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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Short-term Activity Ratios (Summary)
Becton, Dickinson & Co., short-term (operating) activity ratios (quarterly data)
Based on: 10-Q (reporting date: 2022-03-31), 10-Q (reporting date: 2021-12-31), 10-K (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-Q (reporting date: 2020-12-31), 10-K (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-Q (reporting date: 2019-12-31), 10-K (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-Q (reporting date: 2018-12-31), 10-K (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-Q (reporting date: 2017-12-31), 10-K (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-Q (reporting date: 2016-12-31).
The analysis of the quarterly financial ratios and periods reveals several notable trends and fluctuations over the observed time frame.
- Inventory Turnover
- The inventory turnover ratio shows an initial decline from 3.77 to a low of 2.09 by the end of 2017, indicating slower inventory movement. Following this, there was a recovery period with the turnover ratio rising back above 3.5 at various points between 2018 and 2021. The ratio fluctuates within a moderate range, with values generally between 3.1 and 3.8, ending slightly lower at 3.33.
- Receivables Turnover
- Receivables turnover declined from 8.18 to 6.13 through the end of 2017, indicating slower collection of receivables. It progressively improved afterward with intermittent fluctuations, reaching peaks close to or exceeding 9.0 during 2021. The final value of 8.7 reflects an overall strengthening in receivables collection efficiency over the longer term, despite some periodic reductions.
- Working Capital Turnover
- This ratio exhibits significant volatility and some missing data in the middle periods. Early values ranged from 20.13 down to near zero (around 0.79) in mid-2017, indicating major fluctuations in the efficiency of using working capital to generate sales. Subsequently, the ratio recovered, showing spikes such as 81.96 and other elevated levels above 10 at some points. However, values oscillate markedly, suggesting notable instability or changes in working capital management over the course of the timeline.
- Average Inventory Processing Period
- The average days inventory remains high and variable, rising sharply from 97 days in late 2016 to a peak of 174 days at the end of 2017. After this peak, a downward trend is visible, reducing to approximately 97-110 days in recent quarters, indicating improvements in inventory turnover speed though still relatively elevated compared to initial levels.
- Average Receivable Collection Period
- The collection period increased from 45 days at baseline to around 60 days by the end of 2017, signaling slower customer payments. Following this, the trend reversed, generally decreasing to the upper 30s and low 40s by 2021. This improvement suggests enhanced collection efforts, reducing the time to collect receivables closer to or better than the starting period.
- Operating Cycle
- The operating cycle lengthened significantly from 142 days to a peak of 234 days at the end of 2017, reflecting slower inventory processing and receivable collection. After reaching this high level, the cycle duration reduced steadily, stabilizing around 140-155 days in the later periods, indicative of improved operational efficiency but still slightly longer relative to the initial measure.
Overall, the data indicates a challenging period during 2017 where many operational metrics deteriorated, followed by staged recoveries and improvements, particularly in receivables collection and inventory management. The working capital turnover shows considerable variability, suggesting attention is needed in managing short-term assets. The operating cycle data corroborates these findings, initially impacted negatively but improving to near previous levels by the more recent quarters.
Turnover Ratios
Average No. Days
Inventory Turnover
Becton, Dickinson & Co., inventory turnover calculation (quarterly data)
| Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | 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 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||||||
| Cost of products sold | |||||||||||||||||||||||||||||
| Inventories | |||||||||||||||||||||||||||||
| Short-term Activity Ratio | |||||||||||||||||||||||||||||
| Inventory turnover1 | |||||||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||||||
| Inventory Turnover, Competitors2 | |||||||||||||||||||||||||||||
| Abbott Laboratories | |||||||||||||||||||||||||||||
| Intuitive Surgical Inc. | |||||||||||||||||||||||||||||
| Medtronic PLC | |||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2022-03-31), 10-Q (reporting date: 2021-12-31), 10-K (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-Q (reporting date: 2020-12-31), 10-K (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-Q (reporting date: 2019-12-31), 10-K (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-Q (reporting date: 2018-12-31), 10-K (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-Q (reporting date: 2017-12-31), 10-K (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-Q (reporting date: 2016-12-31).
