Starbucks Corp. (NASDAQ:SBUX)

The short-term operating activity ratios exhibit varied trends over the observed period. Inventory turnover generally increased from December 2020 through October 2021, peaking at 14.46 in October 2023, before declining to 13.93 in September 2025. Receivables turnover demonstrated a similar pattern of increase through April 2022, followed by fluctuations, with a recent increase to 30.92 in September 2025. Payables turnover showed a decline from December 2020 to September 2024, followed by a recovery to 17.50 in December 2025. Working capital turnover experienced a significant spike in June 2021, but subsequent values are largely unavailable, with a value of 70.34 observed in December 2025.

Inventory Management

The average inventory processing period generally decreased from 29 days in December 2020 to a low of 23 days in October 2023, indicating improved efficiency in managing inventory. It has since slightly increased to 26 days in June 2025. This suggests a generally efficient inventory management system, though recent periods show a slight lengthening of the processing time.

Receivables Management

The average receivable collection period remained consistently low, fluctuating between 12 and 14 days throughout the majority of the period. A slight increase to 13 days is observed in September 2025, but remains indicative of efficient collection practices. The consistency suggests effective credit and collection policies.

Payables Management

The average payables payment period remained relatively stable between 20 and 22 days from December 2020 through July 2022. A noticeable increase to 26 days was observed in March 2025, suggesting a potential shift in payment terms or strategy. The recent value of 21 days in December 2025 indicates a return towards historical norms.

Operating and Cash Cycles

The operating cycle generally decreased from 43 days in December 2020 to 37 days in October 2023, before stabilizing around 38-41 days. The cash conversion cycle exhibited a more pronounced decrease, falling from 22 days in December 2020 to a low of 15 days in October 2023, and then increasing to 17 days in September 2025. These trends suggest improvements in overall operational efficiency and cash flow management, although the recent increases warrant monitoring.

Overall, the company demonstrates generally efficient management of its short-term assets and liabilities. The recent fluctuations in several ratios, particularly payables turnover and the cash conversion cycle, suggest potential shifts in operational strategies or external factors that merit further investigation.

Inventory turnover exhibited a generally increasing trend over the analyzed period, though with notable fluctuations. Initially, the ratio demonstrated relative stability, followed by a period of decline, and then a resurgence towards the end of the observation window.

Initial Period (Dec 27, 2020 – Oct 3, 2021)

The inventory turnover ratio began at 12.45 and showed a modest increase, reaching 12.89 by October 2021. This suggests a consistent, albeit slow, improvement in the efficiency of inventory management during this timeframe. The cost of revenues also increased during this period, indicating growing sales volume.

Decline and Stabilization (Jan 2, 2022 – Oct 2, 2022)

A decline in inventory turnover was observed, falling to a low of 10.97 in both July and October 2022. This coincided with a significant increase in inventory levels, peaking at 2,176,600 in October 2022, while the growth in cost of revenues slowed. This suggests potential challenges in managing inventory demand or an increase in inventory holding costs.

Recovery and Peak (Jan 1, 2023 – Oct 1, 2023)

The ratio experienced a substantial recovery, reaching a peak of 16.09 in October 2023. This improvement was accompanied by a decrease in inventory levels and continued growth in cost of revenues. This indicates successful inventory reduction strategies and strong sales performance.

Recent Fluctuations (Dec 31, 2023 – Sep 28, 2025)

Following the peak, the inventory turnover ratio exhibited some volatility. It decreased to 13.32 by March 2025, before rising again to 13.93 by September 2025. Inventory levels increased during this period, but cost of revenues also continued to grow, suggesting a dynamic balance between inventory management and sales. The most recent value, 13.93, indicates a return to a relatively healthy inventory turnover rate.

Overall, the observed pattern suggests a company capable of adapting its inventory management strategies in response to changing market conditions. The recent fluctuations warrant continued monitoring to ensure sustained efficiency and avoid potential inventory-related challenges.

The receivables turnover ratio for the analyzed period demonstrates a generally stable pattern with some fluctuations. Overall, the ratio indicates a consistent ability to convert accounts receivable into revenue, though with some variability across the observed quarters.

Initial Period (Dec 2020 - Oct 2021)

The receivables turnover ratio began at 26.09 and exhibited a consistent upward trend, reaching a peak of 30.92 by October 2021. This suggests an improving efficiency in collecting receivables during this timeframe. The increase indicates that, on average, receivables were being collected and converted into cash more quickly.

