Microsoft Excel LibreOffice Calc

Texas Instruments Inc. (TXN)

Short-term (Operating) Activity Analysis

Difficulty: Beginner

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

Ratios (Summary)

Texas Instruments Inc., short-term (operating) activity ratios

Microsoft Excel LibreOffice Calc
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Turnover Ratios
Inventory turnover 2.48 2.73 2.87 3.22 3.15
Receivables turnover 13.08 11.71 10.55 11.16 10.47
Payables turnover 11.52 11.47 12.95 14.09 12.86
Working capital turnover 2.81 2.31 2.57 2.88 2.55
Average No. of Days
Average inventory processing period 147 134 127 113 116
Add: Average receivable collection period 28 31 35 33 35
Operating cycle 175 165 162 146 151
Less: Average payables payment period 32 32 28 26 28
Cash conversion cycle 143 133 134 120 123

Based on: 10-K (filing date: 2019-02-22), 10-K (filing date: 2018-02-22), 10-K (filing date: 2017-02-23), 10-K (filing date: 2016-02-24), 10-K (filing date: 2015-02-24).

Ratio Description The company
Inventory turnover An activity ratio calculated as cost of goods sold divided by inventory. Texas Instruments Inc.’s inventory turnover deteriorated from 2016 to 2017 and from 2017 to 2018.
Receivables turnover An activity ratio equal to revenue divided by receivables. Texas Instruments Inc.’s receivables turnover improved from 2016 to 2017 and from 2017 to 2018.
Payables turnover An activity ratio calculated as cost of goods sold divided by payables. Texas Instruments Inc.’s payables turnover declined from 2016 to 2017 but then slightly increased from 2017 to 2018.
Working capital turnover An activity ratio calculated as revenue divided by working capital. Texas Instruments Inc.’s working capital turnover deteriorated from 2016 to 2017 but then improved from 2017 to 2018 exceeding 2016 level.
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. Texas Instruments Inc.’s average inventory processing period deteriorated from 2016 to 2017 and from 2017 to 2018.
Average receivable collection period An activity ratio equal to the number of days in the period divided by receivables turnover. Texas Instruments Inc.’s average receivable collection period improved from 2016 to 2017 and from 2017 to 2018.
Operating cycle Equal to average inventory processing period plus average receivables collection period. Texas Instruments Inc.’s operating cycle deteriorated from 2016 to 2017 and from 2017 to 2018.
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.
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. Texas Instruments Inc.’s cash conversion cycle improved from 2016 to 2017 but then deteriorated significantly from 2017 to 2018.

Inventory Turnover

Texas Instruments Inc., inventory turnover calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Selected Financial Data (US$ in millions)
Cost of revenue (COR) 5,507  5,347  5,130  5,440  5,618 
Inventories 2,217  1,957  1,790  1,691  1,784 
Ratio
Inventory turnover1 2.48 2.73 2.87 3.22 3.15
Benchmarks
Inventory Turnover, Competitors2
Apple Inc. 41.39 29.05 61.62 59.64 53.18
Applied Materials Inc. 2.54 2.73 3.08 3.11 3.34
Broadcom Inc. 9.00 6.31 5.21 6.24 4.61
Cisco Systems Inc. 10.14 11.00 15.03 11.97 12.18
Intel Corp. 3.74 3.39 4.18 4.00 4.74
NVIDIA Corp. 4.89 3.59 5.26 4.31 4.80
Qualcomm Inc. 6.05 4.81 6.27 6.96 7.33
Inventory Turnover, Sector
Technology Hardware & Equipment 11.00 9.62 12.63 13.66 12.98
Inventory Turnover, Industry
Technology 14.47 13.03 16.06 15.79 15.47

Based on: 10-K (filing date: 2019-02-22), 10-K (filing date: 2018-02-22), 10-K (filing date: 2017-02-23), 10-K (filing date: 2016-02-24), 10-K (filing date: 2015-02-24).

1 2018 Calculation
Inventory turnover = Cost of revenue (COR) ÷ Inventories
= 5,507 ÷ 2,217 = 2.48

2 Click competitor name to see calculations.

Ratio Description The company
Inventory turnover An activity ratio calculated as cost of goods sold divided by inventory. Texas Instruments Inc.’s inventory turnover deteriorated from 2016 to 2017 and from 2017 to 2018.

