Dell Technologies Inc. (NYSE:DELL)

The financial data reveals various trends and patterns regarding operational efficiency and liquidity management over the analyzed periods.

Inventory Turnover

The inventory turnover ratio exhibits fluctuations with an overall declining tendency in the medium term, dropping from highs above 18 to lows near 11-12 in the 2024-2025 periods. This suggests a slowdown in the frequency of inventory being sold and replaced over the later quarters, potentially indicating either increased inventory levels or slower sales.

Receivables Turnover

The receivables turnover ratio shows variability but remains relatively stable around the 7 to 10 range. Notably, there are peaks above 10 in mid-2023 and early 2024, implying improved collection efficiency during these intervals; however, some declines towards late 2025 suggest possible challenges in receivables collection.

Payables Turnover

Payables turnover shows a moderate trend with values roughly between 2.8 and 4.3 over the timeline. After a period of gradual decrease until early 2022, there is a notable spike around early 2023, followed by moderate fluctuation. The elevated values briefly observed may imply faster payments to suppliers, whereas the subsequent declines might indicate a stretched payment schedule or improved cash management.

Average Inventory Processing Period

The average inventory processing period (days) lengthened from about 18-21 days in early phases to a peak exceeding 33 days in 2024, then eased slightly thereafter. This rise aligns with the decreased inventory turnover, reinforcing the observation of slower inventory movement.

Average Receivable Collection Period

The average receivable collection period varies between approximately 35 to 54 days, with peaks in 2024 and some dips in mid-2023. Longer collection periods indicate less efficient receivables management, potentially impacting cash flow.

Operating Cycle

The operating cycle duration increases from around 54-69 days in the earlier periods to highs in the mid to upper 70s and peaks near 87 days in late 2024. This increase reflects a lengthening combined period of inventory holding plus receivable collection, implying capital tied up in operations for longer durations.

Average Payables Payment Period

The average payables payment period significantly exceeds other cycle components, ranging between roughly 85 and 130 days. There is a generally increasing trend from earlier periods through 2024, suggesting the company is taking longer to pay its suppliers, which may be a strategic liquidity management decision.

Cash Conversion Cycle

The cash conversion cycle (CCC) remains consistently negative throughout the periods, indicating that payables payment time exceeds the sum of inventory and receivables periods. While the exact CCC value fluctuates between approximately -18 and -53 days, the persistent negative values imply effective working capital management that allows the company to defer cash outflows relative to cash inflows.

Overall, the trends suggest that while inventory turnover and inventory processing duration point to slower operational movement recently, the company manages to maintain liquidity through extended payables periods. The negative cash conversion cycle demonstrates a cash flow advantage, as payments to suppliers occur later than cash is collected from customers and inventory is sold. Fluctuations in receivables turnover and collection periods indicate variability in customer payment behavior, which may warrant continued monitoring.

The analysis of the quarterly financial data reveals several notable trends and fluctuations in cost of net revenue, inventories, and inventory turnover for the company over the observed periods.

Cost of Net Revenue

The cost of net revenue demonstrates a general upward trend from May 2020 through the first quarter of 2022, increasing from approximately $15 billion to above $22 billion. This suggests rising operational costs or increased volume of sales during this period. However, from April 2022 onward, the cost fluctuates, with declines in some quarters such as October 2022 and May 2023, but overall maintaining high levels compared to early 2020. Notably, the highest quarterly cost appears in August 2025, followed by a slight decline in October 2025. These variations could reflect changing business conditions, supply chain dynamics, or strategic adjustments in pricing and cost management.

Inventories

Inventories exhibit a steady increase from May 2020 through October 2021, rising from about $3.6 billion to over $5.4 billion, indicating either accumulation of stock or preparation for anticipated demand. This upward trend continues into early 2022 with inventories peaking near $6.3 billion. Afterward, a decline is observed in the subsequent quarters, particularly reaching a low in November 2023 around $3.4 billion. Following this low, inventories increase again significantly, rising to approximately $7.4 billion by May 2025, before a slight reduction towards the end of the observed period. These inventory swings suggest responses to demand variability, supply chain considerations, or inventory management strategies.

