General Dynamics Corp. (NYSE:GD)

Inventory Turnover

The inventory turnover ratio shows a declining trend from 7.53 in early 2016 to values fluctuating around 4.2 to 5.1 thereafter. A significant drop is observed beginning in 2017, stabilizing at lower turnover rates through 2020, indicating slower inventory movement or higher inventory levels relative to cost of goods sold.

Receivables Turnover

Receivables turnover maintained a relatively stable range around 8.5 to 9.1 between 2016 and 2018, then experienced a notable increase reaching a peak near 11.17 by the end of 2019. A slight decline is seen in 2020, settling close to 9.9, suggesting improved efficiency in collections up to 2019 followed by a moderate slowdown.

Payables Turnover

Payables turnover decreased steadily from approximately 12.9 in early 2016 to around 7.7 by late 2017, implying longer payment terms or slower payments to suppliers. Subsequently, a trend reversal occurred, with turnover rising above 13 in mid-2020, reflective of accelerated payables management or shorter payment periods.

Working Capital Turnover

The working capital turnover ratio exhibits high variability, initially peaking near 17.8 in mid-2016, followed by a sharp decline to a low near 5.9 in 2017. Volatility continues through 2019 with a dramatic surge to approximately 24.8 in early 2019, then falling back to a range around 6 to 10 by 2020. This indicates fluctuations in how effectively working capital is utilized to generate sales.

Average Inventory Processing Period

The average inventory processing days increased from approximately 48 days in early 2016 to about 86 days in late 2016 and 2017, signaling slower inventory turnover. A slight improvement is recorded from 2018 onwards, with days decreasing gradually to the mid-70s by the end of 2020.

Average Receivable Collection Period

Receivable collection periods remained relatively stable, ranging from 40 to 44 days between 2016 and 2018. Beginning in 2019, a steady decline is evident, dropping to a low of about 33 days during late 2019 and maintaining near this level through 2020, reflecting enhanced collections efficiency.

Operating Cycle

The operating cycle saw an increase from around 88 days in early 2016 to a peak near 129 days in 2017, largely influenced by longer inventory processing periods. A subsequent reduction occurs, with the cycle shortening to approximately 108-111 days by late 2019 and remaining stable through 2020, indicating improved overall operational efficiency.

Average Payables Payment Period

The payables payment period lengthened from approximately 28 days in early 2016 to nearly 47 days by late 2017, suggesting extended credit terms or delayed payments. Then, a contraction trend is observed, diminishing back to about 27-30 days by mid-2020, indicating a return to quicker payments to suppliers.

Cash Conversion Cycle

The cash conversion cycle experienced a rise from 60 days in early 2016 to a high near 91 days in late 2016 and 2017, reflecting slower conversion of resources into cash. A downward trend followed, reaching a low around 68 days by late 2019, but then increased again to approximately 82 days during 2020, implying some recent challenges in cash flow efficiency.

The cost of revenue demonstrates fluctuating yet generally increasing trends over the observed periods. Initially, values remain relatively stable around the 6,200 to 6,500 million USD range in 2015 and early 2016, followed by a moderate increase toward the end of 2016. The cost then exhibits some volatility from 2017 through 2018, with noticeable peaks toward late 2018 where it reaches its highest values in the dataset, surpassing 8,500 million USD. In 2019 and into mid-2020, despite some quarter-to-quarter variability, the cost of revenue remains elevated overall, consistently above 7,000 million USD, with a maximum near 8,800 million USD in late 2019 before a slight decline towards the third quarter of 2020.

Inventories show a distinct pattern characterized by a notable increase starting in early 2017. Prior to this, inventory levels were relatively consistent, fluctuating modestly in the range of approximately 3,200 to 3,700 million USD. Beginning in the first quarter of 2017, inventories jump sharply to values exceeding 5,300 million USD, peaking around 6,300 to 6,800 million USD during 2018 and 2019. Toward the latter half of 2019 and into 2020, inventory levels experience some reduction but remain significantly higher compared to the earlier years, oscillating roughly between 6,400 and 6,800 million USD.

The inventory turnover ratio data is available from late 2015 onward and reveals a declining trend over time. Initially, turnover ratios exceed 7.0, indicating a relatively efficient conversion of inventory into sales during 2015 and early 2016. However, from that point forward, the ratio declines steadily, falling below 5.0 from early 2017 onward. This sustained reduction suggests a slower movement of inventory relative to sales over the subsequent years. Despite minor fluctuations, the ratio remains around the mid-4 to mid-5 range through 2019 and 2020, indicating a decrease in inventory efficiency compared to the earlier period.

Overall, the data indicates that while the cost of revenue has generally increased over time, the volume of inventories held has also risen markedly since early 2017. Simultaneously, the declining inventory turnover ratio points to slower inventory usage or sales relative to stock on hand. These dynamics may suggest evolving operational or market conditions affecting inventory management and cost structures, warranting careful monitoring and possibly strategic adjustments.

