Analysis of Short-term (Operating) Activity Ratios
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)
Las Vegas Sands Corp., short-term (operating) activity ratios
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
- Inventory Turnover
- The inventory turnover ratio exhibited a declining trend from 2018 to 2022. It started at a high level of 199.26 in 2018, decreasing to 184.65 in 2019, then sharply dropping to 81.5 in 2020. It showed a partial recovery in 2021 to 119.36 but declined again to 87.86 in 2022. This indicates slower inventory movement over the years, with notable volatility during the period.
- Receivables Turnover
- The receivables turnover ratio showed a general decline from 2018 through 2020, falling from 18.91 to 10.69. However, there was a significant rebound in 2021 to 20.96, followed by a decline again in 2022 to 15.39. The pattern suggests fluctuating efficiency in collecting receivables, with improved collections in 2021.
- Payables Turnover
- The payables turnover ratio increased from 39.18 in 2018 to a peak of 45.85 in 2019, then declined sharply to 26.61 in 2020. It partially recovered in 2021 to 34.1, followed by a decrease to 27.64 in 2022. This reflects variability in the company's payment practices, with slower payment cycles in 2020 and 2022 compared to earlier years.
- Working Capital Turnover
- Working capital turnover ratio showed an increasing trend from 2018 (5.7) to 2020 (10.78), indicating improved efficiency in employing working capital during this period. However, it sharply dropped to 1.44 in 2021 and remained steady in 2022 (1.45), signaling diminished effectiveness in utilizing working capital in recent years.
- Average Inventory Processing Period
- The average inventory processing period remained stable at 2 days in 2018 and 2019, before increasing to 4 days in 2020. It decreased to 3 days in 2021 but rose again to 4 days in 2022. This slight lengthening of the processing period aligns with the decreasing inventory turnover, indicating slower inventory handling.
- Average Receivable Collection Period
- The receivable collection period elongated from 19 days in 2018 to 22 days in 2019, then increased significantly to 34 days in 2020. It improved to 17 days in 2021 but extended again to 24 days by 2022. These fluctuations indicate variability in the company's credit collection practices, with notable delays in 2020 and 2022.
- Operating Cycle
- The operating cycle extended from 21 days in 2018 to 24 days in 2019 and further to 38 days in 2020, reflecting longer periods to convert inventory and receivables into cash. It shortened markedly to 20 days in 2021 but increased again to 28 days in 2022, showing some volatility in operational efficiency.
- Average Payables Payment Period
- The average payables payment period decreased slightly from 9 days in 2018 to 8 days in 2019, then increased sharply to 14 days in 2020. It decreased to 11 days in 2021 before rising again to 13 days in 2022. This indicates a trend toward lengthening the time taken to settle payables, particularly in 2020 and 2022.
- Cash Conversion Cycle
- The cash conversion cycle, representing the net time between outlay of cash and receipt from operations, increased from 12 days in 2018 to 16 days in 2019 and further to 24 days in 2020. It improved to 9 days in 2021 but expanded again to 15 days in 2022. The fluctuation suggests changes in cash flow efficiency, with the most efficient period observed in 2021.
Turnover Ratios
Average No. Days
Inventory Turnover
Las Vegas Sands Corp., inventory turnover calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Cost of revenues | ||||||
| Inventories | ||||||
| Short-term Activity Ratio | ||||||
| Inventory turnover1 | ||||||
| Benchmarks | ||||||
| Inventory Turnover, Competitors2 | ||||||
| Chipotle Mexican Grill Inc. | ||||||
| McDonald’s Corp. | ||||||
| Starbucks Corp. | ||||||
| Inventory Turnover, Sector | ||||||
| Consumer Services | ||||||
| Inventory Turnover, Industry | ||||||
| Consumer Discretionary | ||||||
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Inventory turnover = Cost of revenues ÷ Inventories
= ÷ =
2 Click competitor name to see calculations.
- Cost of Revenues
- The cost of revenues displayed a declining trend over the analyzed period. It decreased slightly from 6974 million US dollars in 2018 to 6832 million in 2019, followed by a significant drop in 2020 to 2608 million. The values in 2021 and 2022 remained relatively stable but lower, at 2626 and 2460 million respectively. This reduction could indicate decreased sales volumes or improved cost management.
- Inventories
- Inventory levels fluctuated modestly during the period, starting at 35 million US dollars in 2018 and reaching a low of 22 million in 2021, before rising again to 28 million in 2022. This variation suggests some changes in inventory management or demand forecasting, yet overall inventory values remained relatively low compared to cost of revenues.
