Dell Technologies Inc. (NYSE:DELL)

Inventory Turnover

The inventory turnover ratio exhibits fluctuation over the analyzed periods. It begins at 19.27 in 2020, slightly decreases to 19.05 in 2021, then experiences a significant drop to 13.45 in 2022. It recovers to 16.67 in 2023 and continues rising to 18.65 in 2024, before declining sharply to 11.07 in 2025. This indicates variability in how efficiently inventory is managed, with lower turnover suggesting slower inventory movement in the most recent year.

Receivables Turnover

The receivables turnover ratio shows a generally increasing trend from 7.38 in 2020 to 9.46 in 2024, slightly declining to 9.28 in 2025. This suggests an overall improvement in the collection of receivables, reflecting enhanced efficiency in managing credit extended to customers.

Payables Turnover

The payables turnover ratio declines from 3.15 in 2020 to 2.92 in 2022, indicating slower payment to suppliers during this period. It then increases to 4.28 in 2023, followed by slight decreases to 3.48 in 2024 and a minor increase to 3.57 in 2025. The variability suggests fluctuating payment practices over the years.

Average Inventory Processing Period

The average inventory processing period increases from 19 days in 2020 and 2021 to 27 days in 2022, indicating slower inventory processing during that year. It then decreases to 22 days in 2023 and 20 days in 2024, followed by a notable increase to 33 days in 2025. This pattern aligns inversely with the inventory turnover ratio, reaffirming changes in inventory management efficiency.

Average Receivable Collection Period

The average receivable collection period gradually decreases from 49 days in 2020 and 50 days in 2021 to 39 days in 2024 and remains stable in 2025. This reflects improved credit collection efforts, resulting in cash being collected more quickly from customers.

Operating Cycle

The operating cycle exhibits variation, starting at 68 days in 2020 and rising slightly to 74 days in 2022, before dropping to 59 days in 2024 and increasing again to 72 days in 2025. These fluctuations result from the combined effects of changes in inventory processing and receivables collection periods, affecting the overall duration from inventory acquisition to cash collection.

Average Payables Payment Period

This period increases from 116 days in 2020 to 125 days in 2022, indicating longer time taken to pay suppliers. However, it decreases sharply to 85 days in 2023, then rises again to 105 days in 2024 and slightly decreases to 102 days in 2025. This reflects variations in the company’s payment strategy to suppliers over time.

Cash Conversion Cycle

The cash conversion cycle remains negative throughout all periods, ranging from -48 days in 2020 to a low of -18 days in 2023, then improving to -46 days in 2024 and -30 days in 2025. A negative cash conversion cycle indicates the company collects cash from customers faster than it pays suppliers, which is generally favorable for liquidity. The less negative figure in 2023 suggests a temporary elongation, but the overall trend demonstrates maintained operational efficiency in cash management.

Cost of Net Revenue

The cost of net revenue shows an overall increasing trend from 2020 to 2025 with some fluctuations. It rose from $63,221 million in 2020 to a peak of $79,615 million in 2023. Thereafter, a decline is evident in 2024 to $67,556 million, followed by a rebound to $74,317 million in 2025. This pattern indicates variability in cost management or changes in sales volumes or product mix over the years.

Inventories

Inventory levels have generally increased over the period, rising from $3,281 million in 2020 to a high of $6,716 million in 2025. Notably, after an increase to $5,898 million in 2022, inventories decreased in 2023 and 2024 before surging again in 2025. This suggests fluctuating stock management strategies possibly in response to demand cycles or supply chain conditions.

Inventory Turnover Ratio

The inventory turnover ratio exhibits significant variability and an overall declining tendency. Starting at 19.27 in 2020, it dropped substantially to 13.45 by 2022, increased somewhat in subsequent years to 18.65 in 2024, and then declined sharply to 11.07 in 2025. A decreasing inventory turnover ratio, especially the drop in 2025, may imply slower inventory movement, which could affect liquidity and operational efficiency.

