Analysis of Short-term (Operating) Activity Ratios
Quarterly Data
Activity ratios measure how efficiently a company performs day-to-day tasks, such us the collection of receivables and management of inventory.
Short-term Activity Ratios (Summary)
Delta Air Lines Inc., short-term (operating) activity ratios (quarterly data)
Based on: 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
- Inventory Turnover
- The inventory turnover ratio exhibited fluctuations over the observed periods, initially increasing to a peak around the end of 2018 and early 2019, followed by volatility throughout 2020 and 2021, and a general declining trend into mid-2022. The ratio moved from highs above 18 in early periods to below 11 by mid-2022, indicating a slowdown in the frequency of inventory turnover.
- Receivables Turnover
- This ratio demonstrated variability, with relatively strong performance until early 2020, peaking notably in mid-2020. Subsequently, the ratio declined significantly through 2021, suggesting slower collection of receivables, before showing signs of recovery in 2022.
- Payables Turnover
- The payables turnover ratio maintained moderate fluctuations but exhibited a noticeable decline beginning in late 2019 and continuing through 2021, indicating a lengthening in payment periods to suppliers. The recovery by mid-2022 remains incomplete compared to earlier levels.
- Working Capital Turnover
- Data on working capital turnover was only available intermittently. The available data point in 2020 showed a moderate level of turnover, followed by a substantial increase in mid-2020, suggesting improved efficiency in using working capital to generate sales during that period.
- Average Inventory Processing Period
- The average inventory processing period showed variability inversely related to inventory turnover, with days decreasing during high turnover periods and increasing again in 2021 and 2022. The gradual lengthening from low teens back toward the 30-day range indicates slower inventory processing.
- Average Receivable Collection Period
- The receivable collection period increased from 2018 into 2021, peaking drastically in early 2021, implying slower collection of revenue from customers. This trend reversed moderately thereafter, with shorter collection periods reported into 2022.
- Operating Cycle
- The operating cycle, representing the sum of inventory and receivables periods, followed a similar pattern of expansion into 2021, reaching a peak near 86 days, before contracting again in 2022. This indicates a lengthening and then shortening of the time to convert inventory and receivables into cash.
- Average Payables Payment Period
- The payables payment period lengthened steadily from 2018 onwards, peaking significantly in 2021 at over 130 days, demonstrating a strategy or necessity to extend payment terms to suppliers. A slight reduction occurred in 2022 but remained elevated compared to previous years.
- Cash Conversion Cycle
- The cash conversion cycle remained negative throughout the period, reflecting a scenario where payables deferral exceeds the sum of inventory and receivable periods. The cycle lengthened further into negative territory in 2020 and 2021, reaching around -53 days, indicating extended use of supplier credit for financing operations. This trend softened marginally in 2022.
Turnover Ratios
Average No. Days
Inventory Turnover
Delta Air Lines Inc., inventory turnover calculation (quarterly data)
| Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||
| Cost of operating revenue | 6,106) | 4,702) | 4,036) | 3,927) | 3,486) | 2,946) | 2,416) | 2,024) | 1,790) | 4,465) | 4,839) | 5,163) | 5,158) | 4,771) | 4,847) | 5,183) | 4,993) | 4,419) | ||||||
| Fuel, expendable parts and supplies inventories, net of allowance for obsolescence | 1,734) | 1,292) | 1,098) | 1,012) | 1,005) | 828) | 732) | 746) | 847) | 974) | 1,251) | 1,072) | 1,083) | 1,071) | 1,055) | 1,170) | 1,589) | 1,146) | ||||||
| Short-term Activity Ratio | ||||||||||||||||||||||||
| Inventory turnover1 | 10.83 | 12.50 | 13.11 | 12.62 | 10.82 | 11.08 | 14.61 | 17.58 | 19.19 | 20.15 | 15.93 | 18.60 | 18.43 | 18.48 | 18.43 | 16.30 | 11.60 | 15.46 | ||||||
| Benchmarks | ||||||||||||||||||||||||
| Inventory Turnover, Competitors2 | ||||||||||||||||||||||||
| FedEx Corp. | 150.76 | 150.16 | 143.03 | 135.08 | 127.31 | 120.56 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Union Pacific Corp. | 29.66 | 31.22 | 35.11 | 31.95 | 29.89 | 29.29 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| United Airlines Holdings Inc. | 30.89 | 27.13 | 25.06 | 20.79 | 16.00 | 11.54 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
1 Q2 2022 Calculation
Inventory turnover
= (Cost of operating revenueQ2 2022
+ Cost of operating revenueQ1 2022
+ Cost of operating revenueQ4 2021
+ Cost of operating revenueQ3 2021)
÷ Fuel, expendable parts and supplies inventories, net of allowance for obsolescence
= (6,106 + 4,702 + 4,036 + 3,927)
