FedEx Corp. (NYSE:FDX)

The analysis of the financial ratios and periods reveals notable trends in the company's operational efficiency and working capital management over the observed quarters.

Inventory Turnover

The inventory turnover ratio remained relatively high and stable, fluctuating between approximately 120 and 150 times per period after the initial recorded values. A gradual increase is observed from around 126 in early periods to a peak above 150, followed by a slight decline toward the later periods, indicating efficient inventory management with a consistent rate of stock renewal.

Receivables Turnover

Receivables turnover demonstrated moderate volatility but exhibited an overall upward trend from values near 7.0 to highs exceeding 8.8 times in the most recent quarters. This suggests gradual improvement in the speed of collection from customers, reflecting better credit control or stronger cash inflows from receivables.

Payables Turnover

Payables turnover showed fluctuations within the range of approximately 20 to 27 times, with no clear directional trend. Peaks were visible above 23 and approaching 27 times in specific periods, implying some variability in supplier payment rates but generally consistent payment behavior over time.

Working Capital Turnover

The working capital turnover ratio displayed considerable variation, initially rising sharply from around 17 to over 31, then experiencing a significant decline to under 9, followed by recovery phases reaching above 26. This volatility indicates changing efficiency in using working capital to generate sales, with periods of both strong and weak performance.

Average Inventory Processing Period

The average inventory processing period remained largely stable at about 2 to 3 days throughout the periods analyzed, reflecting a consistent and rapid inventory conversion cycle.

Average Receivable Collection Period

This period generally ranged between 41 and 56 days, showing some oscillations but trending downward in the latter periods, suggesting improving efficiency in customer collections.

Operating Cycle

The operating cycle closely followed the trend in receivables collection, moving within the range of approximately 43 to 59 days. Recent quarters showed a slight contraction, indicative of enhanced operational efficiency.

Average Payables Payment Period

Average payment periods to suppliers remained quite steady, mostly between 15 and 18 days, with minor decreases near later periods, which might imply moderately faster payments to vendors.

Cash Conversion Cycle

The cash conversion cycle exhibited fluctuations between 27 and 41 days. The later periods showed a decline toward the lower end of this range, signaling an improvement in the net duration between cash outflows and inflows, thus reflecting better cash management.

In summary, the company demonstrated strong control over inventory and receivables with minor variability in payables management. Working capital turnover exhibited some instability but generally improved over time. The contraction in operating and cash conversion cycles toward recent periods indicates enhanced operational and cash flow efficiencies overall.

The quarterly financial data exhibits several notable trends and fluctuations over the examined periods. Revenue shows an overall increasing trajectory, with some periodic declines and recoveries. Starting from approximately 17,052 million US dollars, revenue generally rises to a peak around the first half of 2022 with values exceeding 24,000 million US dollars. Subsequently, there is a gradual decline and stabilization, with revenue fluctuating between roughly 21,500 and 22,000 million US dollars in the most recent quarters.

Expenses represented by "Spare parts, supplies, and fuel, less allowances" also demonstrate a gradual increase over time. Beginning near 523 million US dollars, these costs rise steadily to exceed 640 million US dollars by the later periods. The incremental rise in operational costs suggests persistent pressure on input expenses, although the growth rate is relatively moderate compared to revenue changes.

The inventory turnover ratio exhibits distinct values starting in the period around mid-2019. Initially, the turnover ratio is just above 120, indicating moderate efficiency in inventory management. Over subsequent quarters, this ratio increases substantially, reaching and maintaining levels above 140 and peaking near 150 in some intervals. This upward trend in inventory turnover ratio implies improving efficiency in inventory utilization and possibly more effective supply chain management or faster sales cycles. The relatively stable high levels in the latest periods indicate sustained strong performance in this area.

Revenue

Generally increasing trend from 2018 to mid-2022, followed by a slight decline and stabilization in later periods.

Spare parts, supplies, and fuel expense

Steady increase from initial values around 523 million US dollars, reaching over 640 million US dollars in recent quarters, indicating rising operational costs.

Inventory turnover ratio

Rises from about 120 to sustained high levels above 140, peaking near 150, reflecting enhanced inventory management efficiency over time.

In summary, the data suggests overall revenue growth accompanied by increased operational expenses and significant improvements in inventory turnover efficiency. These patterns may reflect strategic adjustments in operational processes alongside market-driven revenue changes. The recent stabilization of revenue and the ongoing high inventory turnover rates denote a period of controlled operational performance with attention to resource utilization.

The financial data over the analyzed periods reveal several notable trends in operational performance and asset management.

