Activity ratios measure how efficiently a company performs day-to-day tasks, such us the collection of receivables and management of inventory.
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- Statement of Comprehensive Income
- Balance Sheet: Assets
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Profitability Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Enterprise Value (EV)
- Dividend Discount Model (DDM)
- Price to Operating Profit (P/OP) since 2007
- Price to Book Value (P/BV) since 2007
- Price to Sales (P/S) since 2007
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Short-term Activity Ratios (Summary)
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
- Inventory Turnover
- The inventory turnover ratio exhibited fluctuation over the observed period. It increased from 13.06 in 2017 to a peak of 18.43 in 2018, then declined gradually to 13.11 by the end of 2021. This suggests an initial improvement in inventory management efficiency, followed by a tapering off towards earlier levels.
- Receivables Turnover
- The receivables turnover ratio increased from 17.35 in 2017 to 19.2 in 2018, indicating faster collection of receivables. Afterward, it steadily declined reaching 12.44 in 2021, reflecting a slowdown in receivable collections and possibly longer credit terms or collection delays.
- Payables Turnover
- Payables turnover rose from 4.72 in 2017 to 6.53 in 2018, indicating quicker payment to suppliers. Thereafter, it declined continuously to 3.4 in 2021, suggesting increased time taken to pay suppliers, which may be a strategy to preserve cash.
- Working Capital Turnover
- Data for working capital turnover is incomplete, with only the 2020 figure reported as 11.57, limiting trend analysis. However, the available figure suggests a relatively high efficiency in utilizing working capital during that year.
- Average Inventory Processing Period
- The average inventory processing period decreased from 28 days in 2017 to 20 days in 2018, then gradually increased to 28 days again by 2021. This mirrors the inventory turnover trend, indicating fluctuating inventory holding times.
- Average Receivable Collection Period
- The average collection period shortened slightly from 21 days in 2017 to 19 days in 2018 but lengthened thereafter to around 29 days by 2021, showing a trend toward more extended credit periods or slower collection.
- Operating Cycle
- The operating cycle, representing the time to convert inventory and receivables into cash, decreased from 49 days in 2017 to 39 days in 2018, then increased steadily to 57 days in 2021. This suggests a longer cash-to-cash cycle over time, potentially indicating reduced operational efficiency.
- Average Payables Payment Period
- The average payment period to suppliers decreased from 77 days in 2017 to 56 days in 2018, then increased significantly to 108 days in 2021. The extended payment period in later years indicates a strategy to delay cash outflows, which could help liquidity but might affect supplier relationships.
- Cash Conversion Cycle
- The cash conversion cycle remained negative throughout the period, indicating that payables are paid after sales receipts. It improved from -28 days in 2017 to -15 days in 2019, then significantly decreased to -51 days in 2021, showing that the company effectively extends its payables period relative to its receivables and inventory turnover, optimizing cash flow management.
Turnover Ratios
Average No. Days
Inventory Turnover
Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
---|---|---|---|---|---|---|
Selected Financial Data (US$ in millions) | ||||||
Cost of operating revenue | ||||||
Inventories | ||||||
Short-term Activity Ratio | ||||||
Inventory turnover1 | ||||||
Benchmarks | ||||||
Inventory Turnover, Competitors2 | ||||||
FedEx Corp. | ||||||
Union Pacific Corp. | ||||||
United Airlines Holdings Inc. | ||||||
United Parcel Service Inc. | ||||||
Inventory Turnover, Sector | ||||||
Transportation | ||||||
Inventory Turnover, Industry | ||||||
Industrials |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Inventory turnover = Cost of operating revenue ÷ Inventories
= ÷ =
2 Click competitor name to see calculations.
The data reveals notable fluctuations across the examined financial metrics over the five-year period ending December 31, 2021.
- Cost of Operating Revenue
- The cost of operating revenue displayed an overall increasing trend from 2017 through 2019, rising from $17,358 million to $19,931 million. However, in 2020, there was a sharp decline to $10,695 million, representing a significant reduction likely linked to extraordinary external factors impacting operational activity. By 2021, the cost rebounded to $14,395 million but remained below the pre-2020 levels.
- Inventories
- Inventories showed variability over the period but generally decreased from $1,329 million in 2017 to $732 million in 2020, before partially recovering to $1,098 million in 2021. This pattern suggests adjustments in inventory management or reduced stock levels during 2020, possibly reflecting operational constraints, with a gradual return to higher inventory holdings in the following year.
