Analysis of Short-term (Operating) Activity Ratios
Quarterly Data
Activity ratios measure how efficiently a company performs day-to-day tasks, such us the collection of receivables and management of inventory.
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- Analysis of Revenues
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Short-term Activity Ratios (Summary)
Anadarko Petroleum Corp., short-term (operating) activity ratios (quarterly data)
Based on: 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31), 10-K (reporting date: 2013-12-31), 10-Q (reporting date: 2013-09-30), 10-Q (reporting date: 2013-06-30), 10-Q (reporting date: 2013-03-31), 10-K (reporting date: 2012-12-31), 10-Q (reporting date: 2012-09-30), 10-Q (reporting date: 2012-06-30), 10-Q (reporting date: 2012-03-31).
The analysis of the quarterly financial ratios and periods reveals several notable trends and fluctuations over the observed timeframe.
- Receivables Turnover
- The receivables turnover ratio generally exhibits an upward trend from a low point of approximately 9.0 in early 2012 to a peak exceeding 14.5 around late 2014 and early 2015, indicating improved efficiency in collecting receivables over this period. However, starting in 2016, the ratio declines steadily, dropping below 9.5 by the end of 2016 and fluctuating thereafter, suggesting a deceleration in collection efficiency or increased outstanding receivables.
- Payables Turnover
- This ratio demonstrates a gradual increase across the timeline, starting near 0.9 in early 2012 and climbing steadily to nearly 2.0 by late 2017. The consistent increase implies the company is paying off its suppliers at a faster rate over the years, indicating improving liquidity or changes in credit terms with suppliers.
- Working Capital Turnover
- The working capital turnover ratio shows considerable volatility. Initial values hover around 4 to 6 in 2012 and early 2013, followed by a notable peak reaching over 22 in late 2013, then a decrease to the range of approximately 14 to 17 through mid-2015. Post-2015, the ratio decreases further, reaching low values around 2 by late 2016 and 2017. This pattern suggests fluctuating efficiency in using working capital to generate revenue, with a peak period of high turnover efficiency around 2013, followed by declining performance in subsequent years.
- Average Receivable Collection Period
- The average collection period generally decreases from about 40 days in early 2012 to approximately 25 days by late 2014, reflecting faster collection of receivables. Post-2014, this period remains relatively stable in the mid-20s before increasing again to above 35 days in 2016, signaling slower collections and potential challenges in cash flow management during that period. The collection period decreases once more towards 30–35 days near the end of the dataset.
- Average Payables Payment Period
- The payment period to suppliers manifests a downward trend over the years, starting at over 400 days in 2012 and progressively shortening to under 200 days by the latter part of 2017. The reduction in payables payment period indicates faster settlement of obligations, which may reflect stronger cash positions or altered supplier agreements.
In summary, the receivables turnover and collection period trends suggest a period of improving receivables management followed by some deterioration. Payables turnover and payment period data illustrate a marked effort to reduce outstanding payables efficiently. The working capital turnover ratio's variability hints at changing operational dynamics affecting working capital utilization throughout the periods analyzed.
Turnover Ratios
Average No. Days
Receivables Turnover
Anadarko Petroleum Corp., receivables turnover calculation (quarterly data)
| Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | Dec 31, 2014 | Sep 30, 2014 | Jun 30, 2014 | Mar 31, 2014 | Dec 31, 2013 | Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | Sep 30, 2012 | Jun 30, 2012 | Mar 31, 2012 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||||||||
| Sales revenues | ||||||||||||||||||||||||||||||
| Accounts receivable, net of allowance, customers | ||||||||||||||||||||||||||||||
| Short-term Activity Ratio | ||||||||||||||||||||||||||||||
| Receivables turnover1 | ||||||||||||||||||||||||||||||
| Benchmarks | ||||||||||||||||||||||||||||||
| Receivables Turnover, Competitors2 | ||||||||||||||||||||||||||||||
| Chevron Corp. | ||||||||||||||||||||||||||||||
| ConocoPhillips | ||||||||||||||||||||||||||||||
| Occidental Petroleum Corp. | ||||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31), 10-K (reporting date: 2013-12-31), 10-Q (reporting date: 2013-09-30), 10-Q (reporting date: 2013-06-30), 10-Q (reporting date: 2013-03-31), 10-K (reporting date: 2012-12-31), 10-Q (reporting date: 2012-09-30), 10-Q (reporting date: 2012-06-30), 10-Q (reporting date: 2012-03-31).