Revenue Trends

Revenue exhibits a generally upward trajectory from August 2018 to May 2024, increasing from approximately $17,052 million to a peak above $24,000 million during mid-2022. There are fluctuations around this general growth, such as a decline observed around late 2022 to 2023, where revenue decreased progressively to near $21,681 million before a modest recovery toward $22,160 million by early 2025. This suggests a period of volatility following sustained growth, possibly influenced by external market conditions or operational adjustments.

Receivables, Less Allowances

The accounts receivable balance shows a steady increase from $8,716 million in August 2018 to a peak exceeding $12,000 million in mid-2021, followed by a gradual decline and fluctuation around $10,000 million in the most recent periods. The initial increase aligns with revenue growth, indicating growing sales volume and corresponding credit sales. The subsequent contraction in receivables could reflect improved collection efforts or adjustments in credit policy amid revenue fluctuations. The receivables balance trends tend to lag somewhat behind revenue changes.

Receivables Turnover Ratio

Receivables turnover ratio, which measures the effectiveness of credit and collection policies, shows variability but generally exhibits an increasing trend from a low of approximately 6.55 to a peak near 8.85 over the analyzed timeframe. Notable increases in turnover correspond to periods where receivables decreased or stabilized, supporting the interpretation of enhanced collection efficiency or tighter credit controls. The improvement in turnover is particularly evident from 2020 onward, suggesting operational improvements in working capital management.

Overall Insights

The concurrent analysis of revenue, receivables, and turnover ratios indicates that the company managed growth effectively during the initial years, with revenue and receivables rising in tandem. Subsequently, the focus appears to have shifted toward optimizing cash flow and working capital efficiency, as seen in the improved receivables turnover and stabilization or reduction in receivables despite high revenue levels. The dip in revenue and receivables in some periods highlights challenges that may have impacted sales or credit management, but the financial ratios suggest responsive management interventions to maintain liquidity and operational control.

The revenue of the company shows a generally stable and upward trend over the observed periods, with fluctuations reflecting seasonal or market-related factors. Starting from a baseline in August 2018, revenue exhibits gradual increases, particularly noticeable in the latter periods from mid-2020 through early 2022, reaching peaks near the 24,000 million US dollar mark. However, following this peak, a modest decline and stabilization occur, with revenues oscillating around the 21,500 to 22,000 million US dollars range in the most recent quarters.

Accounts payable figures demonstrate moderate variability across the quarters, without a clear long-term directional trend. The values range mostly between approximately 3,000 and 4,200 million US dollars. Some peaks, such as those observed in November 2021 and November 2020, suggest periods of increased payables, potentially linked to operational cycles or supplier payment terms. Periods with lower accounts payable, such as May 2024, indicate decreased outstanding supplier obligations.

The payables turnover ratio, calculated as a ratio, is only intermittently available but provides insight into changes in payment velocity to suppliers. The ratio fluctuates mostly between 20 and 24, with occasional spikes like in August 2024 when it jumps to 27.5, indicating a faster turnover of payables during that quarter. Overall, the turnover ratio maintains a relatively consistent level, suggesting stable payment practices over time.

Revenue Trends

Generally upward with seasonal fluctuations, peaking around early 2022, followed by slight declines and stabilization.

Accounts Payable Trends

Variable but mostly stable within a range around 3,000 to 4,200 million US dollars, with no clear long-term increase or decrease.

Payables Turnover Ratio

Relatively steady values between 20 and 24, indicating consistent payables management; notable spike around mid-2024 implies faster payment during that period.

Working Capital

The working capital shows considerable fluctuations over the observed period. Starting at 3,035 million USD in August 2018, it increased steadily until peaking at 9,150 million USD in November 2020. Following this peak, there was a general decline with some intermittent increases, reaching a low point around 3,318 million USD in February 2025. This indicates variability in short-term liquidity management and operational efficiency over the years, with a notable peak corresponding roughly with late 2020.

Revenue

Revenue demonstrates a generally upward trend from 17,052 million USD in August 2018 to a high of 24,394 million USD by May 2022. After this peak, revenue declined moderately, settling around 22,160 million USD in February 2025. Despite some fluctuations, the overall trajectory suggests growth in business operations and sales volume over the long term, with a peak during mid-2022 and a mild contraction thereafter.

Working Capital Turnover

Working capital turnover exhibits notable variation throughout the timeline. Initial data points are missing, but from May 2019, turnover increased sharply from 17.11 to 31.44 by May 2020, indicating improved efficiency in using working capital to generate revenue. Subsequently, the ratio dropped significantly, reaching a low of approximately 8.17 in February 2021, then gradually climbed again with some volatility, peaking again at 26.47 in May 2025. This pattern reflects changing dynamics in capital utilization, with periods of both high and low efficiency.