- Inventory Turnover Ratio
- The inventory turnover ratio illustrates the efficiency of inventory utilization. It increased from 13.06 in 2017 to a peak of 18.43 in 2018, indicating improved inventory management or higher sales relative to inventory during that period. Subsequently, the ratio declined to 15.93 in 2019 and further to 14.61 in 2020, reflecting a slowdown in turnover potentially aligned with the reduced operating scale. By 2021, the ratio decreased further to 13.11, approaching the initial 2017 level, which may suggest challenges in regaining pre-2020 operational efficiency.
Receivables Turnover
Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
---|---|---|---|---|---|---|
Selected Financial Data (US$ in millions) | ||||||
Operating revenue | ||||||
Accounts receivable, net of an allowance for uncollectible accounts | ||||||
Short-term Activity Ratio | ||||||
Receivables turnover1 | ||||||
Benchmarks | ||||||
Receivables Turnover, Competitors2 | ||||||
FedEx Corp. | ||||||
Uber Technologies Inc. | ||||||
Union Pacific Corp. | ||||||
United Airlines Holdings Inc. | ||||||
United Parcel Service Inc. | ||||||
Receivables Turnover, Sector | ||||||
Transportation | ||||||
Receivables Turnover, Industry | ||||||
Industrials |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Receivables turnover = Operating revenue ÷ Accounts receivable, net of an allowance for uncollectible accounts
= ÷ =
2 Click competitor name to see calculations.
- Operating Revenue
- The operating revenue shows an increasing trend from 2017 through 2019, rising from 41,244 million US dollars in 2017 to 47,007 million in 2019. This upward trajectory indicates growth during these years. However, there is a significant decline in 2020 to 17,095 million, reflecting a sharp downturn likely influenced by external factors. In 2021, the revenue partially recovers to 29,899 million, suggesting a phase of recovery but still below the pre-2020 levels.
- Accounts Receivable, Net
- Accounts receivable net of allowances fluctuates over the period. There is a slight decrease from 2,377 million in 2017 to 2,314 million in 2018, followed by an increase to 2,854 million in 2019. This amount then falls sharply to 1,396 million in 2020, coinciding with the decline in operating revenue, and rises again to 2,404 million in 2021. These movements indicate variability in the company's collections consistent with changes in revenue.
- Receivables Turnover Ratio
- The receivables turnover ratio exhibits a decreasing trend over the analyzed years. Starting at 17.35 in 2017, it increases slightly to 19.2 in 2018 but declines to 16.47 in 2019. The ratio then drops more substantially to 12.25 in 2020 and remains relatively stable at 12.44 in 2021. This trend suggests a lengthening in the collection period, implying that the company is taking more time to collect its receivables, particularly after 2019.
Payables Turnover
Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
---|---|---|---|---|---|---|
Selected Financial Data (US$ in millions) | ||||||
Cost of operating revenue | ||||||
Accounts payable | ||||||
Short-term Activity Ratio | ||||||
Payables turnover1 | ||||||
Benchmarks | ||||||
Payables Turnover, Competitors2 | ||||||
FedEx Corp. | ||||||
Uber Technologies Inc. | ||||||
Union Pacific Corp. | ||||||
United Airlines Holdings Inc. | ||||||
United Parcel Service Inc. | ||||||
Payables Turnover, Sector | ||||||
Transportation | ||||||
Payables Turnover, Industry | ||||||
Industrials |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Payables turnover = Cost of operating revenue ÷ Accounts payable
= ÷ =
2 Click competitor name to see calculations.
- Cost of operating revenue
- The cost of operating revenue exhibited a general upward trend from 2017 through 2019, increasing from 17,358 million USD in 2017 to 19,931 million USD in 2019. In 2020, there was a significant decline to 10,695 million USD, likely reflecting an extraordinary event impacting operations. The cost partially rebounded in 2021, reaching 14,395 million USD, although it remained below the pre-2020 levels.
- Accounts payable
- Accounts payable fluctuated over the observed periods. It decreased from 3,674 million USD in 2017 to 2,976 million USD in 2018, then rose slightly to 3,266 million USD in 2019. There was a decline again in 2020 to 2,840 million USD, followed by a notable increase to 4,240 million USD in 2021, surpassing all previous years.