1 Q3 2017 Calculation
Receivables turnover
= (Sales revenuesQ3 2017
+ Sales revenuesQ2 2017
+ Sales revenuesQ1 2017
+ Sales revenuesQ4 2016)
÷ Accounts receivable, net of allowance, customers
= ( + + + )
÷ =
2 Click competitor name to see calculations.
- Sales Revenues
- Sales revenues demonstrate a fluctuating pattern over the periods analyzed. Initially, there is a moderate increase from 3,412 million USD in March 2012 to a peak of 4,385 million USD in June 2014. Following this peak, a noticeable decline occurs, with revenues dropping sharply to 2,034 million USD by December 2015. A subsequent recovery phase is observed, with sales rising again to 2,898 million USD by September 2017, although this level remains below the earlier peak. This suggests a period of volatility in sales performance, possibly influenced by external market factors or internal operational changes.
- Accounts Receivable, Net of Allowance, Customers
- The accounts receivable balances exhibit a general downward trend after mid-2014, starting from a high of 1,674 million USD in March 2014 and declining to a low of 633 million USD by June 2016. Post this low point, receivables gradually increase again to 1,009 million USD by September 2017. The initial accumulation of receivables corresponds with the revenue peak period, followed by a reduction that aligns with declining sales. The later increase in receivables may indicate loosening credit terms or delayed collections relative to the improving sales figures.
- Receivables Turnover Ratio
- The receivables turnover ratio begins from a ratio of 9.03 in March 2013 and increases significantly to a high of 14.65 in March 2015, indicating improved efficiency in collecting receivables during this timeframe. After reaching this peak, the ratio experiences some volatility and shows a declining trend toward late 2016, reaching lows around 8.39, which suggests a slowdown in collections relative to sales. Toward the end of the period, the turnover ratio improves again, stabilizing around 10.41 by September 2017. This pattern suggests fluctuating effectiveness in credit and collection policies across the periods analyzed.
Payables Turnover
Anadarko Petroleum Corp., payables turnover calculation (quarterly data)
| Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | Dec 31, 2014 | Sep 30, 2014 | Jun 30, 2014 | Mar 31, 2014 | Dec 31, 2013 | Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | Sep 30, 2012 | Jun 30, 2012 | Mar 31, 2012 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||||||||
| Cost of sales revenues | ||||||||||||||||||||||||||||||
| Accounts payable, trade | ||||||||||||||||||||||||||||||
| Short-term Activity Ratio | ||||||||||||||||||||||||||||||
| Payables turnover1 | ||||||||||||||||||||||||||||||
| Benchmarks | ||||||||||||||||||||||||||||||
| Payables Turnover, Competitors2 | ||||||||||||||||||||||||||||||
| Chevron Corp. | ||||||||||||||||||||||||||||||
| ConocoPhillips | ||||||||||||||||||||||||||||||
| Occidental Petroleum Corp. | ||||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31), 10-K (reporting date: 2013-12-31), 10-Q (reporting date: 2013-09-30), 10-Q (reporting date: 2013-06-30), 10-Q (reporting date: 2013-03-31), 10-K (reporting date: 2012-12-31), 10-Q (reporting date: 2012-09-30), 10-Q (reporting date: 2012-06-30), 10-Q (reporting date: 2012-03-31).
