AT&T Inc. (NYSE:T)

The short-term operating activity ratios exhibit varied trends over the observed period. Inventory turnover generally increased from the beginning of the period to the end, with some quarterly fluctuations. Receivables turnover demonstrated a similar pattern of improvement, while the working capital turnover ratio only has values for the latter part of the period. Analysis of the average processing and collection periods reveals improvements in efficiency over time, though some quarterly variations exist. Overall, the company appears to be becoming more efficient in managing its inventory and collecting receivables.

Inventory Turnover

Inventory turnover began at 22.66 and generally trended upward, reaching 23.39 before fluctuating and ending at 21.00. A noticeable dip occurred in September 2022, followed by a recovery. The most recent values suggest a slight decrease from the peak observed in early 2024, but remain above the initial value from March 2022. This indicates a generally improving ability to convert inventory into sales, with some quarterly volatility.

Receivables Turnover

Receivables turnover showed an increasing trend throughout the period, starting at 8.98 and rising to 14.21. The ratio experienced fluctuations, but the overall direction is positive. This suggests an improvement in the efficiency of collecting receivables, potentially due to improved credit policies or collection efforts.

Working Capital Turnover

Working capital turnover data is limited, appearing only from September 2025 onwards. The ratio is reported as 177.07 in September 2025, with no subsequent values. This single data point suggests efficient utilization of working capital to generate sales, but further observation is needed to confirm a consistent trend.

Average Inventory Processing Period

The average inventory processing period generally decreased over the period, starting at 16 days and fluctuating around 17-19 days before ending at 17 days. There was a peak of 25 days in September 2022, but the trend is generally downward. This indicates a reduction in the time it takes to convert raw materials into finished goods and sell them.

Average Receivable Collection Period

The average receivable collection period demonstrated a consistent downward trend, beginning at 41 days and decreasing to 26 days. This indicates a significant improvement in the speed at which the company collects payments from its customers. The reduction is relatively steady, suggesting effective implementation of credit and collection policies.

Operating Cycle

The operating cycle generally decreased from 57 days to 43 days over the observed period. Fluctuations were present, but the overall trend is a reduction in the time it takes to convert investments in inventory and other resources into cash flows from sales. This improvement aligns with the observed trends in both the inventory processing and receivable collection periods.

The inventory turnover ratio exhibits fluctuations over the observed period, spanning from March 31, 2022, to December 31, 2025. An initial decline is noted, followed by periods of increase and subsequent stabilization, with a final uptick in the most recent quarter.

Initial Decline (Q1 2022 - Q3 2022)

The inventory turnover ratio decreased from 22.66 in March 2022 to 14.50 in September 2022. This suggests a slowing in the rate at which inventory was sold and replenished during this period. The decrease could be attributable to various factors, including shifts in demand, supply chain disruptions, or changes in inventory management strategies.

Recovery and Volatility (Q4 2022 - Q3 2023)

Following the decline, the ratio experienced a recovery, reaching 23.02 in September 2023. However, this recovery was not linear, with fluctuations observed in each quarter. The ratio moved from 16.28 in December 2022 to 18.07 in March 2023, then to 21.26 in June 2023, before settling at 19.76 in September 2023. This volatility indicates inconsistent sales patterns or inventory levels.

Stabilization and Final Increase (Q4 2023 - Q4 2025)

From December 2023 through September 2025, the inventory turnover ratio generally remained within a range of 19.01 to 27.18. A notable peak was observed in June 2024, with a ratio of 27.18, representing the highest value in the observed period. The ratio concluded the period with a value of 21.00 in December 2025, indicating a slight increase from the 19.35 observed in September 2024. This suggests a potential improvement in inventory management or increased sales momentum towards the end of the period.

Cost of Revenues and Inventory Relationship

The cost of revenues generally remained relatively stable throughout the period, with fluctuations between approximately US$11.4 billion and US$14.8 billion. Inventory levels also demonstrated variability, ranging from US$1.8 billion to US$3.9 billion. The observed fluctuations in the inventory turnover ratio are consistent with these changes in both cost of revenues and inventory levels, suggesting a direct relationship between these financial items and the ratio’s performance.

