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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- Balance Sheet: Assets
- Common-Size Balance Sheet: Assets
- Analysis of Long-term (Investment) Activity Ratios
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- Enterprise Value to FCFF (EV/FCFF)
- Dividend Discount Model (DDM)
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Short-term Activity Ratios (Summary)
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
- Inventory Turnover
- The inventory turnover ratio exhibited minor fluctuations over the analyzed period, starting at 0.78 in 2020, dipping slightly to 0.75 in 2021, then rising to 0.88 in 2023 before settling back to 0.78 in 2024. This indicates a relatively stable but low frequency of inventory being sold and replaced during the years assessed.
- Receivables Turnover
- The receivables turnover ratio showed variability, decreasing from 29.75 in 2020 to a low of 23.58 in 2021, improving to 29.37 in 2023, and then declining again to 25.28 in 2024. This suggests fluctuations in the efficiency and speed with which receivables are collected, without a clear long-term trend of improvement or deterioration.
- Payables Turnover
- Payables turnover increased notably from 4.94 in 2020 to 6.4 in 2021, followed by a slight decline in the subsequent years, ending at 6.03 in 2024. This pattern implies an initial acceleration in payment of payables, with a modest reduction in turnover intensity in the later years.
- Working Capital Turnover
- Working capital turnover experienced a strong increasing trend from 1.69 in 2020 to a peak of 5.78 in 2023, before declining sharply to 2.15 in 2024. This suggests much more effective use of working capital in generating sales up to 2023, followed by a notable decrease in operational efficiency based on this metric in the latest period.
- Average Inventory Processing Period
- The average inventory processing period decreased from 467 days in 2020 to 415 days in 2023, reflecting improved inventory management speed. However, it rose abruptly to 466 days in 2024, indicating a regression to the previous slower turnover pace.
- Average Receivable Collection Period
- This period increased from 12 days in 2020 to 15 days in 2021, hovered around 14 days in 2022 and 2024, and dipped back to 12 days in 2023. This pattern shows modest variation in customer payment collection timing, with no consistent trend of acceleration or delay.
- Operating Cycle
- The operating cycle lengthened from 479 days in 2020 to 501 days in 2021, shortened to 427 days in 2023, and then extended again to 480 days in 2024. This variability reflects the combined influence of inventory and receivables periods, indicating fluctuating operational efficiency in managing the full cycle from inventory acquisition to cash receipt.
- Average Payables Payment Period
- The payables payment period declined sharply from 74 days in 2020 to 57 days in 2021, then gradually increased in subsequent years, stabilizing around 61 days in 2024. This suggests a strategy shift to faster payments in 2021 followed by a relaxation to longer payment terms in later periods.
- Cash Conversion Cycle
- The cash conversion cycle showed an upward movement from 405 days in 2020 to a peak of 444 days in 2021, then improved to 365 days in 2023, and deteriorated again to 419 days in 2024. This indicates variable efficiency in converting resource investments back into cash, with the best performance in 2023 and setbacks in other years.
Turnover Ratios
Average No. Days
Inventory Turnover
Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
---|---|---|---|---|---|---|
Selected Financial Data (US$ in millions) | ||||||
Cost of products and services | ||||||
Inventories | ||||||
Short-term Activity Ratio | ||||||
Inventory turnover1 | ||||||
Benchmarks | ||||||
Inventory Turnover, Competitors2 | ||||||
Caterpillar Inc. | ||||||
Eaton Corp. plc | ||||||
GE Aerospace | ||||||
Honeywell International Inc. | ||||||
Lockheed Martin Corp. | ||||||
RTX Corp. | ||||||
Inventory Turnover, Sector | ||||||
Capital Goods | ||||||
Inventory Turnover, Industry | ||||||
Industrials |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Inventory turnover = Cost of products and services ÷ Inventories
= ÷ =
2 Click competitor name to see calculations.
The financial data reflects a series of trends over the five-year period ending December 31, 2024.
- Cost of products and services
- Initially, there was a decrease from US$63,800 million in 2020 to US$59,237 million in 2021. This was followed by an upward trend reaching US$70,070 million in 2023, before slightly declining to US$68,508 million in 2024. The pattern suggests a recovery and increase in the cost base after a dip, possibly reflecting changes in production volume, input prices, or operational adjustments.
- Inventories
- Inventory levels showed a gradual decline from US$81,715 million in 2020 to US$78,151 million in 2022. This decline reversed from 2023 onward, with inventories increasing sharply to US$87,550 million by 2024. The rising inventory levels in the last two years could indicate accumulation of stock, potentially due to supply chain management strategies or anticipation of future demand.
