Microsoft Excel LibreOffice Calc

T-Mobile US Inc. (NASDAQ:TMUS)

Analysis of Short-term (Operating) Activity Ratios

Beginner level

Activity ratios measure how efficiently a company performs day-to-day tasks, such us the collection of receivables and management of inventory.

Short-term Activity Ratios (Summary)

T-Mobile US Inc., short-term (operating) activity ratios

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Turnover Ratios
Inventory turnover 19.21 16.93 11.31 14.90 11.50
Receivables turnover 23.83 24.48 21.20 19.64 17.93
Payables turnover 4.29 3.34 2.86 3.21 2.43
Working capital turnover — — — 7.17 5.98
Average No. Days
Average inventory processing period 19 22 32 25 32
Add: Average receivable collection period 15 15 17 19 20
Operating cycle 34 37 49 44 52
Less: Average payables payment period 85 109 127 114 150
Cash conversion cycle -51 -72 -78 -70 -98

Based on: 10-K (filing date: 2020-02-06), 10-K (filing date: 2019-02-07), 10-K (filing date: 2018-02-08), 10-K (filing date: 2017-02-14), 10-K (filing date: 2016-02-17).

Short-term activity ratio Description The company
Inventory turnover An activity ratio calculated as cost of goods sold divided by inventory. T-Mobile US Inc.’s inventory turnover ratio improved from 2017 to 2018 and from 2018 to 2019.
Receivables turnover An activity ratio equal to revenue divided by receivables. T-Mobile US Inc.’s receivables turnover ratio improved from 2017 to 2018 but then slightly deteriorated from 2018 to 2019.
Payables turnover An activity ratio calculated as cost of goods sold divided by payables. T-Mobile US Inc.’s payables turnover ratio increased from 2017 to 2018 and from 2018 to 2019.
Working capital turnover An activity ratio calculated as revenue divided by working capital.
Short-term activity ratio Description The company
Average inventory processing period An activity ratio equal to the number of days in the period divided by inventory turnover over the period. T-Mobile US Inc.’s number of days of inventory outstanding improved from 2017 to 2018 and from 2018 to 2019.
Average receivable collection period An activity ratio equal to the number of days in the period divided by receivables turnover.
Operating cycle Equal to average inventory processing period plus average receivables collection period. T-Mobile US Inc.’s operating cycle improved from 2017 to 2018 and from 2018 to 2019.
Average payables payment period An estimate of the average number of days it takes a company to pay its suppliers; equal to the number of days in the period divided by payables turnover ratio for the period. T-Mobile US Inc.’s number of days of payables outstanding decreased from 2017 to 2018 and from 2018 to 2019.
Cash conversion cycle A financial metric that measures the length of time required for a company to convert cash invested in its operations to cash received as a result of its operations; equal to average inventory processing period plus average receivables collection period minus average payables payment period. T-Mobile US Inc.’s cash conversion cycle deteriorated from 2017 to 2018 and from 2018 to 2019.

Inventory Turnover

T-Mobile US Inc., inventory turnover calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Selected Financial Data (US$ in millions)
Cost of revenues 18,521  18,354  17,708  16,550  14,898 
Inventories 964  1,084  1,566  1,111  1,295 
Short-term Activity Ratio
Inventory turnover1 19.21 16.93 11.31 14.90 11.50
Benchmarks
Inventory Turnover, Industry
Telecommunications 29.98 29.53 30.39 33.29 20.44

Based on: 10-K (filing date: 2020-02-06), 10-K (filing date: 2019-02-07), 10-K (filing date: 2018-02-08), 10-K (filing date: 2017-02-14), 10-K (filing date: 2016-02-17).

1 2019 Calculation
Inventory turnover = Cost of revenues ÷ Inventories
= 18,521 ÷ 964 = 19.21

Short-term activity ratio Description The company
Inventory turnover An activity ratio calculated as cost of goods sold divided by inventory. T-Mobile US Inc.’s inventory turnover ratio improved from 2017 to 2018 and from 2018 to 2019.