Inventory Turnover

The inventory turnover ratio starts at a relatively high level of about 17.5 in May 2020, indicating efficient inventory utilization. This ratio gradually declines through 2021, reaching around 13.5 in early 2022, which corresponds with steadily increasing inventory levels. From mid-2022 to early 2023, the ratio improves sharply, peaking above 20 in late 2023, reflecting more rapid inventory movement or reduced inventory levels. However, from 2024 onward, the ratio trends downward again, dropping to near 10 by mid-2025. This reduction suggests inventory is turning over more slowly, potentially due to increased stock or lower sales velocity. The partial rebound at the end of the period to roughly 11.9 may indicate some improvement in inventory efficiency.

In summary, the data reflects periods of growth and adjustment in costs and inventory, with inventory management efficiency fluctuating in response. The company appears to have gone through phases of inventory buildup and reduction, impacting turnover rates, which could imply reactions to market demand dynamics, supply chain conditions, or strategic operational decisions over the examined timeframe.

Net Revenue

The net revenue figures exhibit notable fluctuations across the examined periods. Starting from approximately $21.9 billion, revenue shows a general upward trend with intermittent declines. Peaks are observed around January 2022 and October 2025, where revenues reached approximately $28.0 billion and $29.8 billion, respectively. Periods of decline often follow these peaks, as seen in the subsequent quarters, reflecting variability likely related to seasonal effects or market conditions. Overall, despite short-term dips, the revenue trend indicates growth potential over the longer term.

Accounts Receivable, Net of Allowance

The accounts receivable values demonstrate substantial variability as well. Initial values near $10.8 billion increase gradually, reaching highs above $14 billion in late 2021. Subsequently, values experience contractions, dropping below $9 billion around mid-2023 and early 2024 periods. In the most recent quarters, there is a marked increase again, peaking above $15 billion by late 2025. This pattern suggests fluctuating credit sales or changes in collection policies, with possible implications for working capital management.

Receivables Turnover Ratio

The receivables turnover ratio generally fluctuates within the range of approximately 6.75 to 10.5 over the timeline analyzed. A low turnover ratio in October 2025 (around 6.75) contrasts with higher values exceeding 10 in mid-2023 and early 2024. High turnover values indicate improved efficiency in collecting receivables, whereas declines point to slower collection cycles. The recent downward shift in turnover accompanied by rising receivable balances may signal emerging challenges in cash collection efficiency or loosening credit terms in the latest periods.

Overall Analysis

The financial data reveal a cyclical pattern in both revenue and receivables, with periods of growth often followed by contraction. Revenue growth is intermittent but generally positive over time. However, the increasing accounts receivable alongside declining turnover in recent quarters warrants attention as it may impact liquidity. Monitoring collection policies and receivables management could be critical to sustaining operational cash flow and supporting continued revenue growth.

Cost of Net Revenue

The cost of net revenue exhibits a general upward trend from May 2020 through October 2025, although the pattern is marked by fluctuations. Initially, from May 2020 to January 2022, the cost steadily increases from approximately 15,044 million to a peak around 22,374 million. Subsequently, the cost declines in the following quarters, reaching lower points near 15,904 million in May 2023. Afterward, it rises again, reaching a higher peak of 24,329 million in October 2025 before slightly decreasing. The fluctuations could suggest variations in production or procurement costs, seasonal effects, or shifts in sales volume across periods.

Accounts Payable

Accounts payable also demonstrate an overall ascending trend but with considerable volatility. Starting at 18,432 million in May 2020, it grows to a high of approximately 27,143 million by January 2022. Afterwards, a notable decline is observed, particularly dropping sharply to around 17,796 million by May 2023. This is followed by renewed increases that push accounts payable close to 27,463 million by August 2025. The oscillations may reflect changes in supplier payment terms, business activity levels, or working capital management strategies.