Trend Analysis and Insights

The data reflects cycles in operational and financial efficiency. The peak working capital in late 2020 corresponds with the lowest working capital turnover, suggesting a buildup of capital that was not immediately matched by proportional revenue increases. Conversely, periods of high turnover align with reduced working capital levels, indicative of more efficient capital deployment to drive revenue. Revenue growth over the years indicates expanding business activities, though the recent slight decline post-2022 suggests potential market or operational challenges. The fluctuations in both working capital and turnover ratios underscore the importance of ongoing management focus on optimizing capital structure and operational efficiency to support sustainable growth.

The inventory turnover ratio demonstrates a generally stable and high level of activity over the observed periods. Starting from a value above 120 in mid-2019, the ratio shows a tendency to increase gradually, reaching a peak above 150 during 2021 and early 2022. This peak indicates enhanced efficiency in inventory management during that timeframe. After this peak, the ratio slightly declines but remains consistently high above 140 through 2023 and into mid-2024, suggesting that the company has maintained a strong capability to convert its inventory into sales efficiently over time.

Correspondingly, the average inventory processing period remains remarkably stable and low, fluctuating predominantly between 2 and 3 days throughout the periods for which data is available. This short processing period aligns with the high inventory turnover ratios and underscores a rapid inventory cycle. The occasional shifts between 2 and 3 days do not indicate any significant operational disruptions or changes in inventory management strategy.

Inventory Turnover Ratio Trends

Consistently high performance, with values ranging mostly between 120 and 150, indicative of efficient inventory utilization.

Noticeable increase reaching a peak in 2021 and early 2022, reflecting possible improvements in sales or inventory management.

Slight decline post-peak but values remain robust, sustaining operational efficiency through mid-2024.

Average Inventory Processing Period Trends

Consistently low and stable at 2 to 3 days, evidencing rapid inventory movement and minimal stockholding time.

Minimal variation suggests steady operational practices without significant disruptions or changes in inventory turnover strategy.

Overall, the data indicates a sustained focus on maintaining efficient inventory turnover, with rapid processing periods that likely contribute positively to liquidity and operational performance. The high turnover rates alongside the consistently short processing days suggest effective inventory control and a responsive supply chain management system.

The analysis of the receivables turnover ratio and the average receivable collection period over the observed quarters reveals distinct trends and fluctuations that reflect the company's credit and collection efficiency over time.

Receivables Turnover Ratio

The receivables turnover ratio data begins from August 31, 2018, with a value of 7.65 and shows a general declining trend until February 28, 2021, where it reached a low point of approximately 6.55. Thereafter, an upward trend is observable, with the ratio increasing steadily and peaking at 8.85 in August 31, 2023. Post this peak, values exhibit minor fluctuations but generally maintain levels above 8.0, with the last recorded value at 8.58 for February 28, 2025.

Average Receivable Collection Period

The average receivable collection period exhibits an inverse relationship to the receivables turnover ratio, starting at 48 days in August 31, 2018. This period gradually increased to a peak of 56 days by February 28, 2021. Following the peak, there is a notable decrease in the collection period, reaching a low of 41 days by August 31, 2023. From then on, the days fluctuate slightly but remain around the low 40s, with the final observation registering 43 days by February 28, 2025.

Interpretation of Trends

Between 2018 and early 2021, the decreasing receivables turnover ratio and increasing receivable collection period indicate a trend of slower collections and less efficient receivables management. From mid-2021 onward, the reversal of these trends suggests significant improvement, reflecting stronger credit control practices or enhanced collection efforts leading to faster cash conversion cycles. The stabilization of these metrics in the latter periods points to a consistent and possibly optimized receivables management system.

The data over the multiple quarterly periods reveals consistent patterns in the operational efficiency metrics.

Average Inventory Processing Period

The average inventory processing period remains relatively stable over the observed quarters, predominantly maintaining a duration of 3 days. A slight improvement is observable in a series of quarters starting from August 31, 2021, where the period reduces to 2 days, indicating enhanced efficiency in inventory turnover. However, this shorter period does not sustain over the long term, as it returns to 3 days in later quarters, suggesting a potential reversion to previous inventory handling durations.

Average Receivable Collection Period

This period exhibits variability but within a moderate range, mostly fluctuating between 41 and 56 days. Initially, from August 31, 2018, to August 31, 2021, it trends upwards from the high 40s to mid-50s, indicating a slower collection cycle during that timeframe. Subsequently, a downward trend is noted, with the period decreasing to the low 40s in later quarters, implying improved efficiency in collecting receivables. Notably, no extreme volatility or prolonged spikes are evident, suggesting stable credit and collection policies.