- Inventory turnover ratio
- The inventory turnover ratio fluctuated over the time frame. Starting at 0.78 in 2020, it slightly decreased to 0.75 in 2021, increased to a peak of 0.88 in 2023, and then decreased back to 0.78 in 2024. This suggests that the efficiency of inventory usage improved towards 2023 before reverting, which may be linked to the changes in inventory levels and cost structures observed prior. The lower turnover ratio in 2024, coupled with increased inventories, could imply slower movement of stock relative to cost of goods sold.
Receivables Turnover
Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
---|---|---|---|---|---|---|
Selected Financial Data (US$ in millions) | ||||||
Revenues | ||||||
Accounts receivable, net | ||||||
Short-term Activity Ratio | ||||||
Receivables turnover1 | ||||||
Benchmarks | ||||||
Receivables Turnover, Competitors2 | ||||||
Caterpillar Inc. | ||||||
Eaton Corp. plc | ||||||
GE Aerospace | ||||||
Honeywell International Inc. | ||||||
Lockheed Martin Corp. | ||||||
RTX Corp. | ||||||
Receivables Turnover, Sector | ||||||
Capital Goods | ||||||
Receivables Turnover, Industry | ||||||
Industrials |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Receivables turnover = Revenues ÷ Accounts receivable, net
= ÷ =
2 Click competitor name to see calculations.
- Revenues
- The revenues exhibit an overall upward trend from 2020 to 2023, increasing from $58,158 million in 2020 to a peak of $77,794 million in 2023. However, there is a notable decline in 2024 where revenues decrease to $66,517 million, indicating a significant drop compared to the previous year. This suggests a period of strong growth followed by a reduction in sales or service income in the latest year.
- Accounts Receivable, Net
- Accounts receivable show a gradual increase from 2020 through 2021, rising from $1,955 million to $2,641 million. Subsequently, the value remains relatively stable around the $2,500–2,600 million range through 2022 to 2024, ending at $2,631 million. This stability suggests consistent credit sales management despite fluctuations in revenues.
- Receivables Turnover Ratio
- The receivables turnover ratio starts at a high level of 29.75 in 2020, indicating rapid collection of receivables relative to net credit sales. It declines to a low of 23.58 in 2021, implying slower collections or increased credit sales during that year. Recovery is seen in 2022 and 2023, where the ratio rises to 26.46 and 29.37 respectively, suggesting improved collection efficiency. The ratio decreases again in 2024 to 25.28, indicating a moderate slowdown in the ability to collect receivables as efficiently as in the previous year.
- Overall Insights
- The data reflects a period of revenue growth up to 2023 followed by a downturn in 2024, which may impact liquidity and operational planning. Accounts receivable balances remaining stable amidst fluctuating revenues may indicate controlled credit policies. Variations in the receivables turnover ratio point to shifts in collection efficiency over the years, with potential challenges in receivables management during certain periods, particularly in 2021 and 2024. The combination of these trends warrants attention to revenue streams and receivables collection processes to sustain financial performance.
Payables Turnover
Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
---|---|---|---|---|---|---|
Selected Financial Data (US$ in millions) | ||||||
Cost of products and services | ||||||
Accounts payable | ||||||
Short-term Activity Ratio | ||||||
Payables turnover1 | ||||||
Benchmarks | ||||||
Payables Turnover, Competitors2 | ||||||
Caterpillar Inc. | ||||||
Eaton Corp. plc | ||||||
GE Aerospace | ||||||
Honeywell International Inc. | ||||||
Lockheed Martin Corp. | ||||||
RTX Corp. | ||||||
Payables Turnover, Sector | ||||||
Capital Goods | ||||||
Payables Turnover, Industry | ||||||
Industrials |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Payables turnover = Cost of products and services ÷ Accounts payable
= ÷ =
2 Click competitor name to see calculations.
- Cost of Products and Services
- The cost of products and services showed a fluctuating trend over the analyzed period. It initially decreased from 63,800 million USD in 2020 to 59,237 million USD in 2021, followed by an increase to 63,078 million USD in 2022. The upward trend continued with a more significant rise to 70,070 million USD in 2023, before slightly declining to 68,508 million USD in 2024. This pattern indicates variability in production costs or sales volume, with a peak reached in 2023.
- Accounts Payable
- Accounts payable exhibited a general downward movement from 12,928 million USD in 2020 to 9,261 million USD in 2021. Subsequently, it rose steadily over the next three years, reaching 11,364 million USD in 2024. This suggests an initial reduction in short-term obligations followed by an increase, potentially indicating expansion in purchasing activities or delayed payments over the latter years.
