Analysis of Short-term (Operating) Activity Ratios
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)
United Airlines Holdings Inc., short-term (operating) activity ratios
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
- Inventory Turnover
- The inventory turnover ratio shows a notable increase from 16.48 in 2020 to a peak of 40.54 in 2022, followed by a slight decline to 34.41 in 2023 and a moderate recovery to 36.3 in 2024. This indicates improved efficiency in managing inventory, reaching the highest turnover in 2022 before stabilizing at a high level.
- Receivables Turnover
- Receivables turnover increased consistently from 11.86 in 2020 to 28.3 in 2023, before slightly decreasing to 26.38 in 2024. This trend reflects a growing effectiveness in collecting receivables and accelerating cash inflows, with a minor reduction at the end of the period.
- Payables Turnover
- The payables turnover remained relatively stable around 9.6 in 2020 and 2021, then increased significantly to above 13 from 2022 onward. This suggests a quicker payment cycle to suppliers during the latter years.
- Working Capital Turnover
- Working capital turnover displayed a marginal decline from 7.4 in 2020 to 6.98 in 2021, followed by an anomalous and extraordinary surge to 681.14 in 2022. Subsequent data for 2023 and 2024 is missing, hampering further trend analysis. The spike indicates an extraordinary event or accounting adjustment in 2022.
- Average Inventory Processing Period
- The average inventory processing period steadily declined from 22 days in 2020 to 9 days in 2022, slightly increasing to 11 days in 2023 and reverting back to 10 days in 2024. This pattern shows improved speed in inventory processing with minor fluctuations in recent years.
- Average Receivable Collection Period
- There was a steady reduction in the average receivable collection period from 31 days in 2020 to 13 days in 2023, with a small increase to 14 days in 2024. This reflects improving efficiency in collecting receivables, enhancing liquidity.
- Operating Cycle
- The operating cycle contracted significantly from 53 days in 2020 to 24 days by 2022, remaining stable through 2024. This shortening implies more efficient management of inventory and receivables combined.
- Average Payables Payment Period
- The average payables payment period held steady at 38 days in 2020 and 2021, then declined between 2022 and 2024 to around 26-27 days. This indicates payments to suppliers are being made more quickly over time.
- Cash Conversion Cycle
- The cash conversion cycle improved dramatically from 15 days in 2020 down to positive single digits by 2021, and became negative from 2022 onward (-4, -2, -3). A negative cash conversion cycle suggests the company is receiving cash from customers faster than it is paying its suppliers, highlighting strong cash management.
Turnover Ratios
Average No. Days
Inventory Turnover
United Airlines Holdings Inc., inventory turnover calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Operating revenue | 57,063) | 53,717) | 44,955) | 24,634) | 15,355) | |
| Aircraft fuel, spare parts and supplies, net | 1,572) | 1,561) | 1,109) | 983) | 932) | |
| Short-term Activity Ratio | ||||||
| Inventory turnover1 | 36.30 | 34.41 | 40.54 | 25.06 | 16.48 | |
| Benchmarks | ||||||
| Inventory Turnover, Competitors2 | ||||||
| FedEx Corp. | 142.82 | 149.26 | 146.80 | 143.03 | 121.01 | |
| Union Pacific Corp. | 31.53 | 32.46 | 33.57 | 35.11 | 30.62 | |
| United Parcel Service Inc. | 110.25 | 97.28 | 112.87 | 135.69 | 136.50 | |
| Inventory Turnover, Sector | ||||||
| Transportation | 75.83 | 73.23 | 83.93 | 81.51 | 70.20 | |
| Inventory Turnover, Industry | ||||||
| Industrials | 4.06 | 4.23 | 4.28 | 4.03 | 3.71 | |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Inventory turnover = Operating revenue ÷ Aircraft fuel, spare parts and supplies, net
= 57,063 ÷ 1,572 = 36.30
2 Click competitor name to see calculations.
- Operating Revenue
- Operating revenue has demonstrated a significant and consistent upward trend over the five-year period. Starting from approximately $15.4 billion in 2020, it increased markedly to $24.6 billion in 2021, nearly doubling from the prior year to $44.9 billion in 2022. Growth continued in subsequent years, reaching about $53.7 billion in 2023 and $57.1 billion in 2024. This trajectory indicates strong revenue expansion, suggesting successful business growth and recovery trends, likely linked to increasing operational activity or market demand.
