eBay Inc. (NASDAQ:EBAY)

The analysis of the financial ratios over the five-year period reveals several notable trends in operational efficiency and working capital management.

Receivables Turnover

The receivables turnover ratio declined sharply from 22.46 in 2014 to a low point of 13.88 in 2015. Thereafter, it exhibited modest fluctuations, increasing to 15.17 in 2016, dipping slightly to 13.77 in 2017, and rising again to 15.09 in 2018. This overall decline from 2014 suggests a reduction in the frequency with which receivables are collected during the year, indicating a potential decrease in collection efficiency.

Payables Turnover

The payables turnover ratio experienced a substantial decrease from 14.29 in 2014 to 5.07 in 2015, reflecting a marked slowdown in the rate at which the company paid its suppliers. Subsequently, the ratio gradually improved, climbing to 7.09 in 2016, slightly declining to 6.73 in 2017, and increasing to 8.33 in 2018. Despite the improvement, the ratio remains significantly below the 2014 level, which may indicate extended payment terms or delays in payments.

Working Capital Turnover

The working capital turnover ratio shows an overall upward trend, starting at 1.99 in 2014, declining slightly to 1.52 in 2015, then gradually increasing to 1.79 in 2016 and 2.28 in 2017, followed by a notable increase to 4.02 in 2018. This suggests that the company has become more efficient in generating revenue from its working capital over time, particularly in the last year of the period analyzed.

Average Receivable Collection Period

The average receivable collection period lengthened significantly from 16 days in 2014 to 26 days in 2015. It then decreased slightly to 24 days in 2016, increased again to 27 days in 2017, and settled at 24 days in 2018. These values correspond with the receivables turnover ratio trends, reaffirming a reduced speed in collecting receivables compared to 2014.

Average Payables Payment Period

The average payable payment period showed a dramatic increase from 26 days in 2014 to 72 days in 2015, indicating considerably slower payments to suppliers. The period then reduced to 51 days in 2016, slightly increased to 54 days in 2017, and shortened further to 44 days in 2018. Despite the improvements after 2015, the company still takes significantly longer to pay its suppliers than it did in 2014.

In summary, the data indicate a shift toward longer collection and payment cycles starting in 2015, with partial recoveries in subsequent years. The working capital turnover ratio's marked improvement by 2018 may reflect better utilization of current assets and liabilities despite the slower receivables and payables turnovers. Overall, the patterns suggest adjustments in credit and payment policies as well as working capital management strategies during the period analyzed.

The financial data over the five-year period reveals several notable trends in the key financial metrics under consideration.

Net Revenues

The net revenues experienced a significant decline from 2014 to 2015, dropping from 17,902 million US dollars to 8,592 million US dollars. From 2015 onwards, revenues demonstrated a steady recovery, increasing to 8,979 million in 2016, 9,567 million in 2017, and reaching 10,746 million by the end of 2018. This suggests a period of contraction followed by gradual revenue growth.

Accounts Receivable, Net

Accounts receivable decreased from 797 million US dollars in 2014 to 619 million in 2015 and continued a slight downward trend to 592 million in 2016. However, there was a reversal in this trend with a gradual increase in 2017 and 2018, reaching 695 million and 712 million respectively. This pattern could indicate changes in credit policies or collection efficiency across the years.

Receivables Turnover

The receivables turnover ratio shows a marked decline from 22.46 in 2014 to 13.88 in 2015, indicating slower collection of receivables or extended credit terms. It slightly improved to 15.17 in 2016, decreased marginally to 13.77 in 2017, then increased again to 15.09 in 2018. Overall, the turnover has remained considerably lower than the 2014 level, suggesting moderation in collection efficiency compared to 2014.

In summary, the data indicates a profound shift in net revenues and accounts receivable between 2014 and 2015, with subsequent years showing recovery and stabilization. The receivables turnover ratio trends lower after 2014, reflecting a noticeable change in the efficiency of receivables management throughout the period.

Cost of net revenues

The cost of net revenues shows a significant drop from 5732 million USD in 2014 to 1771 million USD in 2015, followed by a gradual increase over the subsequent years, reaching 2382 million USD by the end of 2018. This pattern suggests an initial sharp reduction in costs, after which there is a steady upward trend, though costs remain well below the 2014 level throughout the analyzed period.

Accounts payable

Accounts payable decreased from 401 million USD at the end of 2014 to 283 million USD in 2016. It then experienced a slight increase to 330 million USD in 2017 before declining again to 286 million USD by the end of 2018. Overall, accounts payable demonstrate a downward trend with minor fluctuations over the years.