Overall, the inventory turnover ratio demonstrates a dynamic pattern over the analyzed timeframe. While an initial decline was observed, the ratio ultimately recovered and stabilized, with a final increase suggesting improved efficiency in inventory management or increased sales activity.

The receivables turnover ratio exhibits considerable fluctuation over the observed period, generally trending upwards with some quarterly variations. Initial values indicate a ratio of 8.98, followed by a substantial increase to 12.33, and then a moderate decline before stabilizing around the 11 to 14 range for the majority of the analyzed timeframe. The most recent periods show a continued upward trend, culminating in a ratio of 14.21.

Overall Trend

The receivables turnover ratio demonstrates an overall increasing trend from 2022 to 2025. While quarterly variations exist, the ratio generally moves from below 9 to over 14, suggesting improving efficiency in collecting receivables.

Initial Period (Mar 31, 2022 – Dec 31, 2022)

The period begins with a relatively low receivables turnover ratio of 8.98. A significant increase is then observed, peaking at 12.33 before declining slightly to 10.53 by the end of 2022. This initial fluctuation could be attributed to changes in credit policies, sales terms, or the composition of the customer base.

Stabilization and Subsequent Increase (Mar 31, 2023 – Dec 31, 2024)

From early 2023 through the end of 2024, the ratio stabilizes within a range of approximately 11.90 to 14.02. This suggests a period of consistent receivables management. A slight increase is noted towards the end of this period, indicating a positive trend in collection efficiency.

Recent Performance (Mar 31, 2025 – Dec 31, 2025)

The most recent two quarters demonstrate continued improvement, with the ratio increasing from 13.93 to 14.21. This represents the highest value observed throughout the entire analyzed period and suggests a strengthening of the company’s ability to convert receivables into cash.

Correlation with Operating Revenues

While not a direct correlation, the observed increases in receivables turnover generally coincide with periods of stable or increasing operating revenues. This suggests that revenue growth is not negatively impacting the speed at which receivables are collected.

In summary, the receivables turnover ratio indicates improving efficiency in managing and collecting receivables over the analyzed period. The recent upward trend is particularly noteworthy, suggesting effective credit and collection practices.

The working capital turnover ratio exhibits a notable shift towards the end of the observed period. Throughout most of the timeframe, the ratio is unavailable, indicating either a calculation issue or a lack of reported components. However, a value of 177.07 is recorded for the September 30, 2025 period. This suggests a significant increase in the efficiency with which working capital is being utilized to generate sales during that quarter.

Working Capital Trend

Working capital consistently registers as negative throughout the majority of the period, ranging from approximately -5.6 billion to -28.2 billion US dollars. A gradual decrease in the magnitude of the negative working capital is observed from December 31, 2022 (-23.065 billion) to September 30, 2025 (0.703 billion). This indicates a lessening of short-term financial strain, culminating in a positive working capital balance in the third quarter of 2025.

Operating Revenues Trend

Operating revenues demonstrate relative stability, fluctuating between approximately 29.6 billion and 33.5 billion US dollars. A slight upward trend is discernible, particularly in the later periods, with revenues reaching 33.466 billion US dollars by December 31, 2025. This suggests a potential increase in sales activity towards the end of the observation window.

Working Capital Turnover – September 2025

The reported working capital turnover of 177.07 for September 30, 2025, signifies that for every dollar of working capital, approximately 177.07 dollars of operating revenue were generated. This is a substantial turnover rate, implying efficient management of current assets and liabilities. The absence of prior period ratios makes it difficult to assess whether this represents a significant deviation from historical performance, but it does indicate a strong relationship between working capital and sales during that specific quarter.

The transition from negative to positive working capital, coupled with the increase in operating revenues and the high working capital turnover ratio in the final reported quarter, suggests a potential improvement in the company’s short-term financial health and operational efficiency. Further investigation into the factors driving these changes would be beneficial.

The average inventory processing period exhibited fluctuations over the observed timeframe, generally remaining within a relatively narrow range. An initial increase is noted, followed by a period of stabilization and subsequent variability.

