DuPont de Nemours Inc. (NYSE:DD)

Inventory Turnover

The inventory turnover ratio demonstrates significant variability over the analyzed periods. Starting from 5.51 in March 2016, it generally declines to a low of 2.53 by December 2017. Thereafter, it recovers gradually reaching around 4.08 in December 2018, before exhibiting a sharp increase to 11.22 in March 2019 followed by a decrease to 3.25 by December 2019. This pattern suggests fluctuating efficiency in managing inventory, with periods of slower movement particularly toward the end of 2017 and early 2018, and an exceptionally high turnover in early 2019 that was not sustained.

Receivables Turnover

The receivables turnover ratio follows a similar trend to inventory turnover, beginning at 6.22 in March 2016, declining gradually to a minimum around 3.04 in December 2017. After this low point, the ratio improves moderately to 4.96 by March 2019, then spikes sharply to 15.51 in March 2019, again followed by a drop to 5.66 in December 2019. This volatility indicates fluctuating effectiveness in collecting receivables, with a notable peak early in 2019, suggesting either exceptionally rapid collections or possible data anomalies.

Payables Turnover

The payables turnover ratio reveals a declining trend from 6.45 in March 2016 to about 3.8 in December 2017, after which it increases steadily to 5.28 by March 2019. A pronounced peak is observed at 16.31 in March 2019, followed by a decrease to 4.79 in December 2019. The variability in payables turnover indicates changing payment timing strategies or supplier terms, with particularly shorter payment cycles reflected in early 2019.

Working Capital Turnover

Working capital turnover shows moderate fluctuations. It starts at 3.68 in March 2016, dips to 2.01 in December 2017, then increases to 4.85 by June 2018, declines slightly thereafter, and then rises sharply reaching 15.68 in March 2019. After this high spike, it falls to 13.01 by December 2019. These changes suggest shifts in the efficiency with which the company utilizes its working capital to generate sales, with erratic changes particularly pronounced in early 2019.

Average Inventory Processing Period

There is a clear increase in the average inventory processing period from 66 days in March 2016, peaking at 144 days in December 2017. This period gradually shortens to 89 days by December 2018 before dropping significantly to 33 days in March 2019. Subsequently, the period extends again to 112 days by December 2019. These data points demonstrate fluctuating inventory holding times, with notably prolonged periods around late 2017 and early 2018 and a sharp decrease in early 2019, suggesting improved inventory turnover at that time.

Average Receivable Collection Period

The average receivable collection period increases from 59 days in March 2016 to a peak of 120 days in December 2017, reflecting slower collection processes. It decreases gradually to 74 days by June 2019, followed by a sharp drop to 24 days in March 2019, then rising again to 65 days in December 2019. This indicates volatility in credit collection efficiency, with notable improvements early in 2019.

Operating Cycle

The operating cycle lengthens considerably from 125 days in March 2016 to a high of 264 days in December 2017, then decreases steadily to 167 days by December 2018 before a sharp fall to 57 days in March 2019. It rises again to 177 days in December 2019. This pattern reflects wider fluctuations in the overall time taken from inventory purchase to cash collection, with a pronounced reduction in early 2019.

Average Payables Payment Period

The average payables payment period increases from 57 days in March 2016 to a peak of 96 days in December 2017, followed by a gradual decline to around 69 days by December 2018. It drops markedly to 22 days in March 2019 but increases again to 76 days by the end of 2019. This trend signals changing payment behaviors, with shorter payment periods notably in early 2019, suggesting altered supplier payment strategies.

Cash Conversion Cycle

The cash conversion cycle exhibits substantial fluctuations, moving from 68 days in March 2016 to a maximum of 168 days in December 2017, then decreasing to about 94 days by June 2018. It falls sharply to 35 days in March 2019 before rising to 101 days by December 2019. These variations mirror changes in the interplay of inventory, receivables, and payables management, highlighting a notably improved cash conversion efficiency in early 2019, followed by a reversal later that year.