1 Q2 2022 Calculation
Inventory turnover
= (Cost of products soldQ2 2022
+ Cost of products soldQ1 2022
+ Cost of products soldQ4 2021
+ Cost of products soldQ3 2021)
÷ Inventories
= ( + + + )
÷ =
2 Click competitor name to see calculations.
The cost of products sold demonstrates a fluctuating pattern across the periods analyzed, with a general upward trend from the end of 2016 through the first quarter of 2022. The data reveals a significant increase in cost starting in early 2018, reaching peak values in late 2021, followed by a slight decline towards the first quarter of 2022. This increase is marked by some volatility, with occasional quarters showing reductions, yet the overall direction is increasing over the long term.
Inventories display a somewhat similar trend of increase over time but with less volatility compared to the cost of products sold. Starting from a lower base in late 2016, inventory levels rise steadily through the years, with notable increments during 2017 and again toward the end of the sample period, reaching the highest levels by March 2022. This steady rise indicates an accumulation of stock or possibly strategic inventory buildup.
The inventory turnover ratio exhibits a noticeable dip starting in late 2017, falling from above 3.3 to just above 2.0, which indicates a slower movement of inventory during that period. Following this decline, the turnover ratio recovers gradually from early 2018 and stabilizes in a range between approximately 3.1 and 3.8 for the remainder of the observed quarters. The recovery in turnover after the dip suggests improvements in inventory management or sales efficiency.
- Cost of products sold
- General increase over time with peaks in late 2020 and 2021, slight decrease first quarter 2022.
- Inventories
- Steady increase with some acceleration in accumulation, peaking in early 2022.
- Inventory turnover ratio
- Significant drop late 2017, recovery and stabilization between 3.1 and 3.8 subsequently.
Overall, the data indicates growing costs and inventory levels, with inventory turnover recovering from a prior decline and maintaining stability thereafter. This suggests the company may have experienced challenges in inventory movement during late 2017 but managed to improve efficiency while holding higher inventory levels in subsequent periods.
Receivables Turnover
Becton, Dickinson & Co., receivables turnover calculation (quarterly data)
| Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | 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 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||||||
| Revenues | |||||||||||||||||||||||||||||
| Trade receivables, net | |||||||||||||||||||||||||||||
| Short-term Activity Ratio | |||||||||||||||||||||||||||||
| Receivables turnover1 | |||||||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||||||
| Receivables Turnover, Competitors2 | |||||||||||||||||||||||||||||
| Abbott Laboratories | |||||||||||||||||||||||||||||
| Elevance Health Inc. | |||||||||||||||||||||||||||||
| Intuitive Surgical Inc. | |||||||||||||||||||||||||||||
| Medtronic PLC | |||||||||||||||||||||||||||||
| UnitedHealth Group Inc. | |||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2022-03-31), 10-Q (reporting date: 2021-12-31), 10-K (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-Q (reporting date: 2020-12-31), 10-K (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-Q (reporting date: 2019-12-31), 10-K (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-Q (reporting date: 2018-12-31), 10-K (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-Q (reporting date: 2017-12-31), 10-K (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-Q (reporting date: 2016-12-31).
1 Q2 2022 Calculation
Receivables turnover
= (RevenuesQ2 2022
+ RevenuesQ1 2022
+ RevenuesQ4 2021
+ RevenuesQ3 2021)
÷ Trade receivables, net
= ( + + + )
÷ =
2 Click competitor name to see calculations.
The quarterly financial data reveals several key trends related to revenues, trade receivables, and receivables turnover over the observed periods.
- Revenues
- Revenues exhibited fluctuations across the quarters, beginning at $2,922 million in the last quarter of 2016 and increasing to a peak of $5,315 million by the third quarter of 2020. Initial growth was relatively moderate until early 2018, after which there is a noticeable surge in revenue levels. Despite some volatility, including a decline in later periods such as the third quarter of 2020, revenues generally maintained a higher plateau compared to earlier years, culminating in over $5,000 million in several of the most recent quarters. This indicates overall expansion with intermittent decreases.
- Trade Receivables, Net
- Trade receivables increased from $1,518 million in the last quarter of 2016 to higher levels subsequently, with peaks near $2,497 million in the fourth quarter of 2021. The data shows some variability, with occasional declines following peaks, but the underlying trend points to a gradual increase in outstanding receivables. This escalation aligns with the increase in revenues, suggesting higher sales volumes and possibly extended credit terms or slower collections in some periods.