Summary

The data reflect a dynamic environment with changes in inventory levels and costs impacting turnover rates. The initial years show a balance with moderate inventory growth and stable turnover, but later years reveal increasing inventories alongside declining turnover ratios. This combination may warrant attention to inventory management practices and cost control to optimize operational efficiency and financial performance going forward.

The financial data reveals several notable trends over the six-year period under review. Net revenue demonstrates an overall upward trajectory from 2020 through 2023, increasing from 92,154 million US dollars to a peak of 102,301 million US dollars in 2023. However, this is followed by a decline in 2024 to 88,425 million US dollars before rising again in 2025 to 95,567 million US dollars. This pattern suggests initial growth followed by a setback and a partial recovery.

Accounts receivable, net of allowance, remains relatively stable from 2020 through 2023, fluctuating slightly around the 12,000 to 13,000 million US dollars range. There is a significant drop in 2024 to 9,343 million US dollars, marking a notable deviation from prior levels, followed by a moderate increase in 2025 to 10,298 million US dollars. The sharp decline in 2024 could indicate changes in credit policies, collection efficiencies, or sales dynamics impacting receivables.

The receivables turnover ratio steadily improves over the period, indicating enhanced efficiency in collecting receivables relative to sales. Starting at 7.38 in 2020, the ratio remains relatively constant through 2021, then increases progressively to a high of 9.46 in 2024 before a slight decrease to 9.28 in 2025. The improvement in this ratio suggests more effective management of credit and collections, which is particularly evident in the years when accounts receivable saw reductions.

Net Revenue

Displays growth up to 2023, a decline in 2024, and partial recovery in 2025.

Accounts Receivable, Net

Stable from 2020 to 2023, sharp decline in 2024, mild recovery in 2025.

Receivables Turnover Ratio

Progressively increases, indicating improved collection efficiency, peaking in 2024.

Overall, the data indicates a period of growth followed by a short-term setback in revenue and receivables in 2024, counterbalanced by improved receivables management efficiency. The partial recovery in net revenue and the sustained high turnover ratio in 2025 suggest positive adjustments in operational or financial practices after the dip.

Cost of Net Revenue

The cost of net revenue exhibited a generally increasing trend from 2020 to 2023, rising from $63,221 million to a peak of $79,615 million. There was a notable decrease in 2024 to $67,556 million, followed by an increase again in 2025 to $74,317 million. This pattern suggests some volatility in cost management or operational scale, with a significant dip in 2024 that might warrant further investigation.

Accounts Payable

Accounts payable increased steadily from $20,065 million in 2020 to $27,143 million in 2022, indicating growing obligations to suppliers or extended payment terms. However, there was a sharp decline in 2023 to $18,598 million, followed by incremental increases in 2024 and 2025, reaching $20,832 million. This sharp decrease in 2023 may reflect changes in payment policies, supplier negotiations, or cash management strategies.

Payables Turnover Ratio

The payables turnover ratio moved downward from 3.15 in 2020 to 2.92 in 2022, indicating slower payments or an increase in accounts payable relative to cost of goods sold. In 2023, the ratio rose sharply to 4.28, implying faster payment cycles or reduced liabilities relative to cost of revenue. In the last two years, the ratio stabilized between 3.48 and 3.57. The fluctuations in turnover ratio mirror the changes observed in accounts payable and cost of net revenue, reflecting dynamic working capital management.

The financial data presents a multi-year view of selected key metrics for the subject company, revealing notable trends in working capital and net revenue.

Working Capital

The company’s working capital remains negative throughout the observed period, indicating current liabilities exceed current assets. The negative working capital decreased in magnitude from -15,588 million USD in early 2020 to -10,565 million USD in early 2021, suggesting a significant improvement in liquidity or operational efficiency. However, this was followed by slight fluctuations, with working capital worsening again to -12,547 million USD by early 2024 before improving to -10,298 million USD in early 2025. The overall trend suggests some volatility but an underlying move toward a moderately less negative working capital position compared to the initial year.

Net Revenue

Net revenue demonstrated a generally upward trajectory over the period from 2020 to 2023, rising from approximately 92.2 billion USD to slightly above 102.3 billion USD. This growth reflects an expansion in sales or service income. However, in 2024, a decline in net revenue to around 88.4 billion USD is observed, indicating a contraction in earnings. This downturn was followed by a recovery in early 2025, with net revenue increasing again to about 95.6 billion USD. Overall, the revenue pattern shows both growth phases and some volatility in the latest years.

