DuPont de Nemours Inc. (NYSE:DD)

Inventory Turnover

The inventory turnover ratio shows a general declining trend from 5.51 in 2015 to 3.25 in 2019, indicating a slower rate of inventory movement over the period. The most significant drop occurred between 2016 and 2017, falling from 5.11 to 2.97, with a subsequent moderate recovery and slight decline thereafter.

Receivables Turnover

Receivables turnover also decreased sharply from 11.96 in 2015 to 5.52 in 2017, implying that collections from customers slowed significantly. However, there was an improvement during 2018 and 2019, with ratios increasing to 6.95 and 7.15 respectively, suggesting some recovery in collection efficiency.

Payables Turnover

The payables turnover showed a downward trend from 6.45 in 2015 to 3.92 in 2017, followed by a moderate rebound to around 4.79 by 2019. This indicates the company took longer to pay its suppliers during the middle years, with a somewhat faster payment cycle toward the end of the period.

Working Capital Turnover

Working capital turnover exhibited volatility, initially rising from 3.68 in 2015 to 4.36 in 2016, then declining sharply to 2.63 in 2017. A modest recovery occurred in 2018, followed by a notable surge to 13.01 in 2019, indicating a significant increase in sales generated per unit of working capital in the final year.

Average Inventory Processing Period

The average inventory processing period increased substantially from 66 days in 2015 to 123 days in 2017, implying slower inventory movement and potential buildup. Although it improved to 93 days in 2018, it rose again to 112 days in 2019, confirming extended inventory holding times compared to earlier years.

Average Receivable Collection Period

This period lengthened from 31 days in 2015 to 66 days in 2017, reflecting slower collections. It shortened in the following years to 53 days in 2018 and 51 days in 2019, indicating improved efficiency in collecting receivables toward the end of the period.

Operating Cycle

The operating cycle increased significantly from 97 days in 2015 to 189 days in 2017, pointing to slower overall inventory processing and receivables collection. It then shortened to 146 days in 2018 but remained elevated at 163 days in 2019 relative to the starting point, suggesting ongoing challenges in managing operating assets.

Average Payables Payment Period

The average payables payment period lengthened steadily from 57 days in 2015 to a peak of 93 days in 2017, indicating a slower payment schedule to suppliers. A reduction occurred in 2018 to 73 days, with a slight increase to 76 days in 2019, maintaining a generally extended payment timeframe compared to 2015.

Cash Conversion Cycle

The cash conversion cycle remained relatively stable between 2015 and 2016 at around 39-40 days but increased dramatically to 96 days in 2017, reflecting increased time to convert resources back into cash. It improved to 73 days in 2018 but rose again to 87 days in 2019, suggesting that the company's liquidity conversion has been less efficient since 2017.

Cost of Sales

The cost of sales remained relatively stable between 2015 and 2016, with values of approximately $37.8 billion and $37.6 billion, respectively. There was a significant increase in 2017, rising to about $50.4 billion, followed by a further rise in 2018 to approximately $65.3 billion. However, in 2019, there was a sharp decline to roughly $14.1 billion.

Inventories

Inventory levels followed a moderate upward trend from 2015 to 2016, increasing from approximately $6.9 billion to $7.4 billion. A substantial jump occurred in 2017 to approximately $17.0 billion, which slightly decreased to around $16.6 billion in 2018. In 2019, inventories dropped markedly to about $4.3 billion.

Inventory Turnover Ratio

The inventory turnover ratio displayed a downward trend overall. It decreased from 5.51 in 2015 to 5.11 in 2016, followed by a sharper decline to 2.97 in 2017. In 2018, the ratio recovered somewhat to 3.93, but then fell again to 3.25 in 2019.

Summary

From 2015 through 2018, the cost of sales and inventories both showed significant increases, indicating potential growth or changes in operational scale. However, 2019 experienced a substantial reduction in both cost of sales and inventory levels, which may suggest a strategic change, divestiture, or an extraordinary event impacting operations. The inventory turnover ratio's decline from 2015 to 2017 reflects a slower movement of inventory relative to sales, which partially improved in 2018 but declined again in 2019. The data indicate fluctuating efficiency in inventory management and notable volatility in the cost of sales and inventory values over the analyzed period.

The financial data reveals several notable trends over the five-year period analyzed. Net sales exhibit a substantial increase from 2015 through 2018, rising from 48.778 billion US dollars in 2015 to a peak of 85.977 billion US dollars in 2018. However, there is a pronounced decline in net sales in 2019, with the reported amount dropping sharply to 21.512 billion US dollars.

Accounts and notes receivable, trade, follow a similar pattern. These balances show growth from 4.078 billion US dollars in 2015 to 12.376 billion US dollars in 2018. In 2019, this figure decreases markedly to 3.007 billion US dollars, reflecting a significant contraction in trade receivables toward the end of the period.

The receivables turnover ratio, which measures how efficiently the company collects its receivables, demonstrates a downward trend from 11.96 times in 2015 to a low of 5.52 times in 2017. This decline suggests a slowdown in collection efficiency during this time. Subsequently, the ratio improves somewhat to 6.95 times in 2018 and then moderately to 7.15 times in 2019, indicating a partial recovery in the effectiveness of receivable collections.

