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.
Short-term Activity Ratios (Summary)
LyondellBasell Industries N.V., short-term (operating) activity ratios
Based on: 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31).
- Inventory Turnover
- The inventory turnover ratio declined from 8.62 in 2014 to 6.09 in 2016, indicating a slowdown in inventory movement during this period. However, there was a subsequent improvement to 7.2 by 2018, suggesting enhanced efficiency in managing inventory towards the end of the period.
- Receivables Turnover
- The receivables turnover ratio showed a decreasing trend from 13.23 in 2014 to a low of 9.74 in 2017, reflecting longer collection times. In 2018, there was a partial recovery to 11.13, implying some improvement in collecting receivables more promptly.
- Payables Turnover
- This ratio declined significantly from 12.71 in 2014 to 9.17 in 2016, then slightly improved to 10.54 by 2018. A lower payables turnover ratio indicates the company took longer to pay its suppliers during the mid-period, with slight normalization later.
- Working Capital Turnover
- Working capital turnover exhibited a downward trend from 7.35 in 2014 to 4.95 in 2017, representing reduced efficiency in using working capital to generate sales. This was followed by a notable recovery to 7.72 in 2018, surpassing the 2014 level, signaling an improvement in working capital management.
- Average Inventory Processing Period
- The average inventory processing period increased from 42 days in 2014 to a peak of 60 days in 2016, indicating slower inventory movement, then decreased to 51 days by 2018, consistent with the improvement in inventory turnover.
- Average Receivable Collection Period
- The receivable collection period remained steady at 28 days in 2014 and 2015, increased to 37 days in 2017, then decreased to 33 days in 2018. This mirrors the fluctuations seen in receivables turnover, with collection becoming slower then improving.
- Operating Cycle
- The operating cycle lengthened from 70 days in 2014 to 96 days in 2016, before contracting to 84 days by 2018. This indicates the overall period from inventory acquisition to cash collection initially extended but showed signs of improvement later.
- Average Payables Payment Period
- The payment period increased from 29 days in 2014 to 40 days in 2016, suggesting the company took longer to pay suppliers. This period then shortened to 35 days by 2018, indicating a trend toward quicker payment terms in recent years.
- Cash Conversion Cycle
- The cash conversion cycle increased from 41 days in 2014 to 56 days in 2016, reflecting a longer time to convert resource inputs into cash flows. It then decreased to 49 days in 2018, indicating an improvement in cash flow efficiency compared to the peak period.
Turnover Ratios
Average No. Days
Inventory Turnover
LyondellBasell Industries N.V., inventory turnover calculation, comparison to benchmarks
| Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Cost of sales | 32,529) | 28,059) | 23,191) | 25,683) | 38,939) | |
| Inventories | 4,515) | 4,217) | 3,809) | 4,051) | 4,517) | |
| Short-term Activity Ratio | ||||||
| Inventory turnover1 | 7.20 | 6.65 | 6.09 | 6.34 | 8.62 | |
| Benchmarks | ||||||
| Inventory Turnover, Competitors2 | ||||||
| Linde plc | — | — | — | — | — | |
| Sherwin-Williams Co. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31).
1 2018 Calculation
Inventory turnover = Cost of sales ÷ Inventories
= 32,529 ÷ 4,515 = 7.20
2 Click competitor name to see calculations.
The financial data reveals several notable trends over the five-year span ending in 2018.
- Cost of Sales
- There is a marked decrease in the cost of sales from 2014 to 2016, dropping from US$38,939 million to US$23,191 million. This represents a significant reduction in the expenses directly associated with producing goods. However, from 2016 onwards, the cost of sales increased to US$28,059 million in 2017 and further to US$32,529 million in 2018. This rebound suggests a possible recovery or expansion phase following the earlier contraction.
- Inventories
- The inventory levels showed a decline from US$4,517 million in 2014 to US$3,809 million in 2016, consistent with the reduction in cost of sales during the same period. Subsequently, inventories rose to US$4,217 million in 2017 and slightly more to US$4,515 million in 2018. The movement of inventory values closely mirrors the changes seen in the cost of sales, highlighting a potential correlation between production inputs and inventory management practices.
