Analysis of Short-term (Operating) Activity Ratios
Quarterly Data
Activity ratios measure how efficiently a company performs day-to-day tasks, such us the collection of receivables and management of inventory.
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Short-term Activity Ratios (Summary)
Hubbell Inc., short-term (operating) activity ratios (quarterly data)
Based on: 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).
The analysis of the quarterly financial ratios and periods reveals notable trends and shifts in the operational efficiency and working capital management over the observed time frame.
- Inventory Turnover
- The inventory turnover ratio showed a gradual increase from early 2019, peaking around the first quarter of 2020, indicating efficient inventory management and faster stock movement during that period. However, from mid-2020 onward, the ratio declined and stabilized at a lower level compared to the peak, suggesting a relative slowing in inventory turnover towards late 2023.
- Receivables Turnover
- Receivables turnover ratio exhibited some fluctuation throughout the periods, with a notable dip during the middle of 2021 followed by partial recovery. The ratio remained relatively stable with moderate variation, indicating consistent but somewhat varying efficiency in collecting receivables over time.
- Payables Turnover
- The payables turnover ratio experienced a pronounced decline from early 2019 through the end of 2021. This decrease suggests that the company took longer to settle its payables, reflecting extended payment periods. Beginning in 2022, the ratio showed a slight increase, indicating improvements in payment speed but still remaining below earlier levels.
- Working Capital Turnover
- The working capital turnover ratio demonstrated volatility, with periods of increase and subsequent decline. Notably, the ratio peaked towards the end of 2019 and again in late 2020, correlating with increased operational efficiency. However, from 2021 onwards, the ratio gradually decreased, pointing to a slower turnover of working capital as time progressed.
- Average Inventory Processing Period
- The average inventory processing period shortened to its lowest point around the first quarter of 2020, aligning with the peak in inventory turnover. After this, the period lengthened progressively, reaching its highest values in late 2021 and stabilizing at an extended duration through 2023. This trend indicates a slower movement of inventory in recent periods.
- Average Receivable Collection Period
- The average receivable collection period fluctuated moderately, with a noticeable increase in the second half of 2021, indicating slower collections during that period. It later returned closer to earlier levels, demonstrating variability but without a sustained upward or downward trend.
- Operating Cycle
- The operating cycle, which combines inventory and receivables periods, increased significantly in 2021, reaching its highest levels across the entire timeline. This suggests an extended period for converting inventory into cash. Although it decreased slightly afterward, the cycle remained longer than the earlier years, indicating reduced operational efficiency.
- Average Payables Payment Period
- The average payables payment period generally lengthened from 2019 into 2021, indicating the company took longer to pay its suppliers during these years. Subsequently, the payment period shortened somewhat but remained elevated compared to the early 2019 levels, reflecting a strategic extension of creditor financing.
- Cash Conversion Cycle
- The cash conversion cycle remained relatively stable with minor fluctuations. However, it peaked notably at the end of 2021, coinciding with the extended operating cycle and longer inventory and receivable periods. This peak implies a temporary decline in cash flow efficiency. The cycle shortened afterward but still indicated moderate cash flow timing compared to earlier years.
Overall, the data suggests that the company managed operational and working capital processes effectively through early 2020, as reflected in higher turnover ratios and shorter processing periods. Post-2020 trends indicate challenges, with slower inventory movement, extended payment and collection periods, and lengthened operating and cash conversion cycles. These patterns may reflect broader market conditions affecting operations or changes in company policies regarding credit terms and inventory management.