Payables turnover

The payables turnover ratio shows a notable decline from 14.29 in 2014 to 5.07 in 2015, indicating a substantial slowdown in the rate at which payables are settled. After 2015, the ratio increases moderately, fluctuating between 6.73 and 8.33 from 2016 to 2018 but does not return to the high level observed in 2014. This suggests some improvement in payment speed during the latter years but still reflects a more extended payable period compared to 2014.

Summary

The financial data reveals a sharp cost reduction in 2015, followed by increasing cost trends through 2018, albeit below the initial 2014 level. Accounts payable generally diminished over time with small variations, while payables turnover ratio significantly declined in 2015, pointing to slower payments, with partial recovery in later years. These trends may indicate changes in operational efficiency, cost management, and payment policies during the period analyzed.

Working Capital

The working capital showed a continuous downward trend over the analyzed period. Beginning at 9,000 million US dollars in 2014, it declined significantly each year to reach 2,672 million US dollars by the end of 2018. This represents a substantial decrease in the company's short-term financial health and liquidity over the five-year span.

Net Revenues

Net revenues experienced fluctuations within the period under review. An initial sharp drop occurred from 17,902 million US dollars in 2014 to 8,592 million in 2015. However, from 2015 onwards, net revenues generally trended upward, reaching 10,746 million US dollars in 2018. This indicates a recovery and growth in revenue after the significant decrease seen after 2014.

Working Capital Turnover

The working capital turnover ratio exhibited variability but an overall increasing trend. Starting at 1.99 in 2014, it dipped to 1.52 in 2015 but then rose steadily in the subsequent years, culminating at 4.02 by 2018. This improvement suggests that the company became more efficient in generating revenue from each unit of working capital invested despite the reduction in absolute working capital.

Summary of Trends

Over the five-year period, the company experienced a decreasing working capital alongside an initial decline in net revenues, followed by a recovery and growth phase. The working capital turnover ratio's upward trajectory indicates enhanced operational efficiency in utilizing working capital to generate revenue. The significant reduction in working capital coupled with improved turnover could reflect changes in asset management or capital structure aimed at optimizing resource use.

Receivables Turnover

The receivables turnover ratio showed a notable decline from 22.46 in 2014 to 13.88 in 2015, indicating a significant reduction in the frequency of collections from customers. Following this sharp decrease, the ratio experienced slight fluctuations, increasing to 15.17 in 2016, then decreasing again to 13.77 in 2017 before rising to 15.09 in 2018. Overall, the pattern suggests a period of lower turnover efficiency compared to the starting point in 2014, with values stabilizing at a moderate level over the subsequent years.

Average Receivable Collection Period

The average number of days to collect receivables increased markedly from 16 days in 2014 to 26 days in 2015, corroborating the observed decline in receivables turnover. After 2015, this metric fluctuated slightly, decreasing to 24 days in 2016, rising again to 27 days in 2017, and settling back to 24 days in 2018. These variations indicate a generally longer collection period compared to 2014, reflecting some challenges in reducing the time taken to convert receivables into cash.

Overall Analysis

The combined trends of receivables turnover and average collection period point to a decrease in receivables management efficiency commencing in 2015. This change could be due to altered credit policies or customer payment behavior. However, from 2016 onward, the ratios show relative stability, suggesting the company may have adapted to the new operating conditions, maintaining moderate efficiency in managing receivables.

The payables turnover ratio exhibited considerable fluctuation over the five-year period. Initially, the ratio was high at 14.29 in 2014, indicating rapid payment to suppliers. However, it sharply declined to 5.07 in 2015, signaling a significant slowdown in payables turnover. Following this decline, the ratio experienced moderate recovery with values of 7.09 in 2016, slight decrease to 6.73 in 2017, and a subsequent rise to 8.33 in 2018. Despite improvements from the 2015 low, the ratio in later years did not return to the initial high level recorded in 2014.

Correspondingly, the average payables payment period, expressed in days, moved inversely to the payables turnover. The payment period was shortest at 26 days in 2014, then extended significantly to 72 days in 2015, marking a substantial increase in the duration taken to settle payables. After 2015, the payment period trended downward, with reductions to 51 days in 2016, a modest increase to 54 days in 2017, and a further decline to 44 days in 2018. Although the payment period decreased notably after 2015, it remained elevated relative to the 2014 figure.

Overall, the data reveals a trend of prolonged payment periods and reduced payable turnover in 2015, which partially reversed in the subsequent years but did not fully recover to the initial position recorded in 2014. This pattern suggests changes in payment practices, potentially reflecting shifts in working capital management or supplier negotiations during the period assessed.