Receivables Turnover

Texas Instruments Inc., receivables turnover calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Selected Financial Data (US$ in millions)
Revenue 15,784  14,961  13,370  13,000  13,045 
Accounts receivable, net of allowances 1,207  1,278  1,267  1,165  1,246 
Ratio
Receivables turnover1 13.08 11.71 10.55 11.16 10.47
Benchmarks
Receivables Turnover, Competitors2
Apple Inc. 11.45 12.82 13.69 13.87 10.47
Applied Materials Inc. 6.73 6.22 4.75 5.55 5.43
Broadcom Inc. 6.27 7.20 6.07 6.70 5.46
Cisco Systems Inc. 8.88 9.33 8.42 9.20 9.14
Intel Corp. 10.54 11.19 12.66 11.56 12.62
NVIDIA Corp. 7.68 8.37 9.92 9.88 9.69
Qualcomm Inc. 7.98 6.23 10.74 13.02 11.21
Receivables Turnover, Sector
Technology Hardware & Equipment 10.12 10.65 11.24 11.94 10.22
Receivables Turnover, Industry
Technology 7.69 7.81 8.16 8.77 8.01

Based on: 10-K (filing date: 2019-02-22), 10-K (filing date: 2018-02-22), 10-K (filing date: 2017-02-23), 10-K (filing date: 2016-02-24), 10-K (filing date: 2015-02-24).

1 2018 Calculation
Receivables turnover = Revenue ÷ Accounts receivable, net of allowances
= 15,784 ÷ 1,207 = 13.08

2 Click competitor name to see calculations.

Ratio Description The company
Receivables turnover An activity ratio equal to revenue divided by receivables. Texas Instruments Inc.’s receivables turnover improved from 2016 to 2017 and from 2017 to 2018.

Payables Turnover

Texas Instruments Inc., payables turnover calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Selected Financial Data (US$ in millions)
Cost of revenue (COR) 5,507  5,347  5,130  5,440  5,618 
Accounts payable 478  466  396  386  437 
Ratio
Payables turnover1 11.52 11.47 12.95 14.09 12.86
Benchmarks
Payables Turnover, Competitors2
Apple Inc. 2.93 2.88 3.52 3.95 3.72
Applied Materials Inc. 9.47 8.47 7.77 8.67 8.53
Broadcom Inc. 12.47 8.26 5.79 5.30 4.64
Cisco Systems Inc. 9.83 12.84 17.32 17.64 18.77
Intel Corp. 7.09 8.09 9.37 10.02 7.37
NVIDIA Corp. 6.53 5.87 7.43 7.10 5.74
Qualcomm Inc. 5.61 4.97 5.25 7.98 4.90
Payables Turnover, Sector
Technology Hardware & Equipment 3.75 3.73 4.48 4.94 4.67
Payables Turnover, Industry
Technology 4.70 4.66 5.31 5.58 5.25

Based on: 10-K (filing date: 2019-02-22), 10-K (filing date: 2018-02-22), 10-K (filing date: 2017-02-23), 10-K (filing date: 2016-02-24), 10-K (filing date: 2015-02-24).

1 2018 Calculation
Payables turnover = Cost of revenue (COR) ÷ Accounts payable
= 5,507 ÷ 478 = 11.52

2 Click competitor name to see calculations.

Ratio Description The company
Payables turnover An activity ratio calculated as cost of goods sold divided by payables. Texas Instruments Inc.’s payables turnover declined from 2016 to 2017 but then slightly increased from 2017 to 2018.