Turnover Ratios
Average No. Days
Inventory Turnover
Hubbell Inc., inventory turnover calculation (quarterly data)
| Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||||||
| Cost of goods sold | |||||||||||||||||||||||||
| Inventories, net | |||||||||||||||||||||||||
| Short-term Activity Ratio | |||||||||||||||||||||||||
| Inventory turnover1 | |||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||
| Inventory Turnover, Competitors2 | |||||||||||||||||||||||||
| Boeing Co. | |||||||||||||||||||||||||
| Caterpillar Inc. | |||||||||||||||||||||||||
| Eaton Corp. plc | |||||||||||||||||||||||||
| GE Aerospace | |||||||||||||||||||||||||
| Honeywell International Inc. | |||||||||||||||||||||||||
| Lockheed Martin Corp. | |||||||||||||||||||||||||
| RTX Corp. | |||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).
1 Q3 2023 Calculation
Inventory turnover
= (Cost of goods soldQ3 2023
+ Cost of goods soldQ2 2023
+ Cost of goods soldQ1 2023
+ Cost of goods soldQ4 2022)
÷ Inventories, net
= ( + + + )
÷ =
2 Click competitor name to see calculations.
- Cost of Goods Sold (COGS)
- The cost of goods sold exhibits some fluctuation throughout the periods analyzed. Initially, there is an increase from 780,000 thousand US dollars in the first quarter of 2019, peaking at 842,000 in the third quarter of the same year. The amount then declines toward the end of 2019 and remains somewhat variable through 2020, with a noticeable dip in the second quarter of 2020 at 668,700 thousand US dollars, likely reflecting external factors affecting operations during that time. Subsequently, COGS displays a general upward trend from early 2021 onward, reaching approximately 888,400 thousand US dollars by the third quarter of 2023. Despite periodic decreases, the overall trajectory suggests increased production or costs over the long term.
- Inventories, Net
- Inventories demonstrate some variability but maintain a general upward trend over the periods. Starting at 663,000 thousand US dollars in the first quarter of 2019, the inventory levels decrease slightly by the beginning of 2020, reaching the lowest point of 584,900 in the third quarter of 2020. After this trough, inventories increase consistently through 2021 and 2022, peaking near 794,100 thousand US dollars in the third quarter of 2023, which might indicate accumulation or stock buildup, possibly to meet anticipated demand or due to supply chain considerations.
- Inventory Turnover Ratio
- The inventory turnover ratio reflects efficiency in managing inventory relative to sales. It starts at 4.91 in the first quarter of 2019 and shows modest variation around this range during 2019 and early 2020. Notably, turnover peaks at 5.43 in the first quarter of 2020, indicating higher efficiency or quicker inventory movement, before declining steadily to a low of 4.26 in the third quarter of 2021. After this low point, there is a slight recovery, with the ratio hovering around 4.4 to 4.7 in the most recent quarters of 2022 and 2023. The downward trend followed by modest recovery could suggest challenges in inventory management or sales velocity during the period, with some improvement evident in the last year.
- Overall Analysis
- The data depicts a business environment with cyclical fluctuations and responses to external influences, particularly noted by the dip in COGS and inventory levels during 2020. The subsequent recovery phases in both costs and inventories imply adaptation and growth. The inventory turnover ratio’s decline and partial rebound highlight operational challenges with inventory efficiency, suggesting room for improvement in aligning inventory with sales demands. The rising inventory levels, combined with increasing costs, may warrant close monitoring to prevent potential overstocking or increased holding costs.
Receivables Turnover
Hubbell Inc., receivables turnover calculation (quarterly data)
| Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||||||
| Net sales | |||||||||||||||||||||||||
| Accounts receivable, net of allowances | |||||||||||||||||||||||||
| Short-term Activity Ratio | |||||||||||||||||||||||||
| Receivables turnover1 | |||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||
| Receivables Turnover, Competitors2 | |||||||||||||||||||||||||
| Boeing Co. | |||||||||||||||||||||||||
| Caterpillar Inc. | |||||||||||||||||||||||||
| Eaton Corp. plc | |||||||||||||||||||||||||
| GE Aerospace | |||||||||||||||||||||||||
| Honeywell International Inc. | |||||||||||||||||||||||||
| Lockheed Martin Corp. | |||||||||||||||||||||||||
| RTX Corp. | |||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).
