Accenture PLC (NYSE:ACN)

Receivables Turnover

The receivables turnover ratio exhibits a fluctuating trend, starting at 6.16 in 2020, declining to 5.74 in 2021, then experiencing a slight recovery through 2022 and 2023 at 5.87 and 6.00 respectively, followed by a downward movement to 5.47 in 2024 and further to 5.33 in 2025. This indicates a gradual decrease in the efficiency of collecting receivables over the period, with collection speed slowing especially towards the later years.

Payables Turnover

The payables turnover ratio shows notable volatility. It starts at a high of 22.48 in 2020, sharply decreases to 15.03 in 2021, then modestly increases over the next years to 16.37 in 2022 and 17.41 in 2023. The ratio dips again to 15.94 in 2024, before rising to 17.60 in 2025. This suggests variable payment behavior, with a general trend towards slower payment to suppliers compared to 2020, although some recovery is seen in the later years.

Working Capital Turnover

The working capital turnover ratio demonstrates significant fluctuations throughout the observed periods. Starting at 8.71 in 2020, it increases substantially to 12.77 in 2021 and further to 15.07 in 2022. However, it falls back to 11.93 in 2023, spikes dramatically to 34.49 in 2024, and then sharply declines to 8.15 in 2025. The large spike in 2024 indicates an exceptional increase in sales or revenue relative to working capital, possibly from operational improvements or changes in working capital management, but the pronounced drop in 2025 suggests volatility and inconsistency in this metric.

Average Receivable Collection Period

The average collection period in days rises gradually over the years, beginning at 59 days in 2020 and increasing to 64 days in 2021. It slightly decreases to 62 and 61 days in 2022 and 2023 respectively, then climbs again to 67 days in 2024 and 68 days in 2025. The trend indicates a modest lengthening in the time taken to collect receivables, consistent with the observed decrease in receivables turnover.

Average Payables Payment Period

The payable payment period increases from 16 days in 2020 to 24 days in 2021, then oscillates between 21 and 23 days up to 2025. This suggests a shift towards longer payment periods compared to 2020, potentially reflecting negotiating strategies or cash management approaches aimed at extending payment durations to suppliers.

The company's revenues exhibit a consistent upward trend over the observed period. Starting from approximately 44.3 billion USD, revenues increased steadily each year, reaching nearly 69.7 billion USD by the final period. This represents a notable growth trajectory and reflects enhanced business operations or market expansion.

Receivables also show a growing pattern, rising from about 7.19 billion USD to 13.07 billion USD over the same timeline. This increase indicates that the company is extending more credit or experiencing higher outstanding customer balances as the business scales.

Receivables Turnover Ratio

The receivables turnover ratio demonstrates some fluctuations but generally trends downward. Initially, it stood at 6.16, decreased to a low of 5.47 in the penultimate period, and further declined to 5.33 in the last period analyzed. This declining ratio suggests that the company is collecting its receivables at a slower pace relative to revenue, indicating potential elongation of the collection cycle or changes in credit terms offered to clients.

Overall, the financial data reveals robust revenue growth accompanied by a proportionate increase in receivables. However, the decreasing receivables turnover ratio warrants monitoring as it may impact cash flow and liquidity if the trend continues over the long term.

The data reveals notable trends in the company's cost of services, accounts payable, and payables turnover ratio over the six-year span from 2020 to 2025.

Cost of Services

The cost of services demonstrates a consistent upward trend throughout the period. Starting at approximately 30.35 billion USD in 2020, it increased annually to reach about 47.44 billion USD by 2025. This growth indicates escalating operational expenditures or an expansion in service delivery activities over these years.

Accounts Payable

Accounts payable figures show a general increase from approximately 1.35 billion USD in 2020 to a peak near 2.74 billion USD in 2024, followed by a slight decline to about 2.70 billion USD in 2025. Despite some fluctuations, this upward movement suggests growing obligations to suppliers or creditors, potentially driven by increased purchasing or extended credit terms.

Payables Turnover Ratio

The payables turnover ratio exhibits volatility but remains within a range between approximately 15.0 and 22.5 over the years. Starting high at 22.48 in 2020, there was a notable decline to 15.03 in 2021, followed by moderate increases and decreases, ending at 17.6 in 2025. This fluctuation indicates variability in the rate at which the company settles its payables, with a somewhat slower turnover compared to the start of the period. Such patterns could reflect changes in payment policies, supplier negotiations, or cash management strategies.