÷ 1,734 = 10.83
2 Click competitor name to see calculations.
- Cost of Operating Revenue
- Over the reported periods, the cost of operating revenue exhibited notable fluctuations. Initially, from early 2018 to the end of 2019, costs generally remained within the range of approximately $4.7 billion to $5.2 billion per quarter, showing slight seasonal variations. A significant decline occurred beginning in the first quarter of 2020, with costs dropping sharply to a low point of around $1.79 billion in the second quarter of 2020, likely reflecting the impact of external disruptions during that time. Subsequently, a steady recovery trend is observed through 2021 and into mid-2022, with costs rising consistently each quarter, ultimately surpassing pre-2020 levels by reaching $6.1 billion in the second quarter of 2022.
- Fuel, Expendable Parts and Supplies Inventories, Net of Allowance for Obsolescence
- The inventory values for fuel and related supplies show considerable volatility during the period under review. Starting in 2018 with values near $1.1 billion, inventories rose to nearly $1.6 billion mid-year but showed some decline towards the end of 2018. The level stabilizes somewhat throughout 2019 with slight increments. A drop occurs again in the first half of 2020, coinciding with the broader downturn in operations, reaching approximately $732 million by the end of that year. In 2021 and continuing into 2022, the inventories rebound strongly, culminating at approximately $1.73 billion by mid-2022, indicating replenishment and possibly increased operational activity or higher fuel holdings.
- Inventory Turnover Ratio
- Inventory turnover experienced pronounced variations from 2018 to 2022. Early 2018 saw relatively high turnover ratios between approximately 15 and 18, reflecting efficient inventory management. This efficiency peaked around the end of 2018 and into the first quarter of 2019. Thereafter, turnover ratios fluctuated moderately through 2019, then increased markedly in early 2020, reaching a peak of over 20 in the first quarter, perhaps due to reduced inventory in response to the crisis conditions prevailing at that time. However, inventory turnover gradually declined through late 2020 and much of 2021, reaching a low near 10.8 by mid-2022. This downward trend suggests a slower movement of inventories relative to cost of sales, likely attributable to increased inventory levels or reduced operating demand as operations recovered.
Receivables Turnover
Delta Air Lines Inc., receivables turnover calculation (quarterly data)
| Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||
| Operating revenue | 13,824) | 9,348) | 9,469) | 9,154) | 7,126) | 4,150) | 3,973) | 3,062) | 1,468) | 8,592) | 11,439) | 12,560) | 12,536) | 10,472) | 10,742) | 11,953) | 11,775) | 9,968) | ||||||
| Accounts receivable, net of an allowance for uncollectible accounts | 3,093) | 3,039) | 2,404) | 2,183) | 2,258) | 1,837) | 1,396) | 1,503) | 1,375) | 2,280) | 2,854) | 2,836) | 2,844) | 3,154) | 2,314) | 2,517) | 2,427) | 2,568) | ||||||
| Short-term Activity Ratio | ||||||||||||||||||||||||
| Receivables turnover1 | 13.51 | 11.55 | 12.44 | 11.18 | 8.11 | 6.89 | 12.25 | 16.34 | 24.77 | 19.79 | 16.47 | 16.33 | 16.07 | 14.25 | 19.20 | 17.46 | 17.74 | 16.38 | ||||||
| Benchmarks | ||||||||||||||||||||||||
| Receivables Turnover, Competitors2 | ||||||||||||||||||||||||
| FedEx Corp. | 7.34 | 7.79 | 6.96 | 6.86 | 6.55 | 6.80 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Uber Technologies Inc. | 10.39 | 8.65 | 7.16 | 11.13 | 10.67 | 10.04 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Union Pacific Corp. | 11.42 | 11.57 | 12.66 | 12.63 | 12.34 | 11.99 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| United Airlines Holdings Inc. | 16.07 | 14.05 | 14.81 | 11.62 | 8.14 | 7.63 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| United Parcel Service Inc. | 8.78 | 8.82 | 7.76 | 9.01 | 9.12 | 8.84 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
1 Q2 2022 Calculation
Receivables turnover
= (Operating revenueQ2 2022
+ Operating revenueQ1 2022
+ Operating revenueQ4 2021
+ Operating revenueQ3 2021)
÷ Accounts receivable, net of an allowance for uncollectible accounts
= (13,824 + 9,348 + 9,469 + 9,154)