- Inventory Turnover Ratio
- The inventory turnover ratio experienced significant volatility. It started at a very high level of 199.26 in 2018 and decreased to 184.65 in 2019, then saw a sharp decline to 81.5 in 2020, likely reflecting reduced sales or slower inventory movement. It improved somewhat to 119.36 in 2021 but decreased again to 87.86 in 2022. This pattern suggests inconsistent inventory management efficiency and possible challenges in matching inventory to sales demand throughout the years.
Receivables Turnover
Las Vegas Sands Corp., receivables turnover calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net revenues | ||||||
| Accounts receivable, net of provision for credit losses | ||||||
| Short-term Activity Ratio | ||||||
| Receivables turnover1 | ||||||
| Benchmarks | ||||||
| Receivables Turnover, Competitors2 | ||||||
| Airbnb Inc. | ||||||
| Booking Holdings Inc. | ||||||
| Chipotle Mexican Grill Inc. | ||||||
| DoorDash, Inc. | ||||||
| McDonald’s Corp. | ||||||
| Starbucks Corp. | ||||||
| Receivables Turnover, Sector | ||||||
| Consumer Services | ||||||
| Receivables Turnover, Industry | ||||||
| Consumer Discretionary | ||||||
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Receivables turnover = Net revenues ÷ Accounts receivable, net of provision for credit losses
= ÷ =
2 Click competitor name to see calculations.
- Net Revenues
- Net revenues remained relatively stable between 2018 and 2019, showing a marginal increase from 13,729 million to 13,739 million US dollars. However, there was a significant decline in 2020, with revenues dropping sharply to 3,612 million US dollars. This downward trend slightly reversed in the two subsequent years, reaching 4,234 million in 2021 and tapering slightly to 4,110 million in 2022, but revenues remained substantially below pre-2020 levels.
- Accounts Receivable, Net of Provision for Credit Losses
- The net accounts receivable balance increased from 726 million US dollars in 2018 to 844 million in 2019, indicating higher outstanding customer balances. It then decreased substantially in 2020 to 338 million US dollars, further declining to 202 million in 2021. In 2022, there was a modest recovery to 267 million US dollars, although the outstanding receivables remained significantly below the 2018-2019 figures.
- Receivables Turnover Ratio
- The receivables turnover ratio declined from 18.91 in 2018 to 16.28 in 2019, reflecting a slower collection period or increased outstanding receivables management challenges. This ratio dropped considerably to 10.69 in 2020, consistent with the decline in revenues and receivables, indicating reduced efficiency in collecting receivables during that year. In 2021, the ratio sharply improved to 20.96, exceeding prior years, suggesting enhanced collection performance. However, it decreased again to 15.39 in 2022, signaling some deterioration in collection efficiency compared to 2021 but still better than the 2019 and 2020 levels.
- Overall Analysis
- The data reveals a dramatic disruption beginning in 2020, with revenues and receivables sharply declining, reflecting significant operational challenges. The partial recovery in revenues and receivables in 2021 and 2022 indicates some stabilization, although full recovery to pre-2020 levels has not occurred. The receivables turnover ratio exhibits volatility, reaching a low point in 2020 but improving substantially in 2021 before decreasing again in 2022. This pattern suggests fluctuating effectiveness in credit management and collections over the period, with the highest efficiency observed in 2021.
Payables Turnover
Las Vegas Sands Corp., payables turnover calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Cost of revenues | ||||||
| Accounts payable | ||||||
| Short-term Activity Ratio | ||||||
| Payables turnover1 | ||||||
| Benchmarks | ||||||
| Payables Turnover, Competitors2 | ||||||
| Airbnb Inc. | ||||||
| Booking Holdings Inc. | ||||||
| Chipotle Mexican Grill Inc. | ||||||
| DoorDash, Inc. | ||||||
| McDonald’s Corp. | ||||||
| Starbucks Corp. | ||||||
| Payables Turnover, Sector | ||||||
| Consumer Services | ||||||
| Payables Turnover, Industry | ||||||
| Consumer Discretionary | ||||||
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Payables turnover = Cost of revenues ÷ Accounts payable
= ÷ =
2 Click competitor name to see calculations.
- Cost of Revenues
- The cost of revenues displayed a downward trend over the five-year period. Starting at 6974 million USD in 2018, it slightly decreased to 6832 million USD in 2019, then showed a significant decline to 2608 million USD in 2020. This lower level largely persisted through 2021 and 2022, with values of 2626 million USD and 2460 million USD respectively, indicating a substantial reduction compared to the initial years.
