Microsoft Excel LibreOffice Calc

Short-term (Operating) Activity Analysis

Difficulty: Beginner


Ratios (Summary)

Honeywell International Inc., short-term (operating) activity ratios

Microsoft Excel LibreOffice Calc
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Turnover Ratios
Inventory turnover 6.71 5.98 6.22 6.05 6.57
Receivables turnover 5.57 4.57 4.81 4.78 5.06
Payables turnover 5.18 4.19 4.77 4.79 5.40
Working capital turnover 7.69 5.68 5.84 22.94 5.43
Average No. of Days
Average inventory processing period 54 61 59 60 56
Add: Average receivable collection period 66 80 76 76 72
Operating cycle 120 141 135 136 128
Less: Average payables payment period 70 87 76 76 68
Cash conversion cycle 50 54 59 60 60

Based on: 10-K (filing date: 2019-02-08), 10-K (filing date: 2018-02-09), 10-K (filing date: 2017-02-10), 10-K (filing date: 2016-02-12), 10-K (filing date: 2015-02-13).

Ratio Description The company
Inventory turnover An activity ratio calculated as cost of goods sold divided by inventory. Honeywell International Inc.’s inventory turnover deteriorated from 2016 to 2017 but then improved from 2017 to 2018 exceeding 2016 level.
Receivables turnover An activity ratio equal to revenue divided by receivables. Honeywell International Inc.’s receivables turnover deteriorated from 2016 to 2017 but then improved from 2017 to 2018 exceeding 2016 level.
Payables turnover An activity ratio calculated as cost of goods sold divided by payables. Honeywell International Inc.’s payables turnover declined from 2016 to 2017 but then increased from 2017 to 2018 exceeding 2016 level.
Working capital turnover An activity ratio calculated as revenue divided by working capital. Honeywell International Inc.’s working capital turnover deteriorated from 2016 to 2017 but then improved from 2017 to 2018 exceeding 2016 level.

Ratio Description The company
Average inventory processing period An activity ratio equal to the number of days in the period divided by inventory turnover over the period. Honeywell International Inc.’s average inventory processing period deteriorated from 2016 to 2017 but then improved from 2017 to 2018 exceeding 2016 level.
Average receivable collection period An activity ratio equal to the number of days in the period divided by receivables turnover. Honeywell International Inc.’s average receivable collection period deteriorated from 2016 to 2017 but then improved from 2017 to 2018 exceeding 2016 level.
Operating cycle Equal to average inventory processing period plus average receivables collection period. Honeywell International Inc.’s operating cycle deteriorated from 2016 to 2017 but then improved from 2017 to 2018 exceeding 2016 level.
Average payables payment period An estimate of the average number of days it takes a company to pay its suppliers; equal to the number of days in the period divided by payables turnover ratio for the period. Honeywell International Inc.’s average payables payment period increased from 2016 to 2017 but then declined significantly from 2017 to 2018.
Cash conversion cycle A financial metric that measures the length of time required for a company to convert cash invested in its operations to cash received as a result of its operations; equal to average inventory processing period plus average receivables collection period minus average payables payment period. Honeywell International Inc.’s cash conversion cycle improved from 2016 to 2017 and from 2017 to 2018.

Inventory Turnover

Honeywell International Inc., inventory turnover calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Selected Financial Data (USD $ in millions)
Cost of products and services sold 29,046  27,575  27,150  26,747  28,957 
Inventories 4,326  4,613  4,366  4,420  4,405 
Ratio
Inventory turnover1 6.71 5.98 6.22 6.05 6.57
Benchmarks
Inventory Turnover, Competitors
3M Co. 3.82 3.97 4.44 4.37 4.44
Danaher Corp. 4.42 4.42 4.68 5.17
General Electric Co. 4.19 3.91 3.67 4.60
Inventory Turnover, Sector
General Industrials 4.43 4.31 4.14 4.93
Inventory Turnover, Industry
Industrials 4.43 4.49 4.28 4.56

Based on: 10-K (filing date: 2019-02-08), 10-K (filing date: 2018-02-09), 10-K (filing date: 2017-02-10), 10-K (filing date: 2016-02-12), 10-K (filing date: 2015-02-13).

2018 Calculations

1 Inventory turnover = Cost of products and services sold ÷ Inventories
= 29,046 ÷ 4,326 = 6.71

Ratio Description The company
Inventory turnover An activity ratio calculated as cost of goods sold divided by inventory. Honeywell International Inc.’s inventory turnover deteriorated from 2016 to 2017 but then improved from 2017 to 2018 exceeding 2016 level.