Cost of Sales

The cost of sales displayed a generally fluctuating pattern over the examined periods. It started near US$9.5 billion in early 2015, experienced slight increases and decreases through 2016 and 2017, and peaked dramatically in late 2017 at approximately US$17.3 billion. Following this peak, there was a noticeable decline into 2018 and early 2019, with a sharp drop to negative values by the end of 2019. The sharp fluctuations and eventual negative values suggest unusual operational or accounting activities in the final reported period.

Inventories

Inventories remained relatively stable during the initial periods from 2015 to mid-2017, generally ranging around US$8 billion. From late 2017, there was a pronounced increase, reaching about US$17 billion, which parallels the increase in cost of sales during this period. After this peak, inventory levels slightly decreased but remained elevated relative to earlier years, before dropping sharply and stabilizing near US$4.3 billion at the end of 2019. This pattern reflects changes in stock management or supply chain dynamics.

Inventory Turnover Ratio

The inventory turnover ratio, indicating how efficiently inventory is managed relative to sales, was unavailable in early 2015 but began being reported in 2016. The ratio began at approximately 5.5 and experienced some variation, declining to values around 3 in 2017 before recovering towards 4 in 2018. A significant spike occurred in early 2019, reaching above 11, followed by a sharp decrease towards 3 by the end of 2019. These fluctuations imply varying efficiency in inventory utilization, with periods of both rapid turnover and slower movement of inventory.

Overall Analysis

The data reveal significant volatility in cost of sales and inventories from 2017 onwards, which may reflect changes in business operations, market conditions, or accounting treatments. The concurrent peaks in inventories and cost of sales in late 2017 suggest a period of expansion or buildup of stock that was followed by correction. The sharp negative value in cost of sales at the end of 2019 and the abrupt drop in inventories suggest possible one-time adjustments or extraordinary events affecting financial reporting. Meanwhile, the inventory turnover ratio’s variability illustrates shifting operational effectiveness in managing stock relative to sales volumes across the periods analyzed.

Net Sales

The net sales exhibited fluctuations over the analyzed periods. Initially, from March 2015 to December 2016, there was a general upward trend, increasing from 12,370 million USD to 13,020 million USD. This was followed by a more pronounced growth phase through 2017 and mid-2018, peaking at 24,245 million USD in September 2018. After this peak, net sales declined in the last two quarters of 2018 and throughout 2019, with a particularly sharp decrease to negative values in the final quarter of 2019 (-9,031 million USD), indicating a notable adverse event or accounting adjustment impacting the reporting.

Accounts and Notes Receivable, Net

Receivables showed a gradual increase from 8,739 million USD in March 2015 up to a significant peak of 20,303 million USD in June 2018. Following this peak, a decline is observed, dropping to 18,339 million USD by December 2018, and then sharply decreasing in 2019, ending at 3,802 million USD in December 2019. This sharp drop coincides with the net sales reduction, suggesting possible write-offs, collection issues, or changes in credit policy affecting receivables.

Receivables Turnover Ratio

Receivables turnover ratio data is available from March 2016 onward. Initially, the ratio was relatively stable around 5.0 to 6.2, indicating consistent collection efficiency up to mid-2017. However, starting in late 2017, the ratio decreased notably to a low of 3.04, reflecting slower collections or increased receivables relative to sales. This ratio gradually improved through 2018, reaching 4.96 by March 2019. An outlier appears in the second and third quarters of 2019 with very high turnover ratios of 15.51 and 12.78, likely caused by the sharp declines in receivables and sales, leading to distorted ratio values. By the end of 2019, the ratio dropped back to 5.66, suggesting a return toward prior collection patterns.

Cost of Sales

Over the observed periods, cost of sales exhibited notable fluctuations. Initially, there was a decline from 9,535 million USD in March 2015 to 7,951 million USD in March 2016, indicating a downward trend in production or procurement costs. However, from March 2016 onward, the cost generally increased, peaking dramatically at 17,289 million USD in December 2017. After this peak, costs remained elevated with some variability, reaching a significant drop to negative values (-7,697 million USD) by December 2019, which may suggest unusual accounting adjustments, reversals, or anomalies in the final period.