- Inventory Turnover Ratio
- The inventory turnover ratio, which measures how many times inventory is sold and replaced over a period, decreased significantly from 8.62 in 2014 to a low of 6.09 in 2016. This decline implies slower inventory movement. Following 2016, the ratio improved to 6.65 in 2017 and further to 7.2 in 2018, indicating enhanced efficiency in inventory management or increased sales volume relative to inventories.
Overall, the company experienced a period of contraction between 2014 and 2016, reflected in lower cost of sales and inventories, along with reduced inventory turnover efficiency. From 2017 onwards, an upward trend in all these indicators suggests a recovery, with increased production costs, higher inventory levels, and better turnover ratios, pointing to potentially improved operational dynamics.
Receivables Turnover
LyondellBasell Industries N.V., receivables turnover calculation, comparison to benchmarks
| Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Sales and other operating revenues | 39,004) | 34,484) | 29,183) | 32,735) | 45,608) | |
| Accounts receivable | 3,503) | 3,539) | 2,842) | 2,517) | 3,448) | |
| Short-term Activity Ratio | ||||||
| Receivables turnover1 | 11.13 | 9.74 | 10.27 | 13.01 | 13.23 | |
| Benchmarks | ||||||
| Receivables Turnover, Competitors2 | ||||||
| Linde plc | — | — | — | — | — | |
| Sherwin-Williams Co. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31).
1 2018 Calculation
Receivables turnover = Sales and other operating revenues ÷ Accounts receivable
= 39,004 ÷ 3,503 = 11.13
2 Click competitor name to see calculations.
- Sales and Other Operating Revenues
- The sales and other operating revenues show a declining trend from 2014 to 2016, decreasing significantly from 45,608 million US dollars in 2014 to 29,183 million US dollars in 2016. Following this decline, there is a recovery phase observed in 2017 and 2018, with revenues increasing to 34,484 million US dollars in 2017 and further to 39,004 million US dollars in 2018. Despite the recovery, the 2018 revenue level remains below the 2014 peak.
- Accounts Receivable
- Accounts receivable follow a fluctuating pattern over the period. After a decrease from 3,448 million US dollars in 2014 to 2,517 million US dollars in 2015, the value rises to 2,842 million US dollars in 2016 and further increases to 3,539 million US dollars in 2017, before slightly declining to 3,503 million US dollars in 2018. Overall, accounts receivable exhibit moderate variability but tend to move upwards from the low point in 2015.
- Receivables Turnover Ratio
- The receivables turnover ratio decreases steadily from 13.23 in 2014 to 9.74 in 2017, indicating a slowdown in the rate at which receivables were collected during this period. In 2018, the ratio improves to 11.13, suggesting better efficiency in collections compared to the previous two years, yet still below the initial 2014 level. This pattern aligns with the trends observed in accounts receivable and sales, where collection efficiency seems to have declined during the years of revenue contraction and then improved during the period of revenue recovery.
Payables Turnover
LyondellBasell Industries N.V., payables turnover calculation, comparison to benchmarks
| Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Cost of sales | 32,529) | 28,059) | 23,191) | 25,683) | 38,939) | |
| Accounts payable | 3,087) | 2,895) | 2,529) | 2,182) | 3,064) | |
| Short-term Activity Ratio | ||||||
| Payables turnover1 | 10.54 | 9.69 | 9.17 | 11.77 | 12.71 | |
| Benchmarks | ||||||
| Payables Turnover, Competitors2 | ||||||
| Linde plc | — | — | — | — | — | |
| Sherwin-Williams Co. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31).
1 2018 Calculation
Payables turnover = Cost of sales ÷ Accounts payable
= 32,529 ÷ 3,087 = 10.54
2 Click competitor name to see calculations.
- Cost of Sales Trend
- The cost of sales exhibited a significant decline from US$38,939 million in 2014 to US$23,191 million in 2016. Following this drop, the figure experienced a steady increase, reaching US$32,529 million by 2018. This pattern indicates an initial reduction in expenses associated with producing goods or services, followed by a resurgence likely reflective of increased operational activity or rising input costs.
- Accounts Payable Trend
- Accounts payable decreased from US$3,064 million in 2014 to US$2,182 million in 2015, then gradually increased to US$3,087 million by the end of 2018. This trend suggests an initial tightening of payment obligations, followed by a gradual expansion in short-term liabilities to suppliers over the subsequent years.