- Accounts Payable
- Accounts payable showed a consistent decline from 178 million USD at the end of 2018 to 149 million USD in 2019, then further dropped to 98 million USD in 2020. This decrease continued through 2021, reaching 77 million USD, before slightly increasing to 89 million USD in 2022. Overall, there was a marked reduction in accounts payable over the period, with a modest uptick in the final year.
- Payables Turnover Ratio
- The payables turnover ratio exhibited fluctuating behavior. It increased from 39.18 in 2018 to 45.85 in 2019, indicating faster payment cycles. However, it then sharply declined to 26.61 in 2020, improved to 34.1 in 2021, and subsequently decreased again to 27.64 in 2022. These variations suggest changes in payment management, with a general trend toward slower turnover after 2019 despite some recovery in 2021.
Working Capital Turnover
Las Vegas Sands Corp., working capital turnover calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current assets | ||||||
| Less: Current liabilities | ||||||
| Working capital | ||||||
| Net revenues | ||||||
| Short-term Activity Ratio | ||||||
| Working capital turnover1 | ||||||
| Benchmarks | ||||||
| Working Capital Turnover, Competitors2 | ||||||
| Airbnb Inc. | ||||||
| Booking Holdings Inc. | ||||||
| Chipotle Mexican Grill Inc. | ||||||
| DoorDash, Inc. | ||||||
| McDonald’s Corp. | ||||||
| Starbucks Corp. | ||||||
| Working Capital Turnover, Sector | ||||||
| Consumer Services | ||||||
| Working Capital Turnover, Industry | ||||||
| Consumer Discretionary | ||||||
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Working capital turnover = Net revenues ÷ Working capital
= ÷ =
2 Click competitor name to see calculations.
- Working Capital
- Working capital exhibited a declining trend from 2018 through 2020, decreasing significantly from 2,409 million US dollars in 2018 to 335 million US dollars in 2020. This sharp reduction was followed by a substantial recovery in 2021, reaching 2,945 million US dollars, and a slight decrease to 2,842 million US dollars in 2022.
- Net Revenues
- Net revenues remained relatively stable between 2018 and 2019, with values of approximately 13,729 million and 13,739 million US dollars, respectively. However, there was a pronounced drop in 2020, with net revenues falling to 3,612 million US dollars. Subsequently, net revenues showed a moderate recovery in 2021 and 2022, reaching 4,234 million and 4,110 million US dollars, respectively, though these figures remained significantly below pre-2020 levels.
- Working Capital Turnover
- The working capital turnover ratio increased from 5.7 in 2018 to 6.6 in 2019 and peaked sharply at 10.78 in 2020, indicating a higher efficiency in using working capital to generate revenue despite the decline in absolute revenue figures. However, from 2021 onwards, the ratio dropped significantly to 1.44 and 1.45, reflecting a reduced turnover rate likely influenced by the recovery in working capital coupled with comparatively modest net revenue growth.
Average Inventory Processing Period
Las Vegas Sands Corp., average inventory processing period calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Inventory turnover | ||||||
| Short-term Activity Ratio (no. days) | ||||||
| Average inventory processing period1 | ||||||
| Benchmarks (no. days) | ||||||
| Average Inventory Processing Period, Competitors2 | ||||||
| Chipotle Mexican Grill Inc. | ||||||
| McDonald’s Corp. | ||||||
| Starbucks Corp. | ||||||
| Average Inventory Processing Period, Sector | ||||||
| Consumer Services | ||||||
| Average Inventory Processing Period, Industry | ||||||
| Consumer Discretionary | ||||||
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ =
2 Click competitor name to see calculations.
- Inventory Turnover
- The inventory turnover ratio shows a declining trend over the five-year period. Starting from a high of 199.26 in 2018, it decreased to 184.65 in 2019, then dropped significantly to 81.5 in 2020. A partial recovery occurred in 2021, with the ratio increasing to 119.36, but it declined again to 87.86 in 2022. This overall downward trend indicates a reduction in the frequency with which inventory is sold and replaced, suggesting potential challenges in inventory management or a slowdown in sales activity.
