DuPont de Nemours Inc. (NYSE:DD)

The financial ratios and periods analyzed reflect notable fluctuations and trends over the examined quarters.

Inventory Turnover

The inventory turnover ratio experienced variability, with values generally oscillating between approximately 2.5 and 5.1 throughout most quarters, except for a marked spike reaching 11.22 and 8.67 during mid to late 2019. This indicates a significant acceleration in inventory movement during those specific quarters compared to earlier periods. However, a decline to 3.25 in the last quarter of 2019 suggests a return to a more moderate turnover rate.

Receivables Turnover

Receivables turnover showed a generally steady pattern around 4.8 to 5.5 ratios initially but then similarly spiked in 2019, reaching a peak of 15.51 and 12.78, before decreasing to 5.66 by the end of the period. These changes imply sudden improvements in the collection of receivables during the peak quarters, enhancing liquidity temporarily.

Payables Turnover

Payables turnover mostly remained in a range from 3.8 to 5.4 through most of the examined periods, with a notable surge to 16.31 and 12.68 in 2019, followed by a regression to 4.79. This suggests a more rapid settlement of payables during the peak quarters, potentially reflecting strategic payment practices or better cash management in those times.

Working Capital Turnover

The working capital turnover ratio generally stayed between 2.0 and 4.4, but there was a significant jump to over 12.0 and 15.7 in 2019, maintaining relatively high levels in the final period analyzed. This increase indicates improved efficiency in generating sales from working capital during that time frame.

Average Inventory Processing Period (Days)

The average days inventory was held fluctuated between approximately 33 and 144 days. There was a marked increase to over 140 days in mid-2017, indicating slower inventory movement during that period. Conversely, in mid-2019, the inventory processing period sharply decreased to around 33-42 days before rising again, demonstrating variability in inventory management efficiency.

Average Receivable Collection Period (Days)

This metric showed relative stability in the 65 to 75 days range but spiked to 99 and 120 days around 2017, indicating slower collections. Notably, in mid-2019, the receivable period sharply dropped to around 24-29 days, reflecting faster collections, before settling back to 65 days by the end of the period.

Operating Cycle (Days)

The operating cycle mirrored the trends in inventory and receivables periods, increasing significantly in mid-2017 to over 260 days, suggesting a slowdown in the combined inventory and receivables process. In contrast, it dropped dramatically to below 75 days in mid-2019, indicating a more rapid conversion of raw materials and receivables into cash, before moving upwards again at period end.

Average Payables Payment Period (Days)

The average payables period fluctuated moderately but increased noticeably to over 90 days during mid-2017, implying extended payment terms or delays. In mid-2019, it briefly decreased to around 22-29 days, indicating quicker payments, before increasing again near 76 days at the end.

Cash Conversion Cycle (Days)

The cash conversion cycle reflected the interplay of operating cycle and payables period trends. It remained largely between 70 and 130 days for most quarters, peaking at 168 days in mid-2017, inferring longer cash tied-up periods. Mid-2019 saw a sharp reduction to approximately 35-42 days, improving cash flow efficiency substantially, although it rose again to around 101 days by the final quarter analyzed.

Overall, the data suggests periods of significant operational variances, with mid-2017 marked by substantial delays in inventory turnover, receivables, and payables, leading to prolonged cash conversion cycles. Conversely, mid-2019 displayed a period of considerable improvement in working capital efficiency, faster collections, and shorter operating and cash conversion cycles, enhancing liquidity and operational cash flow. However, some metrics showed partial reversal toward the end of the period, signifying potential volatility in working capital management.

The financial data over the reported quarters exhibit notable fluctuations in cost of sales, inventories, and inventory turnover. A detailed assessment of these changes provides insights into operational and inventory management trends.