Working Capital

The working capital showed variability over the examined periods. Beginning at approximately 5.09 billion USD, it declined to roughly 3.96 billion USD in the following year. It then slightly increased to about 4.09 billion USD and saw a more significant rise to approximately 5.37 billion USD. However, a sharp decrease occurred in the subsequent year, bringing it down to roughly 1.88 billion USD, before sharply increasing again to an estimated 8.55 billion USD in the last recorded year. This pattern indicates fluctuations in the company's liquidity and short-term financial health, with notable volatility in recent years.

Revenues

Revenues demonstrated a consistent upward trend across all periods under review. Starting at around 44.33 billion USD, revenues increased steadily each year, reaching approximately 69.67 billion USD by the final year. This upward trajectory reflects continuous growth in the company's sales or service income over time, highlighting positive business expansion or market demand.

Working Capital Turnover

The working capital turnover ratio initially improved from 8.71 to 12.77 and further to 15.07, indicating enhanced efficiency in using working capital to generate revenues during the early periods. However, it then declined to 11.93 in the following year. A substantial spike occurred in the next year, with the ratio soaring to 34.49, suggesting exceptional efficiency or possibly a significant decrease in working capital. The ratio then dropped sharply to 8.15 in the final period, representing a reduced efficiency compared to previous years. These fluctuations suggest varying efficiency in managing working capital relative to revenue generation.

Overall Insights

The data reveals a steadily growing revenue base, signifying strong operational growth. In contrast, the working capital figures show pronounced volatility, which may point to shifting operational or financial management strategies impacting liquidity. The working capital turnover ratio fluctuates markedly, reflecting changes in the relationship between working capital and revenues, with no clear long-term efficiency trend. The considerable variations in working capital alongside steady revenue growth may warrant further analysis into the company's working capital management practices and their impacts on operational effectiveness.

Receivables Turnover

The receivables turnover ratio exhibited a fluctuating trend over the examined periods. Initially, it decreased from 6.16 to 5.74 between 2020 and 2021, indicating a slower rate of collection. A moderate recovery followed in 2022 and 2023, reaching 6.00, before declining again to 5.47 in 2024 and further to 5.33 in 2025. This overall decline in recent years suggests a gradual decrease in the efficiency of collecting receivables.

Average Receivable Collection Period

The average collection period, expressed in days, shows an overall upward trajectory. It increased from 59 days in 2020 to 64 days in 2021, then slightly declined to 62 and 61 days in 2022 and 2023, respectively. However, it lengthened again to 67 days in 2024 and extended further to 68 days in 2025. This pattern implies that the company is taking more time to collect its receivables, especially in the latter years.

Insights

There is an inverse relationship between the receivables turnover ratio and the average collection period, consistent with financial theory. The declining receivables turnover and increasing collection period in the last two years suggest that the company may be experiencing delays in collecting payments. This trend could affect cash flow and liquidity and might warrant closer monitoring to manage credit risk effectively.

Payables Turnover Ratio

The payables turnover ratio demonstrates notable variability over the observed periods, beginning at a relatively high figure of 22.48 in 2020. This metric then decreases markedly to 15.03 in 2021, followed by marginal increases and decreases, reaching 17.6 in 2025. The initial sharp decline suggests a potential shift in payment practices or supplier terms, while the subsequent fluctuations indicate ongoing adjustments in managing payables efficiency.

Average Payables Payment Period (Days)

The average payables payment period shows an inverse trend relative to the turnover ratio, starting at 16 days in 2020 and increasing up to 24 days in 2021. Thereafter, it fluctuates around the low twenties, moving between 21 and 23 days through 2025. This pattern implies a lengthening of the time taken to settle payables post-2020, which corresponds logically with the reduced payables turnover during the same timeframe.

Overall Insights

The data reveal a clear relationship between payables turnover and the average payment period, with the former decreasing as the latter increases in the early part of the timeline. This suggests a strategic or operational shift towards slower payments, possibly to optimize cash flow or due to changed supplier arrangements. The stabilization of both metrics in later years indicates a period of equilibrium after initial adjustments, reflecting a more consistent approach to managing payables.