Activity ratios measure how efficiently a company performs day-to-day tasks, such us the collection of receivables and management of inventory.
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- Balance Sheet: Assets
- Balance Sheet: Liabilities and Stockholders’ Equity
- Common-Size Income Statement
- Enterprise Value to EBITDA (EV/EBITDA)
- Price to FCFE (P/FCFE)
- Present Value of Free Cash Flow to Equity (FCFE)
- Selected Financial Data since 2005
- Debt to Equity since 2005
- Total Asset Turnover since 2005
- Aggregate Accruals
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Short-term Activity Ratios (Summary)
Based on: 10-K (reporting date: 2024-10-31), 10-K (reporting date: 2023-10-31), 10-K (reporting date: 2022-10-31), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-31), 10-K (reporting date: 2019-10-31).
- Inventory turnover
- The inventory turnover ratio exhibits a declining trend overall, decreasing from 5.32 in 2019 to 3.44 in 2024. There was a notable dip in 2021 and a brief increase in 2022, but the ratio declined again in the two most recent years, indicating a slower movement of inventory over time.
- Receivables turnover
- The receivables turnover ratio shows variability but a generally stable pattern, with fluctuations between 4.72 and 7.4 across the observed period. A peak in 2021 (7.4) was followed by slight declines and recoveries, ending at 6.56 in 2024, suggesting moderate changes in how quickly receivables are collected.
- Payables turnover
- There is a significant decline in payables turnover, dropping sharply from 38 in 2019 to 6.01 in 2024. This indicates the company is taking longer to pay its suppliers, corroborated by the increase in the average payables payment period over the same period.
- Working capital turnover
- Available data from 2020 onwards shows fluctuations, with a peak of 21.34 in 2022 followed by a steep decline to 1.6 in 2024. This erratic pattern may suggest instability or changing efficiency in managing working capital relative to sales.
- Average inventory processing period
- The average days inventory is held indicate an increasing trend, rising from 69 days in 2019 to 106 days in 2024. A temporary reduction in 2022 was followed by further increases, suggesting inventory is being held longer before sale.
- Average receivable collection period
- The receivable collection period fluctuates moderately, peaking at 77 days in 2020, decreasing to 49 days in 2021, and then stabilizing around the high 50s in subsequent years. This reflects relatively consistent collection times with minor variations.
- Operating cycle
- The operating cycle shows variability with an increase from 129 days in 2019 to a higher range between 130 and 162 days through 2024. This signals an overall extension in the duration from inventory purchase to cash collection.
- Average payables payment period
- The payables payment period lengthened significantly, from 10 days in 2019 to 61 days in 2024. This change aligns with the sharp decrease in payables turnover, indicating the company is taking longer to fulfill its payment obligations.
- Cash conversion cycle
- The cash conversion cycle improved somewhat, decreasing from 119 days in 2019 to a low of 101 days in 2024, despite fluctuations in the interim years. This suggests enhanced overall efficiency in converting investments in inventory and receivables back into cash.
Turnover Ratios
Average No. Days
Inventory Turnover
Oct 31, 2024 | Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | ||
---|---|---|---|---|---|---|---|
Selected Financial Data (US$ in thousands) | |||||||
Cost of revenue | |||||||
Inventories | |||||||
Short-term Activity Ratio | |||||||
Inventory turnover1 | |||||||
Benchmarks | |||||||
Inventory Turnover, Competitors2 | |||||||
Cadence Design Systems Inc. | |||||||
International Business Machines Corp. | |||||||
Microsoft Corp. | |||||||
Oracle Corp. | |||||||
Inventory Turnover, Sector | |||||||
Software & Services | |||||||
Inventory Turnover, Industry | |||||||
Information Technology |
Based on: 10-K (reporting date: 2024-10-31), 10-K (reporting date: 2023-10-31), 10-K (reporting date: 2022-10-31), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-31), 10-K (reporting date: 2019-10-31).
1 2024 Calculation
Inventory turnover = Cost of revenue ÷ Inventories
= ÷ =
2 Click competitor name to see calculations.
- Cost of Revenue
- The cost of revenue shows a consistent upward trend over the analyzed periods, increasing from approximately $753 million in 2019 to roughly $1.25 billion in 2024. This indicates a steady rise in expenses directly tied to the production or delivery of goods and services, potentially reflecting growth in sales volume or increased input costs.
