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)
Inventory Turnover
Receivables Turnover
Working Capital Turnover
Average Inventory Processing Period
Average Receivable Collection Period
Operating Cycle

Air Products & Chemicals Inc., short-term (operating) activity ratios (quarterly data)

	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019	Dec 31, 2018	Sep 30, 2018	Jun 30, 2018	Mar 31, 2018	Dec 31, 2017	Sep 30, 2017	Jun 30, 2017	Mar 31, 2017	Dec 31, 2016	Sep 30, 2016	Jun 30, 2016	Mar 31, 2016	Dec 31, 2015
Turnover Ratios
Inventory turnover	15.09	14.62	14.20	14.47	14.07	14.77	14.77	15.39	14.82	15.01	15.27	15.63	19.15	17.98	17.29	17.15	19.97	18.62	18.52	10.33	10.56	10.05	10.08
Receivables turnover	6.91	6.67	6.32	6.95	6.26	6.42	6.95	7.08	6.66	7.13	7.05	7.40	7.20	6.95	6.91	6.97	7.67	7.45	8.51	6.61	6.08	6.95	7.52
Working capital turnover	1.73	1.61	1.54	1.41	1.37	3.12	3.09	3.19	3.24	3.18	3.21	3.25	3.00	2.39	2.42	2.42	2.90	3.25	14.62	9.21	—	—	—
Average No. Days
Average inventory processing period	24	25	26	25	26	25	25	24	25	24	24	23	19	20	21	21	18	20	20	35	35	36	36
Add: Average receivable collection period	53	55	58	53	58	57	53	52	55	51	52	49	51	53	53	52	48	49	43	55	60	53	49
Operating cycle	77	80	84	78	84	82	78	76	80	75	76	72	70	73	74	73	66	69	63	90	95	89	85

The analysis of the quarterly financial data reveals notable trends and fluctuations in key efficiency ratios and operating cycle metrics over the observed periods.

Inventory Turnover Ratio: This ratio shows a generally high level of inventory efficiency, with values oscillating between about 10 and nearly 20 times per year. A significant increase took place around the end of 2016 when the ratio nearly doubled from approximately 10 to 18, maintaining elevated levels through 2017 and dropping slightly but stabilizing around 14 to 15 from 2018 to mid-2021. This trend suggests an initial improvement in how quickly inventory is sold or used, followed by a moderate normalization.
Receivables Turnover Ratio: The receivables turnover ratio experienced some volatility, with early periods showing a decline from above 7.5 to around 6 by mid-2016. A recovery followed towards late 2016, peaking around 8.5, but subsequent quarters generally reflected a gradual decrease, settling between 6.3 and 7.0 from 2018 onwards. This indicates variability in the company’s efficiency in collecting its accounts receivable, with some slowing down over time.
Working Capital Turnover Ratio: Working capital turnover data is sparse before mid-2016 but reveals a sharp peak at 14.62 in the same quarter, followed by a steep decline to around 2 to 3 in the following years. From 2018 onward, the ratio displays a gradual decline from approximately 3.2 to below 1.8 by mid-2021, highlighting decreasing efficiency in generating sales from working capital.
Average Inventory Processing Period: The average inventory processing period decreased markedly from about 36 days in late 2015 to roughly 20 days by late 2016, reflecting faster inventory turnover. Minor fluctuations occur thereafter, but the period remains relatively stable around 24 to 26 days through 2020 and early 2021. This consistency points to a sustained improvement in inventory management speed compared to the earlier period.
Average Receivable Collection Period: The average collection period fluctuated between 43 and 60 days over the quarters. Initially, it exhibited a reduction from approximately 60 days in mid-2016 to about 43 days by the end of 2016, but a gradual upward trend followed, reaching nearly 58 days in 2020. The increase in collection days suggests slightly slower receivables conversion into cash over time.
Operating Cycle: The operating cycle, combining inventory processing and receivables collection periods, decreased significantly from around 85-95 days in 2015-2016 to a low near 63 days by the end of 2016. Post-2016, the cycle showed moderate increases, fluctuating between 70 and 84 days through 2020, with a slight downward trend towards 77 days by mid-2021. Overall, this reflects improved operating efficiency with some gradual lengthening in later periods.