Subsequent Fluctuations (Jan 2022 - Oct 2022)

Following the peak in October 2021, the ratio experienced a slight decline to 27.44 by October 2022. While still remaining above the initial value, this period shows a moderation in the rate of receivables collection. The ratio fluctuated between 29.45 and 27.44 during this period.

Recent Trends (Jan 2023 - Sep 2025)

From January 2023 through September 2025, the receivables turnover ratio continued to fluctuate, generally remaining within a range of 28.30 to 32.90. A peak of 32.90 was observed in March 2024. The most recent quarter, ending September 2025, shows a ratio of 30.92, which is consistent with the overall trend observed in the latter part of the analyzed period. There is no clear upward or downward trend in this recent period, suggesting relative stability in the company’s receivables collection efficiency.

Overall Assessment

The receivables turnover ratio has generally remained strong throughout the analyzed period. While fluctuations exist, the ratio consistently indicates efficient management of accounts receivable. The observed variations may be attributable to seasonal sales patterns, changes in credit terms offered to customers, or broader economic conditions. The ratio’s stability in the most recent quarters suggests a consistent approach to credit and collection policies.

The accounts payable turnover ratio exhibits a generally stable pattern over the analyzed period, with some notable fluctuations. Initially, the ratio demonstrates a slight increase from December 2020 to March 2021, followed by a period of relative stability through October 2021. A subsequent decline is observed through the first half of 2022, before recovering and fluctuating between 16.57 and 18.13 from October 2022 to December 2023. A more pronounced downward trend emerges in early 2024, continuing through the first half of 2025, before a final increase in the last reported period.

Overall Trend

The accounts payable turnover ratio generally remained within a range of 14.25 to 18.13 over the observed timeframe. While fluctuations occurred, a clear, sustained upward or downward trend was not consistently present until the period beginning in early 2024.

Initial Period (Dec 2020 – Oct 2021)

The ratio began at 17.44 in December 2020 and peaked at 17.82 in March 2021. It then experienced a modest decline, settling at 17.06 by October 2021. This initial period suggests a consistent ability to pay off suppliers within a similar timeframe.

Mid-Period Fluctuation (Jan 2022 – Dec 2023)

From January 2022, the ratio decreased to 16.81, then recovered to 18.13 by December 2023. This period shows increased variability, potentially reflecting changes in purchasing patterns, supplier credit terms, or payment strategies. The increase in accounts payable during this period, coupled with relatively stable cost of revenues, contributed to these fluctuations.

Recent Decline (Jan 2024 – Sep 2025)

A noticeable downward trend is evident starting in January 2024, with the ratio declining from 17.76 to a low of 14.25 in March 2025. This decline coincides with a significant increase in accounts payable, while cost of revenues remained relatively stable. The ratio then increased to 17.50 in September 2025, suggesting a potential reversal of this trend.

Accounts Payable & Cost of Revenues Relationship

The accounts payable turnover ratio is calculated using cost of revenues and accounts payable. Increases in accounts payable, without a corresponding increase in cost of revenues, generally lead to a lower turnover ratio, indicating a longer period to pay suppliers. Conversely, increases in cost of revenues, without a corresponding increase in accounts payable, generally lead to a higher turnover ratio.

The observed fluctuations in the accounts payable turnover ratio warrant further investigation to determine the underlying causes. The recent decline, in particular, should be monitored to assess its potential impact on supplier relationships and working capital management.

The working capital turnover ratio exhibits considerable fluctuation over the observed period. Initial values demonstrate a relatively stable, and high, turnover, followed by a period of significant volatility and, ultimately, a return to a higher level in the most recent quarter.

Initial Period (Dec 2020 - Jun 2021)

From December 2020 through June 2021, the working capital turnover ratio increased from 48.92 to 205.59. This suggests a substantial improvement in the efficiency with which working capital was being utilized to generate revenue during this timeframe. The dramatic increase in June 2021 warrants further investigation to understand the underlying drivers, such as changes in inventory management, accounts receivable collection, or accounts payable payment terms.

Volatility and Negative Working Capital (Oct 2021 - Dec 2023)

Following the peak in June 2021, the ratio experienced a sharp decline to 18.11 by October 2021. Subsequently, working capital transitioned to negative values, persisting through December 2023. The inability to calculate the working capital turnover ratio during this period, due to the negative working capital, indicates a potential liquidity concern or a strategic shift in financing practices. The consistently negative working capital suggests the company is funding its operations with more liabilities than current assets.