÷ 3,093 = 13.51
2 Click competitor name to see calculations.
- Operating Revenue
- The operating revenue experienced fluctuations over the observed periods. Initially, from March 2018 to December 2019, revenue showed a generally upward trend, rising from approximately 9,968 million USD to around 11,439 million USD. However, a significant decline occurred beginning in the first quarter of 2020, with revenue dropping sharply to a low of 1,468 million USD in June 2020, coinciding with the global downturn in the aviation sector. Following this nadir, there was a gradual recovery through 2021 and into mid-2022, reaching 13,824 million USD by June 2022, which suggests a substantial rebound surpassing pre-pandemic levels.
- Accounts Receivable, Net
- The net accounts receivable values varied somewhat but showed relative stability in the earlier periods, fluctuating between approximately 2,314 million USD and 3,154 million USD prior to 2020. With the onset of the pandemic in early 2020, the net receivables decreased noticeably to a low of 1,375 million USD in June 2020, in line with reduced revenue. Thereafter, receivables gradually increased again, reaching approximately 3,093 million USD by mid-2022, indicating a recovery in credit sales or collections consistent with rising revenues.
- Receivables Turnover Ratio
- The receivables turnover ratio generally reflects the efficiency of the company's credit and collection processes. From 2018 through 2019, the ratio fluctuated mostly between 14 and 19 times, indicating consistent collection efficiency. A spike to 24.77 times occurred in June 2020, possibly reflecting tightened credit policies or faster collections during the period of reduced sales. Subsequently, turnover declined sharply to 6.89 times by March 2021, suggesting slower collections or changes in credit terms during the recovery phase. The following quarters saw a gradual improvement in turnover, reaching 13.51 by June 2022, still below the pre-pandemic range but indicating ongoing normalization in receivables management.
Payables Turnover
Delta Air Lines Inc., payables turnover calculation (quarterly data)
| Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||
| Cost of operating revenue | 6,106) | 4,702) | 4,036) | 3,927) | 3,486) | 2,946) | 2,416) | 2,024) | 1,790) | 4,465) | 4,839) | 5,163) | 5,158) | 4,771) | 4,847) | 5,183) | 4,993) | 4,419) | ||||||
| Accounts payable | 5,353) | 4,810) | 4,240) | 4,017) | 3,930) | 3,432) | 2,840) | 2,403) | 2,332) | 3,337) | 3,266) | 3,470) | 3,359) | 3,214) | 2,976) | 3,265) | 3,749) | 3,351) | ||||||
| Short-term Activity Ratio | ||||||||||||||||||||||||
| Payables turnover1 | 3.51 | 3.36 | 3.40 | 3.18 | 2.77 | 2.67 | 3.77 | 5.46 | 6.97 | 5.88 | 6.10 | 5.75 | 5.94 | 6.16 | 6.53 | 5.84 | 4.92 | 5.29 | ||||||
| Benchmarks | ||||||||||||||||||||||||
| Payables Turnover, Competitors2 | ||||||||||||||||||||||||
| FedEx Corp. | 21.37 | 22.67 | 21.86 | 19.74 | 20.02 | 21.41 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Uber Technologies Inc. | 18.17 | 13.53 | 10.87 | 24.80 | 15.26 | 23.16 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| United Airlines Holdings Inc. | 9.49 | 9.77 | 9.62 | 9.03 | 6.58 | 5.77 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| United Parcel Service Inc. | 13.96 | 14.04 | 12.93 | 14.65 | 14.09 | 14.20 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
1 Q2 2022 Calculation
Payables turnover
= (Cost of operating revenueQ2 2022
+ Cost of operating revenueQ1 2022
+ Cost of operating revenueQ4 2021
+ Cost of operating revenueQ3 2021)
÷ Accounts payable
= (6,106 + 4,702 + 4,036 + 3,927)
÷ 5,353 = 3.51
2 Click competitor name to see calculations.
- Cost of Operating Revenue
- The cost of operating revenue exhibited a general increasing trend from the beginning of 2018 through mid-2019, followed by a stabilization with minor fluctuations until early 2020. Starting in the first quarter of 2020, there was a sharp decline that reached its lowest point in the second quarter of 2020, corresponding to significantly reduced costs. Subsequently, the cost began a steady recovery from the third quarter of 2020 onwards, with a consistent upward trajectory through mid-2022, ultimately surpassing pre-2020 levels by a considerable margin.