- Payables turnover ratio
- The payables turnover ratio showed significant variability. Starting at 4.72 in 2017, it increased to a peak of 6.53 in 2018, then declined slightly to 6.1 in 2019. A sharp decrease occurred in 2020 to 3.77, and the ratio further declined to 3.4 in 2021. This downward trend suggests the company was taking longer to pay its suppliers in more recent years, particularly after 2019.
Working Capital Turnover
Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
---|---|---|---|---|---|---|
Selected Financial Data (US$ in millions) | ||||||
Current assets | ||||||
Less: Current liabilities | ||||||
Working capital | ||||||
Operating revenue | ||||||
Short-term Activity Ratio | ||||||
Working capital turnover1 | ||||||
Benchmarks | ||||||
Working Capital Turnover, Competitors2 | ||||||
FedEx Corp. | ||||||
Uber Technologies Inc. | ||||||
Union Pacific Corp. | ||||||
United Airlines Holdings Inc. | ||||||
United Parcel Service Inc. | ||||||
Working Capital Turnover, Sector | ||||||
Transportation | ||||||
Working Capital Turnover, Industry | ||||||
Industrials |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Working capital turnover = Operating revenue ÷ Working capital
= ÷ =
2 Click competitor name to see calculations.
- Working Capital
- The working capital fluctuated significantly over the period under review. It started with a substantial negative value of -10,729 million USD in 2017 and deteriorated further to -12,238 million USD in 2018. A slight improvement was noted in 2019, with a working capital of -11,955 million USD. However, a pronounced positive reversal occurred in 2020, with working capital rising sharply to 1,477 million USD, suggesting an improvement in short-term liquidity and operational funding. The subsequent year saw a regression back into negative territory at -5,026 million USD, indicating challenges in maintaining positive working capital.
- Operating Revenue
- Operating revenue exhibited an overall upward trend from 2017 through 2019, increasing from 41,244 million USD to 47,007 million USD, reflecting steady growth and possibly expanding market operations. A dramatic decline was observed in 2020, when revenue plummeted to 17,095 million USD, a substantial decrease likely tied to external adverse factors affecting operational performance. In 2021, a recovery phase began, with revenue rising to 29,899 million USD, though still not reaching the pre-2020 levels.
- Working Capital Turnover
- The working capital turnover ratio is only available for 2020, where it stood at 11.57. This elevated ratio, combined with the positive working capital in that year, indicates a high level of efficiency in the use of working capital to generate operating revenue during this specific period. The absence of data in other years limits the ability to ascertain trends in this efficiency metric over the full timeline.
Average Inventory Processing Period
Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
---|---|---|---|---|---|---|
Selected Financial Data | ||||||
Inventory turnover | ||||||
Short-term Activity Ratio (no. days) | ||||||
Average inventory processing period1 | ||||||
Benchmarks (no. days) | ||||||
Average Inventory Processing Period, Competitors2 | ||||||
FedEx Corp. | ||||||
Union Pacific Corp. | ||||||
United Airlines Holdings Inc. | ||||||
United Parcel Service Inc. | ||||||
Average Inventory Processing Period, Sector | ||||||
Transportation | ||||||
Average Inventory Processing Period, Industry | ||||||
Industrials |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ =
2 Click competitor name to see calculations.
The analysis of the inventory-related financial metrics over the five-year period reveals notable trends in the company's inventory management efficiency.
- Inventory Turnover Ratio
- The inventory turnover ratio experienced fluctuations, peaking in 2018 at 18.43, which suggests that the company was able to sell and replace its inventory more frequently during that year. Following this peak, turnover declined progressively to 13.11 by the end of 2021, approaching the 2017 level of 13.06. This downward trend after 2018 indicates a reduction in the rate at which inventory was cycled through the business.
- Average Inventory Processing Period (Days)
- This metric, which is inversely related to inventory turnover, demonstrates a corresponding pattern. Starting at 28 days in 2017, the period shortened significantly in 2018 to 20 days, reflecting improved inventory efficiency. Subsequently, the days increased annually, rising back to 28 days in 2021. This increase suggests that the company took longer to process inventory, aligning with the lower turnover rates observed in recent years.
Overall, the data indicate that inventory management was most efficient in 2018, with the highest turnover and shortest processing period. However, a gradual decline in efficiency is evident from 2019 through 2021, as turnover ratios decreased and inventory processing time lengthened, potentially signaling shifts in operational dynamics, market demand, or supply chain factors impacting inventory flow.