- Receivables Turnover Ratio
- The receivables turnover ratio started at 8.18 in the last quarter of 2016, then declined to lows near 5.89 by the second quarter of 2017, indicating slower collection of receivables at that time. After this downturn, the ratio rebounded and fluctuated mostly between 6.5 and 9.5 in subsequent quarters. A ratio above 8.0 in many recent periods reflects improved efficiency in collecting receivables, although occasional dips suggest some inconsistencies in collection speed. The highest ratios recorded, such as 9.57 in mid-2021, imply periods of particularly efficient receivables management.
Overall, the data depict an organization experiencing revenue growth with concomitant increases in trade receivables. The fluctuations in receivables turnover suggest varying effectiveness in credit and collection policies, with general improvement over time following an initial dip. The combination of rising revenues and receivables highlights the importance of maintaining vigilant collection efforts to support cash flow and operational stability.
Working Capital Turnover
Becton, Dickinson & Co., working capital turnover calculation (quarterly data)
| Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | 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 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||||||
| Current assets | |||||||||||||||||||||||||||||
| Less: Current liabilities | |||||||||||||||||||||||||||||
| Working capital | |||||||||||||||||||||||||||||
| Revenues | |||||||||||||||||||||||||||||
| Short-term Activity Ratio | |||||||||||||||||||||||||||||
| Working capital turnover1 | |||||||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||||||
| Working Capital Turnover, Competitors2 | |||||||||||||||||||||||||||||
| Abbott Laboratories | |||||||||||||||||||||||||||||
| Elevance Health Inc. | |||||||||||||||||||||||||||||
| Intuitive Surgical Inc. | |||||||||||||||||||||||||||||
| Medtronic PLC | |||||||||||||||||||||||||||||
| UnitedHealth Group Inc. | |||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2022-03-31), 10-Q (reporting date: 2021-12-31), 10-K (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-Q (reporting date: 2020-12-31), 10-K (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-Q (reporting date: 2019-12-31), 10-K (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-Q (reporting date: 2018-12-31), 10-K (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-Q (reporting date: 2017-12-31), 10-K (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-Q (reporting date: 2016-12-31).
1 Q2 2022 Calculation
Working capital turnover
= (RevenuesQ2 2022
+ RevenuesQ1 2022
+ RevenuesQ4 2021
+ RevenuesQ3 2021)
÷ Working capital
= ( + + + )
÷ =
2 Click competitor name to see calculations.
- Working Capital
- The working capital figures exhibit considerable volatility over the analyzed periods. Initially, there is a sharp increase from 617 million USD at the end of 2016 to a peak of 15,291 million USD by September 2017, followed by a rapid decline into negative territory by the end of 2017 and early 2018. After this trough, the working capital gradually recovers, reaching positive values consistently from mid-2018 onward. From 2019 to 2022, the working capital oscillates moderately, indicating fluctuating short-term liquidity but generally maintaining a positive balance by the end of the latest period.
- Revenues
- Revenues show a general upward trajectory throughout the entire time span, despite some short-term fluctuations. The revenue starts at approximately 2,922 million USD at the end of 2016 and increases steadily through to the first quarter of 2018, exceeding the 4,000 million USD mark. There are fluctuations after this point, with revenues peaking near 5,315 million USD by the first quarter of 2021 and then slightly declining but maintaining levels close to 5,000 million USD through early 2022. This trend indicates overall growth with seasonal or market-related variations.
- Working Capital Turnover
- The working capital turnover ratio reflects significant instability, especially in the first half of the analyzed period. Early ratios are high but drop dramatically around mid to late 2017, coinciding with the extreme fluctuations in working capital. Some data points are missing, but the available figures show a recovery trend from 2019 onward, with ratios fluctuating between moderate and high values. The high spikes, such as 81.96 and 31.45, suggest periods of particularly efficient use of working capital relative to revenue, but these are interspersed with lower values, indicating inconsistent operational efficiency.
- Overall Analysis
- The financial data reveal a period of instability in working capital from 2016 through 2018, with a recovery phase characterized by more consistent, positive working capital levels in subsequent years. Revenue trends show steady growth, with increases mostly sustained despite some quarterly volatility. The working capital turnover ratio's erratic nature reflects changes in both working capital and revenue dynamics, suggesting shifts in operational efficiency and management of short-term assets/liabilities. The data implies ongoing efforts to stabilize liquidity while expanding sales, with mixed success reflected in the working capital turnover ratios.