- Inventories
- Inventory levels have generally increased significantly from about $142 million in 2019 to nearly $362 million in 2024. Notably, there were fluctuations such as a decrease between 2021 and 2022 before rising sharply again through 2023 and 2024. This pattern may indicate changes in inventory management, procurement strategy, or demand forecasting, with the recent sharp rise potentially signaling accumulation of stock.
- Inventory Turnover Ratio
- The inventory turnover ratio declined overall from 5.32 in 2019 to 3.44 in 2024, despite a peak at 5.02 in 2022. This decline suggests that the company is selling and replenishing its inventory less frequently over time. The lower turnover ratio may imply slower inventory movement relative to sales, increased holding periods, or potential inefficiencies in inventory utilization in the recent years.
Receivables Turnover
Oct 31, 2024 | Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | ||
---|---|---|---|---|---|---|---|
Selected Financial Data (US$ in thousands) | |||||||
Revenue | |||||||
Accounts receivable, net | |||||||
Short-term Activity Ratio | |||||||
Receivables turnover1 | |||||||
Benchmarks | |||||||
Receivables Turnover, Competitors2 | |||||||
Accenture PLC | |||||||
Adobe Inc. | |||||||
Cadence Design Systems Inc. | |||||||
CrowdStrike Holdings Inc. | |||||||
Fair Isaac Corp. | |||||||
International Business Machines Corp. | |||||||
Intuit Inc. | |||||||
Microsoft Corp. | |||||||
Oracle Corp. | |||||||
Palantir Technologies Inc. | |||||||
Palo Alto Networks Inc. | |||||||
Salesforce Inc. | |||||||
ServiceNow Inc. | |||||||
Workday Inc. | |||||||
Receivables Turnover, Sector | |||||||
Software & Services | |||||||
Receivables Turnover, Industry | |||||||
Information Technology |
Based on: 10-K (reporting date: 2024-10-31), 10-K (reporting date: 2023-10-31), 10-K (reporting date: 2022-10-31), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-31), 10-K (reporting date: 2019-10-31).
1 2024 Calculation
Receivables turnover = Revenue ÷ Accounts receivable, net
= ÷ =
2 Click competitor name to see calculations.
- Revenue Trends
- The revenue has exhibited a consistent upward trajectory over the observed periods. Beginning at approximately 3.36 billion USD in 2019, it increased steadily each year to reach over 6.12 billion USD by 2024. Notably, the most significant year-over-year growth occurred between 2021 and 2022, where revenue jumped from about 4.2 billion USD to 5.08 billion USD, indicating a strong expansion phase. The growth rate slightly moderated but remained positive in the subsequent years up to 2024.
- Accounts Receivable, Net
- The net accounts receivable amount fluctuated throughout the period without a clear linear trend. It started at approximately 554 million USD in 2019 and peaked around 781 million USD in 2020. This was followed by a notable decline in 2021 to about 569 million USD, then a significant rebound to roughly 796 million USD in 2022. The upward trend continued in 2023 to nearly 947 million USD before a slight decrease to approximately 934 million USD in 2024. Such volatility suggests variations in credit policies or collection efficiency.
- Receivables Turnover Ratio
- The receivables turnover ratio displayed variability across the years. Beginning with a ratio of 6.07 in 2019, it decreased to 4.72 in 2020, indicating slower collection of receivables relative to sales. In 2021, the ratio surged to 7.4, suggesting improved efficiency in managing receivables. This was followed by a decline to 6.38 in 2022, stabilizing near 6.17 in 2023 and increasing slightly to 6.56 in 2024. Overall, the ratio indicates fluctuations in collection performance, with a general tendency toward improved turnover in the latter years.
- Integrated Insights
- The data reveals robust revenue growth alongside fluctuating accounts receivable values and turnover ratios. The variations in receivables and turnover imply possible changes in credit management strategies or customer payment behaviors. Despite these fluctuations, the company's ability to maintain healthy receivables turnover ratios in most years suggests operational effectiveness in managing credit risk amid increasing sales volumes.