Working Capital Turnover

No data is provided for the working capital turnover ratio, limiting the ability to assess how efficiently the company utilizes its working capital in generating revenue over time.

In summary, the company exhibits a consistent challenge with negative working capital, though improvements and occasional reversals are apparent. Net revenue trends reflect growth interrupted by a notable dip in 2024, followed by a partial recovery. The absence of working capital turnover ratio data restricts a deeper efficiency analysis in terms of working capital usage related to revenue generation.

Inventory Turnover

The inventory turnover ratio shows a fluctuating trend over the presented periods. It starts at a relatively high value of 19.27 in January 2020, then slightly declines to 19.05 in January 2021. A more significant drop occurs in January 2022 to 13.45, followed by a recovery to 16.67 in February 2023 and further improvement to 18.65 in February 2024. However, the ratio decreases markedly again to 11.07 by January 2025. This pattern indicates variability in how efficiently inventory is managed and sold, with notable decreases suggesting potential challenges in inventory movement during certain periods.

Average Inventory Processing Period

The average inventory processing period, measured in days, demonstrates an overall increasing trend with some variation. Beginning at 19 days in January 2020 and 2021, it extends to 27 days in January 2022, representing slower inventory turnover. A subsequent reduction to 22 days in February 2023 and 20 days in February 2024 indicates an improvement in processing speed. Nonetheless, the figure rises sharply to 33 days in January 2025, the highest in the examined timeframe. This increase corresponds inversely with the decline in inventory turnover, indicating that inventory is spending more time in stock before being sold.

Correlation and Insights

The inverse relationship between inventory turnover and average inventory processing period is evident across the periods. Periods exhibiting lower turnover ratios coincide with higher average processing days, signifying slower inventory movement or potential overstocking. Conversely, periods with higher turnover ratios have fewer processing days, reflecting efficient inventory management. The volatility in these metrics towards the most recent period suggests possible operational challenges or shifts in demand and supply dynamics that may require further investigation.

Receivables Turnover

The receivables turnover ratio exhibits an overall increasing trend from 7.38 in January 2020 to 9.28 in January 2025. This upward movement indicates an improvement in the efficiency with which the company collects its receivables. The ratio consistently rises each year, with notable increments particularly from 8.20 in February 2023 to 9.46 in February 2024, followed by a slight decrease but still maintaining a high level at 9.28 in January 2025.

Average Receivable Collection Period

The average receivable collection period shows a steady decline over the analyzed periods, moving from 49 days in January 2020 to 39 days by January 2025. This reduction signifies that the company is collecting its receivables faster as time progresses, improving cash flow management. The quickest improvement occurs between February 2023 and February 2024, where the collection period drops from 45 days to 39 days and then remains stable in January 2025.

Overall Insight

The inverse relationship between the receivables turnover ratio and the average receivable collection period is consistent and expected, signaling enhanced efficiency in credit and collection processes. This suggests that the company has implemented effective measures to accelerate receivables conversion into cash, reducing the time customers take to pay. Such trends positively impact liquidity and working capital management, potentially supporting more robust operational capabilities.

Average Inventory Processing Period

The average inventory processing period shows variability over the analyzed years. It remained steady at 19 days in 2020 and 2021, then increased significantly to 27 days in 2022. This was followed by a decline to 22 days in 2023 and further to 20 days in 2024, before rising sharply again to 33 days in 2025. This pattern suggests fluctuations in how long inventory is held, with a notable peak in 2025 indicating potential challenges in inventory turnover or changes in inventory management practices.

Average Receivable Collection Period

The average receivable collection period demonstrates a consistent downward trend over the period. Starting at 49 days in 2020, it slightly increased to 50 days in 2021 but then declined steadily to 47 days in 2022, 45 days in 2023, and reached 39 days by both 2024 and 2025. This decreasing trend indicates an improvement in the efficiency of collecting receivables, suggesting enhanced credit management or customer payment patterns.