Average Inventory Processing Period
Becton, Dickinson & Co., average inventory processing period calculation (quarterly data)
| Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | 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 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||||||||||||||||||||||||
| Inventory turnover | |||||||||||||||||||||||||||||
| Short-term Activity Ratio (no. days) | |||||||||||||||||||||||||||||
| Average inventory processing period1 | |||||||||||||||||||||||||||||
| Benchmarks (no. days) | |||||||||||||||||||||||||||||
| Average Inventory Processing Period, Competitors2 | |||||||||||||||||||||||||||||
| Abbott Laboratories | |||||||||||||||||||||||||||||
| Intuitive Surgical Inc. | |||||||||||||||||||||||||||||
| Medtronic PLC | |||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2022-03-31), 10-Q (reporting date: 2021-12-31), 10-K (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-Q (reporting date: 2020-12-31), 10-K (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-Q (reporting date: 2019-12-31), 10-K (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-Q (reporting date: 2018-12-31), 10-K (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-Q (reporting date: 2017-12-31), 10-K (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-Q (reporting date: 2016-12-31).
1 Q2 2022 Calculation
Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ =
2 Click competitor name to see calculations.
The inventory turnover ratio demonstrates variability over the examined periods, displaying a general downward trend from the end of 2016 through the end of 2017, followed by a recovery and relatively stable performance from 2018 onward. Specifically, the ratio decreased significantly from 3.77 at the end of 2016 to 2.09 by the end of 2017, indicating a slower turnover of inventory during this time frame. From 2018 through early 2021, the ratio fluctuated moderately, mostly remaining between approximately 3.15 and 3.72, with occasional increases and decreases. After peaking near 3.78 in late 2021, the ratio declined slightly to 3.33 by early 2022.
The average inventory processing period, expressed in days, inversely reflects the pattern observed in inventory turnover, as expected. Starting at 97 days at the end of 2016, this metric increased steadily to a peak of 174 days by the end of 2017, indicating that the company held inventory for a significantly longer period during this interval. Following this peak, the processing period decreased gradually, settling at a range between approximately 102 and 111 days for the years 2018 through early 2022, with some moderate fluctuations. The increase during 2017 corresponds with the notable decrease in inventory turnover during the same period.
This inverse relationship between inventory turnover and average processing period highlights a period of reduced operational efficiency in late 2017, with slower movement and increased holding times of inventory. The subsequent stabilization and moderate improvement in both metrics suggest enhanced inventory management practices or demand stabilization from 2018 onward. Despite fluctuations, the figures do not return to the more efficient levels at the start of the series, indicating a lasting shift in inventory dynamics. The recent slight decline in turnover ratio and corresponding increase in processing period in early 2022 may warrant monitoring to assess whether this signals a developing trend or a temporary variation.
Average Receivable Collection Period
Becton, Dickinson & Co., average receivable collection period calculation (quarterly data)
| Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | 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 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||||||||||||||||||||||||
| Receivables turnover | |||||||||||||||||||||||||||||
| Short-term Activity Ratio (no. days) | |||||||||||||||||||||||||||||
| Average receivable collection period1 | |||||||||||||||||||||||||||||
| Benchmarks (no. days) | |||||||||||||||||||||||||||||
| Average Receivable Collection Period, Competitors2 | |||||||||||||||||||||||||||||
| Abbott Laboratories | |||||||||||||||||||||||||||||
| Elevance Health Inc. | |||||||||||||||||||||||||||||
| Intuitive Surgical Inc. | |||||||||||||||||||||||||||||
| Medtronic PLC | |||||||||||||||||||||||||||||
| UnitedHealth Group Inc. | |||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2022-03-31), 10-Q (reporting date: 2021-12-31), 10-K (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-Q (reporting date: 2020-12-31), 10-K (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-Q (reporting date: 2019-12-31), 10-K (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-Q (reporting date: 2018-12-31), 10-K (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-Q (reporting date: 2017-12-31), 10-K (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-Q (reporting date: 2016-12-31).
1 Q2 2022 Calculation
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ =
2 Click competitor name to see calculations.
The analysis of the receivables turnover and average receivable collection period over the presented periods reveals several notable trends and fluctuations.
