Starbucks Corp. (NASDAQ:SBUX)

The analysis of turnover ratios and period metrics over multiple quarters reveals several noteworthy trends and fluctuations.

Inventory Turnover

The inventory turnover ratio showed a general decline from a high of 13.72 to lows near 10.97, indicating slower inventory movement during some quarters, notably around early 2022. However, a recovery phase is visible afterwards, culminating in a peak near 16.09 before settling around 13.32. This suggests variations in inventory management efficiency or demand fluctuations over the observed period.

Receivables Turnover

There was a gradual decrease in receivables turnover from approximately 30.15 down to a low in the high 20s, before stabilizing and eventually increasing to about 31.48. This pattern reflects changes in how quickly receivables are collected, signaling periodic shifts in credit policy effectiveness or customer payment behaviors.

Payables Turnover

The payables turnover ratio displayed an increasing trend early on, reaching a high near 21.71, followed by a downward trend to around 14.25. This variability may indicate changes in payment practices to suppliers, possibly influenced by cash management strategies or supplier negotiations.

Working Capital Turnover

Available data for working capital turnover is sparse but shows a significant spike to 205.59 in one quarter, which is an outlier relative to surrounding quarters near the 50 range. This suggests a one-time event or measurement anomaly, warranting further detailed examination to understand its cause.

Average Inventory Processing Period

The average inventory processing period fluctuated moderately between 24 and 33 days, with a notable increase around early 2022, indicating longer holding times for inventory during that span. More recently, the trend points to reduced processing periods, implying improved inventory turnover speeds.

Average Receivable Collection Period

This metric remained relatively stable, mostly between 11 and 14 days, with minor variations that suggest consistency in credit collection efforts across periods.

Operating Cycle

The operating cycle length varied from roughly 35 days up to 46 days, with longer cycles occurring around early 2022. This correlates to periods of slower overall cash flow conversion, possibly related to extended inventory or receivables periods.

Average Payables Payment Period

There is a generally downward trend in the average payables payment period early on, dropping from 23 days to a low of 17 days, followed by recovery back to the low-to-mid twenties. This variation suggests changes in payment timing strategies, possibly balancing supplier relations and cash flow requirements.

Cash Conversion Cycle

The cash conversion cycle exhibited moderate fluctuations between 13 and 27 days, with notable extensions in the middle periods analyzed, reflecting slower conversion of working capital components into cash. More recent quarters show a shortening trend, suggesting improved operational efficiency and liquidity management.

The analysis of the provided quarterly financial data reveals several trends and insights relating to cost of revenues, inventory levels, and inventory turnover ratios over the observed periods.

Cost of Revenues

The cost of revenues exhibited fluctuations over the time span from late 2018 through early 2025. Initially, the cost declined from approximately $4.75 billion in December 2018 to around $4.56 billion by March 2019 but then gradually increased, peaking intermittently above $6.8 billion by the end of 2024. There was a notable dip during the mid-2020 quarters, correlating likely with the global economic impact of the COVID-19 pandemic, after which cost levels recovered and continued an upward trajectory into 2023 and 2024. This overall increase may reflect higher operational costs, expanded sales volumes, or other economic factors influencing production or supply expenses.

Inventories

Inventory levels showed a general increasing trend from late 2018 through 2024, with some variability. Starting at about $1.35 billion, inventories rose consistently, reaching over $2.17 billion by late 2022. Subsequently, inventory values decreased somewhat but remained elevated relative to the earlier period, fluctuating near the $1.7 billion mark toward the end of the analyzed timeframe. These rising inventory balances could indicate strategic stockpiling, supply chain adjustments, or preparation for increased sales demand. The slight reductions toward the end may signal inventory optimization efforts or changes in demand patterns.

Inventory Turnover Ratio

The inventory turnover ratio, available from the third quarter of 2019 onwards, displayed a varied pattern. Initially, turnover rates were around 12 to 13 times per year but declined to slightly below 11 in mid-2022. Afterward, the ratio improved, reaching a peak near 16 times by mid-2023, before trending slightly downward to approximately 13 times at the end of 2024. The fluctuating turnover ratio suggests shifts in inventory management efficiency and sales velocity, with improvements in the later periods indicating enhanced turnover or possibly reduced inventory levels relative to sales.

In summary, the data reflect an overall growth in cost of revenues and inventories over the years, interrupted by the impacts observed around 2020. Inventory turnover ratios moved in tandem with these shifts, showing periods of lower efficiency followed by stronger recovery and stabilization. These patterns collectively suggest adaptive business strategies in response to market conditions and operational challenges.