1 Q3 2023 Calculation
Receivables turnover
= (Net salesQ3 2023
+ Net salesQ2 2023
+ Net salesQ1 2023
+ Net salesQ4 2022)
÷ Accounts receivable, net of allowances
= ( + + + )
÷ =
2 Click competitor name to see calculations.
- Net Sales Trend
- The net sales figures exhibit fluctuations across the observed quarters. Early periods show a general increase from $1,087,300 thousand in March 2019 to a peak of $1,204,000 thousand in September 2019, followed by a decline towards December 2019 and early 2020. A significant drop is evident in the second quarter of 2020, likely reflecting external economic factors, with sales falling to $949,200 thousand. Recovery is observed beginning in the third quarter of 2020, with a gradual upward trend continuing into 2021 and notably accelerating in 2022, reaching a high of $1,316,200 thousand in September 2022 before slightly retracting by the end of 2022. The quarterly data for 2023 show overall strong performance, with net sales remaining robust around $1,370,000 thousand by September 2023, suggesting consistent growth momentum.
- Accounts Receivable (Net of Allowances) Dynamics
- Accounts receivable maintain a fluctuating but generally upward trajectory. Starting at $716,200 thousand in March 2019, the amount grows to approximately $787,100 thousand by September 2019 before a decline in the subsequent quarter. Despite some volatility, including a downturn in mid-2020, the trend from 2021 onward shows renewal in growth, peaking close to $852,900 thousand in September 2023. Periodic fluctuations suggest some seasonality or timing variations in collections, but overall expansion in receivables aligns with increased sales levels in later periods, indicating a proportional relationship between revenue generation and outstanding receivables.
- Receivables Turnover Ratio Analysis
- The receivables turnover ratio ranges from approximately 5.18 to 6.75 during the periods analyzed, indicating moderate variation in the company's efficiency in collecting receivables. Early 2019 figures start relatively high near 6.39, followed by a decline to near 5.87–5.88 mid-year, then improvement towards the end of the year. In 2020, the ratio fluctuates, with some quarters exceeding 6.5, reflecting occasional improvements in collection speed despite the challenging market environment seen in that year. The ratio shows downward pressure in parts of 2021, dipping to a low near 5.18, before gradually recovering to around 6.15 by late 2023. These movements suggest periods of slower receivables collection potentially linked to fluctuating sales or changes in credit policies, balanced by intervals of stronger collection performance.
- Overall Summary
- The data reflect a business subject to external economic influences, especially visible around 2020. After a period of sales contraction and volatility in receivable balances, the company demonstrates resilience and recovery through 2021 to 2023, with strengthening sales and receivables corresponding with an improving receivables turnover ratio in recent quarters. The overall trends point to positive momentum in revenue growth accompanied by largely stable receivables management, though periodic variations in turnover ratio suggest ongoing attention to credit and collection practices may be warranted to sustain efficiency.
Payables Turnover
Hubbell Inc., payables turnover calculation (quarterly data)
| Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||||||
| Cost of goods sold | |||||||||||||||||||||||||
| Accounts payable | |||||||||||||||||||||||||
| Short-term Activity Ratio | |||||||||||||||||||||||||
| Payables turnover1 | |||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||
| Payables Turnover, Competitors2 | |||||||||||||||||||||||||
| Boeing Co. | |||||||||||||||||||||||||
| Caterpillar Inc. | |||||||||||||||||||||||||
| Eaton Corp. plc | |||||||||||||||||||||||||
| GE Aerospace | |||||||||||||||||||||||||
| Honeywell International Inc. | |||||||||||||||||||||||||
| Lockheed Martin Corp. | |||||||||||||||||||||||||
| RTX Corp. | |||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).