In summary, the company exhibited significant operational improvements around late 2016, notably in inventory turnover and operating cycle reduction. Subsequently, these efficiencies stabilized or slightly regressed, particularly in working capital and receivables management, indicating potential areas for continued focus on optimizing working capital and receivables conversion. Inventory management remains relatively strong with consistent inventory turnover ratios and processing days. The trends suggest overall solid but somewhat variable operational efficiency performance across the reviewed periods.

Turnover Ratios

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Average No. Days

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Air Products & Chemicals Inc., inventory turnover calculation (quarterly data)

	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019	Dec 31, 2018	Sep 30, 2018	Jun 30, 2018	Mar 31, 2018	Dec 31, 2017	Sep 30, 2017	Jun 30, 2017	Mar 31, 2017	Dec 31, 2016	Sep 30, 2016	Jun 30, 2016	Mar 31, 2016	Dec 31, 2015
Selected Financial Data (US$ in thousands)
Cost of sales	1,801,900)	1,745,500)	1,632,400)	1,566,500)	1,344,900)	1,460,100)	1,486,600)	1,490,800)	1,466,000)	1,474,700)	1,544,000)	1,565,800)	1,545,400)	1,506,500)	1,571,800)	1,545,300)	1,486,200)	1,403,800)	1,318,100)	1,648,700)	1,639,300)	1,519,000)	1,595,700)
Inventories	447,200)	430,300)	422,900)	404,800)	410,900)	399,700)	400,600)	388,300)	408,300)	408,300)	403,400)	396,100)	322,100)	339,900)	347,400)	335,400)	293,300)	322,800)	330,700)	619,900)	611,100)	649,800)	665,600)
Short-term Activity Ratio
Inventory turnover¹	15.09	14.62	14.20	14.47	14.07	14.77	14.77	15.39	14.82	15.01	15.27	15.63	19.15	17.98	17.29	17.15	19.97	18.62	18.52	10.33	10.56	10.05	10.08
Benchmarks
Inventory Turnover, Competitors²
Linde plc	9.86	9.56	9.20	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Sherwin-Williams Co.	5.99	5.84	5.39	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—

¹ Q3 2021 Calculation
Inventory turnover = (Cost of sales_{Q3 2021} + Cost of sales_{Q2 2021} + Cost of sales_{Q1 2021} + Cost of sales_{Q4 2020}) ÷ Inventories
= (1,801,900 + 1,745,500 + 1,632,400 + 1,566,500) ÷ 447,200 = 15.09

² Click competitor name to see calculations.

The analysis of the quarterly financial data reveals several noteworthy trends in cost of sales, inventories, and inventory turnover over the examined periods.

Cost of Sales: The cost of sales demonstrates a fluctuating pattern with some general tendencies. Initially, from December 2015 to September 2016, the cost exhibits moderate variability, remaining around the range of approximately 1.5 to 1.65 million US dollars. A significant decline is noted at the end of 2016, dropping to roughly 1.32 million. Following this dip, there is a gradual increase throughout 2017 and 2018, culminating near 1.54 million at the end of 2018. During 2019, the cost of sales stabilizes around the range of 1.46 to 1.49 million, but a decline appears in early 2020, reaching approximately 1.34 million by mid-2020. This is followed by a marked increase in the latter quarters of 2020 and into mid-2021, peaking near 1.8 million, the highest value observed in the period.
Inventories: Inventories exhibit a marked downward adjustment starting from the end of 2015 through 2016, halving from over 660,000 to roughly 330,000 US dollars. Post-2016, inventories show some volatility but generally maintain a lower plateau compared to the starting levels until late 2018 when an upward trend is observable, increasing from around 322,000 to over 403,000 by the end of 2018. This elevated level of inventories persists with slight fluctuations through 2019 and 2020. By mid-2021, inventories continue to incrementally rise, reaching approximately 447,000 US dollars, indicating accumulation or slower turnover conditions relative to earlier years.
Inventory Turnover: The inventory turnover ratio provides insight into the efficiency of inventory management. Initially around 10 times per year at the end of 2015, the ratio sharply increases in 2016 to a peak exceeding 19 times per year in mid-2017, suggesting significantly faster inventory turnover following the substantial decrease in inventory levels. However, from 2018 onward, the turnover ratio declines gradually, moving down towards the range of 14 to 15 times by mid-2021. This decline corresponds with the rising inventory numbers, indicating a reduced pace in inventory movement, potentially reflective of changes in sales volume, inventory policies, or market conditions.