Payables Turnover Ratio

The payables turnover ratio shows significant variability throughout the observed periods, oscillating between approximately 2.80 and 4.28 times. Early in the timeline, the ratio decreases steadily from about 3.43 in May 2020 to a low near 2.80 in October 2021, indicating lengthening payment cycles or slower turnover of payables. There is a pronounced increase to a peak of 4.28 by February 2023, suggesting accelerated payment frequency or improved management efficiency. However, following this peak, the ratio declines again, illustrating fluctuating payment practices or changing supplier relationships. The variability suggests dynamic cash flow management and possibly seasonal or operational factors affecting how quickly payables are settled.

Summary of Relationships

Both cost of net revenue and accounts payable exhibit upward trajectories with periodic declines, implying synchronized patterns possibly related to volume or cost management. The payables turnover ratio's variability suggests shifts in payment policy or cash management efficiency, not always directly correlated with absolute levels of cost or payables. Overall, these trends reflect a complex interaction of operational scale, supplier relations, and financial strategies across the quarters.

Working Capital

The working capital has consistently remained negative throughout the observed periods, indicating a recurring state where current liabilities exceed current assets. The values fluctuate significantly, with the most negative point recorded around August 2024 at approximately -14,490 million US dollars. There is a notable recovery in the earlier quarters of 2023, where working capital improves to around -9,300 million, before deteriorating again in subsequent quarters. The volatility suggests ongoing challenges in managing short-term liquidity or operational cycles.

Net Revenue

Net revenue displays a pattern of moderate growth interspersed with fluctuations. Initially, from May 2020 to January 2021, there is a clear upward trend, with revenue increasing from about 21,897 million US dollars to a peak of 26,112 million. Following this, revenues experience some oscillations, peaking again in early 2022 and then showing periods of decline and recovery. The highest recorded value is around 29,776 million in October 2025. Despite these fluctuations, the general trend over the entire timeframe is positive, indicating growth in sales or service income. The revenue growth outpaces the fluctuations in working capital, suggesting effectiveness in generating sales even if short-term financial management remains variable.

Working Capital Turnover

No data is available for working capital turnover, preventing analysis of the relationship between net revenue and working capital levels in terms of efficiency.

Overall Insights

The company demonstrates a challenging liquidity profile as indicated by persistent negative working capital, yet it achieves a growth trajectory in net revenues over the long term. This suggests that while the company is successful in expanding its sales base, it may face constraints in managing short-term assets and liabilities, potentially relying on external financing or operational efficiencies to sustain its activities. The absence of working capital turnover data limits the ability to precisely measure how efficiently the company uses its working capital to generate revenue. Attention to improving working capital management could enhance financial stability.

The inventory turnover ratio exhibits noticeable fluctuations over the quarters observed. Initially, the ratio is relatively high, starting at 17.47 and maintaining levels above 17 through early 2021. However, a decline begins around mid-2021, reaching a low of approximately 13.4 by late 2022, indicating a slowing rate of inventory turnover during this period. Following this dip, a recovery phase is evident, with the ratio rising sharply to a peak of 20.66 in late 2023, suggesting enhanced efficiency in inventory management. Subsequent to this peak, the turnover ratio experiences another downward trend, trending downward to below 12 by late 2025, which may reflect challenges in inventory movement or shifts in demand and supply dynamics.

Correspondingly, the average inventory processing period, measured in days, shows an inverse relationship with the inventory turnover ratio, as would be expected. Early data points reveal a processing period around 20 to 21 days, which lengthens significantly to 27-28 days during the mid to late 2021 period, consistent with the reduced turnover ratio. The processing period then shortens notably, reaching its minimal values of 18 days in late 2023, aligning with the peak inventory turnover ratio. Towards the end of the timeline, the processing period lengthens once more, exceeding 30 days during late 2024 and into 2025, corresponding to the lower turnover ratios observed concurrently.

This analysis indicates that periods of decreased inventory turnover are associated with longer inventory processing times, suggesting slower movement or accumulation of stock. Conversely, higher turnover ratios coincide with shorter processing durations, reflecting improved inventory efficiency and quicker stock turnover. The trends suggest cycles of inventory management effectiveness that could be influenced by external market conditions, operational adjustments, or demand fluctuations throughout the periods reviewed.