Overall, the data points to a phase of expansion in sales and receivables from 2015 through 2018, accompanied by decreasing collection efficiency. The sharp decline in both net sales and receivables in 2019 suggests a significant change in business circumstances or reporting, coupled with a marginal improvement in collection processes as indicated by the receivables turnover ratio.

The financial data reveals notable fluctuations in key cost and liability metrics over the five-year period.

Cost of Sales

The cost of sales remained relatively stable between 2015 and 2016, with a slight decline from 37,836 million to 37,641 million US dollars. However, there was a sharp increase in 2017 and 2018, reaching 50,414 million and 65,333 million respectively. In 2019, there was a pronounced drop to 14,056 million, indicating a significant change in operations or reporting for that year.

Accounts Payable

Accounts payable grew steadily from 5,864 million in 2015 to 6,920 million in 2016. The value then nearly doubled in 2017 to 12,861 million and slightly increased to 13,113 million in 2018. Similar to cost of sales, 2019 experienced a sharp decline in accounts payable to 2,934 million. This pattern suggests a possible restructuring or change in working capital management occurring in 2019.

Payables Turnover Ratio

The payables turnover ratio, which indicates how many times the company pays off its accounts payable during the year, showed a downward trend from 6.45 in 2015 to 3.92 in 2017, signifying slower payment cycles. A slight recovery occurred in 2018 to 4.98, followed by a marginal decrease to 4.79 in 2019. Overall, the ratio's movement suggests fluctuations in the payment efficiency and cash flow management throughout the period.

In summary, there is a discernible pattern of growth in both cost of sales and accounts payable through 2018, followed by a substantial decline in 2019. The payables turnover ratio's decline over the first three years indicates lengthening payment terms or delays, with some improvement afterward. These trends may point to operational adjustments, changes in supplier relationships, or shifts in strategic financial management during the observed period.

Working Capital

The working capital exhibited fluctuations over the analyzed period. It initially declined from 13,260 million USD in 2015 to 11,055 million USD in 2016, marking a noticeable reduction. Subsequently, there was a significant increase in 2017 and 2018, reaching peak values of 23,765 million USD and 24,888 million USD respectively. However, a sharp decline occurred in 2019, where working capital dropped drastically to 1,653 million USD, indicating a potential change in the company’s operational liquidity or capital management strategy.

Net Sales

Net sales showed varying trends during the five-year period. The figures remained relatively stable between 2015 and 2016, with a slight decrease from 48,778 million USD to 48,158 million USD. From 2016 onwards, there was a considerable increase, climbing to 62,484 million USD in 2017 and then to 85,977 million USD in 2018. However, 2019 saw a substantial drop in net sales, falling sharply to 21,512 million USD. This decline could indicate significant changes in market conditions, product demand, or strategic shifts.

Working Capital Turnover

The working capital turnover ratio was subject to significant variation. The ratio increased from 3.68 in 2015 to 4.36 in 2016, suggesting improved efficiency in utilizing working capital to generate sales. This efficiency declined in 2017 and 2018, with ratios of 2.63 and 3.45 respectively, reflecting either increased working capital or decreased sales efficiency during those years. In 2019, the ratio surged dramatically to 13.01, which, combined with the substantial drop in working capital and net sales, indicates a pronounced shift in balance sheet management or operational dynamics.

Overall Observations

The data reflects a period of considerable volatility. Both working capital and net sales experienced growth peaks in 2017 and 2018, followed by steep declines in 2019. The working capital turnover ratio's sharp increase in 2019 reflects an unusual operational or financial circumstance affecting how efficiently working capital was converted into sales. These fluctuations warrant further analysis to understand underlying causes, such as changes in business strategy, market environment, or accounting policies adopted in 2019.

Inventory Turnover

The inventory turnover ratio exhibits a declining trend over the analyzed period. Starting at 5.51 in 2015, it decreased to 5.11 in 2016, followed by a sharp drop to 2.97 in 2017. Although there was a partial recovery to 3.93 in 2018, the ratio declined again to 3.25 in 2019. This indicates a reduction in the frequency at which inventory is sold and replaced annually, suggesting potential challenges in inventory management or changes in sales volume.

Average Inventory Processing Period

The average inventory processing period shows an increasing pattern, moving from 66 days in 2015 to 71 days in 2016, then rising significantly to 123 days in 2017. It shortened somewhat to 93 days in 2018 but lengthened again to 112 days by 2019. This trend corresponds inversely with the inventory turnover trend, indicating that inventory remains on hand longer before being sold, which may impair liquidity and increase holding costs.

Overall Insight

The inverse relationship between inventory turnover and average inventory processing period is evident across the examined years. The fluctuations and overall negative trend in turnover, combined with lengthening inventory holding periods, point toward potential inefficiencies in inventory management or shifts in demand forecasts that may warrant further operational review. The spikes in 2017 suggest a particular year of substantial inventory challenges, partially mitigated in subsequent years but without a full return to earlier performance levels.