- Average Inventory Processing Period
- The average inventory processing period exhibits a slightly increasing pattern, indicating a lengthening time that inventory remains before being processed. The period was steady at 2 days in both 2018 and 2019, doubled to 4 days in 2020, decreased to 3 days in 2021, and then rose to 4 days again in 2022. This fluctuation, but general upward movement, may reflect increased inventory holding times, which could tie into the decreasing inventory turnover and suggest operational or demand-side factors impacting inventory flow.
Average Receivable Collection Period
Las Vegas Sands Corp., average receivable collection period calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Receivables turnover | ||||||
| Short-term Activity Ratio (no. days) | ||||||
| Average receivable collection period1 | ||||||
| Benchmarks (no. days) | ||||||
| Average Receivable Collection Period, Competitors2 | ||||||
| Airbnb Inc. | ||||||
| Booking Holdings Inc. | ||||||
| Chipotle Mexican Grill Inc. | ||||||
| DoorDash, Inc. | ||||||
| McDonald’s Corp. | ||||||
| Starbucks Corp. | ||||||
| Average Receivable Collection Period, Sector | ||||||
| Consumer Services | ||||||
| Average Receivable Collection Period, Industry | ||||||
| Consumer Discretionary | ||||||
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ =
2 Click competitor name to see calculations.
- Receivables Turnover
- The receivables turnover ratio exhibited notable fluctuations over the five-year period. It started at 18.91 in 2018, declined to 16.28 in 2019, then dropped sharply to 10.69 in 2020. Following this low point, the ratio rebounded strongly to 20.96 in 2021 before decreasing again to 15.39 in 2022. This pattern indicates variable efficiency in managing receivables, with a significant impairment in 2020, likely reflecting challenges in collections or changes in sales composition, followed by a recovery and another decline.
- Average Receivable Collection Period
- The average receivable collection period demonstrated an inverse relationship to the receivables turnover ratio throughout the period. It increased from 19 days in 2018 to 22 days in 2019 and then surged to 34 days in 2020, indicating a slower collection process. This was followed by a considerable improvement to 17 days in 2021, coinciding with the peak in receivables turnover. However, the period lengthened again to 24 days in 2022. Overall, the collection period shows significant volatility, peaking in 2020 and reflecting increased difficulties in collecting receivables during that year.
- Insights
- The data reveals that the year 2020 was a significant outlier with the lowest efficiency in receivables management, as evidenced by the lowest turnover ratio and longest collection period in the observed timeline. This suggests external or internal factors adversely impacting cash collection during that year. The subsequent recovery in 2021 indicates effective management actions or changing business conditions that improved the collection process temporarily. The decline in 2022, although less severe than in 2020, points to a potential need for continued focus on receivables management to maintain optimal liquidity and operational efficiency.
Operating Cycle
Las Vegas Sands Corp., operating cycle calculation, comparison to benchmarks
No. days
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Average inventory processing period | ||||||
| Average receivable collection period | ||||||
| Short-term Activity Ratio | ||||||
| Operating cycle1 | ||||||
| Benchmarks | ||||||
| Operating Cycle, Competitors2 | ||||||
| Chipotle Mexican Grill Inc. | ||||||
| McDonald’s Corp. | ||||||
| Starbucks Corp. | ||||||
| Operating Cycle, Sector | ||||||
| Consumer Services | ||||||
| Operating Cycle, Industry | ||||||
| Consumer Discretionary | ||||||
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Operating cycle = Average inventory processing period + Average receivable collection period
= + =
2 Click competitor name to see calculations.
- Average inventory processing period
- The average inventory processing period showed slight fluctuations over the five-year period. Starting at 2 days in 2018 and 2019, it increased to 4 days in 2020, indicating slower inventory turnover during that year. In 2021, it improved to 3 days but rebounded to 4 days in 2022, suggesting some volatility in inventory management efficiency.
- Average receivable collection period
- The average receivable collection period experienced considerable variability. It increased from 19 days in 2018 to 22 days in 2019, then spiked sharply to 34 days in 2020, indicating a significant slowdown in collecting receivables. In 2021, the period shortened markedly to 17 days, reflecting improved collections efficiency, but then rose again to 24 days in 2022, showing some recurring difficulties in receivables management.
- Operating cycle
- The operating cycle mirrored the trends of both inventory and receivable periods, reflecting their combined impact. It expanded from 21 days in 2018 to 24 days in 2019 and increased sharply to 38 days in 2020, the highest value recorded, indicating extended cash conversion duration. In 2021, the cycle contracted significantly to 20 days, then extended again to 28 days in 2022, demonstrating fluctuations in overall operational efficiency over the years.