Inventory Turnover Ratio Trends

Generally high in early 2020, a decline occurs mid-2021 through late 2022, followed by a sharp increase in 2023, then a decline again toward 2025.

Average Inventory Processing Period Trends

Shorter processing days at the beginning and middle of the period with lengthening days occurring mid-2021 to late 2022, then shortening again in 2023 before lengthening once more into 2025.

Relationship Between Metrics

Inverse correlation between inventory turnover ratio and average inventory processing period, reflecting typical inventory management dynamics.

The receivables turnover ratio and the average receivable collection period exhibit fluctuating trends over the observed periods. These metrics provide insight into the efficiency of the company's credit and collection policies.

Receivables turnover ratio

The ratio shows variability across the quarters, ranging approximately between 6.75 and 10.48. Initially, it decreases from 8.53 to a low point around 7.01, then experiences periods of increase and decline. Notably, peaks are observed around May 2023 (10.33) and February 2024 (10.48), which indicate intervals during which receivables were collected more efficiently. However, dips such as the one observed in August 2025 (6.75) suggest temporary reductions in turnover.

Average receivable collection period

This metric inversely correlates to the receivables turnover ratio, showing the number of days required on average to collect receivables. The collection period ranges roughly from 35 to 54 days. Periods with higher turnover ratios generally correspond to shorter collection periods, such as the decrease from 43 days to 35 days between May 2020 and May 2023. Conversely, collection periods tend to lengthen when turnover falls, with a notable spike to 54 days in August 2025.

Overall pattern and insights

The data suggests a cyclical nature in the company's receivables management, with shifts in efficiency likely influenced by operational, market, or seasonal factors. Periods of heightened turnover and reduced collection days indicate improved cash flow and tighter credit control, while periods of lower turnover and extended collection times may signal relaxed credit policies or collection challenges. The fluctuations underscore the importance of continuous monitoring and adjustment of receivables management strategies to maintain optimal liquidity and operational performance.

Average Inventory Processing Period

The average inventory processing period exhibits fluctuations over the analyzed timeline. Initially, the period remains stable around 20-22 days in 2020, followed by a noticeable increase reaching up to 28 days by mid-2022. Subsequently, a decline is observed in early 2023 falling back to the range of 18-20 days. However, from late 2023 through 2025, the trend indicates a progressive increase, peaking at approximately 36 days before slightly decreasing to 31 days towards the end of the period. This pattern suggests variability in inventory management efficiency, with periods of both improvement and elongation in processing time.

Average Receivable Collection Period

The average receivable collection period demonstrates considerable volatility. Initially, values oscillate between 40 and 50 days through 2020 and mid-2022, with intermittent peaks and troughs. Notably, there is a decline starting in early 2023 reaching a low point near 35 days in mid-2023, indicating an improvement in receivables collection efficiency. Nonetheless, from late 2023 onwards, the period increases again, with a significant spike to 54 days observed around late 2025 before dropping back to 41 days. This variability may reflect changes in credit policies, customer payment behavior, or economic conditions impacting cash inflows.

Operating Cycle

The operating cycle, which combines inventory processing and receivable collection periods, follows a generally upward trajectory despite short-term declines. Starting in the mid-60s (days) range in 2020, it climbs steadily to peak near 79 days around late 2021. Following this peak, a decline is apparent in early 2023, reaching approximately 54 days. However, from late 2023 through 2025, the operating cycle extends again, reaching a high of 87 days before settling back to 72 days by the end of the timeline. This extended cycle duration in later periods may imply challenges in working capital management, potentially increasing the time required to convert resources into cash.

Summary

Overall, the data show fluctuating efficiency in inventory processing and receivables collection, resulting in corresponding changes in the operating cycle length. Despite periods of improvement, the latter part of the analyzed span indicates increasing durations in inventory turnover and receivables collection, which contribute to a lengthened operating cycle. These trends suggest that the company may face episodic pressures on liquidity and operational efficiency, warranting continued focus on working capital optimization strategies.