Operating Cycle

The operating cycle, defined as the sum of inventory processing and receivable collection periods, fluctuates notably. It increased from 68 days in 2020 to a peak of 74 days in 2022, then dropped to 67 days in 2023 and further to 59 days in 2024. However, there was an increase to 72 days in 2025. These changes reflect the combined effects of variations in inventory turnover and receivable collections, with 2024 marking the shortest cycle, indicative of improved operational efficiency, while 2022 and 2025 reflect longer cycles, potentially signaling operational delays or inefficiencies in those years.

Payables Turnover Ratio

The payables turnover ratio initially demonstrates a slight decline from 3.15 in early 2020 to 2.92 by early 2022, indicating a slower rate of payment to suppliers during this period. However, a sharp increase to 4.28 in early 2023 reflects a significant acceleration in the payment process. Subsequently, the ratio decreases somewhat, stabilizing around 3.48 in early 2024 and slightly rising again to 3.57 by early 2025. Overall, the trend reveals variability with a notable peak in 2023, followed by a moderate normalization.

Average Payables Payment Period (Days)

The average payables payment period shows an opposite but consistent pattern to the turnover ratio, beginning at 116 days in early 2020 and gradually lengthening to 125 days by early 2022. This increase correlates with the decreased turnover ratio, suggesting elongated payment cycles in that timeframe. In early 2023, a marked reduction to 85 days indicates a strategic acceleration in payment practices. After this decrease, the payment period extends again to 105 days in early 2024 and slightly improves to 102 days by early 2025. This pattern aligns with efforts to manage payables more efficiently after a period of slower payments.

Summary

From the observed data, there is a clear inverse relationship between the payables turnover ratio and the average payables payment period, consistent with financial theory. The period from 2020 to 2022 is characterized by slower payment cycles, as seen in both decreasing turnover and increasing days payable. This trend suddenly reversed in 2023, indicating a possible change in payment policy or cash flow management, resulting in faster payments and enhanced turnover ratio. The subsequent years show signs of stabilization with improved but more moderate metrics. These fluctuations may suggest responses to external factors or internal strategic decisions aimed at optimizing working capital management.

The financial data reveals several trends related to the company's working capital management over the six-year period from early 2020 to early 2025.

Inventory Processing Period

The average inventory processing period fluctuated, starting at 19 days in early 2020 and remaining steady into 2021. It then increased sharply to 27 days by early 2022, decreased to 20-22 days in the following years, before rising again significantly to 33 days in early 2025. This pattern indicates some volatility in inventory turnover efficiency, with a notable slowdown in 2025.

Receivable Collection Period

The average receivable collection period showed a consistent downward trend. It began at 49 days in early 2020 and decreased gradually to 39 days by early 2024, remaining stable at 39 days in early 2025. This reduction suggests improving efficiency in collecting receivables over time.

Payables Payment Period

The average payables payment period initially increased from 116 days in early 2020 to a peak of 125 days in early 2022. Subsequently, it declined sharply to 85 days in early 2023, before partially recovering to 102 days by early 2025. This trend indicates changing strategies or external conditions impacting payment cycles, with a contraction in payment periods during 2023 followed by a moderate extension.

Cash Conversion Cycle (CCC)

The cash conversion cycle was persistently negative across all years, indicating a strong liquidity position where payables outweigh the sum of receivables and inventory periods. The CCC improved from -48 days in early 2020 to a low of -53 days in early 2021, then slightly less negative values around -51 and -46 days in subsequent years, with a significant spike to -18 days in early 2023. It improved again to -30 days by early 2025. The substantial reduction in negative days in 2023 suggests a temporary tightening of cash flow, likely related to the shorter payables period observed during the same timeframe.

Overall, the company demonstrated improved receivables collection efficiency and a generally favorable cash conversion cycle with consistent negative values, indicating good liquidity management. However, fluctuations in inventory processing and payables payment periods suggest areas where working capital policies or external factors influenced operational efficiency. The sharp changes in 2023, particularly the shorter payables period and less negative CCC, merit further investigation to understand underlying causes.