Overall Trend

The average inventory processing period began at 16 days in March 2022, increased to 19 days by June 2022, and peaked at 25 days in September 2022. It then decreased to 22 days by December 2022. From March 2023 through December 2024, the period generally trended downwards, reaching a low of 13 days in June 2024. A slight increase to 19 days was observed in September 2024, followed by a return to 17 days by December 2024. The period remained at 17 days in March 2025, increased to 21 days in September 2025, and concluded at 17 days in December 2025.

Short-Term Fluctuations

Significant short-term changes were observed between June and September 2022, with a 6-day increase. A similar increase occurred between September and December 2024, with a 2-day increase. The most substantial decrease occurred between March and June 2024, with a 7-day reduction. These fluctuations suggest potential seasonality or responsiveness to specific market conditions.

Recent Performance

The most recent periods, from March 2024 through December 2025, demonstrate a degree of volatility. While the period largely remained between 17 and 19 days, the increase to 21 days in September 2025 warrants attention. This could indicate a temporary slowdown in inventory turnover or a build-up of inventory in anticipation of future demand.

Comparison to Inventory Turnover

The average inventory processing period generally moves inversely with the inventory turnover ratio. Periods of higher inventory turnover, such as in June 2024 (27.18), correspond with shorter processing periods (13 days). Conversely, lower turnover rates, like those observed in September 2022 (14.50), align with longer processing periods (25 days). This inverse relationship is consistent with expectations.

The average receivable collection period demonstrates a generally decreasing trend over the observed period, with some quarterly fluctuations. Initially, the period stood at 41 days in March 2022, but subsequently decreased and stabilized around 26-31 days for most of the following quarters.

Overall Trend

A clear downward trend is evident from March 2022 to December 2025. The period decreased from 41 days to 26 days, representing a significant improvement in the efficiency of collecting receivables. This suggests improved credit and collection processes, or a shift in customer payment terms.

Short-Term Fluctuations

While the overall trend is downward, there are some quarterly variations. A slight increase to 35 days was observed in December 2022, followed by a return to 31 days in March 2023. Similar minor increases were seen in December 2023 and December 2024, but these were not sustained. These fluctuations may be attributable to seasonal sales patterns, changes in the customer mix, or temporary issues in the collection process.

Recent Stability

From March 2024 through December 2025, the average receivable collection period remained remarkably stable, fluctuating between 26 and 29 days. This indicates a consistent and efficient collection process during this period. The final reported value of 26 days in December 2025 represents the lowest point in the observed timeframe.

The consistent reduction and subsequent stabilization of the average receivable collection period suggest effective management of accounts receivable and a healthy cash conversion cycle.

The operating cycle demonstrates fluctuations over the observed period, with a general tendency towards stabilization in recent quarters. Analysis of the component ratios reveals the drivers behind these changes.

Average Inventory Processing Period

The average inventory processing period exhibited variability between 16 and 25 days throughout the analyzed timeframe. An initial increase from 16 days in March 2022 to 25 days in September 2022 was followed by a decline, reaching 16 days again by December 2022. This pattern continued into 2023 and 2024, with values generally ranging between 13 and 20 days. The most recent quarters, from March 2025 to December 2025, show a slight increase to between 17 and 21 days, but remain within the historical range. Overall, the metric appears relatively stable, with no significant long-term trend.

Average Receivable Collection Period

The average receivable collection period showed a more pronounced decrease from 41 days in March 2022 to 26 days by September 2023. This indicates an improvement in the efficiency of collecting receivables. The period remained consistently at 26 days through December 2025, suggesting a sustained improvement in collection practices. There were some fluctuations, but the overall trend is clearly downward, and the metric has stabilized at a lower level.

Operating Cycle

The operating cycle, calculated as the sum of the average inventory processing period and the average receivable collection period, initially decreased from 57 days to 45 days between March 2022 and June 2023. This decrease reflects the combined effect of the increasing efficiency in both inventory management and receivable collection. The cycle then fluctuated between 43 and 47 days for the remainder of the period, indicating a period of stabilization. The most recent values suggest a slight increase, but remain near the lower end of the historical range. The overall trend suggests improved efficiency in converting investments in inventory and receivables into cash.

In summary, the company has demonstrated improvements in its operating cycle, primarily driven by a significant reduction in the average receivable collection period. While the inventory processing period has fluctuated, it has remained relatively stable. The operating cycle appears to have stabilized at a more efficient level in recent quarters.