The analysis of the quarterly financial data reveals several notable trends and fluctuations across the observed periods.

Net Revenues

Net revenues experienced variability throughout the timeline. Initially, revenues were relatively stable around the 6.3 to 7.1 billion US dollars range until the end of 2019. However, beginning in early 2020, there was a sharp decline, reaching a low in the second quarter of 2020 (around 4.2 billion), which likely corresponds with external macroeconomic disruptions. Following this trough, revenues progressively recovered, surpassing previous highs by late 2021 and early 2022, peaking near 8.7 to 9.3 billion US dollars in 2023. Yet, a slight dip occurred in 2024, bringing revenues back closer to the 8.7 to 9.0 billion range in the latest reported quarters.

Accounts Receivable, Net

Accounts receivable demonstrated a general upward trend over the analyzed periods. Starting at approximately 721 million US dollars at the end of 2018, the balance increased gradually with some fluctuations, reaching a high exceeding 1.2 billion US dollars by mid-2024. Minor dips occurred sporadically but were followed by recovery. This rising trend is consistent with expanding sales volume or extended credit terms, potentially reflecting increased business activity and receivables management policies.

Receivables Turnover Ratio

The receivables turnover ratio, available from mid-2019 onwards, shows a slight downward trend initially, declining from about 30.15 to a low near 26.09 during 2019-2020. This fall indicates a slower collection period or higher accounts receivable relative to sales in that timeframe. Subsequently, turnover improved steadily, climbing to values above 31 in several quarters from 2021 to 2024. The improvement in the turnover ratio suggests enhanced efficiency in collecting receivables or changes in credit policies supporting faster cash conversion.

Overall, the data illustrates the impact of significant external factors in early 2020, reflected by decreases in net revenues and turnover, followed by a recovery phase with increasing revenues, rising receivables balances, and improving turnover ratios. The trends point to a business adapting to shifting market and operational circumstances while regaining growth momentum.

The analyzed financial data reveals several noteworthy trends in the cost of revenues, accounts payable, and payables turnover ratios over the observed periods.

Cost of Revenues

The cost of revenues fluctuated throughout the periods, initially showing a decline from the end of 2018 to early 2020. Specifically, from December 2018 to March 2020, the cost decreased from approximately 4,751,700 thousand US dollars to around 4,719,100 thousand US dollars. This was followed by a sharp decline in June 2020 to 4,021,800 thousand US dollars, likely influenced by external market factors. However, after mid-2020, the cost of revenues generally exhibited an upward trend, increasing significantly to reach a peak of around 7,096,700 thousand US dollars by December 2024. A slight reduction is observed thereafter but remains elevated relative to earlier periods, indicating increased expenditure associated with revenue production over time.

Accounts Payable

Accounts payable displayed moderate variability during the entire period. Beginning at about 1,100,500 thousand US dollars at the close of 2018, it declined to a low around 860,800 thousand US dollars mid-2020, indicating a possible tightening of credit terms or operational adjustments. Following this low point, accounts payable rose steadily, reaching approximately 1,913,800 thousand US dollars by March 2025. This increasing trend suggests a higher reliance on supplier credit or growing procurement activity consistent with the rising costs of revenues.

Payables Turnover Ratio

The payables turnover ratio, available from mid-2019 onwards, demonstrates a decreasing trend over time. Initially, it increased markedly from 15.99 to a peak near 21.71 by September 2019, indicative of faster payment cycles during that period. However, a consistent decline ensued afterward, falling to approximately 14.25 by March 2025. This decrease implies that the company has been taking longer to settle its accounts payable in recent periods, which could be reflective of changes in payment policies or liquidity management strategies.

In summary, the company experienced a reduction in both cost of revenues and accounts payable at the pandemic's onset, with recovery and growth notable in subsequent quarters. The increasing costs and payables indicate expansion or cost inflation, while the declining payables turnover ratio highlights lengthening payment periods. These dynamics collectively suggest adjustments in operational scale and financial management over the reviewed timeframe.

The financial data reveals several notable trends over the presented periods. Net revenues demonstrate a general upward trajectory, reflecting growth with some fluctuations likely influenced by external or operational factors. Beginning with 6,632,700 (thousands of USD) in the earliest period, revenues experienced minor decreases and increases over successive quarters, peaking around the 9,425,300 mark before retracting slightly towards the last reported period at 8,761,600.

