Bristol-Myers Squibb Co. (NYSE:BMY)

Inventory Turnover

The inventory turnover ratio shows a generally declining trend from early 2020 through most of 2024, starting at around 5.68 and decreasing to a low near 3.57 during the middle of 2024. This indicates that the company’s efficiency in managing and selling inventory diminished over this period. Toward the end of 2024 and early 2025, there is a notable recovery, with the ratio increasing back up to approximately 5.18, suggesting an improvement in inventory turnover.

Payables Turnover

The payables turnover ratio fluctuates more significantly, initially dropping from 4.34 to a low of roughly 2.61 by the middle of 2025. These variations indicate inconsistent payment patterns to suppliers, with periods of slower payables turnover possibly reflecting extended payment terms or cash management strategies. Some recovery phases are seen, but the overall trend shows increased variability and a modest decline.

Working Capital Turnover

Working capital turnover exhibits considerable volatility, with values ranging from a low near 3.72 to a peak above 15. This wide fluctuation suggests the company experienced variable efficiency in utilizing its working capital. Periods of sharp increases, such as values exceeding 10 in parts of 2023 and 2024, indicate phases of high efficiency in generating revenue relative to working capital. After these spikes, the ratio tends to moderate but remains elevated compared to the initial periods.

Average Inventory Processing Period

The average days inventory remains steadily on the rise from about 64 days at the end of Q1 2020 to above 100 days during mid-2024. This upward trend reflects longer holding periods for inventory, consistent with the observed decline in inventory turnover. A slight reduction is observed near the end of 2024, potentially linked to the associated improvements in inventory turnover.

Average Payables Payment Period

The average payables payment period also displays an increasing trend with fluctuations. Starting near 84 days, the period extends to approximately 140 days by mid-2025. This indicates that the company is taking longer to settle its payables over time, which could be part of a deliberate cash management practice or impacted by operational constraints. Despite some intermittent decreases, the general tendency points toward lengthening payment cycles.

Cost of Products Sold

The cost of products sold exhibited noticeable fluctuations over the analyzed periods. Starting at 3,662 million USD in March 2020, it decreased significantly in the subsequent two quarters, reaching a low point of 2,502 million USD in September 2020. A moderate rise followed by some volatility was seen throughout 2021 and early 2022, with values generally hovering between approximately 2,350 million and 2,750 million USD. However, a significant spike occurred in June 2025, where cost surged sharply to 4,812 million USD, representing the highest value recorded in the dataset. The surrounding quarters displayed amounts somewhat lower but still elevated compared to earlier years. This pattern suggests episodic increases in production costs or volume, with an unusual peak near the end of the period under review.

Inventories

Inventories showed a general upward trend over the timeframe. Beginning at 2,836 million USD as of March 2020, inventory levels initially declined to approximately 1,949 million USD in September 2020, indicating a reduction in stock during that period. Subsequently, inventory values gradually increased year-over-year, reaching above 3,300 million USD by December 2024, representing a notable accumulation of inventory. By mid-2025, inventory levels moderately decreased but remained higher than early 2020 values, suggesting perhaps adjustments in stock management or shifts in supply chain dynamics.

Inventory Turnover Ratio

Inventory turnover ratio data was available from December 2020 onward. Over the observed quarters, this ratio displayed a gradual declining trend from 5.68 to a low near 3.57 by September 2024, indicating slower movement of inventory relative to cost of sales. Notably, in the final quarters of the dataset, there was a recovery in turnover ratio, climbing back above 5.0, which may reflect improved efficiency in inventory management or changes in sales volume. The general decline in turnover preceding this recovery aligns with the steady increase in inventory levels, suggesting that stock accumulation may have outpaced sales until the later period.

Overall Insights

The data depicts a company experiencing volatility in cost of goods sold with a significant peak in mid-2025, alongside a steady increase in inventory holdings over several years until a slight reduction in recent quarters. The inventory turnover ratio inverse movement supports this observation, reflecting slower inventory movement during periods of accumulation and signs of improvement in the latest data points. These trends might point to changes in operating conditions, demand fluctuations, supply chain adjustments, or strategic inventory policies. Close monitoring of the reasons behind the sharp cost increase and inventory buildup would be prudent to address potential impacts on profitability and liquidity.

Cost of Products Sold, Excluding Amortization of Acquired Intangible Assets

The cost of products sold demonstrates notable fluctuations over the observed periods. Initial values in early 2020 show a decrease from 3,662 million USD in Q1 to 2,502 million USD in Q3, followed by a slight recovery in Q4. From 2021 onwards, the costs tend to oscillate within a moderate range, with some quarters reflecting an increase (notably 2,932 million USD in Q3 2024), but the most remarkable change appears in Q2 2025, where the value sharply rises to 4,812 million USD, representing a significant spike relative to previous quarters. This indicates a sudden and substantial increase in product cost that may affect gross margins unless accompanied by corresponding revenue changes.

Accounts Payable

Accounts payable figures generally show an upward trend over the period analyzed. The initial quarter of 2020 starts at 3,069 million USD, and though some quarters experience minor declines (such as Q3 2020 at 2,441 million USD), the overall trajectory is an increase. By the last reported periods, accounts payable values reach a peak of 5,427 million USD in Q2 2025. This growth suggests increased obligations to suppliers or extended payment terms, which may impact liquidity management and working capital requirements.