Working Capital Turnover

Texas Instruments Inc., working capital turnover calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Selected Financial Data (US$ in millions)
Current assets 8,097  8,734  7,457  7,074  7,768 
Less: Current liabilities 2,474  2,258  2,264  2,555  2,662 
Working capital 5,623  6,476  5,193  4,519  5,106 
Revenue 15,784  14,961  13,370  13,000  13,045 
Ratio
Working capital turnover1 2.81 2.31 2.57 2.88 2.55
Benchmarks
Working Capital Turnover, Competitors2
Apple Inc. 18.35 8.24 7.74 26.66 35.96
Applied Materials Inc. 2.58 1.65 2.29 1.77 2.19
Broadcom Inc. 3.08 1.33 3.27 2.57 1.51
Cisco Systems Inc. 1.42 0.86 0.92 0.93 1.00
Intel Corp. 5.83 5.20 3.91 2.24 4.77
NVIDIA Corp. 1.20 1.02 1.35 0.97 0.88
Qualcomm Inc. 3.70 0.68 1.50 1.58 1.62
Working Capital Turnover, Sector
Technology Hardware & Equipment 4.98 2.54 3.00 3.33 3.53
Working Capital Turnover, Industry
Technology 2.20 1.70 1.88 2.09 2.27

Based on: 10-K (filing date: 2019-02-22), 10-K (filing date: 2018-02-22), 10-K (filing date: 2017-02-23), 10-K (filing date: 2016-02-24), 10-K (filing date: 2015-02-24).

1 2018 Calculation
Working capital turnover = Revenue ÷ Working capital
= 15,784 ÷ 5,623 = 2.81

2 Click competitor name to see calculations.

Ratio Description The company
Working capital turnover An activity ratio calculated as revenue divided by working capital. Texas Instruments Inc.’s working capital turnover deteriorated from 2016 to 2017 but then improved from 2017 to 2018 exceeding 2016 level.

Average Inventory Processing Period

Texas Instruments Inc., average inventory processing period calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Selected Financial Data
Inventory turnover 2.48 2.73 2.87 3.22 3.15
Ratio (no. of days)
Average inventory processing period1 147 134 127 113 116
Benchmarks (no. of days)
Average Inventory Processing Period, Competitors2
Apple Inc. 9 13 6 6 7
Applied Materials Inc. 144 134 119 117 109
Broadcom Inc. 41 58 70 58 79
Cisco Systems Inc. 36 33 24 30 30
Intel Corp. 98 108 87 91 77
NVIDIA Corp. 75 102 69 85 76
Qualcomm Inc. 60 76 58 52 50
Average Inventory Processing Period, Sector
Technology Hardware & Equipment 33 38 29 27 28
Average Inventory Processing Period, Industry
Technology 25 28 23 23 24

Based on: 10-K (filing date: 2019-02-22), 10-K (filing date: 2018-02-22), 10-K (filing date: 2017-02-23), 10-K (filing date: 2016-02-24), 10-K (filing date: 2015-02-24).

1 2018 Calculation
Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ 2.48 = 147

2 Click competitor name to see calculations.

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. Texas Instruments Inc.’s average inventory processing period deteriorated from 2016 to 2017 and from 2017 to 2018.

Average Receivable Collection Period

Texas Instruments Inc., average receivable collection period calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Selected Financial Data
Receivables turnover 13.08 11.71 10.55 11.16 10.47
Ratio (no. of days)
Average receivable collection period1 28 31 35 33 35
Benchmarks (no. of days)
Average Receivable Collection Period, Competitors2
Apple Inc. 32 28 27 26 35
Applied Materials Inc. 54 59 77 66 67
Broadcom Inc. 58 51 60 55 67
Cisco Systems Inc. 41 39 43 40 40
Intel Corp. 35 33 29 32 29
NVIDIA Corp. 48 44 37 37 38
Qualcomm Inc. 46 59 34 28 33
Average Receivable Collection Period, Sector
Technology Hardware & Equipment 36 34 32 31 36
Average Receivable Collection Period, Industry
Technology 47 47 45 42 46

Based on: 10-K (filing date: 2019-02-22), 10-K (filing date: 2018-02-22), 10-K (filing date: 2017-02-23), 10-K (filing date: 2016-02-24), 10-K (filing date: 2015-02-24).

1 2018 Calculation
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ 13.08 = 28

2 Click competitor name to see calculations.

Ratio Description The company
Average receivable collection period An activity ratio equal to the number of days in the period divided by receivables turnover. Texas Instruments Inc.’s average receivable collection period improved from 2016 to 2017 and from 2017 to 2018.