Overall, the data indicates a period of inventory optimization around 2016–2017, characterized by reduced inventory levels and heightened turnover. Subsequent periods show a trend toward increased inventories and diminishing turnover rates, while cost of sales exhibits cyclicality with a recent upward trend through 2020 and into 2021. These patterns suggest adjustments in supply chain management, responding to external and internal factors impacting production, sales, or procurement strategies.

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Air Products & Chemicals Inc., receivables turnover calculation (quarterly data)

	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019	Dec 31, 2018	Sep 30, 2018	Jun 30, 2018	Mar 31, 2018	Dec 31, 2017	Sep 30, 2017	Jun 30, 2017	Mar 31, 2017	Dec 31, 2016	Sep 30, 2016	Jun 30, 2016	Mar 31, 2016	Dec 31, 2015
Selected Financial Data (US$ in thousands)
Sales	2,604,700)	2,502,000)	2,375,200)	2,320,100)	2,065,200)	2,216,300)	2,254,700)	2,283,200)	2,224,000)	2,187,700)	2,224,000)	2,298,900)	2,259,000)	2,155,700)	2,216,600)	2,203,100)	2,121,900)	1,980,100)	1,882,500)	2,463,000)	2,434,400)	2,271,200)	2,355,800)
Trade receivables, net	1,419,300)	1,388,900)	1,419,700)	1,274,800)	1,409,700)	1,399,400)	1,288,600)	1,260,200)	1,340,700)	1,258,500)	1,268,200)	1,207,200)	1,227,600)	1,252,300)	1,233,400)	1,174,000)	1,101,200)	1,176,300)	1,063,300)	1,439,900)	1,563,200)	1,373,300)	1,288,500)
Short-term Activity Ratio
Receivables turnover¹	6.91	6.67	6.32	6.95	6.26	6.42	6.95	7.08	6.66	7.13	7.05	7.40	7.20	6.95	6.91	6.97	7.67	7.45	8.51	6.61	6.08	6.95	7.52
Benchmarks
Receivables Turnover, Competitors²
Linde plc	6.82	6.67	6.70	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Sherwin-Williams Co.	7.57	7.58	7.82	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—

¹ Q3 2021 Calculation
Receivables turnover = (Sales_{Q3 2021} + Sales_{Q2 2021} + Sales_{Q1 2021} + Sales_{Q4 2020}) ÷ Trade receivables, net
= (2,604,700 + 2,502,000 + 2,375,200 + 2,320,100) ÷ 1,419,300 = 6.91

² Click competitor name to see calculations.

Sales Trend Analysis: The sales figures demonstrate fluctuations over the analyzed periods, with an initial peak around the first half of 2016, followed by a noticeable dip toward the end of 2016. Starting in early 2017, sales recovery is evident, showing progressive growth through to the end of 2017 and maintaining relative stability with minor fluctuations through 2018 and 2019. In early 2020, sales show some variability, including a decline in mid-2020, but then a strong rebound toward the end of 2020 and continuing into 2021, reaching the highest recorded level in the last quarter under observation.
Trade Receivables, Net: The net trade receivables exhibit a general upward trend, with intermittent decreases. There is a significant decline in late 2016 compared to previous quarters, mirroring the sales dip in the same period. From 2017 onwards, trade receivables recover steadily with some periodic contraction but maintain growth overall. By mid-2021, trade receivables have risen to levels comparable to the highest observed earlier in the period, indicating sustained credit sales or extended collection periods.
Receivables Turnover Ratio: The receivables turnover ratio fluctuates inversely to changes in trade receivables and sales. The ratio starts relatively high at the end of 2015, decreases through mid-2016, and then shows variability without a consistent trend. Peaks in the turnover ratio typically correspond with periods of lower trade receivable balances or higher sales, suggesting improved collections efficiency during those times. Conversely, declines in the turnover ratio indicate slower collection periods or growing receivables. Notably, the turnover ratio dips in the middle of 2020, coinciding with trade receivables peaking and sales experiencing volatility, before a modest recovery by mid-2021.
Overall Insights: The data points to a cyclical pattern in sales and trade receivables, with external factors likely influencing the dips and recoveries throughout the period. The general trend of increasing sales coupled with growing trade receivables may suggest expanding business activity, but the declining trends in receivables turnover during certain quarters indicate potential challenges in collection efficiency or extended credit terms granted to customers. Monitoring and managing the receivables turnover ratio will be crucial to maintaining liquidity and operational effectiveness as sales volumes increase.