- Payables Turnover Ratio
- The payables turnover ratio decreased from 12.71 in 2014 to 9.17 in 2016, indicating that payables were being paid off more slowly over this period. After 2016, the ratio showed improvement, rising to 10.54 by 2018, which suggests a quicker payment cycle relative to purchases toward the end of the observation period.
- Overall Insights
- The company experienced a contraction in cost of sales until 2016 followed by recovery, which may reflect changes in operational volume or cost management. Accounts payable trends correspond with changes in operational scale or vendor financing terms, initially tightening but loosening across the later years. The payables turnover ratio's decrease and subsequent increase point to initial lengthening of payment terms or slower payment, followed by an acceleration in settling payables, which may impact supplier relationships and liquidity management.
Working Capital Turnover
LyondellBasell Industries N.V., working capital turnover calculation, comparison to benchmarks
| Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current assets | 10,566) | 11,738) | 9,599) | 9,789) | 11,645) | |
| Less: Current liabilities | 5,513) | 4,777) | 4,540) | 4,349) | 5,437) | |
| Working capital | 5,053) | 6,961) | 5,059) | 5,440) | 6,208) | |
| Sales and other operating revenues | 39,004) | 34,484) | 29,183) | 32,735) | 45,608) | |
| Short-term Activity Ratio | ||||||
| Working capital turnover1 | 7.72 | 4.95 | 5.77 | 6.02 | 7.35 | |
| Benchmarks | ||||||
| Working Capital Turnover, Competitors2 | ||||||
| Linde plc | — | — | — | — | — | |
| Sherwin-Williams Co. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31).
1 2018 Calculation
Working capital turnover = Sales and other operating revenues ÷ Working capital
= 39,004 ÷ 5,053 = 7.72
2 Click competitor name to see calculations.
The financial data reveals several notable trends over the five-year period ending December 31, 2018. Firstly, working capital exhibits fluctuations without a clear linear trend, starting at 6,208 million US dollars in 2014 and decreasing to 5,053 million US dollars by 2018. The lowest point was observed in 2018, while a peak occurred in 2017 at 6,961 million US dollars. This volatility suggests varied management or changes in operational needs across the years.
Sales and other operating revenues display a generally declining trend from 2014 to 2016, dropping from 45,608 million US dollars to 29,183 million US dollars. This decrease is followed by a recovery period, with revenues increasing to 39,004 million US dollars by the end of 2018. Despite the partial recovery, sales in 2018 remain lower than the initial 2014 figure, indicating an initial period of contraction followed by gradual growth.
The working capital turnover ratio, which measures the efficiency of using working capital to generate sales, shows an initial decline from 7.35 in 2014 to 4.95 in 2017. This decrease suggests that the company’s efficiency in generating revenues from its working capital weakened during this timeframe. However, a sharp increase to 7.72 in 2018 indicates a significant improvement in operational efficiency, surpassing even the 2014 level. This reversal may reflect better working capital management or improved revenue generation relative to the capital employed.
- Working Capital
- Fluctuated between approximately 5,000 and 7,000 million US dollars, with no clear upward or downward trend; lowest in 2018, highest in 2017.
- Sales and Other Operating Revenues
- Decreased substantially from 2014 through 2016, followed by a recovery phase through 2018, though not reaching 2014 peak levels.
- Working Capital Turnover Ratio
- Declined steadily to a low in 2017, indicating reduced efficiency, but improved sharply in 2018 to exceed earlier levels, signaling better utilization of working capital.
In summary, the company experienced a period of financial contraction with reduced sales and operational efficiency until 2017. The data from 2018 suggests a turnaround, marked by improving sales revenue and enhanced working capital efficiency. These shifts point towards a possible strategic or market-driven recovery during the latter period.
Average Inventory Processing Period
LyondellBasell Industries N.V., average inventory processing period calculation, comparison to benchmarks
| Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Inventory turnover | 7.20 | 6.65 | 6.09 | 6.34 | 8.62 | |
| Short-term Activity Ratio (no. days) | ||||||
| Average inventory processing period1 | 51 | 55 | 60 | 58 | 42 | |
| Benchmarks (no. days) | ||||||
| Average Inventory Processing Period, Competitors2 | ||||||
| Linde plc | — | — | — | — | — | |
| Sherwin-Williams Co. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31).