- Aircraft Fuel, Spare Parts and Supplies, Net
- Expenditure on aircraft fuel, spare parts, and supplies has also risen during the same timeframe, though at a less accelerated pace compared to revenue. The cost increased from approximately $932 million in 2020 to $983 million in 2021, then to $1.11 billion in 2022. A more marked rise was observed in 2023, with costs reaching $1.56 billion, followed by a slight increase to $1.57 billion in 2024. This pattern reflects higher operational costs, possibly due to greater flight activity or increased fuel prices, but the slower growth relative to revenue suggests some level of cost management or efficiency gains.
- Inventory Turnover
- The inventory turnover ratio shows considerable variability over the years, initially increasing sharply from 16.48 in 2020 to 25.06 in 2021, and then surging further to 40.54 in 2022. This indicates a significant acceleration in the rate at which inventory was used or sold. However, the ratio declined to 34.41 in 2023 before slightly recovering to 36.3 in 2024. The fluctuations suggest changes in supply chain dynamics or inventory management practices, with particularly high efficiency or demand fulfillment in 2022, followed by a stabilization phase.
Receivables Turnover
United Airlines Holdings Inc., receivables turnover calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Operating revenue | 57,063) | 53,717) | 44,955) | 24,634) | 15,355) | |
| Receivables, net | 2,163) | 1,898) | 1,801) | 1,663) | 1,295) | |
| Short-term Activity Ratio | ||||||
| Receivables turnover1 | 26.38 | 28.30 | 24.96 | 14.81 | 11.86 | |
| Benchmarks | ||||||
| Receivables Turnover, Competitors2 | ||||||
| FedEx Corp. | 8.69 | 8.85 | 7.88 | 6.96 | 6.85 | |
| Uber Technologies Inc. | 13.19 | 10.95 | 11.47 | 7.16 | 10.38 | |
| Union Pacific Corp. | 12.80 | 11.63 | 13.15 | 12.66 | 12.98 | |
| United Parcel Service Inc. | 8.38 | 8.11 | 7.97 | 7.76 | 7.87 | |
| Receivables Turnover, Sector | ||||||
| Transportation | 10.73 | 10.29 | 9.56 | 8.05 | 8.08 | |
| Receivables Turnover, Industry | ||||||
| Industrials | 9.05 | 8.61 | 8.17 | 7.76 | 7.57 | |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Receivables turnover = Operating revenue ÷ Receivables, net
= 57,063 ÷ 2,163 = 26.38
2 Click competitor name to see calculations.
- Operating Revenue
- The operating revenue demonstrates a strong upward trend over the five-year period. Starting from $15,355 million in 2020, it rose significantly to $24,634 million in 2021, nearly doubling the initial figure. This growth continued in the subsequent years, reaching $44,955 million in 2022, $53,717 million in 2023, and $57,063 million in 2024. The pattern indicates robust expansion and increasing business activity, with the largest increase observed between 2021 and 2022.
- Receivables, Net
- Net receivables have also shown a steady increase throughout the period. From $1,295 million in 2020, the amount rose to $1,663 million in 2021 and further increased to $1,801 million in 2022. The upward trend continued with $1,898 million in 2023 and reached $2,163 million in 2024. The growth in receivables is consistent but at a much slower pace compared to operating revenue, suggesting improved management of receivables in alignment with increasing sales.
- Receivables Turnover Ratio
- The receivables turnover ratio shows a marked improvement from 11.86 in 2020 to 14.81 in 2021, indicating faster collection of receivables relative to the prior year. This ratio surged substantially to 24.96 in 2022 and continued to increase to 28.3 in 2023. There is a slight decrease to 26.38 in 2024, but it remains significantly higher than the initial years. Overall, this suggests enhanced efficiency in converting receivables into cash, with the company collecting payments more quickly, which contributes positively to liquidity and working capital management.