Receivables Turnover

Honeywell International Inc., receivables turnover calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Selected Financial Data (USD $ in millions)
Net sales 41,802  40,534  39,302  38,581  40,306 
Accounts receivable, net 7,508  8,866  8,177  8,075  7,960 
Ratio
Receivables turnover1 5.57 4.57 4.81 4.78 5.06
Benchmarks
Receivables Turnover, Competitors
3M Co. 6.53 6.45 6.86 7.29 7.51
Danaher Corp. 5.20 5.30 5.19 5.48
General Electric Co. 4.63 4.59 3.92 4.59
Receivables Turnover, Sector
General Industrials 4.88 4.94 4.52 5.09
Receivables Turnover, Industry
Industrials 6.39 6.59 6.57 7.01

Based on: 10-K (filing date: 2019-02-08), 10-K (filing date: 2018-02-09), 10-K (filing date: 2017-02-10), 10-K (filing date: 2016-02-12), 10-K (filing date: 2015-02-13).

2018 Calculations

1 Receivables turnover = Net sales ÷ Accounts receivable, net
= 41,802 ÷ 7,508 = 5.57

Ratio Description The company
Receivables turnover An activity ratio equal to revenue divided by receivables. Honeywell International Inc.’s receivables turnover deteriorated from 2016 to 2017 but then improved from 2017 to 2018 exceeding 2016 level.

Payables Turnover

Honeywell International Inc., payables turnover calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Selected Financial Data (USD $ in millions)
Cost of products and services sold 29,046  27,575  27,150  26,747  28,957 
Accounts payable 5,607  6,584  5,690  5,580  5,365 
Ratio
Payables turnover1 5.18 4.19 4.77 4.79 5.40
Benchmarks
Payables Turnover, Competitors
3M Co. 7.36 8.23 8.36 9.08 9.10
Danaher Corp. 5.39 5.08 4.78 5.05
General Electric Co. 6.07 6.06 6.04 4.98
Payables Turnover, Sector
General Industrials 5.70 5.86 5.85 5.36
Payables Turnover, Industry
Industrials 6.77 7.32 7.68 7.41

Based on: 10-K (filing date: 2019-02-08), 10-K (filing date: 2018-02-09), 10-K (filing date: 2017-02-10), 10-K (filing date: 2016-02-12), 10-K (filing date: 2015-02-13).

2018 Calculations

1 Payables turnover = Cost of products and services sold ÷ Accounts payable
= 29,046 ÷ 5,607 = 5.18

Ratio Description The company
Payables turnover An activity ratio calculated as cost of goods sold divided by payables. Honeywell International Inc.’s payables turnover declined from 2016 to 2017 but then increased from 2017 to 2018 exceeding 2016 level.

Working Capital Turnover

Honeywell International Inc., working capital turnover calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Selected Financial Data (USD $ in millions)
Current assets 24,362  26,002  23,058  20,053  22,191 
Less: Current liabilities 18,924  18,861  16,331  18,371  14,773 
Working capital 5,438  7,141  6,727  1,682  7,418 
Net sales 41,802  40,534  39,302  38,581  40,306 
Ratio
Working capital turnover1 7.69 5.68 5.84 22.94 5.43
Benchmarks
Working Capital Turnover, Competitors
3M Co. 5.07 4.80 5.47 7.83 5.52
Danaher Corp. 8.91 12.34 4.94
General Electric Co. 1.73 1.47 1.69 0.52
Working Capital Turnover, Sector
General Industrials 2.50 2.26 2.80 0.90
Working Capital Turnover, Industry
Industrials 5.08 5.16 5.68 2.66

Based on: 10-K (filing date: 2019-02-08), 10-K (filing date: 2018-02-09), 10-K (filing date: 2017-02-10), 10-K (filing date: 2016-02-12), 10-K (filing date: 2015-02-13).

2018 Calculations

1 Working capital turnover = Net sales ÷ Working capital
= 41,802 ÷ 5,438 = 7.69

Ratio Description The company
Working capital turnover An activity ratio calculated as revenue divided by working capital. Honeywell International Inc.’s working capital turnover deteriorated from 2016 to 2017 but then improved from 2017 to 2018 exceeding 2016 level.

Average Inventory Processing Period

Honeywell International Inc., average inventory processing period calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Selected Financial Data
Inventory turnover 6.71 5.98 6.22 6.05 6.57
Ratio (no. of days)
Average inventory processing period1 54 61 59 60 56
Benchmarks (no. of days)
Average Inventory Processing Period, Competitors
3M Co. 96 92 82 83 82
Danaher Corp. 83 83 78 71
General Electric Co. 87 93 99 79
Average Inventory Processing Period, Sector
General Industrials 82 85 88 74
Average Inventory Processing Period, Industry
Industrials 82 81 85 80

Based on: 10-K (filing date: 2019-02-08), 10-K (filing date: 2018-02-09), 10-K (filing date: 2017-02-10), 10-K (filing date: 2016-02-12), 10-K (filing date: 2015-02-13).

2018 Calculations

1 Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ 6.71 = 54

Ratio Description The company
Average inventory processing period An activity ratio equal to the number of days in the period divided by inventory turnover over the period. Honeywell International Inc.’s average inventory processing period deteriorated from 2016 to 2017 but then improved from 2017 to 2018 exceeding 2016 level.