The analysis of the payables turnover ratio and average payables payment period over the observed quarters reveals distinct patterns and fluctuations that merit attention.

Payables Turnover Ratio

The payables turnover ratio exhibits variability across the timeline. Initially, the ratio declines from 3.43 to a low of approximately 2.8, indicating a slower turnover of payables. Subsequently, there is a marked improvement, with the ratio increasing sharply to a peak of 4.28, suggesting more efficient management of payables during that period. After reaching this peak, the ratio generally declines again, with some intermittent rises, concluding near the mid-range value of 3.46. This pattern suggests periods of both efficient and less efficient payables management, reflecting changing payment terms or operational strategies over time.

Average Payables Payment Period

The average payables payment period, measured in days, inversely correlates with the payables turnover ratio, as expected. The payment period starts at 107 days and progressively increases to a maximum near 130 days, indicating an extension in the time taken to settle payables. This trend reverses significantly when the payment period drops sharply to 85 days, coinciding with the peak in the payables turnover ratio. Following this low payment period, there is a recurring pattern of moderate increases and decreases, ending close to 105 days. The fluctuations imply adjustments in the company's credit terms or cash management policies influencing the average days taken to pay suppliers.

Overall Insights

The inverse relationship between the payables turnover ratio and the average payables payment period throughout the quarters is consistent with financial theory that a higher turnover ratio corresponds to a shorter payment period. Significant changes in these metrics suggest the company periodically adjusts its payment practices, potentially balancing cash flow management with supplier relationships. The periods of extended payment days may indicate strategic decisions to conserve cash, while the intervals of shortened payment periods might correspond to improved liquidity or efforts to strengthen supplier terms.

An analysis of the financial data reveals discernible trends in key operational efficiency metrics over the covered periods.

Average Inventory Processing Period

This metric exhibits variability, starting at 21 days and showing a minor decline to 19 days by early 2021. Subsequently, it increases markedly, reaching peaks around 27 to 28 days during late 2021 and early 2022. After a dip to 18 days in mid-2023, the period gradually extends again, rising to above 30 days by late 2024 and into 2025. The overall pattern indicates fluctuating inventory management efficiency, with recent periods suggesting lengthening inventory processing times.

Average Receivable Collection Period

The collection period shows a degree of fluctuation without a clear directional trend. It begins in the mid-40s range of days, rising occasionally to over 50 days, then decreasing to mid-30s by mid-2023. It experiences increased volatility thereafter, with spikes reaching above 50 days, notably near the end of the dataset. This indicates intermittent challenges in receivable collection efficiency, with periods of both improvement and deterioration.

Average Payables Payment Period

The payable period initially trends upward from 107 days to a peak around 130 days in late 2021, suggesting an extended timeframe for settling payables. Following this peak, there is a decline to the mid-80s to low 90s days range by early 2023. Afterwards, the period generally ascends again, fluctuating between approximately 100 and 125 days through to the end of the dataset. This pattern implies strategic use of payables to manage cash flow, with some variability over time.

Cash Conversion Cycle (CCC)

The CCC remains negative throughout the periods, indicating that the company efficiently converts resources into cash within a positive time frame supported by longer payment periods. The cycle becomes less negative moving from around -43 days to approximately -53 days in early 2021, suggesting improved efficiency. However, it trends upward (less negative) again toward early 2023, then fluctuates moderately, concluding near -33 days by late 2025. The negative CCC consistently highlights strong working capital management, though recent trends suggest some loosening in operational efficiency.

Overall, the analysis indicates that while inventory processing periods have lengthened in recent years, receivables collection shows inconsistent patterns. The payables period strategy appears purposeful, allowing for extended payment timings to optimize liquidity. The persistently negative cash conversion cycle reflects effective cash flow conversion, though the narrowing of this advantage in later periods suggests potential areas for operational focus to maintain or improve financial efficiency.