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Air Products & Chemicals Inc., working capital turnover calculation (quarterly data)

	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019	Dec 31, 2018	Sep 30, 2018	Jun 30, 2018	Mar 31, 2018	Dec 31, 2017	Sep 30, 2017	Jun 30, 2017	Mar 31, 2017	Dec 31, 2016	Sep 30, 2016	Jun 30, 2016	Mar 31, 2016	Dec 31, 2015
Selected Financial Data (US$ in thousands)
Current assets	8,376,800)	8,766,600)	8,809,800)	8,684,900)	9,006,500)	4,688,500)	4,719,700)	4,618,300)	4,915,200)	4,895,200)	5,089,900)	5,082,200)	5,055,500)	5,396,300)	5,355,500)	5,876,700)	5,347,000)	5,294,100)	3,548,800)	4,317,300)	3,378,800)	3,031,200)	2,779,000)
Less: Current liabilities	2,697,100)	3,017,400)	2,985,900)	2,416,700)	2,591,000)	1,806,900)	1,819,000)	1,820,900)	2,155,200)	2,073,000)	2,303,500)	2,338,300)	2,109,800)	1,752,300)	1,831,600)	2,489,000)	2,433,200)	2,602,300)	2,929,800)	3,283,300)	3,658,900)	3,839,100)	3,572,400)
Working capital	5,679,700)	5,749,200)	5,823,900)	6,268,200)	6,415,500)	2,881,600)	2,900,700)	2,797,400)	2,760,000)	2,822,200)	2,786,400)	2,743,900)	2,945,700)	3,644,000)	3,523,900)	3,387,700)	2,913,800)	2,691,800)	619,000)	1,034,000)	(280,100)	(807,900)	(793,400)

Sales	2,604,700)	2,502,000)	2,375,200)	2,320,100)	2,065,200)	2,216,300)	2,254,700)	2,283,200)	2,224,000)	2,187,700)	2,224,000)	2,298,900)	2,259,000)	2,155,700)	2,216,600)	2,203,100)	2,121,900)	1,980,100)	1,882,500)	2,463,000)	2,434,400)	2,271,200)	2,355,800)
Short-term Activity Ratio
Working capital turnover¹	1.73	1.61	1.54	1.41	1.37	3.12	3.09	3.19	3.24	3.18	3.21	3.25	3.00	2.39	2.42	2.42	2.90	3.25	14.62	9.21	—	—	—
Benchmarks
Working Capital Turnover, Competitors²
Linde plc	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Sherwin-Williams Co.	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—

¹ Q3 2021 Calculation
Working capital turnover = (Sales_{Q3 2021} + Sales_{Q2 2021} + Sales_{Q1 2021} + Sales_{Q4 2020}) ÷ Working capital
= (2,604,700 + 2,502,000 + 2,375,200 + 2,320,100) ÷ 5,679,700 = 1.73

² Click competitor name to see calculations.

The working capital values indicate a notable fluctuation over the analyzed periods, with an initial negative position turning positive by mid-2016. From late 2016 through early 2021, working capital maintained a positive stance, generally trending upwards but with some variability. A pronounced peak is visible around mid-2020, where working capital reaches above 6.4 billion US dollars, followed by a slight decline moving toward mid-2021.