Receivables Turnover

T-Mobile US Inc., receivables turnover calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Selected Financial Data (US$ in millions)
Revenues 44,998  43,310  40,604  37,242  32,053 
Accounts receivable, net of allowances 1,888  1,769  1,915  1,896  1,788 
Short-term Activity Ratio
Receivables turnover1 23.83 24.48 21.20 19.64 17.93
Benchmarks
Receivables Turnover, Industry
Telecommunications 7.17 6.47 7.80 9.03 9.77

Based on: 10-K (filing date: 2020-02-06), 10-K (filing date: 2019-02-07), 10-K (filing date: 2018-02-08), 10-K (filing date: 2017-02-14), 10-K (filing date: 2016-02-17).

1 2019 Calculation
Receivables turnover = Revenues ÷ Accounts receivable, net of allowances
= 44,998 ÷ 1,888 = 23.83

Short-term activity ratio Description The company
Receivables turnover An activity ratio equal to revenue divided by receivables. T-Mobile US Inc.’s receivables turnover ratio improved from 2017 to 2018 but then slightly deteriorated from 2018 to 2019.

Payables Turnover

T-Mobile US Inc., payables turnover calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Selected Financial Data (US$ in millions)
Cost of revenues 18,521  18,354  17,708  16,550  14,898 
Accounts payable 4,322  5,487  6,182  5,163  6,137 
Short-term Activity Ratio
Payables turnover1 4.29 3.34 2.86 3.21 2.43
Benchmarks
Payables Turnover, Industry
Telecommunications 3.78 3.86 3.89 4.23 4.01

Based on: 10-K (filing date: 2020-02-06), 10-K (filing date: 2019-02-07), 10-K (filing date: 2018-02-08), 10-K (filing date: 2017-02-14), 10-K (filing date: 2016-02-17).

1 2019 Calculation
Payables turnover = Cost of revenues ÷ Accounts payable
= 18,521 ÷ 4,322 = 4.29

Short-term activity ratio Description The company
Payables turnover An activity ratio calculated as cost of goods sold divided by payables. T-Mobile US Inc.’s payables turnover ratio increased from 2017 to 2018 and from 2018 to 2019.

Working Capital Turnover

T-Mobile US Inc., working capital turnover calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Selected Financial Data (US$ in millions)
Current assets 9,305  8,281  8,915  14,217  14,890 
Less: Current liabilities 12,506  10,267  11,515  9,022  9,528 
Working capital (3,201) (1,986) (2,600) 5,195  5,362 
 
Revenues 44,998  43,310  40,604  37,242  32,053 
Short-term Activity Ratio
Working capital turnover1 — — — 7.17 5.98
Benchmarks
Working Capital Turnover, Industry
Telecommunications — — — — —

Based on: 10-K (filing date: 2020-02-06), 10-K (filing date: 2019-02-07), 10-K (filing date: 2018-02-08), 10-K (filing date: 2017-02-14), 10-K (filing date: 2016-02-17).

1 2019 Calculation
Working capital turnover = Revenues ÷ Working capital
= 44,998 ÷ -3,201 = —

Short-term activity ratio Description The company
Working capital turnover An activity ratio calculated as revenue divided by working capital.

Average Inventory Processing Period

T-Mobile US Inc., average inventory processing period calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Selected Financial Data
Inventory turnover 19.21 16.93 11.31 14.90 11.50
Short-term Activity Ratio (no. days)
Average inventory processing period1 19 22 32 25 32
Benchmarks (no. days)
Average Inventory Processing Period, Industry
Telecommunications 12 12 12 11 18

Based on: 10-K (filing date: 2020-02-06), 10-K (filing date: 2019-02-07), 10-K (filing date: 2018-02-08), 10-K (filing date: 2017-02-14), 10-K (filing date: 2016-02-17).