- Accounts Payable
- Accounts payable amounts demonstrated moderate fluctuations from 2018 to 2019, remaining relatively stable with some minor variations around the 3000 to 3500 million US$ range. A notable decrease occurred in the first two quarters of 2020, dropping to the lowest figures observed within the examined periods. From the third quarter of 2020, accounts payable showed a consistent and pronounced increase through June 2022, exceeding previous highs and indicating a significant rise in outstanding obligations toward suppliers or creditors.
- Payables Turnover Ratio
- The payables turnover ratio showed variability throughout the period. Initially, from 2018 to early 2019, the ratio fluctuated between approximately 4.9 and 6.5, suggesting relatively efficient management of payables. During 2020, after a brief increase in the second quarter, the ratio experienced a sharp decline, reaching its lowest point in the fourth quarter, indicative of slower payments or changes in purchasing patterns. From 2021 onwards, the ratio remained at lower levels compared to the earlier years, fluctuating around 2.6 to 3.5, which may imply a strategic extension of payment terms or altered supplier relationships.
- Summary of Observations
- Overall, the data illustrates a significant impact likely attributed to external disruptions beginning in early 2020, as reflected by reductions in operating costs and accounts payable values. The subsequent recovery period is marked by progressive increases in both financial metrics, signaling a return towards or beyond prior activity levels. The downward trend and stabilization at lower values of the payables turnover ratio in the post-2020 period suggest adjustments in working capital management, potentially extending payment cycles or adjusting procurement practices. These patterns collectively underscore adaptive responses in operational and financial management during a period of volatility and recovery.
Working Capital Turnover
Delta Air Lines Inc., working capital turnover calculation (quarterly data)
| Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||
| Current assets | 17,313) | 15,720) | 15,940) | 17,471) | 19,666) | 17,853) | 17,404) | 25,030) | 18,915) | 10,275) | 8,249) | 6,944) | 7,134) | 7,196) | 6,340) | 6,726) | 7,641) | 7,724) | ||||||
| Less: Current liabilities | 26,324) | 24,060) | 20,966) | 20,924) | 23,573) | 20,688) | 15,927) | 19,725) | 20,150) | 19,392) | 20,204) | 20,211) | 21,164) | 21,323) | 18,578) | 18,158) | 19,269) | 20,012) | ||||||
| Working capital | (9,011) | (8,340) | (5,026) | (3,453) | (3,907) | (2,835) | 1,477) | 5,305) | (1,235) | (9,117) | (11,955) | (13,267) | (14,030) | (14,127) | (12,238) | (11,432) | (11,628) | (12,288) | ||||||
| Operating revenue | 13,824) | 9,348) | 9,469) | 9,154) | 7,126) | 4,150) | 3,973) | 3,062) | 1,468) | 8,592) | 11,439) | 12,560) | 12,536) | 10,472) | 10,742) | 11,953) | 11,775) | 9,968) | ||||||
| Short-term Activity Ratio | ||||||||||||||||||||||||
| Working capital turnover1 | — | — | — | — | — | — | 11.57 | 4.63 | — | — | — | — | — | — | — | — | — | — | ||||||
| Benchmarks | ||||||||||||||||||||||||
| Working Capital Turnover, Competitors2 | ||||||||||||||||||||||||
| FedEx Corp. | 13.05 | 13.06 | 12.13 | 9.67 | 8.17 | 9.27 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Uber Technologies Inc. | — | 1,646.62 | — | 9.53 | 129.39 | 10.72 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Union Pacific Corp. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| United Airlines Holdings Inc. | 38.43 | 35.17 | 6.98 | 3.24 | 2.21 | 5.72 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| United Parcel Service Inc. | 12.16 | 11.27 | 13.21 | 12.81 | 14.87 | 19.13 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
1 Q2 2022 Calculation
Working capital turnover
= (Operating revenueQ2 2022
+ Operating revenueQ1 2022
+ Operating revenueQ4 2021
+ Operating revenueQ3 2021)
÷ Working capital
= (13,824 + 9,348 + 9,469 + 9,154)
÷ -9,011 = —
2 Click competitor name to see calculations.
- Working Capital
- The working capital consistently remained negative over the periods analyzed, indicating that current liabilities exceeded current assets throughout. Starting at -12,288 million US dollars in March 2018, the magnitude of the negative working capital increased, reaching a peak negative balance of -14,127 million in March 2019. Subsequently, the negative working capital began to decrease and showed improvement during 2020, moving towards positive territory with a value of 5,305 million in September 2020. However, this improvement was short-lived as the working capital reverted to negative values again in 2021 and continued to deteriorate into 2022, ending at -9,011 million in June 2022. This fluctuation suggests volatility in the company's short-term liquidity position over the period.