1 Q3 2017 Calculation
Payables turnover
= (Cost of sales revenuesQ3 2017
+ Cost of sales revenuesQ2 2017
+ Cost of sales revenuesQ1 2017
+ Cost of sales revenuesQ4 2016)
÷ Accounts payable, trade
= ( + + + )
÷ =
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals several key trends in the cost of sales revenues, accounts payable, and payables turnover ratios over the periods examined.
- Cost of Sales Revenues
-
This item exhibited a generally increasing pattern from March 31, 2012, through December 31, 2014, rising from 671 million USD to a peak of 884 million USD in the last quarter of 2014.
Subsequent periods display some fluctuation with a noticeable dip beginning in the first quarter of 2015, dropping to 764 million USD by mid-2015, then increasing again but never surpassing earlier peaks. The cost decreased more significantly in 2016, reaching a low of 665 million USD in the first quarter, before gradually climbing back up toward 875 million USD by the third quarter of 2017.
Overall, the cost of sales revenues shows a cyclical trend with pronounced volatility, particularly during 2015 and 2016.
- Accounts Payable, Trade
-
Accounts payable values showed a declining trend over the long term. Starting at 3,556 million USD in March 2012, the figures generally decreased with some short-term fluctuations.
After peaking around the end of 2013 and beginning of 2014, with values around 3,940 - 3,979 million USD, accounts payable steadily declined through 2015 and 2016, reaching as low as 1,626 million USD by June 2017.
This declining trend may reflect tighter control over payables or changes in supplier terms or business scale.
- Payables Turnover Ratio
-
The payables turnover ratio began being reported from March 31, 2012, and initially fluctuated between 0.79 and 1.12 until early 2015, indicating somewhat stable but variable turnover speed.
From early 2015 onward, the ratio showed a steady and marked increase, rising from approximately 1.05 to as high as 1.98 by mid-2017, with slight variation at the end of the period, settling near 1.89.
This increasing trend reflects an acceleration in the rate at which payables are settled, possibly indicating improved management of payment cycles or changes in credit terms.
In synthesis, the cost of sales revenues showed cyclical movement with peaks in 2014 and subsequent recovery in 2017 after a trough in 2016. Accounts payable steadily declined over the period, while payables turnover ratio increased significantly, particularly from 2015 onward. These patterns suggest a strategic shift towards more efficient working capital management and possibly responses to changing market conditions impacting both cost structures and supplier relationships.
Working Capital Turnover
Anadarko Petroleum Corp., working capital turnover calculation (quarterly data)
| Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | Dec 31, 2014 | Sep 30, 2014 | Jun 30, 2014 | Mar 31, 2014 | Dec 31, 2013 | Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | Sep 30, 2012 | Jun 30, 2012 | Mar 31, 2012 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||||||||
| Current assets | ||||||||||||||||||||||||||||||
| Less: Current liabilities | ||||||||||||||||||||||||||||||
| Working capital | ||||||||||||||||||||||||||||||
| Sales revenues | ||||||||||||||||||||||||||||||
| Short-term Activity Ratio | ||||||||||||||||||||||||||||||
| Working capital turnover1 | ||||||||||||||||||||||||||||||
| Benchmarks | ||||||||||||||||||||||||||||||
| Working Capital Turnover, Competitors2 | ||||||||||||||||||||||||||||||
| Chevron Corp. | ||||||||||||||||||||||||||||||
| ConocoPhillips | ||||||||||||||||||||||||||||||
| Exxon Mobil Corp. | ||||||||||||||||||||||||||||||
| Occidental Petroleum Corp. | ||||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31), 10-K (reporting date: 2013-12-31), 10-Q (reporting date: 2013-09-30), 10-Q (reporting date: 2013-06-30), 10-Q (reporting date: 2013-03-31), 10-K (reporting date: 2012-12-31), 10-Q (reporting date: 2012-09-30), 10-Q (reporting date: 2012-06-30), 10-Q (reporting date: 2012-03-31).
