Dell Technologies Inc. (NYSE:DELL)

Inventory Turnover

The inventory turnover ratio shows notable fluctuations over the observed periods. Initially high at approximately 19.27 in early 2020, it declined steadily through 2021, reaching a low near 13.11 days in late 2021. A recovery phase is evident in 2022 with ratios climbing back above 16, peaking around 20.66 in early 2024 before declining again to approximately 10.16 by mid-2025. This pattern suggests periods of both increased efficiency in inventory management and subsequent slowdowns.

Receivables Turnover

This ratio demonstrates a generally positive trend with some variability. Starting around 7.38 in early 2020, it increased with intermittent dips but maintained an upward trajectory, peaking above 10.4 by 2023-2024. The recovery from dips indicates improving collection efficiency, with the most recent data maintaining above 9, reflecting relatively effective management of receivables.

Payables Turnover

Payables turnover ratio fluctuates between 2.8 and 4.3 times over the period. From levels near 3.15 initially, it rose to 4.28 in early 2023 before declining to near 3 by mid-2025. The increase around 2023 suggests a shorter time frame to pay suppliers during that period, with a subsequent increase in payment period reflected in reduced turnover later.

Average Inventory Processing Period

The average days to process inventory exhibits a general upward trend from approximately 19 days in early 2020, peaking at around 28 days in 2021, followed by periods of decline and increase again to roughly 36 days by mid-2025. This trend indicates growing inventory holding times, potentially implying slower movement or accumulation of inventory in later periods.

Average Receivable Collection Period

The days required to collect receivables show notable variability, fluctuating between 35 and 52 days with a slight decreasing pattern overall. Early periods show higher values around 49-50 days, decreasing to about 39 days in late 2024 and mid-2025, suggesting improvement in the speed of collecting outstanding customer payments.

Operating Cycle

The operating cycle in days moves generally between mid-50s to mid-70s. It peaks at approximately 79 days in late 2020 and early 2021, before declining to the mid-50s during 2023 and fluctuating near 70 days toward mid-2025. This reflects variability in operational efficiency, with some improvement during the 2023 period followed by increased cycle times.

Average Payables Payment Period

The time taken to pay suppliers generally trends downward from very high levels around 116 days early in 2020 down to approximately 85 days in early 2023, before rising again over 100 days in 2024 and into mid-2025. The decreasing trend suggests improved payment speed to suppliers initially, but the subsequent increase indicates a lengthening of payment terms or delays in supplier payments toward the end of the period.

Cash Conversion Cycle

The cash conversion cycle shows consistently negative values throughout, ranging from approximately -18 days to -53 days. This strongly negative cycle indicates that the company continues to receive payments from customers and convert inventory back to cash faster than it pays its suppliers, effectively using supplier financing. The trend toward more negative values in some periods (e.g., -53 days) suggests strengthening cash flow management efficiency, although fluctuations reflect variability in working capital dynamics.

Cost of Net Revenue

The cost of net revenue exhibited fluctuations over the analyzed periods, starting at approximately 15,111 million USD and reaching a peak of 22,374 million USD in early 2022. Following this peak, a general declining trend is observed through to mid-2024, where values consistently decreased from roughly 19,283 million USD down to 18,105 million USD. This pattern indicates periods of increased production or operational expenses followed by a reduction phase, possibly reflecting adjustments in sales volume, pricing strategies, or operational efficiencies.

Inventories

Inventory levels showed a marked increase from approximately 3,360 million USD in early 2019 to a high of about 7,415 million USD by mid-2025. Notably, inventory growth was steady, with significant jumps observed in the quarters around late 2021 to early 2025. This steady build-up in inventories could suggest either anticipation of higher demand, slower sales requiring stock accumulation, or supply chain considerations leading to increased stockpiling.

Inventory Turnover

Inventory turnover ratios presented a declining trend over the period. The ratio was relatively high initially, near 19.27, but gradually decreased to around 10.16 by mid-2025. This decline suggests that the company was turning over its inventory less frequently, implying slower movement of inventory relative to sales. Such a trend could be a signal of overstocking, decreased demand, or inefficiencies in inventory management.

Overall Analysis

The simultaneous increase in inventory levels alongside a declining inventory turnover ratio highlights potential challenges in inventory management or changes in market conditions. Despite fluctuations in cost of net revenue, which showed episodes of both growth and reduction, the persistence of growing inventories coupled with slower turnover suggests that stock was accumulating faster than it was being sold. This may impact the company's working capital and could necessitate strategic review to optimize inventory levels and improve cash flow efficiency.