- Operating Revenue
- Operating revenue exhibited seasonal fluctuations with notable quarterly variations. From March 2018 through December 2019, revenue demonstrated a general upward trend with peaks generally seen in the middle quarters, reaching a high of 12,560 million US dollars in September 2019. However, starting from March 2020, there was a dramatic decline coinciding with the onset of the global pandemic, where revenue dropped sharply to 1,468 million in June 2020 from 8,592 million in March 2020. Recovery commenced thereafter, with steady increases each quarter through 2021 and into 2022, culminating in the highest revenue figure within the dataset at 13,824 million in June 2022. This recovery trajectory indicates a gradual rebound from the pandemic-induced downturn.
- Working Capital Turnover
- Working capital turnover ratios were only reported for the latter quarters of 2020, showing substantial increases from 4.63 to 11.57. These elevated ratios correspond with the periods when working capital values transitioned to positive or less negative figures and operating revenues were recovering. A higher working capital turnover ratio suggests that the company was generating significantly more revenue per unit of working capital during this recovery phase, implying improved efficiency in the use of working capital resources.
- Overall Insights
- The financial data reveals considerable disruption during early 2020, likely tied to external macroeconomic factors affecting the airline industry. The virus pandemic resulted in a sharp contraction of revenue and liquidity challenges. Nonetheless, the company showed resilience with a strong recovery in operating revenue over the subsequent quarters into 2022. Although working capital remained largely negative, the temporary improvement and high turnover ratios during late 2020 signal periods of enhanced operational efficiency. The recurring negative working capital suggests ongoing challenges in short-term liquidity management. Continued attention to capital structure and liquidity strategies would be beneficial to sustain operational stability during fluctuating market conditions.
Average Inventory Processing Period
Delta Air Lines Inc., average inventory processing period calculation (quarterly data)
| Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||||||||||||||||||||
| Inventory turnover | 10.83 | 12.50 | 13.11 | 12.62 | 10.82 | 11.08 | 14.61 | 17.58 | 19.19 | 20.15 | 15.93 | 18.60 | 18.43 | 18.48 | 18.43 | 16.30 | 11.60 | 15.46 | ||||||
| Short-term Activity Ratio (no. days) | ||||||||||||||||||||||||
| Average inventory processing period1 | 34 | 29 | 28 | 29 | 34 | 33 | 25 | 21 | 19 | 18 | 23 | 20 | 20 | 20 | 20 | 22 | 31 | 24 | ||||||
| Benchmarks (no. days) | ||||||||||||||||||||||||
| Average Inventory Processing Period, Competitors2 | ||||||||||||||||||||||||
| FedEx Corp. | 2 | 2 | 3 | 3 | 3 | 3 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Union Pacific Corp. | 12 | 12 | 10 | 11 | 12 | 12 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| United Airlines Holdings Inc. | 12 | 13 | 15 | 18 | 23 | 32 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
1 Q2 2022 Calculation
Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ 10.83 = 34
2 Click competitor name to see calculations.
The analysis of inventory management metrics reveals notable fluctuations over the examined periods. Inventory turnover, expressed as a ratio, demonstrates variability with certain distinct trends. Starting with moderately high turnover values in early 2018, the ratio experienced a peak towards late 2018 and early 2019, reaching values above 18. This suggests efficient inventory movement during that time. Subsequently, the turnover ratio saw a decline through 2019 and into 2020, coinciding with the onset of the pandemic period, although it peaked sharply in the first quarter of 2020 at over 20. Thereafter, a general downward trend is observed, with the turnover ratio dipping to the range of approximately 10.8 to 13.1 by mid-2022, indicating slower inventory turnover in the most recent periods.
In contrast, the average inventory processing period, measured in days, exhibits an inverse relationship with turnover, as expected. The processing period was relatively low, around 20 days in early 2018, reflecting quick inventory cycles. This period lengthened steadily from late 2019 onward, suggesting slower inventory movement. Notably, the processing period extended to about 34 days by mid-2022, which aligns with the reduction in inventory turnover during the same timeframe. This increase in the average processing period may imply operational adjustments, potential inventory build-ups, or changes in demand patterns.
- Inventory Turnover Ratio
- Exhibited a peak in early 2019 and early 2020, indicating efficient use of inventory during these quarters.
- Subsequent decline post-2020 points to less frequent inventory cycling, potentially due to external disruptions or shifts in supply chain dynamics.