Average Receivable Collection Period
Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
---|---|---|---|---|---|---|
Selected Financial Data | ||||||
Receivables turnover | ||||||
Short-term Activity Ratio (no. days) | ||||||
Average receivable collection period1 | ||||||
Benchmarks (no. days) | ||||||
Average Receivable Collection Period, Competitors2 | ||||||
FedEx Corp. | ||||||
Uber Technologies Inc. | ||||||
Union Pacific Corp. | ||||||
United Airlines Holdings Inc. | ||||||
United Parcel Service Inc. | ||||||
Average Receivable Collection Period, Sector | ||||||
Transportation | ||||||
Average Receivable Collection Period, Industry | ||||||
Industrials |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ =
2 Click competitor name to see calculations.
- Receivables Turnover
- The receivables turnover ratio exhibited variability over the analyzed period. It initially increased from 17.35 in 2017 to a peak of 19.2 in 2018, indicating improved efficiency in collecting receivables during that year. However, a declining trend followed, with the ratio decreasing to 16.47 in 2019 and further dropping sharply to 12.25 in 2020. The ratio showed a slight recovery in 2021, rising marginally to 12.44, but remained substantially below the earlier years. This suggests a reduction in the effectiveness of receivables collection, potentially reflecting longer collection times or weaker credit management in the later years.
- Average Receivable Collection Period
- The average receivable collection period, expressed in days, closely aligns with the trend observed in the receivables turnover ratio, as expected. It decreased from 21 days in 2017 to 19 days in 2018, confirming improved collection speed. Subsequently, the collection period lengthened to 22 days in 2019 and then expanded more significantly to 30 days in 2020. A slight improvement was noted in 2021 with a reduction to 29 days, though the period remained elevated compared to the early years. This lengthening indicates that, over time, it took the company longer to collect receivables, which may affect liquidity and cash flow.
- Overall Analysis
- The data reveals a shift toward less efficient receivables management following 2018, with the most pronounced deterioration occurring in 2020. The observed trends may be influenced by external factors impacting collections, such as economic conditions or operational challenges. Although a minor improvement is evident in 2021, the financial indicators have not returned to their previous higher efficiency levels. Attention to receivables policies and credit risk management could be warranted to enhance cash conversion cycles.
Operating Cycle
Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
---|---|---|---|---|---|---|
Selected Financial Data | ||||||
Average inventory processing period | ||||||
Average receivable collection period | ||||||
Short-term Activity Ratio | ||||||
Operating cycle1 | ||||||
Benchmarks | ||||||
Operating Cycle, Competitors2 | ||||||
FedEx Corp. | ||||||
Union Pacific Corp. | ||||||
United Airlines Holdings Inc. | ||||||
United Parcel Service Inc. | ||||||
Operating Cycle, Sector | ||||||
Transportation | ||||||
Operating Cycle, Industry | ||||||
Industrials |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Operating cycle = Average inventory processing period + Average receivable collection period
= + =
2 Click competitor name to see calculations.
The data reveals notable fluctuations in the company's efficiency metrics over the observed period.
- Average inventory processing period
- The average inventory processing period initially decreased from 28 days in 2017 to 20 days in 2018, indicating an improvement in inventory turnover. However, this trend reversed in subsequent years, rising to 23 days in 2019, 25 days in 2020, and returning to 28 days in 2021, suggesting a decline back to initial processing speeds.
- Average receivable collection period
- This period showed relative stability in the earlier years, at 21 days in 2017 and 19 days in 2018, followed by a slight increase to 22 days in 2019. However, a significant increase occurred in 2020, rising to 30 days, and although it slightly decreased to 29 days in 2021, it remained markedly higher than prior years. This indicates growing delays in the collection of receivables during and after the 2020 period.
- Operating cycle
- The operating cycle, which combines inventory processing and receivable collection periods, followed a similar pattern. It decreased from 49 days in 2017 to 39 days in 2018, implying improved operational efficiency. Thereafter, it increased progressively to 45 days in 2019, 55 days in 2020, and reached 57 days in 2021, reflecting a lengthening operating cycle primarily influenced by extended receivable collection times and lengthening inventory periods.
Overall, while operational efficiency showed initial improvement in 2018, subsequent years exhibited regression, with the operating cycle lengthening. This trend suggests potential challenges in inventory management and accounts receivable collection, particularly noticeable during and after 2020.