Payables Turnover
Oct 31, 2024 | Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | ||
---|---|---|---|---|---|---|---|
Selected Financial Data (US$ in thousands) | |||||||
Cost of revenue | |||||||
Accounts payable | |||||||
Short-term Activity Ratio | |||||||
Payables turnover1 | |||||||
Benchmarks | |||||||
Payables Turnover, Competitors2 | |||||||
Accenture PLC | |||||||
Adobe Inc. | |||||||
Cadence Design Systems Inc. | |||||||
CrowdStrike Holdings Inc. | |||||||
Fair Isaac Corp. | |||||||
International Business Machines Corp. | |||||||
Intuit Inc. | |||||||
Microsoft Corp. | |||||||
Oracle Corp. | |||||||
Palantir Technologies Inc. | |||||||
Palo Alto Networks Inc. | |||||||
Salesforce Inc. | |||||||
ServiceNow Inc. | |||||||
Workday Inc. | |||||||
Payables Turnover, Sector | |||||||
Software & Services | |||||||
Payables Turnover, Industry | |||||||
Information Technology |
Based on: 10-K (reporting date: 2024-10-31), 10-K (reporting date: 2023-10-31), 10-K (reporting date: 2022-10-31), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-31), 10-K (reporting date: 2019-10-31).
1 2024 Calculation
Payables turnover = Cost of revenue ÷ Accounts payable
= ÷ =
2 Click competitor name to see calculations.
The financial data reveals several notable trends over the analyzed periods. The cost of revenue has shown a consistent upward trajectory, increasing steadily from approximately $753 million in 2019 to about $1.25 billion in 2024. This indicates a rising scale of business operations or increased costs associated with delivering products or services.
Accounts payable demonstrate significant fluctuations, with a moderate level in 2019 and 2020, followed by a strong increase beginning in 2021. By 2024, accounts payable have grown substantially, reaching over $207 million, which may suggest extended payment terms or increased purchasing activities.
The payables turnover ratio, which measures how quickly the company pays its suppliers, presents a declining trend. Starting from a high ratio of 38 in 2019, indicating rapid payment cycles, this ratio gradually decreases to approximately 6.01 in 2024. The consistent decrease implies that the company is taking longer to settle its payables over the years, potentially due to strategic cash management or changes in supplier payment terms.
- Cost of Revenue
- Demonstrates steady growth across all years, indicative of scaling operations or higher costs associated with production or service delivery.
- Accounts Payable
- Substantial increase in recent years, signifying a rise in short-term liabilities or possible renegotiation of credit terms with suppliers.
- Payables Turnover Ratio
- Declining trend pointing towards extended payment periods to suppliers, which may impact supplier relationships or reflect improved cash flow management.
Working Capital Turnover
Oct 31, 2024 | Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | ||
---|---|---|---|---|---|---|---|
Selected Financial Data (US$ in thousands) | |||||||
Current assets | |||||||
Less: Current liabilities | |||||||
Working capital | |||||||
Revenue | |||||||
Short-term Activity Ratio | |||||||
Working capital turnover1 | |||||||
Benchmarks | |||||||
Working Capital Turnover, Competitors2 | |||||||
Accenture PLC | |||||||
Adobe Inc. | |||||||
Cadence Design Systems Inc. | |||||||
CrowdStrike Holdings Inc. | |||||||
Fair Isaac Corp. | |||||||
International Business Machines Corp. | |||||||
Intuit Inc. | |||||||
Microsoft Corp. | |||||||
Oracle Corp. | |||||||
Palantir Technologies Inc. | |||||||
Palo Alto Networks Inc. | |||||||
Salesforce Inc. | |||||||
ServiceNow Inc. | |||||||
Workday Inc. | |||||||
Working Capital Turnover, Sector | |||||||
Software & Services | |||||||
Working Capital Turnover, Industry | |||||||
Information Technology |
Based on: 10-K (reporting date: 2024-10-31), 10-K (reporting date: 2023-10-31), 10-K (reporting date: 2022-10-31), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-31), 10-K (reporting date: 2019-10-31).
1 2024 Calculation
Working capital turnover = Revenue ÷ Working capital
= ÷ =
2 Click competitor name to see calculations.
The financial data exhibits significant trends and fluctuations over the analyzed periods. Revenue demonstrates consistent growth, increasing from approximately $3.36 billion in 2019 to over $6.12 billion in 2024. This upward trajectory indicates strong sales performance and expanding business operations over the five-year horizon.
Working capital has experienced notable volatility and a marked overall increase. Initially negative at approximately -$13.5 million in 2019, it shifts to positive territory by 2020 and continues to grow substantially, reaching nearly $3.82 billion by 2024. This positive trend suggests a strengthening liquidity position and improved short-term financial stability, enabling the company to better support its operational needs.