- Recent values show stabilization at a lower level than previous peaks, suggesting a new normal in inventory management pace.
- Average Inventory Processing Period (Days)
- Displayed a decreasing trend in early periods, reflecting faster inventory turnover initially.
- Increased progressively from late 2019 onwards, peaking at 34 days in 2022, indicative of slower inventory handling.
- This trend inversely correlates with inventory turnover, reinforcing the conclusion of slower inventory movement in recent quarters.
Overall, the data indicates that inventory management was highly efficient before the disruptions associated with 2020. The slowdown reflected in extended inventory processing periods and decreased turnover ratios points toward adjustments in operational or market conditions. These trends warrant close monitoring to optimize inventory policies and maintain balance between supply and demand in the current environment.
Average Receivable Collection Period
Delta Air Lines Inc., average receivable collection period calculation (quarterly data)
| Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||||||||||||||||||||
| Receivables turnover | 13.51 | 11.55 | 12.44 | 11.18 | 8.11 | 6.89 | 12.25 | 16.34 | 24.77 | 19.79 | 16.47 | 16.33 | 16.07 | 14.25 | 19.20 | 17.46 | 17.74 | 16.38 | ||||||
| Short-term Activity Ratio (no. days) | ||||||||||||||||||||||||
| Average receivable collection period1 | 27 | 32 | 29 | 33 | 45 | 53 | 30 | 22 | 15 | 18 | 22 | 22 | 23 | 26 | 19 | 21 | 21 | 22 | ||||||
| Benchmarks (no. days) | ||||||||||||||||||||||||
| Average Receivable Collection Period, Competitors2 | ||||||||||||||||||||||||
| FedEx Corp. | 50 | 47 | 52 | 53 | 56 | 54 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Uber Technologies Inc. | 35 | 42 | 51 | 33 | 34 | 36 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Union Pacific Corp. | 32 | 32 | 29 | 29 | 30 | 30 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| United Airlines Holdings Inc. | 23 | 26 | 25 | 31 | 45 | 48 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| United Parcel Service Inc. | 42 | 41 | 47 | 40 | 40 | 41 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
1 Q2 2022 Calculation
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ 13.51 = 27
2 Click competitor name to see calculations.
- Receivables Turnover
- The receivables turnover ratio exhibited fluctuations over the observed periods. Initially, it showed a general increasing trend from 16.38 to 19.2 between the first quarter of 2018 and the last quarter of 2018. This was followed by a decline and then moderate recovery, with values oscillating between 14.25 and 16.47 through the entirety of 2019.
- In 2020, the ratio experienced significant volatility, peaking at 24.77 in the second quarter but then declining sharply to 12.25 by the end of the year. The first half of 2021 marked the lowest turnover ratios seen in the period, dropping to 6.89, which might indicate slower collections or increased receivables.
- From mid-2021 through mid-2022, the turnover improved steadily, rising from 8.11 to 13.51. Despite this recovery, the ratio did not reach the higher levels observed prior to 2020, suggesting ongoing challenges in receivables management or changes in sales and credit terms.
- Average Receivable Collection Period
- The average receivable collection period, measured in days, generally moved inversely to the receivables turnover ratio, as expected. Early 2018 figures showed relatively short collection periods, declining from 22 days to 19 days by the end of 2018.
- During 2019, collection periods lengthened slightly to around 22-26 days, aligning with the modest decline in turnover ratios.
- In 2020, the collection period initially improved, shortening to 15 days in the second quarter, likely reflecting the peak turnover recorded then. However, it then increased sharply to 30 days by the end of 2020.
- The first half of 2021 saw a significant extension of the collection period, reaching 53 days, the highest across all recorded quarters. This prolonged collection window indicates potential difficulties in receivable management or changes in customer payment behavior.
- Subsequently, the collection period reduced gradually into 2022, settling in the high 20s to low 30s range, denoting a partial normalization but remaining above pre-2020 levels.