1 Q3 2023 Calculation
Payables turnover
= (Cost of goods soldQ3 2023
+ Cost of goods soldQ2 2023
+ Cost of goods soldQ1 2023
+ Cost of goods soldQ4 2022)
÷ Accounts payable
= ( + + + )
÷ =
2 Click competitor name to see calculations.
The analysis of the quarterly financial data indicates several notable trends in cost of goods sold, accounts payable, and payables turnover over the examined periods.
- Cost of Goods Sold (COGS)
- The cost of goods sold exhibits fluctuations with a general upward trend from 2019 to 2023. Starting around 780 million USD in the first quarter of 2019, the COGS declined during mid-2020, possibly reflecting the broader economic impacts experienced in that period, before increasing consistently from mid-2021 onwards. By the third quarter of 2023, COGS had risen to approximately 888 million USD, marking a significant increase over the five-year span. The periods following the initial downturn show progressive recovery and growth, potentially indicating increased production or higher input costs.
- Accounts Payable
- Accounts payable rose steadily from approximately 404 million USD in early 2019 to a peak near 570 million USD in the third quarter of 2022. After reaching this high point, accounts payable demonstrated a slight decline to around 545 million USD in the third quarter of 2023. This growth in accounts payable suggests that the company may have been taking longer to settle its obligations or increasing its purchases on credit. The reduction noted towards 2023 may reflect improved payment practices or changes in procurement strategy.
- Payables Turnover Ratio
- The payables turnover ratio reveals a declining trend from 8.06 in the first quarter of 2019 to approximately 6.22 by the third quarter of 2023. This ratio decrease indicates that the company is taking longer to pay its suppliers over time. The most pronounced decline occurred between 2019 and 2021, stabilizing somewhat with minor fluctuations afterward. The lower turnover ratio corresponds with the observed increase in accounts payable and may suggest changes in supplier payment terms or strategic management of working capital.
Overall, the data suggests that while the company experienced an increase in cost of goods sold reflecting growth or cost pressures, it simultaneously extended its accounts payable period, as evidenced by the reduced payables turnover ratio. These patterns may reflect deliberate cash flow management or external factors influencing supplier relations and production costs over the reviewed quarters.
Working Capital Turnover
Hubbell Inc., working capital turnover calculation (quarterly data)
| Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||||||
| Current assets | |||||||||||||||||||||||||
| Less: Current liabilities | |||||||||||||||||||||||||
| Working capital | |||||||||||||||||||||||||
| Net sales | |||||||||||||||||||||||||
| Short-term Activity Ratio | |||||||||||||||||||||||||
| Working capital turnover1 | |||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||
| Working Capital Turnover, Competitors2 | |||||||||||||||||||||||||
| Boeing Co. | |||||||||||||||||||||||||
| Caterpillar Inc. | |||||||||||||||||||||||||
| Eaton Corp. plc | |||||||||||||||||||||||||
| GE Aerospace | |||||||||||||||||||||||||
| Honeywell International Inc. | |||||||||||||||||||||||||
| Lockheed Martin Corp. | |||||||||||||||||||||||||
| RTX Corp. | |||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).
1 Q3 2023 Calculation
Working capital turnover
= (Net salesQ3 2023
+ Net salesQ2 2023
+ Net salesQ1 2023
+ Net salesQ4 2022)
÷ Working capital
= ( + + + )
÷ =
2 Click competitor name to see calculations.
- Working Capital
- The working capital values exhibit a generally increasing trend over the period analyzed. Starting at approximately 803 million US dollars at the end of March 2019, the figure rises and falls somewhat cyclically but experiences a notable increase from early 2022 onwards. By the end of the first quarter of 2023, the working capital peaks at around 1.25 billion US dollars, indicating strengthened liquidity or potentially increased current assets relative to current liabilities.