1 2018 Calculation
Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ 7.20 = 51
2 Click competitor name to see calculations.
The analysis of the annual financial data reveals notable trends in inventory management over the reported periods.
- Inventory Turnover
- The inventory turnover ratio shows a general decline from 8.62 in 2014 to a low of 6.09 in 2016, indicating a decrease in the frequency with which inventory is sold and replaced. This ratio subsequently improves, rising to 7.2 by the end of 2018, suggesting enhanced efficiency in inventory management in later years.
- Average Inventory Processing Period
- The average inventory processing period follows an inverse pattern relative to the inventory turnover ratio. It increased from 42 days in 2014 to a peak of 60 days in 2016, implying that inventory remained on hand for a longer duration. After 2016, the period shortened progressively to 51 days by 2018, aligning with the improved turnover rate and reflecting more rapid processing and turnover of inventory.
- Summary of Trends
- Overall, the data illustrate an initial deterioration in inventory efficiency up to 2016, followed by a recovery phase. By 2018, the company achieved better inventory management characterized by higher turnover and reduced inventory days, which potentially contributes positively to working capital optimization.
Average Receivable Collection Period
LyondellBasell Industries N.V., average receivable collection period calculation, comparison to benchmarks
| Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Receivables turnover | 11.13 | 9.74 | 10.27 | 13.01 | 13.23 | |
| Short-term Activity Ratio (no. days) | ||||||
| Average receivable collection period1 | 33 | 37 | 36 | 28 | 28 | |
| Benchmarks (no. days) | ||||||
| Average Receivable Collection Period, Competitors2 | ||||||
| Linde plc | — | — | — | — | — | |
| Sherwin-Williams Co. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31).
1 2018 Calculation
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ 11.13 = 33
2 Click competitor name to see calculations.
- Receivables Turnover Ratio
- The receivables turnover ratio exhibited a general declining trend from 2014 through 2017, decreasing from 13.23 to 9.74. This decline indicates that the frequency of collecting receivables slowed during this period. In 2018, there was a partial recovery with the ratio increasing to 11.13, suggesting an improvement in the efficiency of receivables collection compared to the previous year, though still below the initial 2014 level.
- Average Receivable Collection Period
- The average collection period showed an inverse trend relative to the receivables turnover ratio, reflecting the expected relationship between these two metrics. Starting at 28 days in 2014 and remaining stable in 2015, it increased markedly to 36 and 37 days in 2016 and 2017, respectively, indicating that receivables were being collected more slowly during these years. In 2018, this metric decreased to 33 days, signaling some improvement in collection efficiency, yet not returning fully to the earlier shorter collection periods.
- Overall Analysis
- The data reveals a period from 2014 to 2017 marked by deteriorating receivables management efficiency, as evidenced by a decreasing turnover ratio and increasing average collection days. The improvements noted in 2018 suggest a potential response to this decline, with collection processes becoming more effective, albeit not to the prior level of performance. These trends highlight a cyclical pattern in receivables management, which may be influenced by internal operational factors or external market conditions affecting customer payment behavior.
Operating Cycle
LyondellBasell Industries N.V., operating cycle calculation, comparison to benchmarks
No. days
| Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Average inventory processing period | 51 | 55 | 60 | 58 | 42 | |
| Average receivable collection period | 33 | 37 | 36 | 28 | 28 | |
| Short-term Activity Ratio | ||||||
| Operating cycle1 | 84 | 92 | 96 | 86 | 70 | |
| Benchmarks | ||||||
| Operating Cycle, Competitors2 | ||||||
| Linde plc | — | — | — | — | — | |
| Sherwin-Williams Co. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31).
1 2018 Calculation
Operating cycle = Average inventory processing period + Average receivable collection period
= 51 + 33 = 84
2 Click competitor name to see calculations.
- Average Inventory Processing Period
- The average inventory processing period exhibits a fluctuating trend over the five-year period. It increased from 42 days in 2014 to a peak of 60 days in 2016, indicating an extended duration for inventory turnover. Subsequently, it decreased to 55 days in 2017 and further to 51 days by 2018, suggesting a partial improvement in inventory management efficiency toward the end of the period.
- Average Receivable Collection Period
- This metric remained stable at 28 days between 2014 and 2015 but then rose notably to 36 days in 2016 and slightly further to 37 days in 2017. A decline to 33 days occurred in 2018, pointing to some challenges in collections during the mid-period, followed by improvement in the final year analyzed.
