Bristol-Myers Squibb Co. (NYSE:BMY)

The analysis of the quarterly financial ratios and periods reveals several notable trends over the examined timeframe.

Inventory Turnover

This ratio shows a gradual decline from 5.68 in Q1 2020 to a low of around 3.57 in Q3 2024, indicating that inventory was being sold and replaced less frequently over time. However, a marked improvement is seen toward the end of the period, with the ratio increasing to 5.46 and 5.28 in Q4 2024 and Q1 2025 respectively, suggesting a potential recovery or improvement in inventory management efficiency.

Payables Turnover

The payables turnover ratio exhibits a fluctuating but generally downward trend, moving from 4.34 in Q1 2020 to a trough of 2.97 in Q3 2020, before recovering somewhat to values around 3.52 to 3.88 in the later quarters. This pattern suggests variability in the speed at which payables are being paid, with periods of slower payment cycles interspersed with moderate improvement.

Working Capital Turnover

The working capital turnover ratio demonstrates significant volatility throughout the periods. Early values remain relatively stable between 3.72 to 4.43 until mid-2021, followed by several spikes reaching as high as 15.56 in Q3 2024. Intermittent peaks such as 10.47 in Q4 2022 and 12.5 in Q3 2024 imply fluctuations in the efficiency of utilizing working capital to generate sales. The periods of sharp increase may be driven by changes in operational effectiveness or accounting adjustments affecting working capital components.

Average Inventory Processing Period

This metric steadily increases from 64 days in early 2020 to peaks near 102 days in Q3 2024, indicating that the average time inventory remains in stock before sale is lengthening. Thereafter, it sharply reduces to 67 and 69 days in Q4 2024 and Q1 2025 respectively, which aligns with the earlier observed rise in inventory turnover and may reflect improved inventory management or increased sales velocity.

Average Payables Payment Period

The payables payment period shows considerable variability with a general trend towards lengthening from 84 days in early 2020, reaching highs above 120 days around mid-2023 to early 2024. This indicates that the company was extending the time taken to pay suppliers over this horizon. Toward the end of the period, the payment cycle shortens somewhat to around 94-104 days, signaling a possible effort to accelerate payments or stabilize supplier relations.

Overall, the data reveals periods of declining efficiency in inventory and payables management followed by a recent trend toward improvement. The fluctuations in working capital turnover and payment periods suggest dynamic operational conditions impacting liquidity management. The recent improvements in inventory turnover and processing periods at the close of the latest quarter may indicate strategic shifts toward optimizing asset utilization and cash flow.

The data reveals notable fluctuations in cost of products sold (excluding amortization of acquired intangible assets), inventories, and inventory turnover ratios over the observed periods.

Cost of Products Sold

The cost of products sold exhibited considerable volatility. Starting at $3,662 million in March 2020, there was a significant decline through June and September 2020, reaching a low around $2,291 million by September 2021. Subsequently, the figures generally increased, peaking at $4,812 million in December 2024, which represents the highest value in the time series. The cost then fell sharply to $3,033 million by March 2025. This pattern suggests periods of decreased expense followed by a substantial spike before a recent contraction.

Inventories

Inventories followed a somewhat different trajectory. Initially, inventories decreased from $2,836 million in March 2020 to a trough near $1,949 million in September 2020. Afterwards, the inventory levels generally increased, reaching a peak of $3,332 million in December 2024. A moderate drop to $2,666 million was observed by March 2025. Overall, inventories show a recovery trend post-2020 decline, culminating in higher levels toward the end of the period examined.

Inventory Turnover Ratio

The inventory turnover ratio data is incomplete for the earliest periods but becomes available from December 2020 onward. There is a clear downward trend in inventory turnover from a high of 5.68 to a low near 3.57 during September 2024, indicating that inventory was being sold more slowly over time. However, a sharp rebound is seen in December 2024 and March 2025, where turnover ratios jump back to approximately 5.46 and 5.28, respectively. This suggests a recent improvement in inventory management or sales velocity after a prolonged period of slower turnover.

In summary, the cost of products sold and inventory levels both experienced declines in early 2020 followed by gradual increases, with significant peaks toward the end of 2024. Meanwhile, the inventory turnover ratio shows a general decline during this period, indicating slower inventory velocity, but rebounds sharply at the end, which may signal operational adjustments or changes in market demand conditions.

Cost of Products Sold

The cost of products sold exhibits significant variability over the observed periods, ranging from a low of 2,291 million US dollars in September 2021 to a high of 4,812 million US dollars in December 2024. Initially, the trend appears to decline from early 2020 through late 2021, with notable decreases until reaching a trough in the third quarter of 2021. From that point, values trend upward, with marked increases towards the end of the timeline, indicating rising costs especially from late 2024 onward. This upward trajectory suggests either increased production costs, volume, or other cost pressures in recent quarters.

Accounts Payable

Accounts payable demonstrate fluctuations with some degree of seasonality or cyclical pattern. Starting at 3,069 million US dollars in March 2020, the value sees a moderate decline before rising again to peak values near 4,002 million US dollars by March 2025. The overall trend over the full period is upward, indicating a progressive increase in amounts owed to suppliers or vendors. The changes do not appear directly proportional to the cost of products sold but suggest larger working capital requirements in later periods.

Payables Turnover Ratio

The payables turnover ratio exhibits a declining trend from early 2020 (starting above 4.0) to values near 3.0 in the middle of the period, followed by minor fluctuations remaining generally between 3.0 and 3.9. The ratio's reduction from over 4.3 to approximately 3.5 by 2025 points to slower payments to suppliers or an increase in accounts payable relative to cost of sales. This could imply extended payment terms or greater reliance on supplier credit. The ratio remains fairly stable within the later periods, suggesting consistency in payment patterns despite changes in absolute values.