1 Q3 2017 Calculation
Working capital turnover
= (Sales revenuesQ3 2017
+ Sales revenuesQ2 2017
+ Sales revenuesQ1 2017
+ Sales revenuesQ4 2016)
÷ Working capital
= ( + + + )
÷ =
2 Click competitor name to see calculations.
- Working Capital
- The working capital showed a generally fluctuating pattern over the analyzed period. Initially, it was strong and positive, peaking at 3,817 million US dollars at the end of the first quarter of 2012. However, it declined consistently throughout 2013 and reached negative values by the first quarter of 2014, hitting a low of -1,780 million US dollars in the second quarter of 2014. After this, working capital partially recovered with positive values toward the end of 2014 and 2015 before declining again in early 2016. From mid-2016 onward, it exhibited an improving trend, rising steadily to reach 4,830 million US dollars in the third quarter of 2017, marking the highest point during the entire period.
- Sales Revenues
- Sales revenues exhibited a generally increasing trend from 2012 through the end of 2013, starting at 3,412 million US dollars in the first quarter of 2012 and rising to a peak of 4,385 million US dollars in the second quarter of 2014. Following this peak, revenues began to decline, with a pronounced decrease through 2015 and early 2016, reaching their lowest value of 1,634 million US dollars by the second quarter of 2016. From this point, there was a moderate recovery in sales revenues, progressively increasing to 2,898 million by the third quarter of 2017. Despite the recovery, revenues did not return to previously high levels observed in 2013 and 2014.
- Working Capital Turnover
- The working capital turnover ratio data begins only in the fourth quarter of 2012, and generally demonstrates significant volatility. There is a notable increase from 4.75 in the fourth quarter of 2012 to a peak of 22.32 in the third quarter of 2014, indicating more efficient use of working capital to generate sales during this period. However, after this peak, the ratio fluctuates considerably, remaining high through late 2014 and 2015, before declining sharply from mid-2016 onwards to values around 2.1 by the end of 2016 and slightly improving to around 2.77 by the third quarter of 2017. This decline in turnover ratio toward the end suggests less efficient conversion of working capital into sales compared to earlier periods.
- Overall Observations
- There is a clear inverse relationship observable between working capital and working capital turnover in some periods. During times when working capital was negative, particularly in 2014 and early 2015, the turnover ratio was exceptionally high, suggesting efficient sales generation relative to limited working capital. Conversely, as working capital improved significantly from 2016 to 2017, the turnover ratio decreased, indicating a less rapid conversion cycle. Meanwhile, sales revenue trends largely correspond to broader industry or economic factors affecting the company, with revenues peaking in mid-2014, undergoing a sharp decline through mid-2016, and then demonstrating a recovering trend. The company’s ability to manage working capital and maintain sales revenue efficiency has varied substantially across the analyzed quarters, reflecting changing operational and market conditions.
Average Receivable Collection Period
Anadarko Petroleum Corp., average receivable collection period calculation (quarterly data)
| Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | Dec 31, 2014 | Sep 30, 2014 | Jun 30, 2014 | Mar 31, 2014 | Dec 31, 2013 | Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | Sep 30, 2012 | Jun 30, 2012 | Mar 31, 2012 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||||||||||||||||||||||||||
| Receivables turnover | ||||||||||||||||||||||||||||||
| Short-term Activity Ratio (no. days) | ||||||||||||||||||||||||||||||
| Average receivable collection period1 | ||||||||||||||||||||||||||||||
| Benchmarks (no. days) | ||||||||||||||||||||||||||||||
| Average Receivable Collection Period, Competitors2 | ||||||||||||||||||||||||||||||
| Chevron Corp. | ||||||||||||||||||||||||||||||
| ConocoPhillips | ||||||||||||||||||||||||||||||
| Occidental Petroleum Corp. | ||||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31), 10-K (reporting date: 2013-12-31), 10-Q (reporting date: 2013-09-30), 10-Q (reporting date: 2013-06-30), 10-Q (reporting date: 2013-03-31), 10-K (reporting date: 2012-12-31), 10-Q (reporting date: 2012-09-30), 10-Q (reporting date: 2012-06-30), 10-Q (reporting date: 2012-03-31).