Cost of Sales

The cost of sales generally increased from the first quarter of 2016 through the end of 2017, peaking dramatically in the fourth quarter of 2017 at 17,289 million US dollars. This sharp rise is followed by a decrease across 2018 and a pronounced drop to negative values by the end of 2019. This unusual negative figure at the end of 2019 could indicate a significant adjustment, such as inventory write-downs, reversals, or accounting corrections that deviate from regular cost behavior.

Inventories

Inventory levels showed a steady increase from early 2016 to late 2017, nearly doubling from around 7,298 million to approximately 17,255 million US dollars in the third quarter of 2017. After peaking, inventories remained relatively stable through 2018 and early 2019, maintaining levels above 16,000 million US dollars. However, there is a sharp decline in the final quarter of the dataset, dropping to approximately 4,319 million US dollars, suggesting a significant reduction in inventory holdings. This reduction aligns temporally with the negative cost of sales figure observed at this time.

Inventory Turnover

Inventory turnover ratios fluctuated considerably throughout the period. In 2016 and early 2017, the ratio hovered around a moderate level between 4 and 5, indicating relatively consistent inventory management relative to cost of sales. However, in late 2017, the turnover ratio decreases sharply to around 2.5 to 3.0, reflecting slower inventory movement, likely related to the accumulation of inventories during this time. Recovery is observed during 2018 where turnover ratios increased back above 4, signifying improved efficiency in inventory utilization. Notably, in early 2019, turnover ratios spiked significantly, exceeding 11.2 in one quarter, followed by a decline toward the end of 2019 to just above 3. This volatility suggests episodic changes in sales relative to inventory levels, possibly driven by large inventory reductions or exceptional sales events.

Overall, the data reveal periods of inventory accumulation followed by rapid reductions and substantial swings in cost of sales. These patterns may suggest shifts in operational strategies, inventory management practices, or extraordinary accounting events during the final reported quarters.

The financial data reveals several notable trends and fluctuations in key metrics over the analyzed periods.

Net Sales

Net sales show a generally increasing trend from the first quarter of 2016 through the first quarter of 2019, with values rising from approximately 10.7 billion to nearly 20.0 billion US dollars. This increase is particularly pronounced during 2017, where sales jumped significantly, peaking at 20.07 billion in the fourth quarter. However, in 2019, there is a sharp decline in net sales, dropping dramatically to a negative 9.03 billion in the last quarter, which indicates an unusual event or adjustment impacting reported sales or revenues.

Accounts and Notes Receivable, Net

Receivables show an increasing pattern overall but with some fluctuations. Starting at 8.76 billion US dollars in early 2016, the balance rises to a peak of over 20.3 billion in mid-2018 before decreasing slightly afterward. The data for 2019 shows a substantial drop in receivables during the second and third quarters, consistent with the decline in net sales, and stabilizes somewhat in the final quarter at around 3.8 billion US dollars. The large changes in receivables could reflect changes in credit terms, collection efficacy, or operational scale.

Receivables Turnover Ratio

This ratio, indicating how frequently receivables are collected during a period, trends downward from 5.38 in early 2016 to a low of 3.04 in the third quarter of 2017. This decline suggests slower collection periods or growing receivables relative to sales. After that low point, turnover improves gradually, reaching near 5.0 by the end of 2018. In 2019, turnover ratios spike sharply to over 15.5 in the second quarter, then decrease but remain elevated relative to earlier periods. This spike may be influenced by the unusual sales figures and smaller receivables balance.

Overall, the period from 2016 to 2018 reflected growth in sales and receivables, accompanied by some variability in collection efficiency as reflected in the turnover ratio. The year 2019 shows marked disruptions, with steep declines in sales and receivables and sudden spikes in turnover ratios, indicating significant operational or reporting changes that should be examined further for underlying causes.

The financial data reveals notable fluctuations in the company's cost of sales, accounts payable, and payables turnover ratios over the analyzed quarters.