Sales figures show moderate volatility quarter to quarter, starting at approximately 2.36 billion US dollars and exhibiting a general tendency to increase over the extended timeline. There is a dip near the end of 2016, but sales progressively recover and reach a new high by mid-2021, closing near 2.6 billion US dollars, suggesting steady growth in revenue generation.

Working capital turnover ratios are missing for some initial quarters but demonstrate significant insights from September 2016 onward. The ratio peaks sharply at 14.62 in the quarter ending March 2017, then experiences a marked drop below 4 in subsequent quarters, stabilizing within a band between approximately 2.4 and 3.2 for several quarters. From early 2020, the turnover ratio declines notably, falling to around 1.37 during the middle of 2020, before showing a gradual improvement to about 1.73 by mid-2021.

Working Capital Trend: Initial negativity turned positive by mid-2016, followed by an overall upward trajectory with some volatility, peaking in mid-2020.
Sales Performance: Moderate fluctuations with a recovery after late 2016 dip, achieving growth and reaching record levels by mid-2021.
Working Capital Turnover Analysis: Extremely high turnover in early 2017, followed by normalization to stable moderate levels and a decline during 2020, with slight recovery thereafter.

These observations imply enhanced working capital management starting 2016, although the sharp decline in turnover ratio during 2020 may reflect challenges in efficient usage of working capital relative to sales despite high working capital balances. Sales growth suggests resilience and expansion in operating performance across the period.

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Air Products & Chemicals Inc., average inventory processing period calculation (quarterly data)

	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019	Dec 31, 2018	Sep 30, 2018	Jun 30, 2018	Mar 31, 2018	Dec 31, 2017	Sep 30, 2017	Jun 30, 2017	Mar 31, 2017	Dec 31, 2016	Sep 30, 2016	Jun 30, 2016	Mar 31, 2016	Dec 31, 2015
Selected Financial Data
Inventory turnover	15.09	14.62	14.20	14.47	14.07	14.77	14.77	15.39	14.82	15.01	15.27	15.63	19.15	17.98	17.29	17.15	19.97	18.62	18.52	10.33	10.56	10.05	10.08
Short-term Activity Ratio (no. days)
Average inventory processing period¹	24	25	26	25	26	25	25	24	25	24	24	23	19	20	21	21	18	20	20	35	35	36	36
Benchmarks (no. days)
Average Inventory Processing Period, Competitors²
Linde plc	37	38	40	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Sherwin-Williams Co.	61	62	68	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—

¹ Q3 2021 Calculation
Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ 15.09 = 24

² Click competitor name to see calculations.

The data reveals notable shifts in inventory management efficiency over the observed periods. Inventory turnover ratios and the corresponding average inventory processing periods highlight changes in operational dynamics.

Inventory Turnover Ratio

From the end of 2015 through the first three quarters of 2016, the inventory turnover ratio remained relatively stable, fluctuating slightly around values close to 10. This stability indicates a consistent rate at which inventory was sold or used during this timeframe.

A significant increase occurred starting in the last quarter of 2016, where the ratio rose sharply to above 18. This elevated level continued through 2017 with some quarterly variation, peaking near 20 midway through the year. This suggests enhanced efficiency in managing inventory or increased sales velocity during that period.

However, beginning in late 2017 and into 2018, there was a decline in turnover ratios, dropping back to the 15-16 range by the end of 2018. The ratio held around this moderate level through 2019 and 2020, with minor fluctuations. Most recently, in the first half of 2021, the ratio exhibited a slight upward trend, moving from approximately 14.2 to 15.1.

Average Inventory Processing Period (Days)

The inventory processing period shows an inverse relationship with the turnover ratio, as expected, since a higher turnover implies fewer days to process inventory.

Initially, between late 2015 and mid-2016, the processing period remained steady at about 35-36 days. Then, from late 2016, the period sharply decreased to around 18-21 days, corresponding with the elevated turnover ratios during the same period. This reflects faster inventory cycles.

In subsequent years, the average processing period gradually increased, reaching near or slightly above 24 days by 2018 and maintaining this longer duration through 2020. This suggests a slowing in inventory turnover pace during these years.