Operating Cycle

Texas Instruments Inc., operating cycle calculation, comparison to benchmarks

No. of days

Microsoft Excel LibreOffice Calc
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Selected Financial Data
Average inventory processing period 147 134 127 113 116
Average receivable collection period 28 31 35 33 35
Ratio
Operating cycle1 175 165 162 146 151
Benchmarks
Operating Cycle, Competitors2
Apple Inc. 41 41 33 32 42
Applied Materials Inc. 198 193 196 183 176
Broadcom Inc. 99 109 130 113 146
Cisco Systems Inc. 77 72 67 70 70
Intel Corp. 133 141 116 123 106
NVIDIA Corp. 123 146 106 122 114
Qualcomm Inc. 106 135 92 80 83
Operating Cycle, Sector
Technology Hardware & Equipment 69 72 61 58 64
Operating Cycle, Industry
Technology 72 75 68 65 70

Based on: 10-K (filing date: 2019-02-22), 10-K (filing date: 2018-02-22), 10-K (filing date: 2017-02-23), 10-K (filing date: 2016-02-24), 10-K (filing date: 2015-02-24).

1 2018 Calculation
Operating cycle = Average inventory processing period + Average receivable collection period
= 147 + 28 = 175

2 Click competitor name to see calculations.

Ratio Description The company
Operating cycle Equal to average inventory processing period plus average receivables collection period. Texas Instruments Inc.’s operating cycle deteriorated from 2016 to 2017 and from 2017 to 2018.

Average Payables Payment Period

Texas Instruments Inc., average payables payment period calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Selected Financial Data
Payables turnover 11.52 11.47 12.95 14.09 12.86
Ratio (no. of days)
Average payables payment period1 32 32 28 26 28
Benchmarks (no. of days)
Average Payables Payment Period, Competitors2
Apple Inc. 125 127 104 92 98
Applied Materials Inc. 39 43 47 42 43
Broadcom Inc. 29 44 63 69 79
Cisco Systems Inc. 37 28 21 21 19
Intel Corp. 51 45 39 36 50
NVIDIA Corp. 56 62 49 51 64
Qualcomm Inc. 65 73 70 46 75
Average Payables Payment Period, Sector
Technology Hardware & Equipment 97 98 81 74 78
Average Payables Payment Period, Industry
Technology 78 78 69 65 70

Based on: 10-K (filing date: 2019-02-22), 10-K (filing date: 2018-02-22), 10-K (filing date: 2017-02-23), 10-K (filing date: 2016-02-24), 10-K (filing date: 2015-02-24).

1 2018 Calculation
Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ 11.52 = 32

2 Click competitor name to see calculations.

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.

Cash Conversion Cycle

Texas Instruments Inc., cash conversion cycle calculation, comparison to benchmarks

No. of days

Microsoft Excel LibreOffice Calc
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Selected Financial Data
Average inventory processing period 147 134 127 113 116
Average receivable collection period 28 31 35 33 35
Average payables payment period 32 32 28 26 28
Ratio
Cash conversion cycle1 143 133 134 120 123
Benchmarks
Cash Conversion Cycle, Competitors2
Apple Inc. -84 -86 -71 -60 -56
Applied Materials Inc. 159 150 149 141 133
Broadcom Inc. 70 65 67 44 67
Cisco Systems Inc. 40 44 46 49 51
Intel Corp. 82 96 77 87 56
NVIDIA Corp. 67 84 57 71 50
Qualcomm Inc. 41 62 22 34 8
Cash Conversion Cycle, Sector
Technology Hardware & Equipment -28 -26 -20 -16 -14
Cash Conversion Cycle, Industry
Technology -6 -3 -1 0 0

Based on: 10-K (filing date: 2019-02-22), 10-K (filing date: 2018-02-22), 10-K (filing date: 2017-02-23), 10-K (filing date: 2016-02-24), 10-K (filing date: 2015-02-24).

1 2018 Calculation
Cash conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= 147 + 28 – 32 = 143

2 Click competitor name to see calculations.

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. Texas Instruments Inc.’s cash conversion cycle improved from 2016 to 2017 but then deteriorated significantly from 2017 to 2018.