Accounts Payable

Accounts payable showed a relatively stable upward trend throughout most of the period, increasing from 6,615 million USD in March 2015 to a peak of 13,130 million USD in March 2018. After this peak, values slightly declined but remained high around the 12,000-13,000 million USD mark until September 2019. In the final quarter, a sharp decrease occurred, reducing payable balances to approximately 2,934 million USD, which may indicate accelerated payments, restructuring, or other significant operational changes.

Payables Turnover Ratio

The payables turnover ratio started with data available only from March 2016. Initial values ranged from approximately 6.45 to 5.00, suggesting a moderate frequency of settlement with suppliers. Between late 2016 and early 2019, the ratio fluctuated mostly between 3.8 and 5.28, indicating relatively consistent payment cycles. Notably, there were spikes to unusually high levels (16.31 in March 2019 and 12.68 in June 2019), which imply exceptionally fast payments in those quarters, possibly in response to reducing accounts payable or managing working capital more aggressively. The ratio then reverted to a lower value (4.79) by December 2019.

The analysis of the financial trends reveals several important observations regarding working capital, net sales, and working capital turnover ratios over the examined periods.

Working Capital

Working capital displayed variability throughout the reporting periods. Initially, it fluctuated moderately between approximately 11,647 million and 13,260 million US dollars during 2015. In 2016, working capital varied more notably, reaching a low near 11,055 million and a high of around 13,429 million US dollars. A significant increase occurred at the end of 2017 and into early 2018, with values peaking at approximately 27,523 million US dollars in the third quarter of 2017, then slightly declining but staying elevated relative to previous years. However, towards the end of 2018 and into 2019, working capital experienced a sharp downward trend, plummeting from roughly 24,888 million to lows near 1,653 million US dollars by the last quarter of 2019, indicating a substantial contraction in available current assets minus current liabilities.

Net Sales

Net sales presented a more stable, generally upward trend from 2015 through most of 2018, increasing from about 12,036 million US dollars to a peak near 24,245 million US dollars in the third quarter of 2018. This suggests robust sales growth over this period. In 2019, however, net sales saw a dramatic decline, with a notable negative value reported in the last quarter (-9,031 million US dollars), implying extraordinary factors such as returns, adjustments, or write-downs impacting revenue recognition during that quarter.

Working Capital Turnover Ratio

The working capital turnover ratio, which indicates how efficiently a company uses its working capital to generate sales, showed an overall increasing trend from the beginning of 2016 until mid-2018, reaching ratios above 4.5 times. Notably, towards the end of 2018 and into 2019, there is a marked increase in turnover ratios, peaking over 15 in the third quarter of 2019. Such a sharp rise generally indicates a very high sales volume relative to working capital; however, given the simultaneous decline in working capital and erratic net sales, this spike reflects the impact of drastically reduced working capital rather than improved operational efficiency.

In summary, the data demonstrates a pattern of relatively stable or growing sales and working capital until late 2018, after which both figures experienced significant decline. The unusually high working capital turnover ratios in 2019 appear to result primarily from the reduction in working capital rather than organic sales growth, highlighting potential liquidity or operational challenges during that period. The extreme negative net sales in the last quarter of 2019 further suggests extraordinary adjustments impacting financial performance.

Inventory Turnover Ratio

The inventory turnover ratio demonstrates significant variability throughout the observed periods. Starting from 2016, it initially declined from 5.51 to 4.31 by the third quarter, then slightly recovered toward the end of the year. In 2017, the ratio maintained a moderate range around 5, but a sharp decrease occurred in the last quarter, dropping to 2.53. This low level continued into early 2018 with gradual improvement observed mid-year, reaching values above 4. However, in the final quarters of 2019, there was a striking upward spike to 11.22 in the first quarter, followed by a decrease to 8.67 and then a further reduction to 3.25 by the fourth quarter. These fluctuations suggest periods of both increased and reduced efficiency in inventory turnover over time.