The revenue figures exhibit a generally fluctuating trend over the examined periods. From early 2015 to late 2017, revenue values oscillate without a clear upward or downward trend, ranging mostly between 7,400 and 8,300 million US dollars. Beginning in 2018, a more pronounced upward movement is observed, with revenue peaking in the fourth quarter of 2018 at 10,378 million US dollars. This peak is followed by moderate fluctuations, with revenue remaining above approximately 9,200 million US dollars through mid-2020, though with some variation quarter to quarter.

Accounts receivable show a somewhat stable pattern across the intervals, generally fluctuating around the 3,400 to 3,800 million US dollars range. There are isolated instances of slight increases or decreases; however, no significant trend of consistent growth or decline is apparent. The data suggests steady levels of outstanding payments due from customers relative to revenue fluctuations.

The receivables turnover ratio indicates the efficiency in collecting accounts receivable. Initially, values are around 8.6 to 8.9 in 2015 to early 2016, with minor oscillations. From 2017 onwards, a gradual improvement in turnover is noted. The ratio increases steadily, from approximately 8.4 up to a peak of 11.17 around the end of 2019 and early 2020, indicating faster collection of receivables relative to credit sales. Toward the latest periods, a slight decrease in turnover to around 9.89 is seen.

Revenue

Fluctuates moderately between 7,400 and 8,300 million early on; significant growth begins in 2018, peaking above 10,000 million; maintains elevated levels with some variability through mid-2020.

Accounts Receivable

Relatively stable, fluctuating between 3,400 and 3,800 million; no persistent upward or downward trend detected.

Receivables Turnover

Shows improvement over time; moves from approximately 8.6–8.9 early on to a peak above 11 near end of 2019, indicating enhanced collection efficiency; slight decline observed in early 2020.

In summary, the financial data illustrates increased revenue generation capability starting in 2018, paired with stable accounts receivable balances. The receivables turnover ratio’s gradual improvement suggests more effective credit and collection management over the period, although the slight reduction in turnover in the most recent quarter may warrant monitoring. Overall, these trends indicate positive operational performance in terms of sales growth and receivables management during the timeframe analyzed.

The analysis of financial data reveals several notable trends in cost of revenue, accounts payable, and payables turnover over the examined quarterly periods.

Cost of Revenue

The cost of revenue shows a fluctuating yet generally increasing pattern through the period. Starting at 6,254 million US dollars in April 2015, it experienced moderate ups and downs, reaching a peak of 8,816 million US dollars by December 2019. The fluctuations could be related to varying operational levels or cost management strategies, with a distinct upward spike observed towards the latter half of the timeline, notably from mid-2018 onward. This suggests increased production or acquisition costs, possibly reflecting expanded operations or inflationary pressures.

Accounts Payable

Accounts payable demonstrates variability but with relatively less pronounced directional movement compared to cost of revenue. Beginning at 2,266 million US dollars in April 2015, it increased to a high of approximately 3,207 million US dollars by December 2017. Subsequently, it fluctuated downward with intermittent recoveries, ending near 2,613 million US dollars by September 2020. The variation may reflect changing supplier payment terms, purchasing cycle management, or shifts in working capital needs.

Payables Turnover Ratio

The payables turnover ratio, available from December 2015 onward, exhibits a generally declining trend from about 12.9 to a low near 7.73, followed by a recovery phase rising back above 12 in later quarters. This ratio measures how quickly the company pays off its suppliers; the initial decline indicates a slower payment cycle or extended payment terms. The subsequent increase suggests an acceleration in payment frequency, potentially signaling improved liquidity management or changes in vendor agreements.

Overall, the cost of revenue has increased considerably, indicating heightened operational scale or cost intensification, while accounts payable levels have varied with a peak period around late 2017. The payables turnover ratio's downward then upward movement depicts shifts in credit management strategies over time. These patterns collectively suggest dynamic adjustments in operational activity and financial management practices during the analyzed period.

Working Capital

The working capital exhibits notable fluctuations over the observed periods. Initially, it declines from 3240 million USD in April 2015 to a low of 1765 million USD in April 2016, indicating a tightening of short-term liquidity. Subsequently, it generally increases, reaching peaks in late 2017 (5229 million USD) and early 2020 (6301 million USD). However, some volatility is present, with intermittent declines such as in mid-2019 (1543 million USD) before recovering again. Overall, the working capital shows an irregular but upward trend after mid-2016, implying periods of improved short-term financial strength interspersed with tighter liquidity intervals.

Revenue

Revenue demonstrates a moderate upward trend from 7784 million USD in April 2015 to a high around 10773 million USD by December 2019. Periods of slight stagnation or decline occur, such as in early 2017 and again in 2020, but the general trajectory remains positive. The highest revenue values appear in late 2018 and 2019, reflecting robust sales during those years. A decrease is observed in the first half of 2020, potentially indicating external pressures or market challenges impacting top-line performance.