- Payables Turnover Ratio
- The payables turnover ratio increased sharply from 4.94 in 2020 to 6.40 in 2021, indicating faster payment to suppliers during that year. It then decreased slightly to 6.18 in 2022 and further to 5.86 in 2023, before rising again to 6.03 in 2024. The overall higher ratio compared to 2020 suggests an improvement in payment efficiency, with some variability observed in the middle years.
Working Capital Turnover
Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
---|---|---|---|---|---|---|
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 | ||||||
Caterpillar Inc. | ||||||
Eaton Corp. plc | ||||||
GE Aerospace | ||||||
Honeywell International Inc. | ||||||
Lockheed Martin Corp. | ||||||
RTX Corp. | ||||||
Working Capital Turnover, Sector | ||||||
Capital Goods | ||||||
Working Capital Turnover, Industry | ||||||
Industrials |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Working capital turnover = Revenues ÷ Working capital
= ÷ =
2 Click competitor name to see calculations.
The financial data reveals several noteworthy patterns relating to working capital, revenues, and the working capital turnover ratio over the five-year period.
- Working Capital
- Working capital shows a declining trend from 2020 through 2023. Starting at 34,362 million USD in 2020, it decreased consistently each year, reaching a low of 13,448 million USD in 2023. However, in 2024, there is a significant rebound to 30,920 million USD, indicating a restoration of liquidity or operational funding after years of decrease.
- Revenues
- Revenues exhibit an overall upward movement from 2020 to 2023, rising steadily from 58,158 million USD in 2020 to a peak of 77,794 million USD in 2023. This represents consistent growth over the first four periods. However, in 2024 revenues decline notably to 66,517 million USD, suggesting a contraction or slowdown in sales or other revenue-generating activities compared to the previous year.
- Working Capital Turnover Ratio
- The working capital turnover ratio displays a continuous increase from 2020 to 2023, moving from 1.69 to a high of 5.78. This indicates increasing efficiency in the use of working capital to generate revenues over these years. The ratio peaks in 2023, which aligns with the lowest working capital value but highest revenues observed during the period. In 2024, the turnover ratio decreases sharply to 2.15, suggesting a relative reduction in efficiency, consistent with the simultaneous increase in working capital and decrease in revenues.
In summary, the period shows an inverse relationship between working capital and working capital turnover, with efficiency peaking when working capital was at its lowest. Revenues grew alongside increasing turnover but declined in the final year, correlating with a rise in working capital and a decrease in turnover, indicating a possible shift in operational dynamics or market conditions.
Average Inventory Processing Period
Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
---|---|---|---|---|---|---|
Selected Financial Data | ||||||
Inventory turnover | ||||||
Short-term Activity Ratio (no. days) | ||||||
Average inventory processing period1 | ||||||
Benchmarks (no. days) | ||||||
Average Inventory Processing Period, Competitors2 | ||||||
Caterpillar Inc. | ||||||
Eaton Corp. plc | ||||||
GE Aerospace | ||||||
Honeywell International Inc. | ||||||
Lockheed Martin Corp. | ||||||
RTX Corp. | ||||||
Average Inventory Processing Period, Sector | ||||||
Capital Goods | ||||||
Average Inventory Processing Period, Industry | ||||||
Industrials |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ =
2 Click competitor name to see calculations.
- Inventory Turnover
- The inventory turnover ratio showed minor fluctuations over the five-year period. It began at 0.78 in 2020, slightly declined to 0.75 in 2021, then improved to 0.81 in 2022, reaching a peak of 0.88 in 2023 before decreasing again to 0.78 in 2024. Despite some variability, the inventory turnover generally hovered around the 0.75 to 0.88 range, indicating relatively stable turnover rates with a modest peak in 2023.
- Average Inventory Processing Period
- This metric, expressed as the number of days required to process inventory, exhibited an inverse pattern relative to inventory turnover. Starting at 467 days in 2020, it increased slightly to 486 days in 2021, suggesting slower inventory processing. It then improved consistently in the following years, declining to 452 days in 2022 and further to 415 days in 2023, which corresponds with the highest inventory turnover ratio in that year. However, in 2024, the average processing period returned to 466 days, indicating a slowdown comparable to the initial year.