Payables Turnover
United Airlines Holdings Inc., payables turnover calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Operating revenue | 57,063) | 53,717) | 44,955) | 24,634) | 15,355) | |
| Accounts payable | 4,193) | 3,835) | 3,395) | 2,562) | 1,595) | |
| Short-term Activity Ratio | ||||||
| Payables turnover1 | 13.61 | 14.01 | 13.24 | 9.62 | 9.63 | |
| Benchmarks | ||||||
| Payables Turnover, Competitors2 | ||||||
| FedEx Corp. | 27.50 | 23.43 | 23.20 | 21.86 | 21.17 | |
| Uber Technologies Inc. | 31.06 | 28.43 | 27.00 | 10.87 | 21.93 | |
| Union Pacific Corp. | 28.63 | 28.18 | 31.73 | 28.99 | 31.92 | |
| United Parcel Service Inc. | 14.45 | 14.35 | 13.36 | 12.93 | 13.11 | |
| Payables Turnover, Sector | ||||||
| Transportation | 18.63 | 17.96 | 17.23 | 15.26 | 15.94 | |
| Payables Turnover, Industry | ||||||
| Industrials | 8.65 | 8.07 | 7.83 | 7.81 | 7.49 | |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Payables turnover = Operating revenue ÷ Accounts payable
= 57,063 ÷ 4,193 = 13.61
2 Click competitor name to see calculations.
- Operating Revenue
- The operating revenue has demonstrated a consistent upward trend over the five-year period. Starting from $15,355 million in 2020, it increased significantly to $24,634 million in 2021 and continued to grow to $44,955 million in 2022. The upward momentum persisted through 2023 and 2024, reaching $53,717 million and $57,063 million respectively. This indicates a strong recovery and expansion in revenue generation over the years, with the most notable increase occurring between 2021 and 2022.
- Accounts Payable
- Accounts payable also exhibits a steady increase from $1,595 million in 2020 to $4,193 million in 2024. This rise suggests growing liabilities toward suppliers or creditors over the years, which could be correlated to the expanding operational scale and increased purchasing or credit activities as revenue grows.
- Payables Turnover
- The payables turnover ratio shows an improving trend from 9.63 in 2020 to a peak of 14.01 in 2023, followed by a slight decline to 13.61 in 2024. The increasing ratio through 2023 indicates improved efficiency in managing and settling accounts payable relative to purchases. The slight dip in 2024 may suggest a marginal slowing in payment velocity or an adjustment in payment policies but overall remains at an elevated level compared to earlier years.
Working Capital Turnover
United Airlines Holdings Inc., working capital turnover calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current assets | 18,883) | 18,487) | 20,058) | 21,834) | 14,800) | |
| Less: Current liabilities | 23,314) | 22,203) | 19,992) | 18,304) | 12,725) | |
| Working capital | (4,431) | (3,716) | 66) | 3,530) | 2,075) | |
| Operating revenue | 57,063) | 53,717) | 44,955) | 24,634) | 15,355) | |
| Short-term Activity Ratio | ||||||
| Working capital turnover1 | — | — | 681.14 | 6.98 | 7.40 | |
| Benchmarks | ||||||
| Working Capital Turnover, Competitors2 | ||||||
| FedEx Corp. | 18.07 | 17.94 | 15.35 | 12.13 | 11.46 | |
| Uber Technologies Inc. | 57.19 | 20.23 | 80.50 | — | 3.69 | |
| Union Pacific Corp. | — | — | — | — | 476.41 | |
| United Parcel Service Inc. | 31.74 | 52.36 | 24.61 | 13.21 | 26.45 | |
| Working Capital Turnover, Sector | ||||||
| Transportation | 107.59 | 75.38 | 32.61 | 15.90 | 13.91 | |
| Working Capital Turnover, Industry | ||||||
| Industrials | 10.82 | 13.27 | 10.34 | 6.90 | 4.52 | |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Working capital turnover = Operating revenue ÷ Working capital
= 57,063 ÷ -4,431 = —
2 Click competitor name to see calculations.
- Working Capital
- The working capital exhibited a fluctuating trend over the analyzed period. It started at 2,075 million USD at the end of 2020 and increased significantly to 3,530 million USD by the end of 2021. However, a sharp decline followed, dropping to 66 million USD at the end of 2022 and turning negative afterward, reaching -3,716 million USD in 2023 and -4,431 million USD by the end of 2024. This trend indicates a deterioration in short-term liquidity and suggests increasing challenges in meeting short-term obligations in the later years.