Working capital figures show considerable volatility throughout the periods analyzed. Initial positive working capital values are followed by a series of negative values indicating potential liquidity pressures or strategic changes in asset and liability management. Large negative spikes, such as those near -2,715,800 and beyond, suggest episodes where current liabilities might have exceeded current assets significantly, posing short-term financial challenges.

The working capital turnover ratio data is sparsely available but indicates extremely high turnover rates in the quarters where it is reported, with ratios exceeding 50 and even reaching above 200. Such elevated turnover ratios typically denote efficient utilization of working capital in generating net revenues during those specific quarters, though the lack of consistent data across periods limits a full assessment of its trend.

Overall, the revenue growth amidst fluctuating and often negative working capital values suggests that while sales are expanding, the company's short-term financial position may be under stress or undergoing restructuring. The sporadic high working capital turnover ratios align with periods of high efficiency in capital use, potentially linked to operational adjustments or strategic initiatives taken within those quarters.

Inventory turnover ratio

The inventory turnover ratio displays some fluctuations over the observed periods. Initially, around the end of 2018 and early 2019, data is missing, but from late 2019 onwards, the ratio starts at 12.44 and shows an increasing trend, reaching a peak of 13.72 by March 2019. Subsequently, it slightly decreases and stabilizes around the 11.8 to 12.9 range during most of 2020 and 2021. Notably, from 2022 through early 2023, the turnover ratio dips to a low of 10.97, indicating slower inventory movement. Afterward, it recovers gradually, increasing sharply in 2023 with a peak of 16.09 in October 2023, followed by a gradual decline towards 13.32 by March 2025. Overall, the ratio suggests periods of both accelerated and decelerated inventory turnover, with a significant improvement in efficiency seen in late 2023.

Average inventory processing period (number of days)

The average inventory processing period inversely reflects the inventory turnover trends. Starting from 29 days in late 2019, the period briefly shortens to 27 days by early 2020, then lengthens to a peak of 33 days around late 2021 and early 2022, indicating slower inventory processing during this time. This increase corresponds with the observed decline in inventory turnover, reflecting a reduced velocity of inventory movement. After early 2022, the days gradually decrease, reaching a low of 23 days by the second quarter of 2023, coinciding with the peak inventory turnover. Towards the latest periods through early 2025, the days slightly increase again, stabilizing around 24 to 27 days. The fluctuations indicate changes in inventory management efficiency, with a notable improvement in processing speed during mid-2023.

The receivables turnover ratio data, available from December 29, 2019, through March 30, 2025, reveals a generally stable but slightly fluctuating trend. Initially, the ratio shows a gradual decline from 30.15 to 26.09 by March 28, 2021. This indicates a modest slowdown in the frequency at which receivables are collected during this period. However, from June 27, 2021, the turnover ratio experiences a recovery trend, gradually increasing and peaking around 32.9 by June 30, 2024, before slightly declining again toward the end of the period.

Correspondingly, the average receivable collection period, which measures the typical number of days taken to collect receivables, complements the turnover ratio observations. Early in the dataset, the period increases from 12 to 14 days, reflecting a slower collection process. This period stabilizes mostly between 12 and 13 days thereafter, with occasional minor fluctuations. A modest improvement is seen toward the end of the timeline, where the collection period slightly shortens to around 11 to 12 days, suggesting a more efficient receivables management in recent quarters.

Receivables Turnover Ratio

Initial decline from 30.15 to 26.09 over approximately one and a half years.

Subsequent recovery and growth peaking at 32.9 around mid-2024.

Minor fluctuations with a slight downward trend near the end of the record.

Average Receivable Collection Period

Increase from 12 days to 14 days, indicating slower collection initially.

Stabilization mostly between 12-13 days, reflecting consistent collection efficiency.

Improvement toward later dates with collection periods shortening to 11-12 days.

Overall, this analysis suggests that the company experienced some difficulty in collecting receivables efficiently in the earlier part of the period, followed by a phase of improved management and quicker collections, as evidenced by the recovery in turnover ratio and shortening collection periods. The trends indicate sound working capital management practices with cyclical adjustments but no extreme volatility.