Average Inventory Processing Period (Number of Days)

The average inventory processing period closely reflects the inverse behavior of the inventory turnover ratio. Beginning in 2016, the processing period extended from 66 days up to 85 days, indicating a slowdown compared to earlier periods. The trend continued with a more substantial increase in the last quarter of 2017, reaching 144 days, signaling a significant elongation in the time inventory remained on hand. Although there was a reduction in this period throughout 2018, ending around 89 days, the values remained higher than those of 2016. A notable improvement occurred in early 2019, with the processing period dropping sharply to 33 days in the first quarter, highlighting a major enhancement in inventory management efficiency. However, this was followed by a gradual increase through the remainder of 2019, culminating in 112 days by year-end, indicating a slowdown once again.

Overall Observations

The data reveals a pattern of volatility in inventory management effectiveness across the analyzed timeline. Periods of improved inventory turnover and reduced processing duration are intermittently offset by phases of inefficiency. The significant spike in turnover ratio and the corresponding sharp decline in the inventory processing period in early 2019 indicate a temporary operational improvement, but the subsequent reversal of these trends suggests challenges in sustaining these gains. The extended processing periods in late 2017 and late 2019 may point to inventory accumulation or slower sales cycles requiring further investigation.

The analysis of the quarterly financial data focusing on receivables turnover and the average receivable collection period reveals distinct trends over the presented periods.

Receivables Turnover

The receivables turnover ratio begins at 6.22 in the first recorded quarter (March 31, 2016) and generally declines over time through to the later quarters of 2017 and 2018, reaching a low of 3.04 by December 31, 2017. This decline indicates a decreasing efficiency in collecting receivables during that timeframe.

From early 2018 onward, the ratio shows a modest recovery, rising gradually to 4.96 in March 31, 2019. However, a significant spike is observed in June 30 and September 30, 2019 periods with values of 15.51 and 12.78, respectively, which suggest a substantial improvement in the turnover rate during these quarters. This sharp increase might point to a change in collection policies or unusual accounting events during this short period.

By the end of 2019 (December 31), the ratio decreases again to 5.66, closer to the levels seen before the spike, suggesting the spike was temporary rather than indicative of a sustained trend.

Average Receivable Collection Period

Complementing the turnover ratio, the average receivable collection period initially shows an increasing trend, starting at 59 days in March 31, 2016, and peaking at 120 days at the end of 2017 (December 31). This increase aligns with the declining turnover ratio in the same timeline, confirming lengthening collection times.

Following this peak, the collection period gradually shortens throughout 2018 and early 2019, dropping to 74 days by March 31, 2019. A sharp contraction is then recorded in mid-2019, with collection periods plummeting to 24 and 29 days for June 30 and September 30, respectively. This reduction corresponds with the spike observed in receivables turnover, indicating a rapid improvement in receivables management during these quarters.

By the end of 2019, the collection period rises again to 65 days, matching the partial normalization reflected in the turnover ratio.

Overall, the data depict a period of declining efficiency in receivables management from 2016 through late 2017, followed by gradual improvement and a temporary, marked enhancement in mid-2019. The oscillations toward the end of the period suggest operational changes or irregular transactions impacting these indicators.

The analysis of the quarterly financial data reveals several notable trends in the operating cycle components for the period under review.

Average Inventory Processing Period

This metric exhibited an upward trend starting from 66 days in March 2016, peaking at 144 days by December 2017. Following this peak, a gradual decrease was observed, reaching a low of 33 days in March 2019. However, by the end of 2019, the period rose again to 112 days. This fluctuation indicates variability in inventory management and turnover efficiency across the quarters.

Average Receivable Collection Period

The receivable collection period showed a similar upward movement from 59 days in March 2016 to a maximum of 120 days in December 2017. After this peak, there was a consistent decrease to 24 days by March 2019, followed by a rise to 65 days in September 2019. The patterns suggest changes in credit policy or customer payment behavior affecting cash flow timing during these intervals.

Operating Cycle

The operating cycle, representing the sum of inventory processing and receivable collection periods, mirrored the trends of its components, increasing from 125 days in March 2016 to a high of 264 days in December 2017. This was followed by a reduction to 57 days in March 2019, before rising again sharply to 177 days by December 2019. Such variations highlight fluctuating operational efficiency and working capital management throughout the observed time frame.