Payables Turnover Ratio

The payables turnover ratio shows variability but generally trends downward from the earliest measurements available. Starting at 4.34 in Q4 2020, the ratio tends to decline towards 2.61 in Q2 2025, with intermittent fluctuations. A declining payables turnover ratio indicates that the company is taking longer to pay its suppliers, which can reflect a strategic extension of payment terms or potential cash flow pressures. This trend, coupled with increasing accounts payable balances, suggests a growing emphasis on accounts payable management or changed supplier negotiations.

Overall Observations

The combination of a rising accounts payable balance and a declining payables turnover ratio signals a lengthening in the payment cycle to suppliers. The substantial increase in product costs in mid-2025 may place further stress on operational cash flow. Monitoring such trends is critical to ensure that increased payables and costs do not impair financial stability. Further examination of revenue data and margins would be necessary to determine the full impact on profitability and liquidity.

Working Capital

The working capital exhibited considerable fluctuations over the reported periods. Starting at 12,621 million USD in March 2020, it declined to 9,781 million USD by March 2021. This downward trend continued, reaching a low of 4,170 million USD in September 2023, before partially recovering to 6,713 million USD in March 2025. Notably, there were intermittent increases, such as the rise from 5,383 million USD in December 2022 to 9,508 million USD in December 2023, indicating periods of improved short-term asset and liability management.

Net Product Sales

Net product sales showed a generally stable to modestly increasing trend throughout the timeline. Beginning at 10,541 million USD in March 2020, sales increased to a peak above 11,600 million USD by late 2021. Although fluctuations occurred, sales generally remained within the range of approximately 10,800 to 11,900 million USD from 2022 onwards. This stability suggests consistent market demand with marginal growth over the longer term.

Working Capital Turnover

Working capital turnover ratios were absent for the initial periods but from September 2020 onward showed significant variation. The ratio started around 3.72 and improved steadily, peaking at 15.56 in June 2024. This increase reflects a notable enhancement in the efficiency with which the company utilized its working capital to generate sales. However, after the peak, the ratio decreased to 6.87 in June 2025, indicating some decline in turnover efficiency, although it remained higher than at the start of the series.

Overall Insights

Over the examined quarters, working capital decreased substantially, signaling either reduced short-term assets, increased liabilities, or a combination. Despite this reduction, the company maintained relatively stable net product sales, indicating effective operational performance. The rising working capital turnover ratio highlights improved efficiency in using capital but with some volatility in later periods. Overall, while liquidity appears tighter with lower working capital, operational output and capital efficiency measures suggest adaptive financial management.

Analysis of the data reveals discernible trends in the inventory management metrics over the period observed.

Inventory Turnover Ratio

The inventory turnover ratio shows a generally declining trend from early 2021 to late 2024. Starting at 5.68 in March 2021, the ratio decreased steadily, reaching a low point of around 3.57 in September 2024. This suggests that the frequency with which inventory is sold and replaced slowed over this time. Notably, towards the end of the series, this ratio exhibits a rebound, increasing to 5.46 by March 2025. This uptick may indicate an improvement in inventory efficiency or a strategic adjustment in inventory levels.

Average Inventory Processing Period

The average inventory processing period, measured in days, increased correspondingly over most of the same timeframe. From 64 days in March 2021, it progressively lengthened to peak around 102 days in December 2024, indicating that inventory was held longer before being sold or used. This extension aligns inversely with the declining inventory turnover ratio, highlighting potential challenges in inventory movement or shifts in supply chain dynamics. However, a marked decrease occurs shortly thereafter, dropping to 67 days by March 2025, which signals a return to more efficient inventory processing consistent with the rebound observed in the turnover ratio.

Overall, the data suggests that from mid-2021 through late 2024, inventory management efficiency declined, with inventory held longer and a reduction in turnover rate. The reversal in these trends in early 2025 points to improvements in operational aspects related to inventory handling, possibly reflecting better demand forecasting, supply chain optimization, or changes in sales patterns.

The payables turnover ratio and the average payables payment period both show moderate fluctuations over the observed periods, indicating variability in the company's payment behavior to suppliers.

Payables Turnover Ratio

The payables turnover ratio starts at 4.34 in December 2020 and then declines to a low of 2.97 by September 2021. It subsequently rises again, fluctuating mostly between 3.2 and 3.88 over the next several quarters. The highest recorded value after the initial period is 3.88 in March 2025, whereas the lowest is 2.61 in June 2025. This pattern suggests some instability in how efficiently the company is managing its payables, with periods of slower payments interrupting phases of more rapid payables turnover.

Average Payables Payment Period (in days)

The average payables payment period demonstrates an inverse relationship with the payables turnover ratio as expected. Starting at 84 days in December 2020, it gradually increases to a peak of 123 days in September 2021. Following this peak, the payment period oscillates mostly between 94 and 120 days, with a notable spike to 140 days in June 2025. This upward trend in days payable implies a tendency to delay payments to suppliers over the long term, which could indicate efforts to optimize cash flow or changes in payment terms.

Overall, the data reveal a general trend towards longer payment periods and lower payables turnover ratios after late 2020, with noticeable variability quarter to quarter. The increase in days payable suggests a strategic inclination to extend payment durations, while the corresponding decrease in turnover ratios further supports this interpretation. The peak values in both metrics around late 2024 to mid-2025 may point to a significant adjustment in working capital management during this time frame.