Net Revenue

Net revenue demonstrated a generally fluctuating pattern over the observed periods, ranging between approximately $21.9 billion and $28.0 billion. Initial growth stages were observed from May 2019 ($21.9 billion) to January 2020 ($24.0 billion), followed by a decline through mid-2020. A notable increase occurred between July 2020 and January 2022, peaking at nearly $28.0 billion in January 2022. Subsequent periods show a decline and stabilization around $23.3 to $25.0 billion, with some quarters reflecting slight decreases towards the end of the series in early 2025.

Accounts Receivable, Net of Allowance

The accounts receivable figures exhibited variability similar to the net revenue trend. Starting at about $10.5 billion in May 2019, the value increased gradually to a peak near $14.2 billion in October 2021. Following this peak, accounts receivable decreased with some volatility, reaching approximately $9.8 billion by early 2025. The trend suggests fluctuations that could correlate to changes in sales volumes and credit management practices over time.

Receivables Turnover

Receivables turnover ratios, available from January 2020 onward, indicate varying efficiency in managing receivables. Ratios generally ranged from around 7.0 to 10.5 times. There was an upward trend from 7.38 in early 2020 to a peak of 10.48 in May 2023, suggesting an improvement in collections efficiency during this interval. However, some fluctuations are present later, with the turnover decreasing to values around 8.0 to 9.9 towards the end of the observed period. Overall, the data suggest ongoing efforts in optimizing accounts receivable turnover, with periods of both improvement and regression.

The analysis of the quarterly financial data reveals several notable trends and fluctuations in the cost of net revenue, accounts payable, and payables turnover over the given periods.

Cost of Net Revenue

The cost of net revenue demonstrates a degree of volatility throughout the timeline. Initially, it hovered around the 15,000 to 16,000 million US dollars range, with some increases and decreases observed. There was a significant increase starting around January 2021, peaking at over 22,000 million US dollars by January 2022. Subsequent quarters show a gradual decline with intermittent rises, ending with values close to 18,000 to 19,000 million US dollars in the most recent periods. This suggests some fluctuations likely due to operational performance or market conditions affecting cost management.

Accounts Payable

Accounts payable fluctuates alongside the cost of net revenue but trends higher overall. Starting near 18,097 million US dollars in early 2019, it rose steadily, peaking at approximately 27,000 million US dollars around late 2021. Thereafter, it witnessed a decline followed by another rise, culminating in a notably high value of 25,349 million US dollars by May 2025. The elevated levels in later periods might suggest increased credit purchases or extended payment terms.

Payables Turnover Ratio

The payables turnover ratio displays variability over time, with initial values around 3.15 to 3.43 in early 2020. A gradual decline is observed through mid to late 2021, with ratios falling close to 2.8, indicating slower payment cycles or increased payable balances relative to purchases. Subsequently, this ratio rose again, reaching peaks of 4.28 and 4.22 in early 2023, implying faster payment cycles or reduced payables relative to net purchases. The later periods show a reduction to levels around 3.0, indicating a normalization of payment patterns.

Overall, the data reflects periods of increased operational activity and cost fluctuations, alongside dynamic changes in accounts payable balances and payment efficiency. The peak in cost of net revenue and accounts payable during 2021 corresponds with a lower payables turnover ratio, which may indicate tighter cash flow management or altered supplier payment terms during that time. Subsequent improvements in the turnover ratio suggest adjustments toward more efficient payments. The recent trends point to stabilized or moderately increasing payable levels with consistent payment turnover ratios near historical averages.

Working Capital

The working capital figures demonstrate significant fluctuations throughout the time periods observed. Beginning at -9,824 million USD in May 2019, the working capital deteriorated further, reaching a more negative value of -15,588 million USD by January 2020. Thereafter, working capital showed some recovery, improving to -9,080 million USD in May 2020, but generally continued to fluctuate in negative territory. From mid-2020 onwards, working capital remained persistently negative, generally ranging between approximately -9,000 million USD and -14,500 million USD. The most recent data points from early 2025 indicate some improvement, with working capital rising to -7,497 million USD in May 2025, the least negative value in the dataset. Overall, the trend suggests consistent negative working capital, which may indicate liquidity constraints or aggressive management of current liabilities relative to current assets, but also a mild improvement toward the latest period.

Net Revenue

Net revenue over the periods shown presents a pattern of variability with an overall upward trend punctuated by intermittent declines. Starting at 21,908 million USD in May 2019, net revenue experienced gradual growth, peaking at 27,992 million USD in January 2022. Following this peak, revenue showed some degree of volatility with decreases and recoveries, including a notable drop to 20,922 million USD in August 2023. Despite this variability, revenues generally stayed above 22,000 million USD in most periods after the early timestamps. The net revenue settles to 23,378 million USD by May 2025, which is above the initial values but below the peak level observed in early 2022. This indicates moderate growth in revenue over the longer term with cyclical fluctuations likely driven by market, seasonal, or operational factors.