Working Capital Turnover

The working capital turnover ratio, available for later periods starting in late 2015, shows significant variation. Initially high values (14.8 and 17.8) suggest efficient use of working capital relative to revenue. Thereafter, the ratio declines steadily, reaching lows around 5.92 in mid-2017, implying slower turnover and possibly excess working capital or reduced sales efficiency. The ratio briefly improves toward early 2019, peaking at 24.81, indicating a sharp increase in efficiency or a reduction in working capital relative to sales. However, the ratio decreases again in 2020, suggesting a return to lower turnover rates. The volatility in this ratio points to inconsistent management of working capital and fluctuating operational efficiency over time.

Overall Insight

The data presents a dynamic interplay between liquidity and operational efficiency. The company experiences periods of both increased working capital and revenue growth, yet these do not always align to optimize turnover. The marked fluctuations in working capital turnover highlight changing cycles in the company’s management of current assets and liabilities relative to sales generation. The declining revenue and working capital turnover in 2020 may indicate emerging operational or market challenges requiring strategic attention. Continuous monitoring of these metrics is advisable to enhance capital utilization and sustain revenue growth.

Inventory turnover

The inventory turnover ratio shows a notable decline from 7.53 in April 2016 to approximately 6.78 by December 2016, indicating slower inventory movement during this period. A more pronounced decrease is observed entering 2017, with turnover ratios dropping sharply to around 4.26 and remaining relatively stable around this level throughout 2017 and the first half of 2018. From late 2018 into 2019, a gradual improvement is evident, with ratios increasing modestly from approximately 4.42 up to peaks near 5.12 by early 2020. However, the turnover ratio dips slightly towards the end of the data with values around 4.66 to 4.96, suggesting some volatility or challenges in maintaining inventory liquidation rates during the latter periods.

Average inventory processing period

The average inventory processing period, expressed in days, fluctuates inversely to the inventory turnover trend. Beginning at 48 days in April 2016, it extends to about 54 days by December 2016, reflecting longer holding times. A significant increase is observed at the start of 2017 with the period lengthening sharply to around 86 days and remaining elevated around this level through most of 2017 and mid-2018. From late 2018 onwards, a reduction trend emerges with the average processing period shortening progressively to roughly 74 days by the end of the data set in late 2020. These movements suggest improvements in inventory management efficiency after a period of extended holding times.

Overall trend and insights

The inverse relationship between inventory turnover and average inventory processing period confirms consistency in the data quality, with slower turnover corresponding to longer holding durations. The initial decline in turnover and extension of inventory processing in 2016–2017 may reflect operational or market challenges affecting stock fluidity. Subsequent gradual recovery in turnover and reduction in processing times from late 2018 suggests measures to enhance inventory management practices or favorable market conditions improving product movement. Although some fluctuations persist, the latest periods indicate moderate stabilization in inventory efficiency metrics. Continued monitoring is advised to assess whether recent improvements translate into sustained operational performance.

The analysis of the receivables turnover ratio and average receivable collection period over the observed quarterly periods reveals distinct trends in the efficiency of receivables management.

Receivables Turnover Ratio

The receivables turnover ratio demonstrates a generally positive trend over the examined periods, starting from a ratio of 9.13 and fluctuating moderately in the initial quarters observed. From the early data points, the ratio remains around the 8.4 to 9.1 range, indicating stable turnover. However, from 2018 onward, the ratio exhibits a consistent upward trajectory, reaching a peak of 11.17 by the end of 2019. This increasing trend suggests an improvement in the company's ability to collect receivables more frequently within the given period. Notably, a slight decline is observed in the most recent quarter, falling to 9.89, which could indicate some deceleration in turnover efficiency.

Average Receivable Collection Period

The average receivable collection period shows an inverse pattern compared to the turnover ratio, which is expected given their relationship. Initially, the collection period is in the low 40s (days), oscillating between 40 and 44 days in the earlier quarters. Over time, this metric steadily decreases, reaching a low of 33 days by the end of 2019 and maintaining this period consistently across the last several quarters. The reduced time taken to collect receivables aligns with the rising turnover ratio, confirming enhanced collection efficiency. The latest available data point indicates a slight increase to 37 days, which may warrant attention as it deviates from the previously stable improvement trend.

Overall, the data indicates a strengthening in receivables management efficiency over the monitored timeframe, characterized by faster collection cycles and higher turnover ratios, except for minor recent reversals that may require ongoing monitoring.

The data reflects quarterly trends over several years for key operational efficiency metrics measured in days. These metrics include the average inventory processing period, average receivable collection period, and the operating cycle.