- Net Sales
- Net sales show variability with some seasonal fluctuations but maintain an overall upward trajectory. Beginning at roughly 1.09 billion US dollars in March 2019, net sales dip noticeably around mid-2020, coinciding with the early phases of the global pandemic period, before recovering and growing steadily through 2021 and 2022. By the third quarter of 2023, net sales reach approximately 1.38 billion US dollars, marking the highest observed levels within the dataset and reflecting recovery and expansion in revenue generation.
- Working Capital Turnover Ratio
- The working capital turnover ratio, calculated as net sales divided by working capital, reveals a fluctuating but generally downward trend. Initially observed at 5.7 in March 2019, the ratio decreases over time with some periodic rebound, reaching a low near 4.2 by September 2023. This decrease suggests that the growth in working capital outpaces the growth in net sales, indicating a relative reduction in asset efficiency or changes in working capital management strategy.
- Overall Insights
- The increasing working capital alongside rising net sales points to expansion, yet the declining turnover ratio suggests that sales growth is not keeping pace proportionally with the increased capital employed. This trend could imply a more conservative or resource-heavy approach to operations, potentially encompassing higher inventory levels, increased receivables, or other current assets. The variability in sales, notably the mid-2020 dip and subsequent recovery, aligns with external economic conditions affecting demand. In summary, while revenue growth is apparent and liquidity strengthens, operational efficiency measured through working capital turnover shows some decline, highlighting areas for potential review in capital utilization.
Average Inventory Processing Period
Hubbell Inc., average inventory processing period calculation (quarterly data)
| Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||||||||||||||||||||
| Inventory turnover | |||||||||||||||||||||||||
| Short-term Activity Ratio (no. days) | |||||||||||||||||||||||||
| Average inventory processing period1 | |||||||||||||||||||||||||
| Benchmarks (no. days) | |||||||||||||||||||||||||
| Average Inventory Processing Period, Competitors2 | |||||||||||||||||||||||||
| Boeing Co. | |||||||||||||||||||||||||
| Caterpillar Inc. | |||||||||||||||||||||||||
| Eaton Corp. plc | |||||||||||||||||||||||||
| GE Aerospace | |||||||||||||||||||||||||
| Honeywell International Inc. | |||||||||||||||||||||||||
| Lockheed Martin Corp. | |||||||||||||||||||||||||
| RTX Corp. | |||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).
1 Q3 2023 Calculation
Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ =
2 Click competitor name to see calculations.
- Inventory Turnover
- The inventory turnover ratio exhibited a gradual increase from 4.91 in the first quarter of 2019 to a peak of 5.43 in the first quarter of 2020, indicating improved efficiency in managing inventory during this period. However, after the peak, the ratio declined steadily through 2020, reaching 4.90 by the end of the year. Throughout 2021, the inventory turnover ratio further decreased, hitting a low of 4.26 in the third quarter, before slightly recovering to 4.60 by the last quarter. In 2022 and into early 2023, the ratio stabilized somewhat around the mid-4s, ending at approximately 4.37 in the third quarter of 2023. This downward trend after early 2020 suggests a slowdown in inventory turnover, potentially reflecting changes in sales volume, inventory management strategies, or market conditions.
- Average Inventory Processing Period
- The average inventory processing period mirrored the inverse pattern of the inventory turnover, starting at 74 days in early 2019 and improving to 67 days by the first quarter of 2020. This shorter processing period indicates faster inventory movement during this time frame. From mid-2020 onwards, the processing period increased again, reaching 74 days by the end of 2020, suggesting a deceleration in inventory movement. In 2021, the processing period extended further, peaking at 86 days in the third quarter, indicative of additional delays or slower inventory turnover. The period then fluctuated slightly but remained elevated around 78 to 83 days through 2022 and into 2023. The extended inventory processing period in recent quarters could imply accumulation of stock, slower sales, or challenges in inventory management.