The working capital turnover ratio shows considerable variation over the years. Starting without a reported value in 2019, it rises to 9 in 2020 and peaks at 21.34 in 2022, followed by a decline to 1.6 by 2024. This pattern indicates an initial increase in efficiency, where sales generated per unit of working capital improved significantly, but later years reveal a drop in turnover efficiency. The sharp decrease in 2024 suggests that the substantial increase in working capital size has outpaced revenue growth, reducing the intensity of asset utilization relative to sales.
Overall, the company's financial position presents strong revenue expansion accompanied by an increasingly large working capital base. While this supports operational growth, the decreasing working capital turnover ratio in recent years may warrant further analysis to ensure working capital is managed efficiently and is not excessively built up relative to revenue.
Average Inventory Processing Period
Oct 31, 2024 | Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | ||
---|---|---|---|---|---|---|---|
Selected Financial Data | |||||||
Inventory turnover | |||||||
Short-term Activity Ratio (no. days) | |||||||
Average inventory processing period1 | |||||||
Benchmarks (no. days) | |||||||
Average Inventory Processing Period, Competitors2 | |||||||
Cadence Design Systems Inc. | |||||||
International Business Machines Corp. | |||||||
Microsoft Corp. | |||||||
Oracle Corp. | |||||||
Average Inventory Processing Period, Sector | |||||||
Software & Services | |||||||
Average Inventory Processing Period, Industry | |||||||
Information Technology |
Based on: 10-K (reporting date: 2024-10-31), 10-K (reporting date: 2023-10-31), 10-K (reporting date: 2022-10-31), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-31), 10-K (reporting date: 2019-10-31).
1 2024 Calculation
Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ =
2 Click competitor name to see calculations.
- Inventory Turnover
- The inventory turnover ratio shows a fluctuating trend over the examined periods, starting at 5.32 in 2019 and declining to 3.44 by 2024. There is a notable drop from 5.32 in 2019 to 4.13 in 2020, followed by a further decrease to 3.76 in 2021. A temporary increase occurs in 2022, reaching 5.02, but this is followed by a decline again in 2023 and 2024, signaling a general reduction in the frequency at which inventory is sold and replaced.
- Average Inventory Processing Period
- The average inventory processing period demonstrates an inverse relationship to inventory turnover, increasing overall from 69 days in 2019 to 106 days in 2024. This duration peaks at 106 days in 2024, with notable increases observed in 2020 and 2021, where the processing period extends from 69 to 88 and then to 97 days respectively. A decrease is observed in 2022 to 73 days, coinciding with the rise in inventory turnover, yet the period lengthens again to 97 in 2023 and further to 106 in 2024.
- Overall Observations
- The patterns imply that inventory is held longer over time, leading to slower turnover rates. The intermittent rise in turnover in 2022, coupled with a drop in processing period, appears to be an isolated improvement in inventory management efficiency. However, the trend reverses post-2022, suggesting challenges in maintaining quicker inventory cycles. These fluctuations may impact working capital management and operational efficiency adversely if the extended holding periods continue.
Average Receivable Collection Period
Oct 31, 2024 | Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | ||
---|---|---|---|---|---|---|---|
Selected Financial Data | |||||||
Receivables turnover | |||||||
Short-term Activity Ratio (no. days) | |||||||
Average receivable collection period1 | |||||||
Benchmarks (no. days) | |||||||
Average Receivable Collection Period, Competitors2 | |||||||
Accenture PLC | |||||||
Adobe Inc. | |||||||
Cadence Design Systems Inc. | |||||||
CrowdStrike Holdings Inc. | |||||||
Fair Isaac Corp. | |||||||
International Business Machines Corp. | |||||||
Intuit Inc. | |||||||
Microsoft Corp. | |||||||
Oracle Corp. | |||||||
Palantir Technologies Inc. | |||||||
Palo Alto Networks Inc. | |||||||
Salesforce Inc. | |||||||
ServiceNow Inc. | |||||||
Workday Inc. | |||||||
Average Receivable Collection Period, Sector | |||||||
Software & Services | |||||||
Average Receivable Collection Period, Industry | |||||||
Information Technology |
Based on: 10-K (reporting date: 2024-10-31), 10-K (reporting date: 2023-10-31), 10-K (reporting date: 2022-10-31), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-31), 10-K (reporting date: 2019-10-31).