Average Inventory Processing Period

This metric starts being reported from the quarter ending April 3, 2016. Initially, it remained relatively stable around the low 50s days mark, fluctuating slightly between 48 and 54 days through the end of 2016. However, a pronounced increase is observed in the first three quarters of 2017, with the period expanding sharply to 86 days and maintaining that level for three consecutive quarters. Following this peak, a gradual decline ensues throughout 2018 and 2019, trending down from the high 70s and 80s back into the low to mid-70s and mid-70s days by the end of 2019. A slight rise is noted again in mid-2020, ending at 76 days, though the last data point falls to 74 days, indicating some stabilization.

Average Receivable Collection Period

This period starts with values in the early 40s days range in 2015 and remains relatively stable with minor fluctuations throughout the observed quarters. The metric slightly oscillates between 40 and 44 days until early 2018. After that, a gradual downward trend begins, reaching a low of 33 days through most of 2019 and continuing into 2020. The last quarter shows a small uptick to 37 days, but overall, the receivable collection period exhibits an improving trend, signaling enhanced efficiency in receivables management over time.

Operating Cycle

The operating cycle combines the inventory processing and receivable collection periods and hence reflects their cumulative effects. Starting at 88 days in early 2016, it follows a pattern of increase, peaking notably in 2017 at approximately 127 to 129 days. Post-2017, there is a distinct downward trend, with the cycle shortening progressively through 2018 and 2019 towards the low 100s days range, indicating improved overall operational efficiency. Despite a slight rebound in mid-2020, the operating cycle remains considerably below its 2017 peak, suggesting sustained gains in cycle management.

In summary, the data reveals a significant increase in the average inventory processing period during 2017, which contributed to a peak in the operating cycle at that time. Subsequently, both metrics demonstrated steady improvement, with inventory processing days and the operating cycle declining through late 2019 and into 2020. The average receivable collection period exhibits a more consistent gradual improvement across the entire timespan. Overall, these trends suggest efforts to enhance inventory turnover and receivables efficiency, resulting in a more streamlined operating cycle.

The analysis of the payables-related financial ratios over the specified periods reveals notable trends and fluctuations. Specifically, the payables turnover ratio and the average payables payment period demonstrate an inverse relationship, as expected, since they measure the efficiency of payables management from different perspectives.

Payables Turnover Ratio

The payables turnover ratio starts at 12.9 in early 2015 (April 5, 2015). Over the ensuing quarters, there is a general downward trend reaching a low of 7.73 around April 2018. This decline suggests a slowing in the frequency with which the company is settling its payables during this timeframe. Following this trough, the ratio begins to recover steadily, increasing to 13.39 by June 28, 2020, indicating improved efficiency in payables management towards the end of the observed period.

Average Payables Payment Period

Conversely, the average payables payment period starts at 28 days (no earlier data available) and rises consistently to a peak of 47 days around April 2018. This lengthening of the payment period signals that the company is taking longer to pay its suppliers during this interval. After reaching that peak, the payment period shortens gradually, moving down to 27 days by late June 2020, reflecting a quicker payment cycle in the more recent quarters.

The inverse movements between these two metrics confirm that the company extended its payment timing notably during the mid-2015 to early 2018 period, potentially indicating a strategic shift to manage cash flow or negotiate longer credit terms. From 2018 onward, the trend reversed, with the company shortening its payment period and increasing payables turnover, which may suggest improved liquidity or a strategic choice to foster stronger supplier relationships by settling payables faster.

Average Inventory Processing Period

The average inventory processing period shows an initial increase from 48 days in April 2016 to a peak of 86 days between April and October 2017. After this peak, a gradual decline occurs, reaching approximately 74 days by September 2020. This suggests that inventory turnover slowed significantly during 2017, but improved slightly in subsequent years.

Average Receivable Collection Period

The receivable collection period remained relatively stable overall, fluctuating mildly around the low 40s days range from April 2016 to December 2017. From early 2018 onward, a gradual decrease is observed, reaching a low of 33 days in the early quarters of 2020, before a slight uptick to 37 days by September 2020. This indicates an improvement in receivables management and faster collection in recent periods.

Average Payables Payment Period

The payables payment period increased from 28 days in April 2016 to a high of 47 days by December 2017. Following this, the period declined steadily, moving down to 27 days by June 2020, before a minor increase to 30 days in September 2020. This suggests a shift from delaying payments to quicker settlements over the analyzed timeline.

Cash Conversion Cycle

The cash conversion cycle mirrored the trends of its components, rising from 60 days in April 2016 to a peak above 90 days in mid-2017, indicating a lengthening in the time to convert investments in inventory and receivables into cash. Subsequently, the cycle declined gradually to the high 60s by early 2020, followed by a slight increase to around 81 days by September 2020. This pattern reflects improvements in operational efficiency after 2017, despite some volatility in the latest periods.