Average Payables Payment Period
Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
---|---|---|---|---|---|---|
Selected Financial Data | ||||||
Payables turnover | ||||||
Short-term Activity Ratio (no. days) | ||||||
Average payables payment period1 | ||||||
Benchmarks (no. days) | ||||||
Average Payables Payment Period, Competitors2 | ||||||
FedEx Corp. | ||||||
Uber Technologies Inc. | ||||||
Union Pacific Corp. | ||||||
United Airlines Holdings Inc. | ||||||
United Parcel Service Inc. | ||||||
Average Payables Payment Period, Sector | ||||||
Transportation | ||||||
Average Payables Payment Period, Industry | ||||||
Industrials |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ =
2 Click competitor name to see calculations.
- Payables Turnover
- The payables turnover ratio exhibited an initial increase from 4.72 in 2017 to a peak of 6.53 in 2018, followed by a slight decline to 6.1 in 2019. Subsequently, the ratio declined substantially to 3.77 in 2020 and further to 3.4 in 2021. This trend indicates that the company was paying off its accounts payable more quickly in 2018 and 2019 compared to other years, but the payment rate slowed markedly starting in 2020 and continued to slow in 2021.
- Average Payables Payment Period
- The average payables payment period decreased from 77 days in 2017 to 56 days in 2018, indicating faster payments. The payment period then slightly lengthened to 60 days in 2019. However, there was a significant increase in the payment period in 2020, reaching 97 days, and this upward trend continued in 2021, with the period extending to 108 days. This suggests that the company took longer to settle its payables during these later years, particularly during and after 2020.
- Combined Analysis
- There is an inverse relationship between payables turnover and average payables payment period, as expected, with turnover decreasing as the payment period lengthens. The data suggests that starting in 2020, the company extended its payment terms or delayed payments significantly, which may reflect changes in cash management strategies or external business conditions affecting liquidity or supplier agreements. The changes from 2017 through 2019 reflect a period of relatively faster payment cycles, whereas 2020 and 2021 mark a shift to longer payment durations.
Cash Conversion Cycle
Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
---|---|---|---|---|---|---|
Selected Financial Data | ||||||
Average inventory processing period | ||||||
Average receivable collection period | ||||||
Average payables payment period | ||||||
Short-term Activity Ratio | ||||||
Cash conversion cycle1 | ||||||
Benchmarks | ||||||
Cash Conversion Cycle, Competitors2 | ||||||
FedEx Corp. | ||||||
Union Pacific Corp. | ||||||
United Airlines Holdings Inc. | ||||||
United Parcel Service Inc. | ||||||
Cash Conversion Cycle, Sector | ||||||
Transportation | ||||||
Cash Conversion Cycle, Industry | ||||||
Industrials |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Cash conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= + – =
2 Click competitor name to see calculations.
- Average Inventory Processing Period
- The average inventory processing period exhibited fluctuations over the observed periods. It decreased from 28 days in 2017 to a low of 20 days in 2018, indicating improved inventory turnover during that year. Subsequently, the period increased slightly to 23 days in 2019 and continued to rise to 25 days in 2020, returning to 28 days in 2021, the same level as in 2017. This trend suggests a temporary efficiency improvement in inventory management in 2018, followed by a gradual return to the initial inventory processing duration.
- Average Receivable Collection Period
- The average receivable collection period showed a decreasing trend from 21 days in 2017 to 19 days in 2018, representing an improvement in receivables turnover. However, it increased to 22 days in 2019 and further escalated to 30 days in 2020, before slightly declining to 29 days in 2021. The substantial increase during the 2020-2021 period could indicate challenges in collecting receivables, potentially as a consequence of external disruptions affecting customer payment behavior.
- Average Payables Payment Period
- The average payables payment period decreased significantly from 77 days in 2017 to 56 days in 2018, reflecting quicker payments to suppliers. This period then rose modestly to 60 days in 2019. However, a notable increase occurred in 2020 and 2021, with the period extending dramatically to 97 days and 108 days respectively. This escalation indicates a strategic or necessity-driven delay in payments to creditors, effectively extending the company's time to settle payables.
- Cash Conversion Cycle
- The cash conversion cycle remained negative throughout the examined years, denoting that the company was able to convert its investments in inventory and other resources into cash before it had to pay its suppliers. This cycle improved slightly from -28 days in 2017 to -17 days in 2018 and further to -15 days in 2019, indicating a contraction in cash flow timing. However, there was a sharp improvement in 2020 and 2021, with the cycle reaching -42 and -51 days respectively. This change suggests a more efficient management of working capital, largely driven by the extension in payables payment period coupled with manageable inventory and receivables durations.