The first two quarters of 2021 demonstrate a minor improvement, with the processing period decreasing from 26 days to 24 days, correlating with the slight uptick in turnover ratios noted earlier.

Overall, the financial data suggests an initial period of consistent inventory management, followed by a phase of improved turnover and reduced processing times in late 2016 through 2017. Thereafter, inventory turnover efficiency declined somewhat and stabilized at moderate levels from 2018 onward, with small indications of recovery in early 2021. This pattern might reflect shifts in market conditions, operational strategies, or supply chain factors influencing inventory handling.

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Air Products & Chemicals Inc., average receivable collection period calculation (quarterly data)

	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019	Dec 31, 2018	Sep 30, 2018	Jun 30, 2018	Mar 31, 2018	Dec 31, 2017	Sep 30, 2017	Jun 30, 2017	Mar 31, 2017	Dec 31, 2016	Sep 30, 2016	Jun 30, 2016	Mar 31, 2016	Dec 31, 2015
Selected Financial Data
Receivables turnover	6.91	6.67	6.32	6.95	6.26	6.42	6.95	7.08	6.66	7.13	7.05	7.40	7.20	6.95	6.91	6.97	7.67	7.45	8.51	6.61	6.08	6.95	7.52
Short-term Activity Ratio (no. days)
Average receivable collection period¹	53	55	58	53	58	57	53	52	55	51	52	49	51	53	53	52	48	49	43	55	60	53	49
Benchmarks (no. days)
Average Receivable Collection Period, Competitors²
Linde plc	54	55	54	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Sherwin-Williams Co.	48	48	47	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—

¹ Q3 2021 Calculation
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ 6.91 = 53

² Click competitor name to see calculations.

The analysis of the receivables turnover ratio and the average receivable collection period over the examined time frame reveals several notable trends and fluctuations.

Receivables Turnover Ratio: The receivables turnover ratio demonstrates variability throughout the periods presented. Initially, the ratio decreased from 7.52 at the end of 2015 to a low near 6.08 in mid-2016, suggesting a slower rate of collecting receivables during that time. Subsequently, the ratio improved markedly to reach a peak of 8.51 by the end of 2016, indicating enhanced efficiency in receivables management.; From early 2017 onward, the ratio oscillated moderately between approximately 6.32 and 7.67, with no sustained upward or downward trend. The ratio experienced a decline around early to mid-2020, coinciding with challenging economic conditions globally, before slightly recovering toward mid-2021.; Overall, the turnover ratio indicates intermittent changes in collection efficiency, with the highest performance observed at the close of 2016 and otherwise moderate fluctuations around a mid-level range.
Average Receivable Collection Period: The average collection period, measured in days, inversely corresponds to the turnover ratio trends. Initially, the collection period increased from 49 days at the end of 2015 to 60 days by mid-2016, reflecting slower collection pace.; This was followed by a reduction to 43 days at the end of 2016, aligning with the peak in turnover ratio and suggesting an acceleration in cash collections. Afterward, the period stabilized mostly within the 49 to 55-day range through 2017 to early 2019.; From mid-2019 through 2020, the average collection period lengthened again, reaching up to 58 days, indicative of some delay in receivables collection, likely linked to broader market or operational challenges.; By mid-2021, the collection period slightly shortened to around 53 days, showing a partial recovery toward more efficient collections.
Overall Insights: The pattern over the reviewed quarters highlights episodic fluctuations in receivables management effectiveness. Periods of improved turnover and shorter collection duration correspond with times of likely stronger operational or market conditions, whereas increases in collection days and decreases in turnover hint at delayed cash flows, potentially due to customer payment delays or strategic changes in credit policy.; The company's receivables metrics indicate an ongoing challenge in maintaining consistently high collection efficiency, with the data suggesting a need for close monitoring and potentially enhanced credit control measures during periods of economic uncertainty or market disruption.