- Overall Analysis
- The data reveals an overall stability in inventory management efficiency with some variability. The peak efficiency period occurred in 2023, where inventory turnover was highest and processing days were at their lowest, reflecting more effective inventory utilization. Nevertheless, the return to initial levels in 2024 implies a possible regression to less efficient inventory handling or external factors affecting inventory movement. These trends suggest the need for further investigation into operational or market conditions influencing inventory dynamics during this period.
Average Receivable Collection Period
Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
---|---|---|---|---|---|---|
Selected Financial Data | ||||||
Receivables turnover | ||||||
Short-term Activity Ratio (no. days) | ||||||
Average receivable collection period1 | ||||||
Benchmarks (no. days) | ||||||
Average Receivable Collection Period, Competitors2 | ||||||
Caterpillar Inc. | ||||||
Eaton Corp. plc | ||||||
GE Aerospace | ||||||
Honeywell International Inc. | ||||||
Lockheed Martin Corp. | ||||||
RTX Corp. | ||||||
Average Receivable Collection Period, Sector | ||||||
Capital Goods | ||||||
Average Receivable Collection Period, Industry | ||||||
Industrials |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ =
2 Click competitor name to see calculations.
The analysis of the annual financial data reveals fluctuations in the receivables management efficiency over the observed periods. The receivables turnover ratio, which indicates how many times receivables are collected during a period, demonstrates variability rather than a consistent trend. Starting at a high of 29.75 in 2020, the ratio decreases significantly to 23.58 in 2021, suggesting a slower collection process or an increase in outstanding receivables. It then improves to 26.46 in 2022 and further rises to 29.37 in 2023, nearing the initial 2020 level, before decreasing again to 25.28 in 2024. This pattern indicates intermittent challenges in maintaining consistently rapid receivables collection.
The average receivable collection period, which shows the average number of days taken to collect receivables, complements the turnover ratio findings. Beginning at 12 days in 2020, the period extends to 15 days in 2021—reflecting a slower collection process consistent with the reduced turnover ratio. It slightly improves to 14 days in 2022, shortens back to 12 days in 2023—indicating an efficient collection period—and then lengthens again to 14 days by 2024. This oscillating pattern aligns with the fluctuations noted in the turnover ratio.
- Receivables Turnover Ratio
- Declined from 29.75 in 2020 to 23.58 in 2021, improved through 2022 and 2023 to 29.37, then decreased to 25.28 in 2024, indicating variable efficiency in collections.
- Average Receivable Collection Period
- Increased from 12 days in 2020 to 15 days in 2021, then fluctuated downward to 12 days in 2023 before rising again to 14 days in 2024, mirroring turnover trend changes.
Overall, the data suggests the company experiences cyclical variations in receivables efficiency, with collection periods and turnover ratios not maintaining steady improvements. These fluctuations may be attributed to external market conditions or internal management strategies affecting credit and collections policies over the years.
Operating Cycle
Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
---|---|---|---|---|---|---|
Selected Financial Data | ||||||
Average inventory processing period | ||||||
Average receivable collection period | ||||||
Short-term Activity Ratio | ||||||
Operating cycle1 | ||||||
Benchmarks | ||||||
Operating Cycle, Competitors2 | ||||||
Caterpillar Inc. | ||||||
Eaton Corp. plc | ||||||
GE Aerospace | ||||||
Honeywell International Inc. | ||||||
Lockheed Martin Corp. | ||||||
RTX Corp. | ||||||
Operating Cycle, Sector | ||||||
Capital Goods | ||||||
Operating Cycle, Industry | ||||||
Industrials |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Operating cycle = Average inventory processing period + Average receivable collection period
= + =
2 Click competitor name to see calculations.
- Inventory Processing Period
- The average inventory processing period showed a fluctuating trend over the analyzed years. It increased from 467 days in 2020 to a peak of 486 days in 2021, then decreased to 452 days in 2022 and further to 415 days in 2023. However, it rose again to 466 days in 2024, nearly returning to the initial level observed in 2020.
- Receivable Collection Period
- The average receivable collection period also exhibited variability but remained within a narrower range. It increased from 12 days in 2020 to 15 days in 2021, then slightly declined to 14 days in 2022, returned to 12 days in 2023, and rose again to 14 days in 2024. This suggests moderate fluctuations in the collection efficiency over the years.
- Operating Cycle
- The operating cycle mirrored the patterns observed in inventory processing and receivable collection periods. It climbed from 479 days in 2020 to 501 days in 2021, decreased to 466 days in 2022, dropped further to 427 days in 2023, and then increased again to 480 days in 2024. This trend highlights variability in the overall operational efficiency, with a notable improvement in 2023 before reverting close to earlier levels in 2024.