Recent Trend (Jan 2024 - Jun 2025)

The ratio became calculable again in the final quarter, reaching 70.34. This represents a significant improvement from the prior period of negative working capital and suggests a potential stabilization or correction of the earlier financial position. The ratio continued to fluctuate, reaching 70.34 in the most recent quarter, indicating a return to a more efficient utilization of working capital. The fluctuations in the most recent periods suggest ongoing adjustments to working capital management.

Overall, the observed pattern indicates a period of efficient working capital management followed by a period of financial restructuring or operational challenges, culminating in a recent return to improved turnover. Continued monitoring of this ratio, alongside its underlying components, is recommended to assess the sustainability of this improvement.

The average inventory processing period exhibited a generally decreasing trend over the observed timeframe, with some fluctuations. Initially, the period stood at 29 days in December 2020, experienced minor variations, and then demonstrated a more pronounced decline towards the end of the period. A subsequent stabilization and slight increase are also noted.

Initial Phase (Dec 2020 – Oct 2022)

The average inventory processing period remained relatively stable between 28 and 30 days during this period. A slight increase to 33 days was observed in July and October of 2022, suggesting a potential slowdown in inventory turnover during those quarters. This could be attributable to seasonal factors or supply chain dynamics.

Declining Trend (Jan 2023 – Oct 2023)

A clear downward trend is evident from January 2023 through October 2023, with the period decreasing from 31 days to a low of 23 days. This indicates improved efficiency in managing inventory, potentially due to optimized supply chain management, increased sales velocity, or a combination of both. The inventory turnover ratio increased during this period, corroborating this observation.

Stabilization and Slight Increase (Dec 2023 – Sep 2025)

Following the decline, the average inventory processing period stabilized, fluctuating between 24 and 29 days. A slight increase is observed in March 2025 to 29 days, followed by a return to 28 days in September 2025. This suggests that the efficiency gains achieved may have reached a plateau, or that external factors are introducing some variability. The inventory turnover ratio also shows a similar pattern of stabilization after the initial increase.

Overall, the observed trend suggests a strengthening of inventory management practices, leading to a faster processing period. However, the recent stabilization and minor fluctuations warrant continued monitoring to identify any emerging challenges or opportunities for further optimization.

The average receivable collection period remained remarkably stable over the analyzed period, spanning from December 2020 to June 2025. The metric consistently hovered around 12 to 13 days, indicating a highly efficient collection process. Minor fluctuations were observed, but these did not represent a significant shift in the company’s ability to convert receivables into cash.

Overall Trend

The average receivable collection period demonstrated a strong tendency towards consistency. It remained within a narrow range throughout the observed timeframe, suggesting effective credit and collection policies were consistently applied. There is no discernible long-term upward or downward trend.

Short-Term Variations

A slight increase to 13 days was noted in several quarters, including March 2021, June 2021, July 2022, October 2022, January 2023, July 2023, September 2025, and December 2025. Conversely, the period briefly decreased to 11 days in April 2022 and January 2022. These variations, however, were temporary and did not disrupt the overall stability of the metric.

Recent Performance

In the most recent quarters analyzed (March 2024 through June 2025), the average collection period fluctuated between 11 and 13 days. The latest reported value, for June 2025, is 12 days, aligning with the historical average. This suggests continued operational efficiency in managing accounts receivable.

The consistency in the average receivable collection period suggests a robust and predictable cash conversion cycle related to receivables. This stability could be attributed to factors such as a consistent customer base, effective credit scoring, and efficient invoicing and collection procedures.

The operating cycle, along with its component parts, exhibits relatively stable performance over the analyzed period, with some observable trends. The average inventory processing period and average receivable collection period demonstrate consistency, contributing to a predictable operating cycle duration.

Average Inventory Processing Period

The average inventory processing period remained largely consistent between 28 and 33 days throughout the observed timeframe. A slight upward trend was present from December 2020 through July 2022, peaking at 33 days, before decreasing to a low of 23 days by October 2023. The period then fluctuated between 23 and 29 days through the end of the analysis, concluding at 28 days. This suggests potential efficiencies in inventory management were achieved in late 2023, followed by a return to more typical processing times.