1 2024 Calculation
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ =
2 Click competitor name to see calculations.
- Receivables Turnover
- The receivables turnover ratio exhibited notable fluctuations over the examined periods. Initially, the ratio declined from 6.07 in 2019 to 4.72 in 2020, indicating a deceleration in the frequency of receivables collection. However, this trend reversed sharply in 2021, with the ratio increasing to 7.4, reflecting an improvement in collection efficiency. Subsequent years saw the ratio moderately decrease to 6.38 in 2022 and 6.17 in 2023, before rising slightly to 6.56 in 2024. Overall, the turnover ratio in 2024 remained above the starting point in 2019, suggesting a generally stronger receivables management compared to the initial period.
- Average Receivable Collection Period
- There is an inverse correlation with the receivables turnover as expected. The collection period started at 60 days in 2019 and lengthened to 77 days in 2020, indicating slower collection of receivables in that year. This was followed by a significant improvement in 2021, where the period decreased to 49 days, marking more efficient collections. In the subsequent years, the collection period gradually increased to 57 days in 2022 and 59 days in 2023, then improved slightly to 56 days in 2024. Despite these fluctuations, the collection period in 2024 remained shorter than in 2019, reflecting overall enhanced efficiency in receivables collection over the longer term.
Operating Cycle
Oct 31, 2024 | Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | ||
---|---|---|---|---|---|---|---|
Selected Financial Data | |||||||
Average inventory processing period | |||||||
Average receivable collection period | |||||||
Short-term Activity Ratio | |||||||
Operating cycle1 | |||||||
Benchmarks | |||||||
Operating Cycle, Competitors2 | |||||||
Cadence Design Systems Inc. | |||||||
International Business Machines Corp. | |||||||
Microsoft Corp. | |||||||
Oracle Corp. | |||||||
Operating Cycle, Sector | |||||||
Software & Services | |||||||
Operating Cycle, Industry | |||||||
Information Technology |
Based on: 10-K (reporting date: 2024-10-31), 10-K (reporting date: 2023-10-31), 10-K (reporting date: 2022-10-31), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-31), 10-K (reporting date: 2019-10-31).
1 2024 Calculation
Operating cycle = Average inventory processing period + Average receivable collection period
= + =
2 Click competitor name to see calculations.
- Average Inventory Processing Period
- The average inventory processing period exhibited fluctuations over the six-year span. It increased from 69 days in 2019 to a peak of 97 days in 2021, then decreased to 73 days in 2022. However, it rose again to 97 days in 2023 and further extended to 106 days by 2024. This suggests variability in inventory management efficiency, with recent years indicating a longer holding period of inventory before processing.
- Average Receivable Collection Period
- The average receivable collection period demonstrated notable fluctuations, commencing at 60 days in 2019, increasing to 77 days in 2020, and then improving to a lower 49 days in 2021. It slightly increased thereafter to 57 days in 2022, followed by marginal changes to 59 days in 2023 and 56 days in 2024. This pattern indicates an initial challenge in receivables collection in 2020, followed by a period of improved efficiency in subsequent years, with minor variations.
- Operating Cycle
- The operating cycle, representing the total time to convert inventory and receivables into cash, showed considerable volatility. Beginning at 129 days in 2019, it rose sharply to 165 days in 2020, decreased to 146 days in 2021, and further reduced to 130 days in 2022. Nonetheless, it increased again to 156 days in 2023 and 162 days in 2024. These fluctuations align with changes in both inventory processing and receivable collection periods, reflecting overall shifts in working capital management efficiency.
Average Payables Payment Period
Oct 31, 2024 | Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | ||
---|---|---|---|---|---|---|---|
Selected Financial Data | |||||||
Payables turnover | |||||||
Short-term Activity Ratio (no. days) | |||||||
Average payables payment period1 | |||||||
Benchmarks (no. days) | |||||||
Average Payables Payment Period, Competitors2 | |||||||
Accenture PLC | |||||||
Adobe Inc. | |||||||
Cadence Design Systems Inc. | |||||||
CrowdStrike Holdings Inc. | |||||||
Fair Isaac Corp. | |||||||
International Business Machines Corp. | |||||||
Intuit Inc. | |||||||
Microsoft Corp. | |||||||
Oracle Corp. | |||||||
Palantir Technologies Inc. | |||||||
Palo Alto Networks Inc. | |||||||
Salesforce Inc. | |||||||
ServiceNow Inc. | |||||||
Workday Inc. | |||||||
Average Payables Payment Period, Sector | |||||||
Software & Services | |||||||
Average Payables Payment Period, Industry | |||||||
Information Technology |
Based on: 10-K (reporting date: 2024-10-31), 10-K (reporting date: 2023-10-31), 10-K (reporting date: 2022-10-31), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-31), 10-K (reporting date: 2019-10-31).