- Overall Insights
- Analyzing the two metrics together reveals a clear inverse relationship: as inventory turnover decreases, the average inventory processing period increases. The data from 2019 to 2023 suggest that the company experienced its most efficient inventory management in early 2020, followed by a sustained period of declining efficiency. This trend may reflect external economic impacts, changes in demand, supply chain disruptions, or internal operational adjustments. The increase in inventory days paired with a decline in turnover could highlight the need for the company to review and optimize its inventory management strategies to improve liquidity and operational efficiency.
Average Receivable Collection Period
Hubbell Inc., average receivable collection period calculation (quarterly data)
| Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||||||||||||||||||||
| Receivables turnover | |||||||||||||||||||||||||
| Short-term Activity Ratio (no. days) | |||||||||||||||||||||||||
| Average receivable collection period1 | |||||||||||||||||||||||||
| Benchmarks (no. days) | |||||||||||||||||||||||||
| Average Receivable Collection Period, Competitors2 | |||||||||||||||||||||||||
| Boeing Co. | |||||||||||||||||||||||||
| Caterpillar Inc. | |||||||||||||||||||||||||
| Eaton Corp. plc | |||||||||||||||||||||||||
| GE Aerospace | |||||||||||||||||||||||||
| Honeywell International Inc. | |||||||||||||||||||||||||
| Lockheed Martin Corp. | |||||||||||||||||||||||||
| RTX Corp. | |||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).
1 Q3 2023 Calculation
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ =
2 Click competitor name to see calculations.
The receivables turnover ratio exhibits noticeable fluctuations over the observed periods, ranging approximately between 5.18 and 6.75. Initially, the ratio declines slightly from 6.39 in the first quarter of 2019 to a low near 5.87 in the second quarter of the same year, indicating a modest slowing in the efficiency of collecting receivables. This is followed by a recovery towards the end of 2019, reaching 6.72.
In 2020, the turnover ratio maintains moderate variability but generally remains below the earlier 2019 peak, spanning from 5.98 to 6.75. This suggests some instability in collection efficiency during this period, possibly reflecting external operational or market influences. The turnover dips again in mid-2021, reaching the series' lowest point at 5.18 in the third quarter, signaling a slowdown in turnover efficiency during that timeframe.
Subsequent quarters demonstrate a recovery trend with turnover increasing up to 6.67 by the end of 2022, followed by a gentle decline towards 6.15 by the third quarter of 2023. Overall, this indicates a rebound in receivables management effectiveness after the mid-2021 trough, though the turnover does not consistently maintain the higher levels seen in early 2019.
Complementing this, the average receivable collection period inversely corresponds with turnover trends. Collection days start at 57 days in early 2019, increasing to 62 days during the middle of the year, reflecting slower collections. The period shortens towards the end of 2019 to 54 days, aligning with the peak receivables turnover.
Throughout 2020, collection days fluctuate between 54 and 61 days, again mirroring the turnover ratio's volatility. In mid-2021, the collection period lengthens notably, reaching 71 days in Q3, which matches the observed low in turnover efficiency, indicating a delay in receivables collection.
From late 2021 through 2022, the collection period decreases back to around 55 days, a trend consistent with the turnover's improvement. By early 2023, collection days stabilize near 56 to 59 days, suggesting a normalization in the collection process.
In summary, the data reveal a cyclical pattern in receivables management efficiency, with periods of reduced performance around mid-2019, mid-2020, and mid-2021, followed by recoveries. The reciprocal relationship between receivables turnover and average collection days is evident throughout, offering insight into the timing of cash inflows and potential operational adjustments to optimize working capital management.
Operating Cycle
Hubbell Inc., operating cycle calculation (quarterly data)
No. days
| Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||||||||||||||||||||
| Average inventory processing period | |||||||||||||||||||||||||
| Average receivable collection period | |||||||||||||||||||||||||
| Short-term Activity Ratio | |||||||||||||||||||||||||
| Operating cycle1 | |||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||
| Operating Cycle, Competitors2 | |||||||||||||||||||||||||
| Boeing Co. | |||||||||||||||||||||||||
| Caterpillar Inc. | |||||||||||||||||||||||||
| Eaton Corp. plc | |||||||||||||||||||||||||
| GE Aerospace | |||||||||||||||||||||||||
| Honeywell International Inc. | |||||||||||||||||||||||||
| Lockheed Martin Corp. | |||||||||||||||||||||||||
| RTX Corp. | |||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).