Working Capital Turnover

The working capital turnover ratio is not provided for any period. The absence of this ratio limits the ability to directly assess the efficiency with which the company is using its working capital to generate sales. Given the consistently negative working capital values, calculation and interpretation of this ratio may be complex or non-standard.

Summary of Trends and Insights

The company’s working capital remains negative throughout the entire observed timeframe, indicating liabilities exceed current assets consistently. However, a partial improvement is noticeable in the latest periods, which may reflect better current asset management or reductions in current liabilities. Meanwhile, net revenue experienced an overall increase with peaks and troughs, suggesting some sensitivity to market or operational conditions but generally maintaining growth over the medium term. The combination of negative working capital and relatively stable or growing revenues may suggest a business model leveraging suppliers or other short-term liabilities to sustain operations and growth. The missing working capital turnover ratio data means a direct assessment of working capital efficiency is unavailable; nevertheless, the available data imply the company manages to sustain revenue levels despite negative liquidity metrics. This scenario could warrant further analysis into cash flow and other liquidity measurements to fully understand the financial health and operational efficiency.

Inventory Turnover Ratio

The inventory turnover ratio shows a fluctuating trend over the reported periods. Starting from a high point of 19.27, the ratio experienced a general decline, reaching a low of 10.16 by May 2025. Intermittent increases are observed, for example, reaching levels of 20.66 in February 2024 before declining again. This decline suggests a gradual reduction in the frequency with which inventory is sold and replaced during these periods.

Average Inventory Processing Period

The average inventory processing period, measured in days, exhibits an inverse trend relative to the inventory turnover ratio. The processing period increases from an initial 19 days to a peak of 36 days by May 2025. This indicates that the company has been taking progressively longer to process inventory over time.

Relationship between Inventory Turnover and Processing Period

The data reveals an expected inverse relationship between inventory turnover and average processing period. As the turnover ratio decreases, the processing period increases, suggesting slower inventory movement. This pattern implies potential changes in inventory management efficiency, demand fluctuations, or supply chain factors affecting stock turnover.

Recent Trends and Implications

In the most recent quarters, a notable decline in inventory turnover combined with an increase in processing days may indicate challenges in inventory clearance or shifts in market demand. The extended inventory processing period could impact liquidity and storage costs, necessitating closer scrutiny and possible strategic adjustments to optimize inventory handling.

Receivables Turnover

The receivables turnover ratio exhibits fluctuations over the observed periods, generally ranging between approximately 7.0 and 10.5. Starting from a lower bound around 7.38 in early 2020 quarters, the ratio improves notably, reaching peaks such as 10.33 in the first quarter of 2023 and 10.48 in early 2024. These peaks indicate periods where the company has been more effective in collecting its receivables. However, intermittent declines are also apparent, such as the decrease to around 7.01 in the first quarter of 2021, suggesting variability in the efficiency of accounts receivable management. Despite these fluctuations, there is a mild upward trend in the receivables turnover over the timeframe, indicative of improving collection efficiency on average.

Average Receivable Collection Period

Conversely, the average receivable collection period reflects an inverse pattern relative to the turnover ratio, as expected. The number of days ranges from approximately 35 to 52 days, starting near 49 days and demonstrating a decreasing trend over time, with the shortest periods observed around mid-2023 (35 days) and early 2024 (35–37 days). These declines correspond to the periods of high receivables turnover, evidencing faster collection cycles. Some increases are also noted—for instance, around early 2021 with collection periods extending beyond 50 days—likely accompanying the ratio declines. Overall, the trend suggests a gradual improvement in the speed of receivables collection, reflecting enhanced cash flow management.

Insights and Implications

The inverse relationship between the receivables turnover ratio and the average collection period is consistent throughout the analyzed periods, validating the data's coherence. The slight upward trend in turnover, coupled with the reduction in collection days, implies strengthening in the company’s credit policies or collection processes. Periodic fluctuations may be attributed to seasonal sales variations, changes in customer payment behavior, or adjustments in credit terms. These metrics collectively suggest increasing efficiency in receivables management which can positively impact cash flow and working capital utilization.

Average Inventory Processing Period

The average inventory processing period shows a general increasing trend over the analyzed quarters. Starting at 19 days in early 2020, it increased steadily, reaching peaks of 27 and 28 days around late 2021 and early 2022. Following this, there was a period of decline to 18 days by mid-2023. However, toward the end of the period analyzed, the inventory processing period rose sharply again, reaching 36 days by mid-2025. This increasing trend in inventory days could suggest slower inventory turnover in recent periods.

