IQVIA Holdings Inc. (NYSE:IQV)

Receivables Turnover

The receivables turnover ratio displayed a generally increasing trend from 4.35 in 2018 to a peak of 5.44 in 2021, followed by a slight decline to 4.94 in 2022. This indicates an overall improvement in the efficiency of collecting receivables over the analyzed period, with a minor drop in the final year suggesting a slowdown in collection speed.

Payables Turnover

The payables turnover ratio showed considerable fluctuations. Starting at 15.44 in 2018, it dropped significantly to around 12.7-12.91 during 2019 and 2020, then rose again to 14.87 in 2021 and slightly decreased to 14.55 in 2022. This pattern suggests changes in the company’s payment activities, with reduced turnover indicating slower payments in 2019-2020 and faster payments reestablished towards 2021 and 2022.

Working Capital Turnover

The working capital turnover ratio exhibited significant volatility, increasing sharply from 30.62 in 2018 to 61.26 in 2019, and then declining abruptly to 21.35 in 2020. There are no available data for 2021 and 2022, which prevents further analysis beyond the steep fluctuations observed in the initial years. The volatility suggests inconsistent management or changes in working capital and sales dynamics.

Average Receivable Collection Period

The average collection period decreased steadily from 84 days in 2018 to a low of 67 days in 2021, then rose slightly to 74 days in 2022. This trend parallels the changes seen in the receivables turnover ratio, confirming improved efficiency in collecting receivables over most of the period, with a slight inefficiency re-emerging in the last year.

Average Payables Payment Period

The average payment period lengthened from 24 days in 2018 to 29 days in 2019, then slightly contracted to 28 days in 2020 and further to 25 days in 2021 and 2022. This reflects a tendency to delay payments earlier in the period, followed by a return toward quicker payment practices in recent years.

The financial data reveals several notable trends in the analyzed periods.

Revenues

There is a consistent upward trend in revenues over the five-year span. The revenues increased from 10,412 million US dollars in 2018 to 14,410 million US dollars in 2022. The most significant growth occurred between 2020 and 2021, where revenues rose sharply by approximately 22% from 11,359 to 13,874 million US dollars, indicating accelerated business expansion or improved market conditions during that period.

Trade Accounts Receivable and Unbilled Services, Net

This item also shows an increasing trend, starting at 2,394 million US dollars in 2018 and rising to 2,917 million US dollars in 2022. However, fluctuations are noted with a decrease in 2020 to 2,410 million US dollars from 2,582 million US dollars the previous year, followed by steady growth in both 2021 and 2022. The rise in receivables, especially in the last recorded year, may reflect larger sales volumes or extended collection periods.

Receivables Turnover Ratio

The receivables turnover ratio, which measures the efficiency of collecting receivables, shows variability within the period. It decreased slightly from 4.35 in 2018 to 4.29 in 2019, indicating a marginal decline in collection efficiency. Subsequently, it improved significantly to 4.71 in 2020 and peaked at 5.44 in 2021, suggesting enhanced effectiveness in managing receivables during these years. However, in 2022, the ratio declined somewhat to 4.94, indicating a slight reduction in collection speed or efficiency relative to the previous year, although still better than the values at the beginning of the period.

Cost of Revenues, Exclusive of Depreciation and Amortization

The cost of revenues increased consistently from 2018 to 2022, starting at $6,746 million and rising to $9,382 million. This represents a significant upward trend, with a notable acceleration between 2020 and 2021. The increase indicates higher operating costs associated with the company's core activities over the five-year period.

Accounts Payable

Accounts payable showed a steady increase over the period, growing from $437 million in 2018 to $645 million in 2022. This gradual rise reflects an expanding amount owed to suppliers, potentially corresponding to the increasing scale of operations and the higher cost of revenues.