Summary of Financial Trends

The data reflects that the company has experienced variable costs of products sold with a notably sharp increase in the most recent quarter. Accounts payable show a general increasing trend, possibly reflecting higher purchases or extended credit terms. The decline and stabilization of the payables turnover ratio reinforce the notion of slower payment cycles or increased supplier credit usage over time. Combined, these factors suggest evolving working capital management strategies and possible cost pressures impacting the company's operations in the recent quarters.

The working capital exhibits notable fluctuations over the analyzed quarters. Initially, working capital decreases from 12,621 million US dollars at the end of March 2020 to 9,781 million by March 2021, indicating a contraction in short-term assets relative to liabilities. Thereafter, it presents intermittent recoveries and declines, reaching a pronounced low of 2,847 million in June 2024 before modestly improving to 6,713 million by March 2025. This volatility could suggest varying operational liquidity demands or changes in the management of current assets and liabilities.

Net product sales maintain a generally stable trajectory with mild growth and some variation across the quarters. Starting at 10,541 million US dollars in March 2020, sales rise steadily with occasional slight declines, peaking at 11,811 million in December 2024. Despite minor fluctuations, the overall sales performance demonstrates resilience and an upward trend over the extended period.

The working capital turnover ratio, which measures the efficiency of using working capital to generate sales, illustrates a significant upward trend after data begins in the third quarter of 2020. Starting around 3.72, it generally increases with notable peaks, such as 15.56 in June 2024. This rising ratio reflects an enhanced ability to generate sales per unit of working capital, indicating improved operational efficiency or tighter working capital management, especially pronounced during periods when working capital is low.

In summary, the data presents a scenario in which net product sales remain relatively stable with gradual increases, while working capital undergoes substantial fluctuations and frequent decreases. Concurrently, the efficiency in utilizing working capital to drive sales has markedly improved over time, compensating for the reduced capital levels. This pattern may indicate strategic initiatives focusing on optimizing capital use to maintain or grow sales performance amid variable working capital availability.

Working Capital

Decreased overall from early 2020 to mid-2024 with intermittent recoveries; reached a low point in mid-2024 before moderate improvement.

Net Product Sales

Relatively stable with a mild upward drift, peaking towards the end of the period, indicating consistent demand and sales generation.

Working Capital Turnover

Significantly increased over time, demonstrating improved efficiency in generating sales from available working capital, especially notable during periods of low working capital.

Inventory Turnover Ratio

The inventory turnover ratio data is available from March 31, 2020, to March 31, 2025. Initially, the ratio was relatively high at 5.68 in March 2020, followed by a gradual decline throughout 2021 and 2022, reaching a low point around 3.7 to 3.72 during the second and third quarters of 2024. A notable recovery is observed towards the end of the period, with the ratio increasing sharply to 5.46 by December 2024 and slightly declining to 5.28 in March 2025. This pattern indicates fluctuating efficiency in inventory management, with a period of reduced turnover followed by a significant improvement.

Average Inventory Processing Period (Days)

The average inventory processing period exhibits an inverse pattern to the turnover ratio, starting at 64 days in March 2020 and increasing steadily through 2021 and 2022, peaking at 99 to 102 days during the latter half of 2023 and early 2024. This suggests that inventory was held longer during this time, consistent with the lower turnover ratios. Subsequently, the processing period decreases markedly to 67 days by December 2024 and remains similar at 69 days in March 2025, mirroring the rebound seen in inventory turnover and indicating improved inventory processing speed and efficiency.

Overall Trend Analysis

The data reveals a trend of declining inventory turnover and increasing inventory processing periods from 2020 through early 2024, suggesting challenges in managing inventory efficiently during that timeframe. This could reflect factors such as supply chain disruptions, demand fluctuations, or operational delays. However, the late 2024 and early 2025 data indicate a strong recovery in operational efficiency, with inventory turnover rising and processing periods shortening notably. This turnaround points to enhanced inventory management and possibly improved supply chain conditions or internal process optimizations.

Payables Turnover Ratio

The payables turnover ratio, measured from the end of 2020 onward, exhibits notable fluctuations over the observed quarters. Starting at 4.34 in December 2020, it decreases to a low of 2.97 by September 2021, indicating a slower rate of payments to suppliers during this period. Subsequently, the ratio recovers somewhat, settling around 3.37 to 3.82 through the end of 2022. The first quarter of 2023 shows a slight dip to 3.33, followed by another period of moderate increase and stabilization between approximately 3.05 and 3.88 in the quarters up to March 2025. Overall, the trend suggests variable but generally moderate payables turnover activity with some periodic intensification in payment speed followed by slowdowns.

Average Payables Payment Period (Number of Days)

The average payables payment period inversely mirrors the payables turnover ratio, as expected. Beginning at 84 days in December 2020, there is a marked increase to a peak of 123 days in September 2021, reflecting significantly slower payment timings during this time frame. This period of extended payment duration corresponds with the noted dip in the payables turnover ratio. Following this peak, the payment period decreases to 96 days by December 2021, then fluctuates between roughly 97 and 120 days through early 2024. A downward adjustment is noted again, reaching 94 days in March 2025. The fluctuations indicate changing payment policies or cash flow management strategies that may have been adapted in response to operational factors or external conditions.

General Observations

The data portrays a cyclical pattern where slower payments to suppliers coincide with lower payables turnover ratios, and vice versa. Peaks in payment periods and troughs in turnover ratios often align closely in time, reflective of a consistent underlying relationship between these metrics. Recent quarters show a tendency toward somewhat faster payment cycles compared to the highest points in 2021, possibly indicating efforts to improve supplier relations or adjust working capital management. However, the persistence of variability throughout the periods suggests ongoing adjustments rather than a fixed policy trend.