Overall, the data reflects a trend of increasing operational duration culminating in late 2017, and subsequently a significant contraction in early 2019, suggesting periods of both extended and improved operational efficiency. The subsequent increases toward the end of 2019 may warrant further examination to understand underlying causes and potential impacts on liquidity and profitability.

Payables Turnover Ratio

The payables turnover ratio exhibited variability from the beginning of the recorded period in March 2016 through the end of 2019. Initially, the ratio decreased from 6.45 in March 2016 to a low of 5.00 by December 2016, indicating a slight slowdown in the rate at which payables were being turned over. Subsequently, the ratio fluctuated modestly around values between approximately 3.80 and 5.44 through December 2018, showing some inconsistency in payment activity throughout this interval.

In 2019, a pronounced fluctuation was observed: the ratio spiked significantly to 16.31 in March, declined sharply to 12.68 in June, and then dropped back to 4.79 by December. This pattern signals a volatile approach to accounts payable management during that year, with a notably rapid turnover early in 2019 followed by a marked reduction towards year-end.

Average Payables Payment Period (Number of Days)

The average number of days to settle payables increased steadily from 57 days in March 2016 to a peak of 96 days by December 2017. This upward trend suggests that payment periods were lengthening over this timeframe, potentially reflecting extended credit terms or slower payment cycles.

After December 2017, the payment period began to decline, falling to 69 days by June 2019. However, a sharp decrease occurred in March 2019, with the payment period dropping significantly to 22 days, followed by a slight increase to 29 days in June 2019, before rising again to 76 days in December 2019. These abrupt changes indicate significant variability in payment practices during 2019.

Summary of Observations

Overall, the data depicts a company managing its payables with varying intensity over the four-year span. The early period shows relatively stable but gradually increasing payment durations, accompanied by slightly declining turnover rates. In contrast, the year 2019 stands out for its high volatility in both payables turnover and payment duration, suggesting shifts in operational or strategic approaches to payable management during that time. Such fluctuations could be attributable to altered supplier credit conditions, cash flow management strategies, or other external factors impacting payment policies.

The financial data exhibits several notable trends regarding the company's working capital management over the observed periods.

Average Inventory Processing Period

Starting from March 31, 2016, this period fluctuates with an initial increase from 66 to 85 days by September 30, 2016. It then decreases and stabilizes around the 70 to 90-day range throughout 2017 and 2018. Towards the end of 2018 and into 2019, a marked reduction is observed, with values dropping to a low of 33 days by March 31, 2019, before rising again to 112 days by December 31, 2019. This suggests variations in inventory turnover efficiency, including a significant improvement early in 2019 and a subsequent elongation later that year.

Average Receivable Collection Period

This period shows a rising trend from 59 days in March 31, 2016, to a peak of 120 days by December 31, 2016. Afterward, a declining pattern is evident, with collection time shortening progressively through 2017 and 2018 to approximately 74 days by June 30, 2019. However, by the end of 2019, this period experiences an increase again, reaching 65 days by September 30, 2019, from a low of 24 days in March 31, 2019. The overall pattern indicates initial difficulty in receivables collection that improves over time with some recent volatility.

Average Payables Payment Period

The payment period initially increases from 57 days in March 31, 2016, to 73 days by December 31, 2016. Subsequently, this period gradually decreases through 2017 and 2018, reaching lows near 69 days. In early 2019, a sharp decline to 22 days on March 31 is observed, followed by a modest increase up to 76 days by December 31, 2019. This behavior implies changes in supplier payment strategies with notable acceleration in payments early in 2019 and a reversal during the remainder of the year.

Cash Conversion Cycle

This cycle, representing the net time to convert resources into cash flow, follows an initial increase from 68 days in March 31, 2016, to a peak of 168 days in December 31, 2016. A decline ensues over the next two years, settling near 90 to 110 days through 2017 and 2018. A significant reduction is noted in the first quarter of 2019 to 35 days, followed by a sharp increase to 101 days by the end of 2019. These figures reflect the aggregate impact of inventory, receivables, and payables trends, suggesting improved cash flow timing in early 2019 with some subsequent deterioration.