Payables Turnover Ratio

The payables turnover ratio experienced fluctuations during the five years. It decreased from 15.44 in 2018 to 12.7 in 2019, indicating slower payment to suppliers. Subsequently, a slight recovery occurred in 2020 with a ratio of 12.91, followed by an increase to 14.87 in 2021, suggesting faster payments. However, the ratio slightly declined to 14.55 in 2022. Overall, the ratio exhibits moderate variability but remains within a relatively stable range, suggesting consistent management of payables relative to purchases.

Working Capital

Working capital displayed notable fluctuations over the analyzed period. Beginning at 340 million US dollars in 2018, it decreased substantially to 181 million in 2019. It then increased sharply to 532 million in 2020, suggesting improved short-term liquidity that year. However, a significant deterioration occurred in 2021 and 2022, with working capital turning negative to -478 million and further declining to -597 million respectively. This shift into negative territory in the last two years indicates growing current liabilities exceeding current assets, which may point to potential liquidity challenges.

Revenues

Revenues exhibited a consistent upward trend throughout the five-year span. Starting at 10,412 million US dollars in 2018, revenues increased each year, reaching 14,410 million by the end of 2022. The most pronounced growth occurred between 2020 and 2021, where revenues jumped from 11,359 million to 13,874 million. This overall growth suggests expanding sales or service demand, contributing positively to the company’s top line.

Working Capital Turnover

The working capital turnover ratio experienced considerable volatility. It was highest in 2019 at 61.26, indicating highly efficient use of working capital to generate revenue during that period. The ratio dropped sharply to 21.35 in 2020, implying decreased efficiency or increased working capital relative to sales that year. Data for 2021 and 2022 are missing, which limits the ability to analyze recent trends in operational efficiency with respect to working capital.

Receivables Turnover

The receivables turnover ratio exhibited an overall upward trend from 2018 to 2021, rising from 4.35 to a peak of 5.44. This indicates an improvement in the efficiency of collecting receivables during this period. However, in 2022, the ratio decreased to 4.94, reflecting a slight decline in collection efficiency compared to the previous year, yet maintaining a level higher than the 2018 and 2019 figures.

Average Receivable Collection Period

The average collection period demonstrated a consistent improvement from 2018 through 2021, dropping from 84 days to 67 days. This reduction suggests that the company was able to collect its receivables faster each year, enhancing liquidity and working capital management. In 2022, the average collection period increased slightly to 74 days, which indicates a moderation in collection speed, though still shorter than the early years in the data set.

Overall Insight

The patterns in both the receivables turnover ratio and the average collection period suggest that the company improved its receivables management significantly from 2018 through 2021. The slight decline in efficiency in 2022 may warrant monitoring to determine if it is an isolated issue or part of a developing trend. Despite this, the company continues to perform better in receivable management than in the earliest years analyzed.

Payables Turnover

The payables turnover ratio initially declined from 15.44 in 2018 to 12.7 in 2019, indicating a slower rate of paying off accounts payable relative to purchases. The ratio remained relatively stable in 2020 at 12.91 before experiencing an increase to 14.87 in 2021, suggesting an improvement in payment efficiency. In 2022, the ratio slightly decreased to 14.55 but stayed significantly higher than the 2019 and 2020 levels, implying maintenance of a faster payment cycle compared to earlier years.

Average Payables Payment Period

The average payables payment period showed an opposite trend to payables turnover. It increased from 24 days in 2018 to 29 days in 2019, reflecting a longer time taken to settle payables. This was followed by a slight decrease to 28 days in 2020, then a more pronounced reduction to 25 days in 2021, where it remained unchanged in 2022. This indicates a gradual improvement in payment timeliness over the latter part of the period.

Overall Insight

The trends in these two metrics exhibit a clear inverse relationship, as expected. The company extended payment periods during 2019 and 2020, potentially to manage cash flow or working capital needs. From 2021 onwards, there is a notable shift toward more efficient payment practices, likely signaling stronger liquidity management or improved supplier relationships. Despite some minor fluctuations, the recent ratios suggest a stable and relatively prompt payables turnover environment.