- Operating Revenue
- Operating revenue showed a strong growth trajectory across the five-year span. Starting at 15,355 million USD in 2020, the revenue increased substantially each year, more than doubling to 24,634 million USD in 2021 and further escalating to 44,955 million USD in 2022. The upward trend continued, reaching 53,717 million USD in 2023 and further increasing to 57,063 million USD by the end of 2024. This consistent growth signals expanded business operations and increased sales activity throughout the period.
- Working Capital Turnover
- The working capital turnover ratio demonstrated significant volatility. Beginning at 7.4 times in 2020, it slightly decreased to 6.98 times in 2021, indicating modest changes in efficiency relative to working capital. However, in 2022, the ratio surged dramatically to 681.14 times, which appears as an outlier and may be influenced by the nearing zero working capital figure of that year. Data for subsequent years were not reported, possibly reflecting the complications arising from negative working capital figures experienced in those years. Such volatility suggests challenges in consistently managing working capital in relation to operating revenue.
Average Inventory Processing Period
United Airlines Holdings Inc., average inventory processing period calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Inventory turnover | 36.30 | 34.41 | 40.54 | 25.06 | 16.48 | |
| Short-term Activity Ratio (no. days) | ||||||
| Average inventory processing period1 | 10 | 11 | 9 | 15 | 22 | |
| Benchmarks (no. days) | ||||||
| Average Inventory Processing Period, Competitors2 | ||||||
| FedEx Corp. | 3 | 2 | 2 | 3 | 3 | |
| Union Pacific Corp. | 12 | 11 | 11 | 10 | 12 | |
| United Parcel Service Inc. | 3 | 4 | 3 | 3 | 3 | |
| Average Inventory Processing Period, Sector | ||||||
| Transportation | 5 | 5 | 4 | 4 | 5 | |
| Average Inventory Processing Period, Industry | ||||||
| Industrials | 90 | 86 | 85 | 91 | 99 | |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ 36.30 = 10
2 Click competitor name to see calculations.
- Inventory Turnover
- The inventory turnover ratio exhibits a significant upward trend from 16.48 in 2020 to 40.54 in 2022, indicating a marked improvement in the efficiency with which inventory is managed and sold. Although there is a slight decrease to 34.41 in 2023, the ratio rises again to 36.3 in 2024, maintaining a substantially higher level than that observed in 2020 and 2021. This overall pattern suggests enhanced operational efficiency and possibly improved demand or inventory management practices over the observed period.
- Average Inventory Processing Period
- The average inventory processing period shows a notable decline from 22 days in 2020 to just 9 days in 2022, reflecting quicker inventory turnover and reduced holding time. There is a minor increase to 11 days in 2023, followed by a decrease to 10 days in 2024. Despite these small fluctuations, the trend over the five years is a significant reduction in inventory processing duration, consistent with the increase seen in inventory turnover ratio. This decrease points to effective inventory control and faster conversion of inventory into sales.
Average Receivable Collection Period
United Airlines Holdings Inc., average receivable collection period calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Receivables turnover | 26.38 | 28.30 | 24.96 | 14.81 | 11.86 | |
| Short-term Activity Ratio (no. days) | ||||||
| Average receivable collection period1 | 14 | 13 | 15 | 25 | 31 | |
| Benchmarks (no. days) | ||||||
| Average Receivable Collection Period, Competitors2 | ||||||
| FedEx Corp. | 42 | 41 | 46 | 52 | 53 | |
| Uber Technologies Inc. | 28 | 33 | 32 | 51 | 35 | |
| Union Pacific Corp. | 29 | 31 | 28 | 29 | 28 | |
| United Parcel Service Inc. | 44 | 45 | 46 | 47 | 46 | |
| Average Receivable Collection Period, Sector | ||||||
| Transportation | 34 | 35 | 38 | 45 | 45 | |
| Average Receivable Collection Period, Industry | ||||||
| Industrials | 40 | 42 | 45 | 47 | 48 | |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ 26.38 = 14