1 2024 Calculation
Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ =
2 Click competitor name to see calculations.
The financial data indicates notable changes in the company's payables efficiency metrics over the analyzed periods.
- Payables Turnover Ratio
- The payables turnover ratio demonstrates a decreasing trend from 38 in 2019 to 6.01 in 2024. This represents a significant decline, particularly evident after 2022, where the ratio drops sharply from 28.3 to 7.84 in 2023 and further to 6.01 in 2024. This decline suggests that the company is turning over its payables less frequently, implying a slower payment cycle to suppliers.
- Average Payables Payment Period
- Correspondingly, the average payables payment period exhibits an increasing pattern from 10 days in 2019 to 61 days in 2024. There is a steady increase from 10 to 14 days between 2019 and 2020, followed by some fluctuations until 2022. A significant rise occurs post-2022, where the payment period more than triples, from 13 days to 47 days in 2023, and further extends to 61 days in 2024. This lengthening of payment terms indicates the company is delaying payments to its suppliers over time.
In summary, the data suggests a clear shift towards longer payment cycles over the period analyzed, as reflected by the steady decline in payables turnover and the simultaneous increase in the average payment period. This could imply strategic changes in working capital management or cash flow considerations leading to extended supplier payment durations.
Cash Conversion Cycle
Oct 31, 2024 | Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | ||
---|---|---|---|---|---|---|---|
Selected Financial Data | |||||||
Average inventory processing period | |||||||
Average receivable collection period | |||||||
Average payables payment period | |||||||
Short-term Activity Ratio | |||||||
Cash conversion cycle1 | |||||||
Benchmarks | |||||||
Cash Conversion Cycle, Competitors2 | |||||||
Cadence Design Systems Inc. | |||||||
International Business Machines Corp. | |||||||
Microsoft Corp. | |||||||
Oracle Corp. | |||||||
Cash Conversion Cycle, Sector | |||||||
Software & Services | |||||||
Cash Conversion Cycle, Industry | |||||||
Information Technology |
Based on: 10-K (reporting date: 2024-10-31), 10-K (reporting date: 2023-10-31), 10-K (reporting date: 2022-10-31), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-31), 10-K (reporting date: 2019-10-31).
1 2024 Calculation
Cash conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= + – =
2 Click competitor name to see calculations.
The analysis of the financial data reveals several notable trends in the company's working capital management over the analyzed periods.
- Average Inventory Processing Period
- The inventory processing period generally increased over the years, starting at 69 days in October 2019 and reaching 106 days by October 2024. There was a slight dip in 2022 to 73 days but the overall trend indicates that inventory remained in stock for longer durations, which may imply slower turnover or accumulation of inventory.
- Average Receivable Collection Period
- This metric showed greater variability but remained relatively stable in the later years. It increased from 60 days in 2019 to a peak of 77 days in 2020, then sharply declined to 49 days in 2021. Afterwards, it fluctuated moderately between 56 and 59 days from 2022 to 2024, suggesting more consistent collection times in recent years.
- Average Payables Payment Period
- There was a marked increase in the payables payment period over the examined timespan. Initially at 10 days in 2019, it showed moderate changes until a significant rise to 47 days in 2023 and further extended to 61 days in 2024. This trend reflects a longer delay in settling payables, which could impact supplier relationships but might provide short-term liquidity advantages.
- Cash Conversion Cycle (CCC)
- The cash conversion cycle decreased steadily from a high of 151 days in 2020 to 101 days in 2024 after an initial increase from 119 days in 2019 to 151 days in 2020. The declining CCC suggests improved efficiency in managing the net time between cash outflows and inflows, meaning the company requires fewer days to convert resources into cash despite longer inventory and payables periods.
In summary, the company displays a trend toward longer inventory holding and payment periods, balanced by relatively stable receivable collection times and an overall improvement in cash conversion efficiency. This combination indicates a strategic shift in working capital management that prioritizes cash flow optimization while managing inventory and payables durations more conservatively.