarters of 2021 and 2022, implying faster cash inflows. This slight improvement is consistent with the increase in receivables turnover observed in the same periods. The collection period further shortens to as low as 11 days in early 2024, indicating peak efficiency in receivables collection. Minor increases back to 12 or 13 days appear sporadically, reflecting slight variability but maintained overall quick turnover of receivables.

Overall Insights

The relationship between the two metrics aligns logically: as receivables turnover increases, the average collection period tends to decrease, evidencing a more efficient collections process. This suggests effective credit policies and customer payment behavior over time. While there are some periods of mild regression, the general pattern points towards an enhancement in working capital management related to accounts receivable.

The analysis of key financial cycle metrics over multiple quarters reveals several notable trends and shifts in operating efficiency.

Average Inventory Processing Period

This metric exhibits some fluctuation across the observed periods. Initially, it remains around 28–30 days, indicating relatively stable inventory turnover. However, a slight increase occurs around early to mid-2022, peaking at 33 days before steadily declining toward 23 days by early 2024. After this decline, a gradual rebound is observed, reaching about 29 days by late 2025. These movements suggest temporary slowdowns in inventory processing followed by improvements, possibly reflecting adjustments in inventory management or supply chain conditions.

Average Receivable Collection Period

The accounts receivable collection period maintains a relatively tight range between 11 and 14 days throughout the timeline, demonstrating consistent effectiveness in receivables management. There is a mild improvement seen in early 2024, where the period reduces to 11 days, indicating faster cash conversion from sales. Subsequently, the period stabilizes again around 12 to 13 days, reflecting consistent credit and collection policies.

Operating Cycle

The operating cycle, derived as the sum of inventory processing and receivables collection periods, shows a downward trend from an initial 43 days to a low near 35 days by early 2024. This represents enhanced operational efficiency and quicker turnover of working capital during that timeframe. However, from mid-2024 onward, the operating cycle lengthens modestly, fluctuating between 37 to 41 days. This upward movement implies a slight deterioration in working capital efficiency, possibly due to the observed increase in inventory days that outweighs the stable receivables period.

Overall, the patterns indicate that the company has been able to improve its operational efficiency significantly up to early 2024, primarily through reducing inventory holding times. The consistently controlled receivable collection period supports steady cash flow from customers. Nonetheless, there is evidence of a slight reversal in these gains in the later periods, calling for monitoring to sustain efficient working capital management.

The analysis of the accounts payable metrics over the observed periods reveals several notable trends and fluctuations. The payables turnover ratio and the average payables payment period show inverse movements consistent with each other, reflecting the company’s payment policies and supplier relationship management.

Payables Turnover Ratio

The payables turnover ratio exhibited variability throughout the observed quarters. Initially, the ratio fluctuated mildly around the 17 to 18 range, reaching a peak of approximately 18.13 in the early part of 2023. Following this peak, the ratio declined steadily to around 14.25 by the first quarter of 2025, before a slight recovery toward 15.5 in the subsequent quarter. This decline suggests a slower rate of payments to suppliers over time, indicating possible elongation in payment cycles or improved terms from suppliers.

Average Payables Payment Period

The number of days in the average payables payment period showed a corresponding inverse trend. Starting at around 20 to 22 days, the payment period extended gradually, reaching up to 26 days by early 2025. This indicates that the company has been taking longer to settle its payables over successive quarters. The increase in the payment period aligns with the decreased payables turnover, suggesting deliberate strategic management of cash flow or changes in supplier agreements.

Overall, the trends suggest a gradual shift toward extending the time taken to pay suppliers, potentially to optimize cash flow or due to renegotiated supplier terms. Although the slight rebound in turnover ratio and reduction in days toward the later period may indicate a partial return to faster payments, the general direction over the analyzed timeframe points to longer payment cycles. This dynamic should be monitored to assess impacts on supplier relationships and financial liquidity management.

Average Inventory Processing Period

The average inventory processing period exhibited a generally decreasing trend over the observed timeframe. Starting at 29 days in late 2020, it remained relatively stable through early 2022, fluctuating between 28 and 33 days. Notably, from late 2022 onwards, the period progressively reduced, reaching a low of 23 days in the first quarter of 2024 before slightly increasing again to 29 days by mid-2025. This pattern suggests an improvement in inventory turnover efficiency during the middle of the period, followed by a modest reversal towards the end.

Average Receivable Collection Period

The average receivable collection period maintained a stable pattern throughout the periods analyzed. Values consistently hovered around 12 to 13 days, with a slight improvement observed around early to mid-2024 when the period declined to 11 days. However, this improvement was temporary as the collection period returned to approximately 12 to 13 days thereafter. This indicates a steady efficiency in receivables management with only minor short-term fluctuations.

Average Payables Payment Period

The average payables payment period showed a gradual lengthening trend over time. Beginning at 21 days at the end of 2020, it experienced modest increases, reaching 26 days by mid-2025. The payment period fluctuated slightly within the 20 to 24 days range before a more pronounced increase occurred in the later quarters. This extension suggests a lengthening of the time taken to settle supplier obligations, which can impact cash flow positively by delaying outflows.

Cash Conversion Cycle

The cash conversion cycle (CCC) demonstrated a declining trend overall, improving from 22-23 days in late 2020 and early 2021 to a minimum of 13 days by early 2024 and again in early 2025. Following these lows, there were slight upticks back to 16-17 days. The reduction in the CCC implies enhanced operational efficiency, with the company effectively managing working capital by reducing the time between cash outflows and inflows. The minor increases towards the end of the period suggest some variability but overall improvement versus the earlier years.