2 Click competitor name to see calculations.
- Receivables Turnover
- The receivables turnover ratio shows a consistent upward trend from 11.86 in 2020 to a peak of 28.3 in 2023, followed by a slight decline to 26.38 in 2024. This indicates an overall improvement in the efficiency of collecting receivables over the observed period, with the company speeding up its collection process significantly until 2023, and then maintaining a high turnover rate in 2024 despite a minor reduction.
- Average Receivable Collection Period
- The average receivable collection period has decreased substantially, moving from 31 days in 2020 down to 14 days in 2024. This downward trajectory aligns inversely with the receivables turnover ratio, demonstrating a continuous improvement in the company's ability to collect payments faster, enhancing cash flow efficiency. The collection period reached its shortest duration of 13 days in 2023 before slightly increasing to 14 days in 2024.
- Overall Analysis
- The data suggest that United Airlines Holdings Inc. has markedly improved its receivables management between 2020 and 2024, with higher turnover ratios and shorter collection periods indicating more effective credit control and collection practices. The minor fluctuations in 2024 relative to 2023 hint at a stabilization phase after significant improvements in prior years.
Operating Cycle
United Airlines Holdings Inc., operating cycle calculation, comparison to benchmarks
No. days
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Average inventory processing period | 10 | 11 | 9 | 15 | 22 | |
| Average receivable collection period | 14 | 13 | 15 | 25 | 31 | |
| Short-term Activity Ratio | ||||||
| Operating cycle1 | 24 | 24 | 24 | 40 | 53 | |
| Benchmarks | ||||||
| Operating Cycle, Competitors2 | ||||||
| FedEx Corp. | 45 | 43 | 48 | 55 | 56 | |
| Union Pacific Corp. | 41 | 42 | 39 | 39 | 40 | |
| United Parcel Service Inc. | 47 | 49 | 49 | 50 | 49 | |
| Operating Cycle, Sector | ||||||
| Transportation | 39 | 40 | 42 | 49 | 50 | |
| Operating Cycle, Industry | ||||||
| Industrials | 130 | 128 | 130 | 138 | 147 | |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Operating cycle = Average inventory processing period + Average receivable collection period
= 10 + 14 = 24
2 Click competitor name to see calculations.
- Average Inventory Processing Period
- The average inventory processing period demonstrates a notable decreasing trend from 22 days in 2020 to 9 days in 2022, indicating improved efficiency in inventory turnover. However, a slight increase to 11 days in 2023 is observed, followed by a modest reduction to 10 days in 2024. Overall, the trend suggests enhanced inventory management over the five-year period, with minor fluctuations towards the end of the timeframe.
- Average Receivable Collection Period
- The average receivable collection period shows a significant reduction from 31 days in 2020 down to 15 days in 2022. This improvement continues with a decrease to 13 days in 2023, though a slight increase to 14 days is noted in 2024. The overall pattern reflects a positive development in the efficiency of collecting receivables, contributing to improved cash flow management despite the minor rise in the final year.
- Operating Cycle
- The operating cycle declines markedly from 53 days in 2020 to 24 days in 2022, remaining stable at 24 days through 2023 and 2024. This reduction indicates a faster conversion of inventory and receivables into cash, reflecting stronger operational efficiency and effective working capital management over the analyzed period.
Average Payables Payment Period
United Airlines Holdings Inc., average payables payment period calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Payables turnover | 13.61 | 14.01 | 13.24 | 9.62 | 9.63 | |
| Short-term Activity Ratio (no. days) | ||||||
| Average payables payment period1 | 27 | 26 | 28 | 38 | 38 | |
| Benchmarks (no. days) | ||||||
| Average Payables Payment Period, Competitors2 | ||||||
| FedEx Corp. | 13 | 16 | 16 | 17 | 17 | |
| Uber Technologies Inc. | 12 | 13 | 14 | 34 | 17 | |
| Union Pacific Corp. | 13 | 13 | 12 | 13 | 11 | |
| United Parcel Service Inc. | 25 | 25 | 27 | 28 | 28 | |
| Average Payables Payment Period, Sector | ||||||
| Transportation | 20 | 20 | 21 | 24 | 23 | |
| Average Payables Payment Period, Industry | ||||||
| Industrials | 42 | 45 | 47 | 47 | 49 | |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ 13.61 = 27