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Air Products & Chemicals Inc., operating cycle calculation (quarterly data)

No. days

	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019	Dec 31, 2018	Sep 30, 2018	Jun 30, 2018	Mar 31, 2018	Dec 31, 2017	Sep 30, 2017	Jun 30, 2017	Mar 31, 2017	Dec 31, 2016	Sep 30, 2016	Jun 30, 2016	Mar 31, 2016	Dec 31, 2015
Selected Financial Data
Average inventory processing period	24	25	26	25	26	25	25	24	25	24	24	23	19	20	21	21	18	20	20	35	35	36	36
Average receivable collection period	53	55	58	53	58	57	53	52	55	51	52	49	51	53	53	52	48	49	43	55	60	53	49
Short-term Activity Ratio
Operating cycle¹	77	80	84	78	84	82	78	76	80	75	76	72	70	73	74	73	66	69	63	90	95	89	85
Benchmarks
Operating Cycle, Competitors²
Linde plc	91	93	94	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Sherwin-Williams Co.	109	110	115	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—

¹ Q3 2021 Calculation
Operating cycle = Average inventory processing period + Average receivable collection period
= 24 + 53 = 77

² Click competitor name to see calculations.

Inventory Processing Period: The average inventory processing period started at 36 days at the end of 2015 and remained stable through the first three quarters of 2016. A significant reduction followed at the end of 2016, dropping to 20 days and continuing a gradual decrease reaching a low of 18 days in mid-2017. Afterward, the period exhibited minor fluctuations in the low 20s range up to 2018, followed by a slight upward trend to 26 days by mid-2020. Toward the first half of 2021, the period stabilized around 24 to 26 days, indicating a modest increase compared to the reduced levels observed in 2016 and 2017.
Receivable Collection Period: The average receivable collection period demonstrated variability over the analyzed time frame. It began at 49 days at the end of 2015, increased to a peak of 60 days by mid-2016, then decreased to the mid-40s by the end of 2016. From early 2017 through 2019, the period mostly ranged between 48 and 55 days, reflecting a relatively stable collection timeframe. An upward trend emerged from early 2020, with the collection period reaching as high as 58 days in mid-2020 and early 2021, before slightly decreasing toward mid-2021. Overall, the data suggests a moderate increase in the time taken to collect receivables in recent periods compared to earlier years.
Operating Cycle: The operating cycle, which is the sum of the inventory processing and receivable collection periods, moved in correlation with its components. It started at 85 days at the end of 2015 and peaked at 95 days by mid-2016, reflecting increases in both inventory and receivable periods. In late 2016, it decreased substantially to 63 days, following the reduction in inventory processing days and a shorter receivable collection period. Throughout 2017 to 2019, the operating cycle hovered between 70 and 80 days, showing moderate fluctuations. During 2020, the cycle lengthened again, reaching 84 days, corresponding with increased receivable collection periods. By mid-2021, the cycle edged down slightly to 77 days but remained elevated compared to the late 2010s.
Summary of Trends: The company observed a notable improvement in inventory management efficiency starting in late 2016, as evidenced by the reduction in inventory processing days. However, this was partially offset by an increase in the average receivable collection period beginning in 2020, which suggests a slower collection of receivables in more recent periods. The overall effect on the operating cycle shows initial improvements in operational efficiency post-2016, followed by a lengthening cycle in 2020 and 2021, potentially signaling challenges in working capital management likely influenced by external factors during that period. Monitoring these trends will be crucial for maintaining optimal liquidity and operational performance moving forward.

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Air Products & Chemicals Inc. (NYSE:APD)

Analysis of Short-term (Operating) Activity Ratios
Quarterly Data

Short-term Activity Ratios (Summary)

Turnover Ratios

Average No. Days

Inventory Turnover

Receivables Turnover

Working Capital Turnover

Average Inventory Processing Period

Average Receivable Collection Period

Operating Cycle

Air Products & Chemicals Inc. (NYSE:APD)

Analysis of Short-term (Operating) Activity Ratios Quarterly Data

Short-term Activity Ratios (Summary)

Turnover Ratios

Average No. Days

Inventory Turnover

Receivables Turnover

Working Capital Turnover

Average Inventory Processing Period

Average Receivable Collection Period

Operating Cycle

Analysis of Short-term (Operating) Activity Ratios
Quarterly Data