- Operating Cycle
- The operating cycle expanded from 70 days in 2014 to a significant 96 days in 2016, coinciding with the increases observed in both the inventory processing and receivable collection periods. Thereafter, the operating cycle shortened to 92 days in 2017 and further reduced to 84 days by 2018. This indicates a general lengthening of the full cash-to-cash cycle through 2016, with a noticeable effort to streamline operations and working capital management in subsequent years.
Average Payables Payment Period
LyondellBasell Industries N.V., average payables payment period calculation, comparison to benchmarks
| Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Payables turnover | 10.54 | 9.69 | 9.17 | 11.77 | 12.71 | |
| Short-term Activity Ratio (no. days) | ||||||
| Average payables payment period1 | 35 | 38 | 40 | 31 | 29 | |
| Benchmarks (no. days) | ||||||
| Average Payables Payment Period, Competitors2 | ||||||
| Linde plc | — | — | — | — | — | |
| Sherwin-Williams Co. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31).
1 2018 Calculation
Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ 10.54 = 35
2 Click competitor name to see calculations.
The financial data reveals trends related to the company's payables management over a five-year period from 2014 to 2018.
- Payables Turnover Ratio
- The payables turnover ratio demonstrates a declining trend from 12.71 in 2014 to a low of 9.17 in 2016, indicating a slower rate of paying off suppliers during this timeframe. Following 2016, this ratio gradually improves, rising to 10.54 by 2018, suggesting some recovery in payment efficiency but still below the 2014 level.
- Average Payables Payment Period (number of days)
- The average payables payment period displays an inverse relationship to the turnover ratio. It increases from 29 days in 2014 to a peak of 40 days in 2016, indicating that the company took longer on average to settle its payables. After 2016, the payment period decreases to 35 days in 2018, signifying an improvement in the speed of payments, though it remains longer than the initial 2014 period.
Overall, the data shows that the company initially extended its payables payment period, possibly to optimize cash flow or due to operational factors, with slower turnover in payables noted up to 2016. Starting in 2017, a reversal of this trend occurred with improved payment promptness reflected in shorter payment periods and moderately increasing payables turnover ratios leading up to 2018.
Cash Conversion Cycle
LyondellBasell Industries N.V., cash conversion cycle calculation, comparison to benchmarks
No. days
| Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Average inventory processing period | 51 | 55 | 60 | 58 | 42 | |
| Average receivable collection period | 33 | 37 | 36 | 28 | 28 | |
| Average payables payment period | 35 | 38 | 40 | 31 | 29 | |
| Short-term Activity Ratio | ||||||
| Cash conversion cycle1 | 49 | 54 | 56 | 55 | 41 | |
| Benchmarks | ||||||
| Cash Conversion Cycle, Competitors2 | ||||||
| Linde plc | — | — | — | — | — | |
| Sherwin-Williams Co. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31).
1 2018 Calculation
Cash conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= 51 + 33 – 35 = 49
2 Click competitor name to see calculations.
- Average Inventory Processing Period
- The average inventory processing period increased significantly from 42 days in 2014 to a peak of 60 days in 2016, indicating a longer duration to convert inventory into sales. After 2016, this period gradually decreased, reaching 51 days by the end of 2018, suggesting some improvement in inventory management efficiency.
- Average Receivable Collection Period
- The receivable collection period remained stable at 28 days during 2014 and 2015, then rose notably to 36 days in 2016 and slightly increased to 37 days in 2017. In 2018, the period shortened to 33 days. This pattern indicates some challenges in collections during 2016 and 2017, with partial recovery in the subsequent year.
- Average Payables Payment Period
- The payables payment period showed an increasing trend from 29 days in 2014 to 40 days by the end of 2016, implying extended payment terms to suppliers. This period then decreased to 38 days in 2017 and further to 35 days in 2018, reflecting a tightening in payment scheduling.
- Cash Conversion Cycle
- The cash conversion cycle, which reflects the net time between cash outflow and inflow, lengthened from 41 days in 2014 to a maximum of 56 days in 2016. It subsequently improved to 54 days in 2017 and further to 49 days in 2018. Though still higher than in 2014, the trend suggests some enhancement in working capital management after 2016.