Average Receivable Collection Period

Honeywell International Inc., average receivable collection period calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Selected Financial Data
Receivables turnover 5.57 4.57 4.81 4.78 5.06
Ratio (no. of days)
Average receivable collection period1 66 80 76 76 72
Benchmarks (no. of days)
Average Receivable Collection Period, Competitors
3M Co. 56 57 53 50 49
Danaher Corp. 70 69 70 67
General Electric Co. 79 80 93 79
Average Receivable Collection Period, Sector
General Industrials 75 74 81 72
Average Receivable Collection Period, Industry
Industrials 57 55 56 52

Based on: 10-K (filing date: 2019-02-08), 10-K (filing date: 2018-02-09), 10-K (filing date: 2017-02-10), 10-K (filing date: 2016-02-12), 10-K (filing date: 2015-02-13).

2018 Calculations

1 Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ 5.57 = 66

Ratio Description The company
Average receivable collection period An activity ratio equal to the number of days in the period divided by receivables turnover. Honeywell International Inc.’s average receivable collection period deteriorated from 2016 to 2017 but then improved from 2017 to 2018 exceeding 2016 level.

Operating Cycle

Honeywell International Inc., operating cycle calculation, comparison to benchmarks

No. of days

Microsoft Excel LibreOffice Calc
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Selected Financial Data
Average inventory processing period 54 61 59 60 56
Average receivable collection period 66 80 76 76 72
Ratio
Operating cycle1 120 141 135 136 128
Benchmarks
Operating Cycle, Competitors
3M Co. 152 149 135 133 131
Danaher Corp. 153 152 148 138
General Electric Co. 166 173 192 158
Operating Cycle, Sector
General Industrials 157 159 169 146
Operating Cycle, Industry
Industrials 139 136 141 132

Based on: 10-K (filing date: 2019-02-08), 10-K (filing date: 2018-02-09), 10-K (filing date: 2017-02-10), 10-K (filing date: 2016-02-12), 10-K (filing date: 2015-02-13).

2018 Calculations

1 Operating cycle = Average inventory processing period + Average receivable collection period
= 54 + 66 = 120

Ratio Description The company
Operating cycle Equal to average inventory processing period plus average receivables collection period. Honeywell International Inc.’s operating cycle deteriorated from 2016 to 2017 but then improved from 2017 to 2018 exceeding 2016 level.

Average Payables Payment Period

Honeywell International Inc., average payables payment period calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Selected Financial Data
Payables turnover 5.18 4.19 4.77 4.79 5.40
Ratio (no. of days)
Average payables payment period1 70 87 76 76 68
Benchmarks (no. of days)
Average Payables Payment Period, Competitors
3M Co. 50 44 44 40 40
Danaher Corp. 68 72 76 72
General Electric Co. 60 60 60 73
Average Payables Payment Period, Sector
General Industrials 64 62 62 68
Average Payables Payment Period, Industry
Industrials 54 50 48 49

Based on: 10-K (filing date: 2019-02-08), 10-K (filing date: 2018-02-09), 10-K (filing date: 2017-02-10), 10-K (filing date: 2016-02-12), 10-K (filing date: 2015-02-13).

2018 Calculations

1 Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ 5.18 = 70

Ratio Description The company
Average payables payment period An estimate of the average number of days it takes a company to pay its suppliers; equal to the number of days in the period divided by payables turnover ratio for the period. Honeywell International Inc.’s average payables payment period increased from 2016 to 2017 but then declined significantly from 2017 to 2018.

Cash Conversion Cycle

Honeywell International Inc., cash conversion cycle calculation, comparison to benchmarks

No. of days

Microsoft Excel LibreOffice Calc
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Selected Financial Data
Average inventory processing period 54 61 59 60 56
Average receivable collection period 66 80 76 76 72
Average payables payment period 70 87 76 76 68
Ratio
Cash conversion cycle1 50 54 59 60 60
Benchmarks
Cash Conversion Cycle, Competitors
3M Co. 102 105 91 93 91
Danaher Corp. 85 80 72 66
General Electric Co. 106 113 132 85
Cash Conversion Cycle, Sector
General Industrials 93 97 107 78
Cash Conversion Cycle, Industry
Industrials 85 86 93 83

Based on: 10-K (filing date: 2019-02-08), 10-K (filing date: 2018-02-09), 10-K (filing date: 2017-02-10), 10-K (filing date: 2016-02-12), 10-K (filing date: 2015-02-13).

2018 Calculations

1 Cash conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= 54 + 6670 = 50

Ratio Description The company
Cash conversion cycle A financial metric that measures the length of time required for a company to convert cash invested in its operations to cash received as a result of its operations; equal to average inventory processing period plus average receivables collection period minus average payables payment period. Honeywell International Inc.’s cash conversion cycle improved from 2016 to 2017 and from 2017 to 2018.