Average Inventory Processing Period

The average inventory processing period exhibits variability over the reported quarters. Starting with data availability at 29 days, it shows a slight reduction to 27 days, followed by a gradual increase peaking at 33 days in early 2022 and 2023. Subsequently, a declining trend is observed, reaching a low of 23 days in early 2024. Toward the most recent periods, the period stabilizes between 24 and 27 days. This pattern suggests some fluctuations in inventory turnover efficiency, with periods of slower processing balanced by improvements in more recent quarters.

Average Receivable Collection Period

The average receivable collection period remains relatively stable throughout the timeline. It begins at 12 days and shows minimal fluctuations, oscillating mostly between 11 and 14 days. Notably, there is a slight increase to 14 days in late 2019 and early 2020, possibly reflecting extended credit terms or collection challenges during that period. Following this, the collection period generally centers around 12 to 13 days, indicating consistent management of receivables with minor variations.

Operating Cycle

The operating cycle mirrors the patterns observed in inventory and receivables periods due to its composite nature. Initially recorded at 41 days, it slightly decreases to 39 days before climbing to a peak of 46 days in early 2022 and 2023. After this peak, there is a notable improvement with the operating cycle shortening to 35 days in early 2024. Toward the latest periods, the cycle shows a minor increase but remains relatively contained within the 35 to 39-day range. This suggests improved overall operational efficiency, with a reduction in the time required to convert inventory and receivables into cash in the more recent quarters.

The analysis of the payables-related financial ratios over the observed quarterly periods reveals distinct trends in payables turnover and the average payables payment period. Both metrics provide insights into the company's efficiency in managing its obligations to suppliers.

Payables Turnover

The payables turnover ratio exhibits an overall fluctuating yet generally decreasing trend from the initial recorded value of 15.99 to a value of 14.25 in the most recent quarter. This ratio peaked around the 2019-2020 period, reaching values as high as 21.71 in September 2019. Following this peak, the turnover showed a gradual decline, with some intermittent increases, stabilizing mostly between 16 and 18 in subsequent quarters before the more noticeable decrease towards the end.

Average Payables Payment Period

The average payables payment period, measured in days, inversely correlates with the payables turnover ratio. Starting at 23 days, it decreased to a low of 17 days in September 2019, coinciding with the peak in payables turnover. After this low point, the payment period increased again, ranging predominantly between 20 to 23 days in the following quarters. Towards the latest quarters, there is a clear upward trend, reaching 26 days, indicating a tendency to take longer to settle payables.

Interpretation of Trends

The initial peak in payables turnover alongside the minimum payment period indicates a period of increased efficiency in settling payables more rapidly. Subsequently, a reversal in this trend suggests a slowing pace in payables settlements, reflected by the decreasing turnover ratio and lengthening payment period. This pattern may point to more relaxed payment terms or potential cash flow management strategies intending to retain cash longer. The fluctuations observed through the quarters could be influenced by operational or market factors impacting the company's payment policies.

Average inventory processing period

The average inventory processing period initially shows a small fluctuation between 27 and 31 days from 2019 through 2022, indicating relative stability in inventory turnover. Notably, there is a peak at 33 days in early 2023, suggesting a slower inventory turnover during that period. Following this peak, the period decreases steadily to 23 days by mid-2024, pointing to improved inventory management and faster processing in more recent quarters. Toward the end of the dataset, there is a slight increase to 27 days, which may indicate a minor slowdown or seasonal variation.

Average receivable collection period

The collection period remains relatively stable over the entire timeline, fluctuating narrowly between 11 and 14 days. This stability demonstrates consistent credit and collection policies. There is a minor increase around late 2019 to early 2021, reaching up to 14 days, after which it returns closer to 12 days. The most recent quarters from mid-2024 show a slight upward shift to 12-13 days, but still within historical ranges.

Average payables payment period

The payment period begins at around 23 days in late 2018, dropping steadily to 17 days by late 2019, indicating a tendency toward quicker payment of obligations. From 2020 onwards, the period fluctuates between 20 and 26 days, with a noticeable increase in late 2024 peaking at 26 days. This trend suggests a strategic extension of payment terms in more recent periods, potentially to optimize cash flow.

Cash conversion cycle

The cash conversion cycle (CCC) reveals several fluctuations over the observed period. After steady values around 18 days in late 2019, CCC rises to a peak of 27 days in the third quarter of 2019, corresponding with increased inventory days. Thereafter, CCC gradually decreases, reaching a low of 13-15 days during 2024, indicating improved efficiency in managing working capital. The reduction in CCC suggests that the company is converting its investments in inventory and receivables into cash more quickly than in previous years.