1 Q3 2023 Calculation
Operating cycle = Average inventory processing period + Average receivable collection period
= + =
2 Click competitor name to see calculations.
The financial data over the observed periods reveals distinct trends in working capital management, specifically concerning inventory processing, receivable collection, and the overall operating cycle.
- Average Inventory Processing Period
- The inventory processing period initially decreased from 74 days at the start of 2019 to a low of 67 days in the first quarter of 2020. Following this reduction, a gradual increase is evident, reaching a peak of 86 days in the third quarter of 2021. After this peak, the inventory period slightly stabilizes, fluctuating between 78 and 83 days through to the third quarter of 2023. Overall, this suggests a slow-down in inventory turnover efficiency from early 2021 onward.
- Average Receivable Collection Period
- The receivable collection period demonstrates moderate variability over the period analyzed. Starting at 57 days in early 2019, it increased to around 62 days throughout the same year. There was a notable dip in the first quarter of 2020 to approximately 54 days, followed by fluctuations mostly within the range of 55 to 65 days in subsequent quarters. A peak of 71 days appeared in the third quarter of 2021, after which collection days settled back closer to the mid-50s to high-50s range in 2023. This reflects some challenges in receivables collection efficiency, with occasional delays but a general return to moderately stable conditions near the end of the period.
- Operating Cycle
- The operating cycle, representing the cumulative time for inventory and receivables conversion, mirrors the dynamics observed in its components. From around 131 to 136 days in early 2019, the operating cycle declined slightly to 123 days in the first quarter of 2020. A subsequent upward trend led to a high of 157 days in the third quarter of 2021. Post this peak, the cycle shortened but remained elevated, fluctuating between 133 and 142 days through the latest periods in 2023. This reflects an overall increase in the time required to turn inventory and receivables into cash compared to the earlier part of the series.
In summary, while there was an improvement in inventory turnover and receivables collection periods up to early 2020, these metrics deteriorated in terms of length in subsequent quarters, peaking notably in 2021. Since then, both metrics have exhibited some stabilization but at higher levels than prior to 2020. The lengthening operating cycle during recent years indicates a slower conversion of working capital, which may have implications for cash flow and operational efficiency.
Average Payables Payment Period
Hubbell Inc., average payables payment period calculation (quarterly data)
| Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||||||||||||||||||||
| Payables turnover | |||||||||||||||||||||||||
| Short-term Activity Ratio (no. days) | |||||||||||||||||||||||||
| Average payables payment period1 | |||||||||||||||||||||||||
| Benchmarks (no. days) | |||||||||||||||||||||||||
| Average Payables Payment Period, Competitors2 | |||||||||||||||||||||||||
| Boeing Co. | |||||||||||||||||||||||||
| Caterpillar Inc. | |||||||||||||||||||||||||
| Eaton Corp. plc | |||||||||||||||||||||||||
| GE Aerospace | |||||||||||||||||||||||||
| Honeywell International Inc. | |||||||||||||||||||||||||
| Lockheed Martin Corp. | |||||||||||||||||||||||||
| RTX Corp. | |||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).
1 Q3 2023 Calculation
Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ =
2 Click competitor name to see calculations.
The analysis of the payables turnover ratio and average payables payment period over the observed quarters reveals notable trends in the company's payment behavior to its suppliers.
- Payables Turnover Ratio
-
This ratio demonstrates a general declining trend from March 2019 through September 2023. Initially, the ratio was relatively high, fluctuating around 8.06 to 9.31 in 2019 and early 2020, indicating a quicker turnover of payables during this period.