Operating Cycle
Delta Air Lines Inc., operating cycle calculation (quarterly data)
No. days
| Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||||||||||||||||||||
| Average inventory processing period | 34 | 29 | 28 | 29 | 34 | 33 | 25 | 21 | 19 | 18 | 23 | 20 | 20 | 20 | 20 | 22 | 31 | 24 | ||||||
| Average receivable collection period | 27 | 32 | 29 | 33 | 45 | 53 | 30 | 22 | 15 | 18 | 22 | 22 | 23 | 26 | 19 | 21 | 21 | 22 | ||||||
| Short-term Activity Ratio | ||||||||||||||||||||||||
| Operating cycle1 | 61 | 61 | 57 | 62 | 79 | 86 | 55 | 43 | 34 | 36 | 45 | 42 | 43 | 46 | 39 | 43 | 52 | 46 | ||||||
| Benchmarks | ||||||||||||||||||||||||
| Operating Cycle, Competitors2 | ||||||||||||||||||||||||
| FedEx Corp. | 52 | 49 | 55 | 56 | 59 | 57 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Union Pacific Corp. | 44 | 44 | 39 | 40 | 42 | 42 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| United Airlines Holdings Inc. | 35 | 39 | 40 | 49 | 68 | 80 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
1 Q2 2022 Calculation
Operating cycle = Average inventory processing period + Average receivable collection period
= 34 + 27 = 61
2 Click competitor name to see calculations.
The analysis of the financial data reveals noticeable fluctuations in the operational efficiency metrics across the observed periods.
- Average Inventory Processing Period
- The average inventory processing period exhibits variability, starting at 24 days in the first quarter of 2018, peaking at 34 days in the second quarter of 2022. There is an initial rise and fall cycle, with notably low values around the early 2020 period (18 to 21 days), followed by a significant increase in 2021 and a generally elevated plateau thereafter.
- Average Receivable Collection Period
- This period shows more pronounced fluctuations. It begins near 22 days in early 2018, dips to a low of 15 days in mid-2020, and then climbs steeply to a peak of 53 days in the first quarter of 2021. Subsequent quarters see a gradual improvement, with the period reducing to the high twenties by mid-2022. This suggests some collection challenges during the 2021 period that were later mitigated.
- Operating Cycle
- The operating cycle, the sum of the inventory processing and receivable collection periods, mirrors the trends of its components. It starts at 46 days in early 2018, fluctuates downward through mid-2020 reaching a low of 34 days, and then sharply increases to a maximum of 86 days in the first quarter of 2021. Post-peak, the cycle shortens gradually but remains elevated compared to earlier years, stabilizing around 61 days by mid-2022.
Overall, the data implies a disruption in operational efficiency particularly during 2020 and 2021, likely influenced by external factors impacting inventory turnover and receivable collections. The elevated operating cycle in 2021 suggests increased capital tied up in current assets during that period, with partial recovery observed thereafter.
Average Payables Payment Period
Delta Air Lines Inc., average payables payment period calculation (quarterly data)
| Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||||||||||||||||||||
| Payables turnover | 3.51 | 3.36 | 3.40 | 3.18 | 2.77 | 2.67 | 3.77 | 5.46 | 6.97 | 5.88 | 6.10 | 5.75 | 5.94 | 6.16 | 6.53 | 5.84 | 4.92 | 5.29 | ||||||
| Short-term Activity Ratio (no. days) | ||||||||||||||||||||||||
| Average payables payment period1 | 104 | 109 | 108 | 115 | 132 | 137 | 97 | 67 | 52 | 62 | 60 | 64 | 61 | 59 | 56 | 63 | 74 | 69 | ||||||
| Benchmarks (no. days) | ||||||||||||||||||||||||
| Average Payables Payment Period, Competitors2 | ||||||||||||||||||||||||
| FedEx Corp. | 17 | 16 | 17 | 18 | 18 | 17 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Uber Technologies Inc. | 20 | 27 | 34 | 15 | 24 | 16 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| United Airlines Holdings Inc. | 38 | 37 | 38 | 40 | 55 | 63 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| United Parcel Service Inc. | 26 | 26 | 28 | 25 | 26 | 26 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
1 Q2 2022 Calculation
Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ 3.51 = 104
2 Click competitor name to see calculations.
- Payables Turnover Ratio
-
The payables turnover ratio exhibited fluctuations over the examined periods. Initially, from early 2018 to the end of 2019, the ratio generally remained within a range of approximately 4.9 to 6.5, peaking at 6.53 in December 2018. A slight decline was observed toward the end of 2019, but it stayed above 5.7. In 2020, the ratio first rose to a high of 6.97 in the second quarter but then experienced a significant decline, reaching a low of 3.77 by the fourth quarter. This downward trend continued into 2021 and the first half of 2022, where the turnover ratio stabilized around the 2.67 to 3.5 range, indicating a notable reduction compared to earlier years.
- Average Payables Payment Period
-
The average payables payment period inversely mirrored the payables turnover ratio trends. From 2018 through 2019, the number of days decreased from 69 days in the first quarter of 2018 to about 56 days by the end of 2018, fluctuating mildly around 59 to 64 days through mid-2019 before stabilizing near 60 days at year-end.