Cost of Sales

The cost of sales generally increased from March 2016 to December 2017, rising from approximately $7.95 billion to a peak of $17.29 billion in the fourth quarter of 2017. Thereafter, the cost of sales exhibited volatility, declining sharply in the final quarter of 2019 to a negative value of approximately -$7.7 billion. This significant drop in the last reported quarter represents an abnormal pattern that warrants further investigation.

Accounts Payable

Accounts payable showed a consistent upward trend from March 2016 through December 2018, increasing from about $6.05 billion to $13.11 billion. However, in 2019, payable balances decreased markedly, falling to around $3 billion in each quarter, a substantial reduction compared to previous years. This decline in payables may indicate changes in supplier payment terms, reduced purchases, or other operational adjustments.

Payables Turnover Ratio

The payables turnover ratio declined between early 2016 and late 2017, moving from about 6 times to below 4 times, suggesting that the company was taking longer to pay its suppliers during this period. Following this, the ratio increased sharply to over 16 in the first half of 2019, indicating a faster payment cycle. In the final quarter of 2019, the turnover ratio decreased again to approximately 4.8 times, which aligns more closely with the longer-term average.

Overall, the data reflects periods of rising costs and payables until late 2017, followed by significant reductions in account payables and volatile payment patterns in 2019. The unusual negative cost of sales in the last quarter of 2019 is a key anomaly, while the sharp swings in the payables turnover ratio in 2019 suggest changes in financial policies or operational conditions affecting payment timing.

Working Capital

Working capital exhibited fluctuations throughout the observed periods. Initially, it increased from 11,652 million USD to 13,429 million USD in mid-2016, followed by a decline towards the end of 2016. A significant surge occurred in the third quarter of 2017, reaching a peak of 27,523 million USD, after which it declined steadily into 2018. In 2019, working capital showed a pronounced downward trend, decreasing sharply to values as low as approximately 1,653 million USD by the last quarter.

Net Sales

Net sales demonstrated an overall upward trend from early 2016 through most of 2018, increasing from 10,703 million USD to a peak around 24,245 million USD. However, within 2018 and into early 2019, net sales showed volatility, with a notable decrease beginning in the first quarter of 2019. The latest figures reflect a sharp decline, even turning negative in the final quarter recorded.

Working Capital Turnover

The working capital turnover ratio fluctuated over the period but generally showed an inverse relationship with the working capital levels. Periods with higher working capital typically corresponded with lower turnover ratios, such as the sharp drop to around 2.01 in late 2017 when working capital peaked. Conversely, as working capital decreased, the turnover ratio increased significantly, reaching values over 15 in early 2019, indicating increased efficiency or reduced capital employed relative to sales during that period. Despite this, the sharp increase in turnover coupled with declining net sales and working capital suggests potential stress in operational efficiency or financial structure in the latest quarters.

Analysis of the inventory management metrics reveals notable fluctuations over the examined periods.

Inventory Turnover Ratio

The inventory turnover ratio exhibited variability across the quarters. Starting around 4.97 in early 2016, there was a general decline toward late 2017 where the ratio dipped to approximately 2.53-2.97, indicating slower inventory movement. Subsequently, the ratio showed partial recovery, reaching above 4.0 for several quarters in 2018. However, the most striking changes occurred in 2019, where a peak of 11.22 in mid-2019 was observed, followed by a decline back to 3.25 by the end of 2019. The peak suggests a temporarily accelerated rate of inventory turnover, possibly due to operational adjustments or sales trends.

Average Inventory Processing Period

The average inventory processing period generally mirrored the inverse of the turnover ratio trends. Early 2016 showed processing periods around 70 to 85 days, followed by a significant extension up to 144 days in the third quarter of 2017. This elongation suggests a slowdown in inventory processing efficiency. Gradual improvement occurred in 2018 with processing times decreasing to the high 80s to mid-90s days range. In 2019, a sharp contraction to as low as 33 days occurred mid-year, aligning with the turnover ratio peak, indicating an accelerated processing period. However, the period lengthened again to 112 days by the end of 2019, signaling a return to slower inventory movement.