Starting from 2021, there is a consistent decrease, with the ratio descending from 6.87 in March 2021 to values around 6.22 by September 2023. This decline suggests that the company is turning over its payables less frequently, pointing to a longer duration in settling its obligations.
- Average Payables Payment Period
-
The average payment period, measured in days, inversely correlates with the payables turnover ratio and displays an increasing trend over the same periods. In 2019, the company’s payables payment period ranged mostly between 39 and 48 days, reflecting relatively prompt payments.
Starting in 2020 and continuing into early 2021, the payment period increases substantially, peaking at 64 days by December 2021. Although there is some fluctuation afterward, the payment period remains elevated compared to 2019 levels, stabilizing between 56 and 61 days during 2022 and into late 2023.
- Overall Insights
-
The inverse relationship between the payables turnover ratio and the average payment period is consistent and expected. The company appears to have extended its payment terms over time, especially after 2019, possibly as a liquidity management strategy or due to changes in supplier agreements.
This lengthening in the payment period might help preserve cash but could also impact supplier relationships or negotiating power. The trend suggests a deliberate or necessitated shift towards slower payments compared to previous years.
Cash Conversion Cycle
Hubbell Inc., cash conversion cycle calculation (quarterly data)
No. days
| Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||||||||||||||||||||
| Average inventory processing period | |||||||||||||||||||||||||
| Average receivable collection period | |||||||||||||||||||||||||
| Average payables payment period | |||||||||||||||||||||||||
| Short-term Activity Ratio | |||||||||||||||||||||||||
| Cash conversion cycle1 | |||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||
| Cash Conversion Cycle, Competitors2 | |||||||||||||||||||||||||
| Boeing Co. | |||||||||||||||||||||||||
| Caterpillar Inc. | |||||||||||||||||||||||||
| Eaton Corp. plc | |||||||||||||||||||||||||
| GE Aerospace | |||||||||||||||||||||||||
| Honeywell International Inc. | |||||||||||||||||||||||||
| Lockheed Martin Corp. | |||||||||||||||||||||||||
| RTX Corp. | |||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).
1 Q3 2023 Calculation
Cash conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= + – =
2 Click competitor name to see calculations.
- Inventory Processing Period
- The average inventory processing period shows moderate variability across the quarters. It started at 74 days in early 2019, dipped slightly to 67 days by the first quarter of 2020, then increased again to peak at 86 days in the third quarter of 2021. Subsequently, it stabilized around the high 70s to low 80s range, reaching 83 days by the third quarter of 2023. This suggests fluctuations in inventory turnover efficiency with some slowing in 2021 followed by relative stabilization.
- Receivable Collection Period
- The receivable collection period also exhibits fluctuations over the analyzed timeline. It ranged from 54 to 71 days between 2019 and 2021, with a noticeable peak of 71 days in the third quarter of 2021. After this peak, the period decreased back to the mid to high 50s range, recording 59 days by the third quarter of 2023. This indicates periods of slower collections around 2021, but a general improvement towards more consistent collection timelines in recent quarters.
- Payables Payment Period
- The payables payment period increased steadily from 45 days at the beginning of 2019 to a peak of 64 days in the fourth quarter of 2021. From that point, it experienced a gradual decline, settling in the high 50s near 59 days by the third quarter of 2023. The trend demonstrates a strategic extension of payables terms or slower payments during 2020 and 2021, followed by a slight tightening in payment practices afterward.
- Cash Conversion Cycle
- The cash conversion cycle remained relatively stable with minor fluctuations, ranging mostly between 74 and 97 days. It registered the highest value of 97 days in the third quarter of 2021, coinciding with the peaks observed in inventory and receivables periods. After this spike, the cycle shortened and stabilized between 77 and 83 days through 2022 and 2023. This suggests that while the company experienced some inefficiencies around 2021, it has since improved working capital management and maintained a more consistent cash conversion duration.