In 2020, a marked increase began, with the payment period extending sharply from 52 days in the second quarter to 97 days by the end of the year. The increase continued into 2021, reaching a peak near 137 days in the first quarter, followed by a gradual decline to about 108-115 days through the remainder of 2021 and into mid-2022. This upward shift indicates that the company took longer to settle payables starting in 2020 and maintained an extended payment period relative to prior years.
- Summary of Observations
-
The data indicates a clear shift starting in early 2020, with the payables turnover ratio declining significantly while the average payables payment period increased substantially. This pattern suggests a strategic or operational change leading to slower payment of obligations. The timing coincides with the onset of broader economic disruptions during 2020, which may have influenced cash management policies or supplier payment practices. After peaking in payment period length in early 2021, the figures show a modest trend toward normalization but remain elevated compared to pre-2020 levels.
Cash Conversion Cycle
Delta Air Lines Inc., cash conversion cycle calculation (quarterly data)
No. days
| Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||||||||||||||||||||
| Average inventory processing period | 34 | 29 | 28 | 29 | 34 | 33 | 25 | 21 | 19 | 18 | 23 | 20 | 20 | 20 | 20 | 22 | 31 | 24 | ||||||
| Average receivable collection period | 27 | 32 | 29 | 33 | 45 | 53 | 30 | 22 | 15 | 18 | 22 | 22 | 23 | 26 | 19 | 21 | 21 | 22 | ||||||
| Average payables payment period | 104 | 109 | 108 | 115 | 132 | 137 | 97 | 67 | 52 | 62 | 60 | 64 | 61 | 59 | 56 | 63 | 74 | 69 | ||||||
| Short-term Activity Ratio | ||||||||||||||||||||||||
| Cash conversion cycle1 | -43 | -48 | -51 | -53 | -53 | -51 | -42 | -24 | -18 | -26 | -15 | -22 | -18 | -13 | -17 | -20 | -22 | -23 | ||||||
| Benchmarks | ||||||||||||||||||||||||
| Cash Conversion Cycle, Competitors2 | ||||||||||||||||||||||||
| FedEx Corp. | 35 | 33 | 38 | 38 | 41 | 40 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| United Airlines Holdings Inc. | -3 | 2 | 2 | 9 | 13 | 17 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
1 Q2 2022 Calculation
Cash conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= 34 + 27 – 104 = -43
2 Click competitor name to see calculations.
- Average Inventory Processing Period
- The average inventory processing period exhibited fluctuations over the analyzed quarters. Initially, it ranged from 20 to 31 days, with a low of 20 days recorded multiple times during 2018 and 2019. A notable increase occurred starting in early 2021, peaking at 34 days in March and June 2021, before slightly declining yet remaining elevated at around 29 to 34 days through mid-2022. This indicates a trend towards slower inventory turnover in recent periods compared to earlier years.
- Average Receivable Collection Period
- This period remained relatively stable in 2018, generally hovering around 19 to 26 days. Beginning in early 2021, the receivable collection period increased significantly, reaching a peak of 53 days in March 2021, followed by a gradual decline towards 27 days by mid-2022. This pattern suggests a temporary extension in the time taken to collect receivables during early 2021, with a subsequent improvement in collection efficiency thereafter.
- Average Payables Payment Period
- The average payables payment period demonstrated a clear upward trend, especially from 2020 onward. Starting at values between 56 and 74 days in 2018, a substantial increase was observed in late 2020 and 2021, peaking at 137 days in March 2021. Although there was a slight reduction following this peak, payment periods remained elevated above 100 days through mid-2022. This indicates the company extended its payment cycles significantly during and after 2020.
- Cash Conversion Cycle
- The cash conversion cycle was consistently negative across all quarters, suggesting that payables were paid after the collection of receivables and completion of inventory processing. The cycle lengthened from roughly -23 days in early 2018 to a maximum negative duration exceeding -50 days during 2020 and 2021. The most extended negative cash conversion periods occurred between late 2020 and late 2021, with a mild contraction to around -43 days by mid-2022. This implies improved cash flow management, likely benefiting from the elongated payables payment period during the more recent quarters.
- Summary Insights
- Overall, there is a clear pattern of the company managing working capital with increasing conservatism from 2020 onward. Inventory processing times increased moderately, receivables collection experienced temporary delays in early 2021 but improved subsequently, while payables payment periods were extended substantially. The resulting effect was a notably negative and extended cash conversion cycle, which could indicate enhanced liquidity management and improved cash conservation strategies during periods of external challenges.