Overall, the data indicate periods of both constrained and enhanced inventory efficiency, with significant volatility particularly evident in 2017 and 2019. The sharp contrasts suggest episodic changes in operational conditions or market demands impacting inventory handling.

Receivables Turnover

The receivables turnover ratio shows a fluctuating pattern over the analyzed quarters. Initially, there is a moderate decline from 5.38 in March 2016 to 4.84 by June 2017. This is followed by a significant drop to 3.04 in September 2017, indicating a slower collection of receivables during that period. Subsequently, there is a recovery trend with the ratio increasing towards the end of 2018, reaching approximately 4.96 in December 2018. In early 2019, the ratio becomes highly volatile, peaking sharply at 15.51 in June 2019 and then declining sharply back to 5.66 by December 2019. This suggests inconsistent efficiency in receivables management during 2019.

Average Receivable Collection Period

The average receivable collection period generally moves inversely to the receivables turnover ratio, as expected. From March 2016 through mid-2017, the collection period shows a gradual increase from 68 days to 75 days, followed by a noticeable spike to 120 days in September 2017, indicating slower collections. After this peak, the period gradually decreases through 2018 to around 74 days by December 2018, suggesting improved collections efficiency. In 2019, a marked decrease is observed, with the collection period dropping sharply to 24 days in June 2019, then slightly increasing to 65 days by December 2019, reflecting inconsistencies in the length of time taken to collect receivables within that year.

Summary of Trends

Overall, the data reflects variable receivables management performance. Notably, there is a period of weakened performance in late 2017 as seen from both the receivables turnover ratio and the collection period. The subsequent improvements in 2018 indicate better collection practices or changes in credit policy. The volatility observed in 2019 suggests potential disruptions or changes in the company's business operations affecting working capital management. The sharp spike in turnover ratio and the drop in collection period in mid-2019 indicate an unusually quick collection phase, which was not maintained consistently through the year.

Inventory Processing Period

The average inventory processing period exhibited notable fluctuations over the observed quarters. Initially, it ranged between 71 to 85 days throughout 2016, followed by a significant increase reaching peaks of 144 and 123 days in the third and fourth quarters of 2017. Afterward, it showed a gradual decline towards 2018, stabilizing in the high 80s to low 90s range. A sharp reduction occurred in the first two quarters of 2019, dropping to 33 and 42 days, before rising again to 112 days by the end of 2019. This variability suggests periods of increased inventory holdings and potential operational adjustments.

Receivable Collection Period

The average receivable collection period demonstrated a parallel pattern to the inventory processing period, starting around 68 to 73 days in 2016. It rose sharply during the middle of 2017, peaking at 120 days in the third quarter, followed by a downward trend through 2018, declining from around 102 down to 74 days by the last quarter. A pronounced drop occurred in early 2019, with collection periods falling drastically to 24 and 29 days, then increasing again to 65 days by the end of the year. This indicates considerable variability in accounts receivable management and customer payment behavior.

Operating Cycle

The operating cycle, summing the inventory processing and receivable collection periods, reflected the combined impact of these two components. It ranged from 139 to 158 days throughout 2016, then escalated sharply to a high of 264 days in the third quarter of 2017. A subsequent decrease followed, bringing the cycle down to the range of 167 to 180 days throughout 2018. Early 2019 saw a significant reduction to 57 and 71 days, followed by an increase to 177 days at year-end. These changes highlight notable efforts or challenges in managing working capital efficiently, especially during 2017 and early 2019.

Summary of Trends

Over the course of the analysis period, the company experienced considerable volatility in its working capital management metrics. Both inventory processing and receivable collection periods peaked substantially in 2017 before declining in 2018. Early 2019 exhibited sharp decreases in both periods, indicative of either operational improvements or changes in business conditions, although these were not entirely sustained by the year’s end. The overall operating cycle mirrored these trends, pointing to periods of extended capital tie-up as well as phases of increased liquidity. This variability signals fluctuating efficiency in inventory turnover and receivables collection, which may impact cash flow and operational effectiveness.