Receivables Turnover

The receivables turnover ratio demonstrates a notable decline from 11.96 in 2015 to 5.52 in 2017, indicating a decrease in the frequency of receivables collection within the year. Following 2017, there is a modest recovery, with the ratio rising to 6.95 in 2018 and slightly increasing to 7.15 in 2019. This pattern suggests initial challenges in managing receivables efficiently, with some improvement in later years.

Average Receivable Collection Period

The average receivable collection period, expressed in days, exhibits an upward trend from 31 days in 2015 to a peak of 66 days in 2017, implying that customers took longer to settle their debts during this period. Subsequently, this period shortens to 53 days in 2018 and further to 51 days in 2019. Although improvement is observed, the collection period in 2019 remains substantially higher than in 2015, indicating that receivables continue to be collected more slowly compared to the earlier period.

Overall Analysis

The inverse relationship between the receivables turnover and the average collection period is clearly visible, with both indicators highlighting a deterioration in receivables management culminating in 2017, followed by a gradual recovery. Despite the recovery, the company’s efficiency in collecting receivables has not returned to the levels observed in 2015, suggesting potential areas for further improvement in credit and collections policies.

Average Inventory Processing Period

The average inventory processing period shows a fluctuating trend over the five-year period. Starting at 66 days in 2015, it increased to 71 days in 2016, peaked sharply at 123 days in 2017, then decreased to 93 days in 2018, before rising again to 112 days in 2019. This indicates variability in inventory management efficiency, with significant elongation during the mid-period followed by some improvement, but ending at a level notably higher than at the start.

Average Receivable Collection Period

The average receivable collection period experienced a general upward trend between 2015 and 2017, moving from 31 days to 66 days, suggesting a lengthening of the time taken to collect receivables. However, from 2017 onwards, there was an improvement as this period decreased to 53 days in 2018 and further to 51 days in 2019. Despite this improvement, the receivable period in 2019 remains significantly higher compared to the initial value in 2015, indicating a somewhat slower collection process compared to the beginning of the period.

Operating Cycle

The operating cycle, which combines inventory and receivable periods, showed an increasing trend from 97 days in 2015 to a peak of 189 days in 2017. After the peak, it declined to 146 days in 2018 but then rose again to 163 days in 2019. The extended operating cycle suggests a lengthening of the overall time the company takes to convert inventory into cash, with the lengthening particularly pronounced in 2017. The partial reduction after 2017 indicates efforts toward improving operational efficiency, but the cycle remains longer than in the initial years.

The data reveals notable trends in the company's payables management over the five-year span.

Payables Turnover Ratio

There is a clear declining trend from 6.45 in 2015 to a low point of 3.92 in 2017, indicating that the company was paying its suppliers less frequently during that period. After 2017, the ratio shows a slight recovery, increasing to 4.98 in 2018 before a minor decrease to 4.79 in 2019. Despite the partial recovery after 2017, the turnover ratio in 2018 and 2019 remains below the levels observed at the beginning of the period.

Average Payables Payment Period

Corresponding with the decrease in payables turnover, the average payment period lengthened significantly from 57 days in 2015 to a peak of 93 days in 2017. This implies that the company was taking longer to settle its payables, possibly to optimize cash flow or due to changes in supplier terms. Following 2017, the payment period shortened to 73 days in 2018, with a slight increase again to 76 days in 2019. Overall, the average payment period is considerably higher in the latter years compared to the starting point, suggesting a strategic shift in payment practices.

In summary, the company's payables turnover ratio and average payment period exhibit inverse movements, consistent with standard financial behavior. The reduced turnover and extended payment period around 2017 suggest a strategic choice or operational challenge that resulted in slower payments. Although there was some normalization afterward, the company did not return to the shorter payment cycles of earlier years by 2019.

Inventory Processing Period

The average inventory processing period experienced a significant increase over the analyzed years. Starting from 66 days in 2015, it rose steadily to 71 days in 2016, then sharply jumped to 123 days in 2017. Although it decreased somewhat to 93 days in 2018, it rose again to 112 days by the end of 2019, indicating less efficient inventory turnover over time.

Receivable Collection Period

The average receivable collection period showed a notable increasing trend from 31 days in 2015 to 66 days in 2017, suggesting slower collection of receivables during this period. After 2017, the period shortened, dropping to 53 days in 2018 and further to 51 days in 2019, indicating an improvement in receivables management in the latter years.

Payables Payment Period

The average payables payment period consistently lengthened throughout the period assessed. Beginning at 57 days in 2015, it increased to 67 days in 2016, peaked at 93 days in 2017, then decreased to 73 days in 2018, followed by a slight rise to 76 days in 2019. The overall trend shows a tendency to extend payment terms to suppliers during this timeframe.

Cash Conversion Cycle

The cash conversion cycle (CCC) remained relatively stable initially, with 40 days in 2015 and 39 days in 2016. It then escalated sharply to 96 days in 2017, reflecting a deterioration in working capital efficiency. The CCC improved somewhat in 2018 to 73 days but increased again to 87 days by 2019, indicating ongoing challenges in optimizing the cash conversion process.