Average Receivable Collection Period

The receivable collection period exhibits notable volatility over the quarters. It started near 49 days in early 2020, fluctuated between the low 40s and low 50s through mid-2022, indicating some inconsistency in collection efficiency. From early 2023, a downward trend is observable, with collection days decreasing to as low as 35 days by mid-2023. However, subsequent quarters show some rebound and again fluctuating between 37 and 45 days up to mid-2025. Overall, despite fluctuations, the latest data suggests modestly improved receivable turnover compared to the initial quarters.

Operating Cycle

The operating cycle, which combines inventory processing and receivable collection periods, generally mirrors the trends observed in both components. It began around 68 days in early 2020 and rose to peak at 79 days by late 2021, indicating longer working capital commitment. After this peak, the cycle shortened significantly to around 54 days by early 2023, reflecting improved working capital efficiency. However, the period from 2023 onward exhibits an upward movement again, reaching 73 days by mid-2025. This suggests a recent reversal in working capital efficiency gains and potential operational challenges.

Summary of Insights

The data reveals an overall increase in the inventory processing period, implying inventory is held longer in recent quarters. Simultaneously, the receivable collection period remains somewhat volatile but shows a general slight improvement in recent periods. The operating cycle fluctuations indicate periods of both improvement and deterioration in working capital management, with recent quarters suggesting increased days outstanding. This trend may impact cash flow and operational liquidity if not addressed.

The payables turnover ratio exhibits a fluctuating pattern over the analyzed periods with an overall upward trend from the early quarters to the more recent ones. Initially, the ratio increases from 3.15 to 3.67, peaking at 4.28 in one of the later quarters, indicating a potential improvement in the company's efficiency in paying off its suppliers. However, this is followed by a gradual decline and some variability, ending at 2.97 in the last reported period. This suggests some inconsistency in payables management or changes in supplier credit terms over time.

Correspondingly, the average payables payment period, measured in days, shows an inverse relationship with the payables turnover ratio, as expected. Starting from 116 days, the period shortens significantly to a low of 85 days, reflecting quicker payments to suppliers. This could imply improved liquidity or efforts to optimize working capital. Nevertheless, from this trough, the payment period lengthens again to about 123 days by the end of the dataset, indicating slower payments or extended credit terms. The fluctuations in the payment period align with the movements observed in the payables turnover ratio, confirming the inverse dynamic between these two metrics.

Payables Turnover Ratio

- Demonstrates variation with an initial rising trend followed by a period of decline and volatility.

- The highest recorded value is 4.28, signifying the most rapid turnover period within the dataset.

- The ratio ends at 2.97, lower than many previous periods, signaling possible slower settlement of payables or changes in supplier relations.

Average Payables Payment Period

- Displays an inverse pattern relative to the turnover ratio.

- Initially decreases from 116 days to a minimum of 85 days, indicating faster payment cycles.

- Subsequently increases back to 123 days, suggesting a lengthening of payment terms or delays.

- Variability over time may reflect shifts in company payment policies or external factors affecting cash flow management.

Inventory Processing Period

The average inventory processing period shows a general upward trend over the analyzed quarters. Starting from 19 days in early 2020, it reaches a peak of 36 days by May 2025. There are fluctuations, with periods of slight decline around mid-2023, but the overall pattern indicates that inventory is being held longer before processing as time progresses.

Receivable Collection Period

The average receivable collection period fluctuates between 35 and 52 days throughout the periods. It begins around the mid-40s in 2020, experiences some peaks near 50 days, particularly in early 2021 and late 2024, but also dips as low as 35 days in mid-2023 and again towards early 2024. This pattern suggests variability in the efficiency of collecting receivables, with no clear long-term upward or downward trend.

Payables Payment Period

The average payables payment period exhibits a generally decreasing trend from a high point of 130 days in early 2021 to lower values near 85 days by early 2023. However, subsequently, the period fluctuates around 100-123 days towards 2024 and 2025, indicating some inconsistency but a tendency to maintain relatively extended payment periods to suppliers over time.

Cash Conversion Cycle

The cash conversion cycle remains negative throughout the observed quarters, ranging approximately from -18 days to -54 days. The negative values indicate that the company collects cash from sales faster than it disburses cash to suppliers. Notably, the cycle deepens to about -54 days in mid-2021 and maintains a similarly strong negative position with some fluctuations through 2024 and early 2025. This suggests effective working capital management by accelerating receivables and/or extending payables.