Average Receivable Collection Period

The average receivable collection period demonstrated remarkable stability, consistently remaining between 12 and 14 days for the majority of the period. A slight increase to 13 days was observed in several quarters, but the period quickly reverted to its typical range. The final reported value is 12 days, indicating effective credit and collection policies were maintained.

Operating Cycle

The operating cycle generally ranged between 35 and 46 days. From December 2020 to October 2021, the cycle decreased from 43 to 40 days. A subsequent increase brought the cycle back to 46 days by July 2022. The most significant decrease occurred between October 2022 and October 2023, falling from 46 to 37 days. The cycle then stabilized around 37-41 days, ending at 41 days. This overall trend suggests improvements in the efficiency of converting inventory into cash, particularly noticeable in the period leading up to October 2023, though this improvement was not fully sustained.

Overall, the analyzed ratios indicate a well-managed short-term operating cycle. The consistency in receivable collection is a positive indicator, and while the inventory processing period experienced some fluctuation, it remained within a reasonable range. The observed decrease in the operating cycle, particularly in late 2023, warrants further investigation to understand the drivers of this improvement and whether it can be replicated consistently.

The average payables payment period exhibited relative stability over the observed period, with some fluctuations and a discernible trend towards a longer payment cycle in the latter portion of the analysis. Initially, the period remained consistently around 21 days for several quarters, before showing increased variability.

Overall Trend

From December 2020 through October 2022, the average payables payment period largely fluctuated between 20 and 23 days. A gradual lengthening of the period is observed from October 2022 onwards. The period increased to 26 days by March 2025, representing a notable shift from the earlier stability.

Short-Term Fluctuations

Minor variations occurred throughout the period. For example, a slight decrease to 20 days was noted in March 2021 and again in January 2023. Conversely, the period reached 23 days in July 2022 and remained at 22 days for several subsequent quarters. These fluctuations suggest responsiveness to changes in supplier terms or internal cash management practices.

Recent Developments

The most significant changes occurred in the final quarters of the observation period. The average payables payment period increased from 24 days in September 2024 to 26 days in March 2025. This suggests a potential shift in payment strategy, possibly to optimize cash flow or leverage supplier credit terms. A slight decrease to 25 days was observed in June 2025, followed by a further decrease to 24 days in September 2025, and finally to 21 days in December 2025.

Implications

The lengthening of the average payables payment period could indicate improved cash management or a deliberate strategy to extend payment terms with suppliers. However, it is important to consider potential implications for supplier relationships. The recent decrease in the period suggests a possible return to previous practices or a response to supplier negotiations.

The short-term operating activity, as measured by the cash conversion cycle and its components, exhibits notable fluctuations over the observed period. Generally, a decreasing trend in the cash conversion cycle is apparent, particularly from late 2022 through mid-2023, followed by a slight increase in the most recent quarters. The individual components – inventory processing, receivable collection, and payable payment – contribute to this overall pattern.

Average Inventory Processing Period

This metric generally remains stable, fluctuating between 28 and 33 days. A slight downward trend is observed from December 2020 to October 2023, decreasing from 29 days to a low of 23 days, before stabilizing around 24-26 days in subsequent periods. This suggests improving efficiency in managing inventory levels.

Average Receivable Collection Period

The average number of days to collect receivables is consistently low, ranging between 12 and 14 days throughout the period. There is minimal variation, indicating a consistently efficient process for converting sales into cash. A slight decrease to 11 days is noted in April 2022 and April 2023, but the metric quickly returns to the typical range.

Average Payables Payment Period

The average payables payment period demonstrates more variability than the other two components. It generally fluctuates between 20 and 26 days. An increasing trend is visible from December 2020 (21 days) to December 2024 (26 days), followed by a decrease to 21 days in the most recent period. This suggests a potential shift in supplier payment terms or company payment strategy.

Cash Conversion Cycle

The cash conversion cycle initially fluctuates around 22-24 days before exhibiting a clear downward trend starting in late 2022. It reaches a low of 13 days in October 2023 and remains relatively low through June 2024. A subsequent increase is observed, reaching 17 days in September 2025. This cycle reflects the combined effect of changes in inventory management, receivable collection, and payable payment practices. The recent increase warrants monitoring to determine if it represents a sustained shift or a temporary fluctuation.

Overall, the observed trends suggest a generally improving efficiency in working capital management, particularly in the period leading up to October 2023. The recent slight increase in the cash conversion cycle, driven by changes in both inventory and payables, should be monitored in future periods to assess its potential impact on liquidity and operational efficiency.