- Overall Insights
- Both inventory management and receivable collection periods showed fluctuations, impacting the operating cycle similarly. The peak observed in 2021 across all metrics may indicate operational delays or inventory buildup, followed by a period of improved efficiency in 2023. However, the reversal in 2024 suggests a return to previous operational rhythms, indicating potential challenges in sustaining operational improvements.
Average Payables Payment Period
Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
---|---|---|---|---|---|---|
Selected Financial Data | ||||||
Payables turnover | ||||||
Short-term Activity Ratio (no. days) | ||||||
Average payables payment period1 | ||||||
Benchmarks (no. days) | ||||||
Average Payables Payment Period, Competitors2 | ||||||
Caterpillar Inc. | ||||||
Eaton Corp. plc | ||||||
GE Aerospace | ||||||
Honeywell International Inc. | ||||||
Lockheed Martin Corp. | ||||||
RTX Corp. | ||||||
Average Payables Payment Period, Sector | ||||||
Capital Goods | ||||||
Average Payables Payment Period, Industry | ||||||
Industrials |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ =
2 Click competitor name to see calculations.
- Payables Turnover
- The payables turnover ratio exhibits a fluctuating trend over the five-year period. Starting at 4.94 in 2020, it significantly increased to a peak of 6.40 in 2021. Subsequently, the ratio experienced a slight decline to 6.18 in 2022 and further decreased to 5.86 in 2023. The ratio then saw a modest uptick to 6.03 in 2024. Overall, the payables turnover ratio demonstrates a tendency to improve relative to the initial year, indicating a generally enhanced efficiency in managing payables, despite some variability in the middle years.
- Average Payables Payment Period
- The average payables payment period shows an inverse pattern compared to payables turnover, starting at a relatively high 74 days in 2020. There was a marked reduction to 57 days in 2021, which reflects a more expedited payment cycle. In the following years, the payment period lengthened slightly, increasing to 59 days in 2022, then to 62 days in 2023, and slightly decreased again to 61 days in 2024. This indicates that the company shortened the time taken to settle payables sharply in the first year but maintained a moderately longer payment period thereafter, reflecting some moderation in payment speed post-2021.
Cash Conversion Cycle
Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
---|---|---|---|---|---|---|
Selected Financial Data | ||||||
Average inventory processing period | ||||||
Average receivable collection period | ||||||
Average payables payment period | ||||||
Short-term Activity Ratio | ||||||
Cash conversion cycle1 | ||||||
Benchmarks | ||||||
Cash Conversion Cycle, Competitors2 | ||||||
Caterpillar Inc. | ||||||
Eaton Corp. plc | ||||||
GE Aerospace | ||||||
Honeywell International Inc. | ||||||
Lockheed Martin Corp. | ||||||
RTX Corp. | ||||||
Cash Conversion Cycle, Sector | ||||||
Capital Goods | ||||||
Cash Conversion Cycle, Industry | ||||||
Industrials |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Cash conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= + – =
2 Click competitor name to see calculations.
- Average Inventory Processing Period
- The average inventory processing period exhibits fluctuations over the observed years. It increased from 467 days in 2020 to a peak of 486 days in 2021, indicating a longer duration to process inventory. This period then decreased steadily to 415 days by 2023, reflecting improved inventory turnover efficiency. However, in 2024, the period rose again to 466 days, nearing the initial level observed in 2020.
- Average Receivable Collection Period
- The average receivable collection period demonstrates minor variability throughout the period. It increased slightly from 12 days in 2020 to 15 days in 2021, followed by a small decrease to 14 days in 2022. It further improved back to 12 days in 2023, before an uptick to 14 days in 2024. Overall, this reflects a relatively stable receivables management with modest fluctuations.
- Average Payables Payment Period
- This metric showed a pronounced decline from 74 days in 2020 to 57 days in 2021, indicating faster payments to suppliers. Subsequently, the payables period slightly increased, stabilizing around 59 to 62 days between 2022 and 2023, and modestly decreasing to 61 days in 2024. This pattern suggests a strategic shift towards quicker payables settling that softened in later years but remained below the initial 2020 level.
- Cash Conversion Cycle
- The cash conversion cycle (CCC) follows a pattern correlated with inventory and receivables trends. It increased from 405 days in 2020 to a high of 444 days in 2021, signaling a longer duration to convert investments in inventory and receivables into cash. The CCC then declined to 365 days in 2023, reflecting enhanced operational efficiency and liquidity management. In 2024, CCC rose again to 419 days, indicating a partial reversal of prior improvements.