Payables Turnover Ratio

The payables turnover ratio shows notable fluctuations over the observed quarters. Initially, from early 2016 through the end of 2017, the ratio predominantly oscillated between approximately 3.8 and 6. The ratio generally remained stable with minor variations during this period. However, a significant spike is evident in mid-2019, with the ratio jumping sharply to 16.31 in June 2019 and then slightly decreasing to 12.68 in September 2019 before dropping back to 4.79 by the end of 2019. This spike suggests a temporary change in payment practices or supplier interactions during this mid-2019 period.

Average Payables Payment Period

The average period taken to pay payables inversely mirrors the payables turnover ratio. From 2016 through early 2019, the payment period ranged mostly between 61 and 96 days, generally staying around the 67 to 85-day mark with some moderate rises in late 2017. A notable contraction in the payment period occurs during mid-2019, with the period drastically reducing to 22 days in June 2019 and slightly increasing to 29 days in September 2019. By the end of 2019, the period extends again to 76 days. This reduction corresponds closely with the peak in the payables turnover ratio during the same mid-2019 timeframe, indicating faster payment to suppliers during that period.

Overall Trends and Insights

Over the examined span, the company's payment behavior generally maintained a moderate pace in settling payables. The mid-2019 quarter represents a significant deviation, where the company accelerated its payments considerably, resulting in a spike in turnover ratio and a steep drop in days payable outstanding. This anomaly could reflect strategic financial management decisions, changes in supplier contracts, or operational shifts. After the peak, payment metrics largely returned toward their historical ranges. Overall, the data shows consistent payment activity with occasional substantial short-term variations.

The quarterly financial data reveals distinct patterns and notable fluctuations in the working capital cycle components over the analyzed periods.

Average Inventory Processing Period

This metric generally maintained a range between approximately 70 to 90 days during the early years, until mid-2017 when it spiked significantly to 144 days and remained elevated near 120 days toward the end of 2017 and through early 2018. Subsequently, it showed a decreasing trend with some variability, hitting a low of 33 days in mid-2019 before increasing again to 112 days by the end of 2019. Such volatility indicates challenges or changes in inventory management or supply chain operations during certain quarters.

Average Receivable Collection Period

The average receivable collection period displayed a relatively stable pattern around 68 to 75 days initially but experienced a sharp increase to 120 days in the third quarter of 2017, followed by a gradual decline through 2018. In 2019, there was a dramatic drop to 24 days mid-year, though it rose again to 65 days by year-end. This suggests variability in customer payment patterns or credit policy enforcement throughout the quarters.

Average Payables Payment Period

This period remained relatively stable between 61 and 73 days during 2016 and most of 2017. It then saw a decline in 2019, plunging from around 69 days down to 22 days mid-2019 before rising back to 76 days by the end of the same year. Such swings could reflect changes in supplier payment terms or cash management strategies.

Cash Conversion Cycle

The cash conversion cycle closely mirrored the trends seen in inventory and receivables periods, fluctuating between approximately 70 and 85 days in early periods. There was a pronounced increase around late 2017, peaking at 168 days, indicating a temporary elongation of the time taken to convert investments back into cash. This figure decreased over 2018 but remained elevated compared to the earliest quarters. A significant reduction to 35 days occurred mid-2019, followed by an increase to 101 days by the end of 2019, pointing to variability in cash flow efficiency throughout the examined timeline.

In summary, the data reveals considerable volatility in the components of working capital, with peaks around late 2017 and mid-2019. These fluctuations highlight periods of extended operational cycles and altered liquidity positions, possibly driven by internal process changes, market conditions, or financial policies affecting inventory, receivables, and payables management.