- Receivables Turnover Ratio
-
The receivables turnover ratio shows a general downward trend from the end of 2016 through to early 2018, declining from 8.18 to a low of 5.89 by March 2018. Following this period, there is a recovery and an upward trajectory with some fluctuations, peaking at 9.57 in June 2021. After this peak, a mild decrease is observed, with the ratio stabilizing around levels between 8.11 and 8.7 by early 2022.
This pattern suggests an initial decline in the efficiency of collecting receivables, followed by significant improvements in subsequent years. The peak in mid-2021 indicates a particularly effective receivable management or faster collection process during that time.
- Average Receivable Collection Period (Days)
-
The average receivable collection period moves inversely to the receivables turnover ratio as expected. There is an increase from 45 days at the end of 2016 to a peak of 62 days in March 2018, indicating a slower collection process. Afterward, the days steadily decline with some slight variability, reaching the lowest points of approximately 38 to 41 days during the periods from mid-2021 through early 2022.
This decline in collection days corresponds with the improvement observed in the receivables turnover ratio, reflecting enhanced effectiveness in the company's credit and collection policies or improved customer payment behavior during the latter periods.
Overall, the data indicates a phase of decreased receivables efficiency and longer collection periods through around early 2018, which is followed by a phase of marked improvement, culminating in a substantially faster receivables conversion cycle by 2021 and early 2022. These trends may reflect changes in operational management, market conditions, or customer payment patterns impacting the company's working capital management over the analyzed timeframe.
Operating Cycle
Becton, Dickinson & Co., operating cycle calculation (quarterly data)
No. days
| Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | 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 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||||||||||||||||||||||||
| Average inventory processing period | |||||||||||||||||||||||||||||
| Average receivable collection period | |||||||||||||||||||||||||||||
| Short-term Activity Ratio | |||||||||||||||||||||||||||||
| Operating cycle1 | |||||||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||||||
| Operating Cycle, Competitors2 | |||||||||||||||||||||||||||||
| Abbott Laboratories | |||||||||||||||||||||||||||||
| Intuitive Surgical Inc. | |||||||||||||||||||||||||||||
| Medtronic PLC | |||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2022-03-31), 10-Q (reporting date: 2021-12-31), 10-K (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-Q (reporting date: 2020-12-31), 10-K (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-Q (reporting date: 2019-12-31), 10-K (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-Q (reporting date: 2018-12-31), 10-K (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-Q (reporting date: 2017-12-31), 10-K (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-Q (reporting date: 2016-12-31).
1 Q2 2022 Calculation
Operating cycle = Average inventory processing period + Average receivable collection period
= + =
2 Click competitor name to see calculations.
The analysis of the provided financial periods reveals notable fluctuations and trends in the average inventory processing period, average receivable collection period, and operating cycle over the intervals examined.
- Average Inventory Processing Period
- This metric displayed a general upward trend from the end of 2016 through the end of 2017, peaking significantly at 174 days by December 31, 2017. Following this peak, there is a noticeable decline and stabilization, with values mostly oscillating between 97 and 116 days throughout 2018 to 2022. This suggests an initial elongation of inventory holding times, possibly indicating challenges in inventory turnover, followed by improvement and stabilization in the following years.
- Average Receivable Collection Period
- The average receivable collection period showed a gradual increase from 45 days at the end of 2016 to a peak of 62 days by March 31, 2018. Subsequently, there is a consistent downward trend, reaching lower levels around 38 to 45 days in 2021 and early 2022. This decline indicates enhanced efficiency in collecting receivables over time, improving the company’s cash conversion cycle and liquidity conditions.
- Operating Cycle
- The operating cycle, combining inventory processing and receivables collection periods, experienced a marked rise to a high of 234 days by December 31, 2017, mirroring the inventory processing peak in the same period. Afterwards, it steadily decreased, stabilizing around the 140 to 160-day range during the subsequent periods. This pattern reflects the combined effects of inventory and receivables management improvements post-2017.
Overall, the data demonstrates an initial period of extended working capital duration around the end of 2017, primarily driven by elevated inventory processing days and extended receivables collection. Improvements after this period suggest more effective operational management focused on reducing inventory levels and accelerating receivables turnover, thereby shortening the operating cycle in recent years.