2 Click competitor name to see calculations.
- Payables Turnover
- The payables turnover ratio demonstrates a marked increase from 9.63 in 2020 and 9.62 in 2021 to 13.24 in 2022. This upward trend continues into 2023, reaching 14.01, before experiencing a slight decline to 13.61 in 2024. The overall increase indicates a more rapid payment cycle to suppliers over the observed period, suggesting enhanced efficiency in managing payables or potentially improved negotiation terms.
- Average Payables Payment Period
- This metric inversely mirrors the payables turnover trend. The average number of days to settle payables remains stable at 38 days in both 2020 and 2021, then sharply declines to 28 days in 2022. It further decreases slightly to 26 days in 2023 before settling at 27 days in 2024. This reduction signifies a faster payment schedule, corroborating the company's quicker settlement of outstanding obligations.
- Overall Insights
- The consistent trend towards a faster payables cycle and shorter payment periods over the five-year span may reflect an improved liquidity position or strategic payment policy adjustments. The slight moderation in 2024 could indicate balancing cash flow management with supplier relationships. The data suggests a deliberate effort to optimize working capital and maintain good supplier standing by managing payables more proactively.
Cash Conversion Cycle
United Airlines Holdings Inc., cash conversion cycle calculation, comparison to benchmarks
No. days
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Average inventory processing period | 10 | 11 | 9 | 15 | 22 | |
| Average receivable collection period | 14 | 13 | 15 | 25 | 31 | |
| Average payables payment period | 27 | 26 | 28 | 38 | 38 | |
| Short-term Activity Ratio | ||||||
| Cash conversion cycle1 | -3 | -2 | -4 | 2 | 15 | |
| Benchmarks | ||||||
| Cash Conversion Cycle, Competitors2 | ||||||
| FedEx Corp. | 32 | 27 | 32 | 38 | 39 | |
| Union Pacific Corp. | 28 | 29 | 27 | 26 | 29 | |
| United Parcel Service Inc. | 22 | 24 | 22 | 22 | 21 | |
| Cash Conversion Cycle, Sector | ||||||
| Transportation | 19 | 20 | 21 | 25 | 27 | |
| Cash Conversion Cycle, Industry | ||||||
| Industrials | 88 | 83 | 83 | 91 | 98 | |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Cash conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= 10 + 14 – 27 = -3
2 Click competitor name to see calculations.
- Average Inventory Processing Period
- The average inventory processing period showed a clear downward trend from 22 days in 2020 to 9 days in 2022. Afterward, it slightly increased to 11 days in 2023 and then marginally declined to 10 days in 2024. This indicates an improvement in inventory turnover efficiency during the initial years followed by stabilization.
- Average Receivable Collection Period
- The average receivable collection period consistently decreased from 31 days in 2020 to 15 days in 2022, reflecting an enhanced ability to collect receivables faster. Afterward, it further improved to 13 days in 2023 but then slightly increased to 14 days in 2024, showing a minor slowdown in collection pace but maintaining a better level compared to earlier years.
- Average Payables Payment Period
- The average payables payment period remained stable at 38 days during 2020 and 2021, then decreased notably to 28 days in 2022 and further declined to 26 days in 2023. In 2024, there is a slight increase to 27 days. This pattern suggests a shift toward quicker payments to suppliers after 2021, with a slight easing in the most recent year.
- Cash Conversion Cycle
- The cash conversion cycle improved markedly over the period analyzed. It decreased from 15 days in 2020 to nearly zero in 2021 (2 days), turning negative from 2022 (-4 days), and remained negative in 2023 (-2 days) and 2024 (-3 days). A negative cash conversion cycle indicates that the company collects cash from customers before paying its suppliers, thereby enhancing liquidity.