1 2019 Calculation
Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ 19.21 = 19

Short-term activity ratio Description The company
Average inventory processing period An activity ratio equal to the number of days in the period divided by inventory turnover over the period. T-Mobile US Inc.’s number of days of inventory outstanding improved from 2017 to 2018 and from 2018 to 2019.

Average Receivable Collection Period

T-Mobile US Inc., average receivable collection period calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Selected Financial Data
Receivables turnover 23.83 24.48 21.20 19.64 17.93
Short-term Activity Ratio (no. days)
Average receivable collection period1 15 15 17 19 20
Benchmarks (no. days)
Average Receivable Collection Period, Industry
Telecommunications 51 56 47 40 37

Based on: 10-K (filing date: 2020-02-06), 10-K (filing date: 2019-02-07), 10-K (filing date: 2018-02-08), 10-K (filing date: 2017-02-14), 10-K (filing date: 2016-02-17).

1 2019 Calculation
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ 23.83 = 15

Short-term activity ratio Description The company
Average receivable collection period An activity ratio equal to the number of days in the period divided by receivables turnover.

Operating Cycle

T-Mobile US Inc., operating cycle calculation, comparison to benchmarks

No. days

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Selected Financial Data
Average inventory processing period 19 22 32 25 32
Average receivable collection period 15 15 17 19 20
Short-term Activity Ratio
Operating cycle1 34 37 49 44 52
Benchmarks
Operating Cycle, Industry
Telecommunications 63 68 59 51 55

Based on: 10-K (filing date: 2020-02-06), 10-K (filing date: 2019-02-07), 10-K (filing date: 2018-02-08), 10-K (filing date: 2017-02-14), 10-K (filing date: 2016-02-17).

1 2019 Calculation
Operating cycle = Average inventory processing period + Average receivable collection period
= 19 + 15 = 34

Short-term activity ratio Description The company
Operating cycle Equal to average inventory processing period plus average receivables collection period. T-Mobile US Inc.’s operating cycle improved from 2017 to 2018 and from 2018 to 2019.

Average Payables Payment Period

T-Mobile US Inc., average payables payment period calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Selected Financial Data
Payables turnover 4.29 3.34 2.86 3.21 2.43
Short-term Activity Ratio (no. days)
Average payables payment period1 85 109 127 114 150
Benchmarks (no. days)
Average Payables Payment Period, Industry
Telecommunications 97 95 94 86 91

Based on: 10-K (filing date: 2020-02-06), 10-K (filing date: 2019-02-07), 10-K (filing date: 2018-02-08), 10-K (filing date: 2017-02-14), 10-K (filing date: 2016-02-17).

1 2019 Calculation
Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ 4.29 = 85

Short-term activity ratio Description The company
Average payables payment period An estimate of the average number of days it takes a company to pay its suppliers; equal to the number of days in the period divided by payables turnover ratio for the period. T-Mobile US Inc.’s number of days of payables outstanding decreased from 2017 to 2018 and from 2018 to 2019.

Cash Conversion Cycle

T-Mobile US Inc., cash conversion cycle calculation, comparison to benchmarks

No. days

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Selected Financial Data
Average inventory processing period 19 22 32 25 32
Average receivable collection period 15 15 17 19 20
Average payables payment period 85 109 127 114 150
Short-term Activity Ratio
Cash conversion cycle1 -51 -72 -78 -70 -98
Benchmarks
Cash Conversion Cycle, Industry
Telecommunications -34 -27 -35 -35 -36

Based on: 10-K (filing date: 2020-02-06), 10-K (filing date: 2019-02-07), 10-K (filing date: 2018-02-08), 10-K (filing date: 2017-02-14), 10-K (filing date: 2016-02-17).

1 2019 Calculation
Cash conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= 19 + 15 – 85 = -51

Short-term activity ratio Description The company
Cash conversion cycle A financial metric that measures the length of time required for a company to convert cash invested in its operations to cash received as a result of its operations; equal to average inventory processing period plus average receivables collection period minus average payables payment period. T-Mobile US Inc.’s cash conversion cycle deteriorated from 2017 to 2018 and from 2018 to 2019.