Average Payables Payment Period
Las Vegas Sands Corp., average payables payment period calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Payables turnover | ||||||
| Short-term Activity Ratio (no. days) | ||||||
| Average payables payment period1 | ||||||
| Benchmarks (no. days) | ||||||
| Average Payables Payment Period, Competitors2 | ||||||
| Airbnb Inc. | ||||||
| Booking Holdings Inc. | ||||||
| Chipotle Mexican Grill Inc. | ||||||
| DoorDash, Inc. | ||||||
| McDonald’s Corp. | ||||||
| Starbucks Corp. | ||||||
| Average Payables Payment Period, Sector | ||||||
| Consumer Services | ||||||
| Average Payables Payment Period, Industry | ||||||
| Consumer Discretionary | ||||||
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ =
2 Click competitor name to see calculations.
- Payables Turnover
- The payables turnover ratio exhibited notable fluctuations over the five-year period. It increased from 39.18 in 2018 to a peak of 45.85 in 2019, indicating a faster payment cycle to suppliers during that year. However, this trend reversed sharply in 2020, when the ratio dropped to 26.61, suggesting a prolonged payment period. The ratio partially recovered to 34.10 in 2021 but declined again to 27.64 in 2022. Overall, the trend reflects increased variability and a tendency toward slower payment processes in the later years.
- Average Payables Payment Period
- Consistent with the payables turnover ratio, the average payables payment period displays an inverse movement. It shortened from 9 days in 2018 to 8 days in 2019, signifying expedited payments. Thereafter, the period extended to 14 days in 2020, before somewhat improving to 11 days in 2021. In 2022, the payment period increased again to 13 days. This dynamic suggests a tendency toward longer payment intervals starting in 2020, potentially reflecting altered cash flow management or supplier negotiation strategies.
- Summary Insight
- The data reveal a shift from a quicker payables cycle in the initial two years toward lengthening payment periods from 2020 onward. This could be symptomatic of operational adjustments or external factors influencing liquidity and vendor relations. The oscillations imply that the company managed payables with varying aggressiveness, possibly in response to evolving financial conditions or strategic priorities during this interval.
Cash Conversion Cycle
Las Vegas Sands Corp., cash conversion cycle calculation, comparison to benchmarks
No. days
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| 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 | ||||||
| Chipotle Mexican Grill Inc. | ||||||
| McDonald’s Corp. | ||||||
| Starbucks Corp. | ||||||
| Cash Conversion Cycle, Sector | ||||||
| Consumer Services | ||||||
| Cash Conversion Cycle, Industry | ||||||
| Consumer Discretionary | ||||||
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Cash conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= + – =
2 Click competitor name to see calculations.
- Average Inventory Processing Period
- The average inventory processing period displayed minor fluctuations over the years. It started at 2 days in 2018 and remained stable in 2019. A notable increase to 4 days occurred in 2020, followed by a slight improvement to 3 days in 2021, then rose again to 4 days in 2022. This indicates some variability in inventory turnover efficiency, with a tendency toward longer processing times in recent years.
- Average Receivable Collection Period
- The average receivable collection period showed significant variability throughout the period. It increased from 19 days in 2018 to 22 days in 2019, then spiked considerably to 34 days in 2020, suggesting delayed collections. A marked improvement occurred in 2021, reducing the period to 17 days, which is the shortest in the timeframe. However, it increased again to 24 days in 2022. This pattern indicates challenges in managing receivables, with considerable inconsistency year over year.
- Average Payables Payment Period
- The average payables payment period reflected moderate fluctuations. The period decreased slightly from 9 days in 2018 to 8 days in 2019, then increased sharply to 14 days in 2020. A reduction to 11 days followed in 2021, with an increase again to 13 days in 2022. This indicates some variability in the company’s payment practices to suppliers, with a tendency toward longer payment periods since 2020.
- Cash Conversion Cycle
- The cash conversion cycle experienced pronounced changes over the years. Beginning at 12 days in 2018, it lengthened to 16 days in 2019 and reached its peak at 24 days in 2020. A substantial improvement occurred in 2021, reducing the cycle to 9 days, representing the shortest cycle in the observed period, suggesting enhanced operational efficiency. Nonetheless, the cycle lengthened again to 15 days in 2022, indicating a partial reversal of previous gains.