1 Q3 2017 Calculation
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ =
2 Click competitor name to see calculations.
The receivables turnover ratio and the average receivable collection period demonstrate notable trends over the observed quarters.
- Receivables Turnover Ratio
- This ratio generally increased from March 2013 through December 2014, moving from 9.03 to a peak of 14.65, indicating an improvement in the company's efficiency in collecting receivables during that timeframe. Following this peak, fluctuations occurred, with the ratio decreasing to 8.39 by September 2016 before slightly recovering to 12.16 in June 2017, then falling again to 10.41 in September 2017. These variations suggest periods of both strengthening and weakening in receivables management efficiency.
- Average Receivable Collection Period
- The average collection period showed a general decline from 40 days in March 2013 to a low of 25 days in December 2014, reflecting a faster collection of receivables consistent with the improvement in the turnover ratio during the same period. After reaching this optimal point, the collection period increased, fluctuating around the mid-30s to low 40s range through 2016 and 2017, corresponding with the decreased turnover ratio, indicating a slower collection cycle in these later periods.
Overall, the data reflect an initial enhancement in receivables management efficiency up until late 2014, followed by a period marked by regression and variability in the subsequent years. This pattern may suggest challenges in maintaining the earlier efficiency levels or changes in credit policies, customer payment behaviors, or economic conditions impacting receivables performance.
Average Payables Payment Period
Anadarko Petroleum Corp., average payables payment period calculation (quarterly data)
| Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | Dec 31, 2014 | Sep 30, 2014 | Jun 30, 2014 | Mar 31, 2014 | Dec 31, 2013 | Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | Sep 30, 2012 | Jun 30, 2012 | Mar 31, 2012 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||||||||||||||||||||||||||
| Payables turnover | ||||||||||||||||||||||||||||||
| Short-term Activity Ratio (no. days) | ||||||||||||||||||||||||||||||
| Average payables payment period1 | ||||||||||||||||||||||||||||||
| Benchmarks (no. days) | ||||||||||||||||||||||||||||||
| Average Payables Payment Period, Competitors2 | ||||||||||||||||||||||||||||||
| Chevron Corp. | ||||||||||||||||||||||||||||||
| ConocoPhillips | ||||||||||||||||||||||||||||||
| Occidental Petroleum Corp. | ||||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31), 10-K (reporting date: 2013-12-31), 10-Q (reporting date: 2013-09-30), 10-Q (reporting date: 2013-06-30), 10-Q (reporting date: 2013-03-31), 10-K (reporting date: 2012-12-31), 10-Q (reporting date: 2012-09-30), 10-Q (reporting date: 2012-06-30), 10-Q (reporting date: 2012-03-31).
1 Q3 2017 Calculation
Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ =
2 Click competitor name to see calculations.
The payables turnover ratio demonstrates a general upward trend from the first available data point in March 2013 through September 2017. Beginning at a level below 1.0 in early 2013, the ratio gradually increases, moving above 1.0 around mid-2014 and continuing to rise more sharply from 2015 onward. By 2017, the payables turnover ratio reaches values close to 1.9, indicating an improvement in the frequency with which the company is able to pay off its suppliers.
Conversely, the average payables payment period shows a decreasing trend over the same timeframe, moving from values around 400 days in early 2013 to under 200 days by mid-2017. There is some fluctuation in the early years; however, the overall trajectory is downward, reflecting a reduction in the average number of days the company takes to settle its payables. Notable is the steady drop from approximately 300 days during 2015 and 2016 to around 190 days in 2017.
The inverse relationship between the payables turnover ratio and the average payment period is consistent with expectations, as a higher turnover ratio corresponds with a shorter payment period. The increasing payables turnover coupled with decreasing payment periods suggests an enhancement in the company's operational efficiency regarding its payables management. The company appears to be improving its ability to meet its obligations more quickly over the analyzed period.