Operating Cycle

The operating cycle, being a combination of inventory processing and receivables collection periods, follows similar trends. It largely ranges from the mid-40s to high 50s in days. A peak appears around the quarters ending February 2021 to November 2021, reflecting the higher inventory processing and receivable collection periods observed concurrently. After this, the cycle shortens, aligning with the reductions seen in the receivable collection duration, indicating enhanced overall operational efficiency. The later quarters show a slight increase again, suggesting periodic fluctuations but generally maintaining a consistent operational timeframe.

In summary, the company demonstrates a generally stable inventory processing period with minor short-term improvements. The average receivable collection period shows mild variability with a notable improvement in recent quarters. Consequently, the operating cycle reflects these underlying trends, with moderate fluctuations but an overall steady state in operational duration.

The payables turnover ratio data available from late 2018 onward depicts a fluctuating but generally stable pattern with notable variations. Initially, the ratio stands in the lower 20s, around 21 to 22, reflecting the frequency with which payables are being turned over during those periods. There is an evident dip in early 2021, followed by a recovery phase where the turnover ratio trends upwards, reaching a peak of 27.5 in November 2024. This peak signifies an acceleration in payables turnover, implying that the company was settling its payables more rapidly during that quarter. Following this spike, the ratio appears to regress to a level closer to previous periods, ending around 24.37 by February 2025, still above the earlier values from 2019–2023.

Regarding the average payables payment period, the values exhibit a degree of consistency with minor variations over the observed quarters. The payment period mostly fluctuates between 15 and 18 days, indicating a relatively stable timeframe for settling outstanding payables. While there were slightly longer payment durations, peaking at 18 days near the end of 2020 and beginning of 2021, the company generally maintained an efficient payment schedule around the 16-day mark. There is a notable change during late 2024, where the payment period drops to 13 days, suggesting an expedited payment process that corresponds with the observed increase in the payables turnover ratio during the same timeframe. Subsequently, the payment period reverts back to approximately 15-16 days.

In summary, the trends in these financial metrics suggest that the company has generally maintained a consistent payables management policy over the analyzed period, with occasional periods of faster payment activity. The significant spike in turnover and corresponding reduction in payment days in late 2024 may indicate a strategic decision to improve supplier relations or respond to changing operational conditions. Overall, the data reflects a balance between maintaining efficient payment cycles and managing cash flow effectively.

Payables Turnover Ratio

Generally stable with minor fluctuations around 20 to 23 through most periods.

Notable increase to 27.5 in November 2024, indicating quicker payment cycles.

Return to elevated but less extreme levels after peak, around 24 in early 2025.

Average Payables Payment Period

Consistently within 15 to 18 days for most quarters.

Transient increase to 18 days near late 2020/early 2021.

Reduction to 13 days in November 2024, aligning with peak turnover ratio.

Reversion to about 15-16 days following the reduced payment period.

The analysis of the provided financial time series reveals several distinct trends in the company's working capital management metrics over the periods spanning from late 2018 through early 2025.

Average Inventory Processing Period

This metric remained consistently stable at 3 days across most periods, with a notable decrease to 2 days beginning from August 31, 2021, through November 30, 2022. Subsequently, the period reverted back to 3 days, maintaining this level through to early 2025. The short duration and limited variation suggest effective inventory turnover and efficient management of inventory processing cycles.

Average Receivable Collection Period

Over the examined periods, the receivable collection period demonstrated moderate fluctuations. Initially, it increased from 48 days in August 2018 to a peak of 56 days in February 2021. Following this peak, a general downward trend is observed, with values decreasing to a low of 41 days by August 2023 before showing slight increases towards the end of the series. This indicates an initial lengthening in the time taken to collect receivables, possibly reflecting more lenient credit terms or slower customer payments, followed by improvements in collections efficiency in later periods.

Average Payables Payment Period

The payables payment period has exhibited relative stability, generally fluctuating between 15 and 18 days. The period stayed mainly around 16 to 17 days, with a minor dip to 13 days observed in August 2024. This consistency suggests steady management of supplier payments, balancing payment obligations without significant extension or shortening.

Cash Conversion Cycle

The cash conversion cycle (CCC) reflects the overall efficiency of the company's working capital management, indicating the net time between cash outflow for purchases and cash inflow from sales. The CCC increased from 35 days in August 2018, reaching a peak around 41 days in February 2020, before trending downward to approximately 27 days in August 2023. After this period, the CCC slightly increased again, stabilizing near 30-32 days towards early 2025. The downward trend suggests improvements in either managing inventory, collecting receivables, or paying suppliers more effectively, thereby reducing the time that capital is tied up. However, the later stabilization and mild increase indicate the possibility of shifting operational dynamics or business cycle influences.