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)
LyondellBasell Industries N.V., short-term (operating) activity ratios (quarterly data)
Based on: 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31).
The analysis of the financial activity ratios over the observed quarters reveals notable fluctuations and emerging trends in key operational efficiency metrics.
- Inventory Turnover
- The inventory turnover ratio exhibits an overall moderate decline from early 2015 through 2016, dropping from 8.38 to a low of 5.62. Starting in 2017, the ratio stabilizes and gradually improves, peaking at 7.51 in mid-2018 before slightly declining again towards mid-2019. This pattern suggests initial lengthening in inventory holding times followed by improved inventory management efficiencies in recent periods.
- Receivables Turnover
- Receivables turnover follows a generally declining trend over the entire period, falling from 13.81 in Q1 2015 to roughly around 9.8 by mid-2019, with some fluctuations. The decrease indicates a slower collection of receivables, suggesting longer credit periods extended to customers or reduced collection effectiveness.
- Payables Turnover
- Payables turnover shows a notable downward shift from early 2015 into mid-2016, moving from approximately 13.58 to below 9.2, suggesting longer payment periods to suppliers. From 2017 onwards, the ratio fluctuates moderately between about 9 and 11, indicating variability but no clear directional trend.
- Working Capital Turnover
- The working capital turnover ratio declines steadily from 6.48 in early 2015 to under 5.0 by late 2017, implying less efficient use of working capital. However, from late 2017 through mid-2019, there is a sharp and substantial increase peaking at 11.61 in early 2019, which may reflect improvements in managing current assets and liabilities or operational optimization.
- Average Inventory Processing Period
- Corresponding with the inventory turnover trend, the average inventory processing period rises from 44 days in early 2015 to around 65 days in late 2016, indicating lengthened inventory holding. Subsequently, it declines steadily, reaching approximately 49 days in mid-2018 before a slight increase towards mid-2019, pointing to improved inventory turnover after 2016.
- Average Receivable Collection Period
- The average receivable collection period extends from 26 days in early 2015 to a peak of about 39 days around 2017 and 2018, reflecting the slower receivables turnover noted. A minor improvement is noted in 2019 when the period decreases back to the mid-30s range, suggesting some recovery in receivables collection efficiency.
- Operating Cycle
- The operating cycle lengthens consistently from about 70 days in early 2015 to around 102 days by late 2016, indicative of a slower overall conversion of inventory and receivables into cash. It partially improves thereafter, declining towards mid-80s to low 90s days by mid-2019, aligning with the improvement trends in inventory and receivable metrics.
- Average Payables Payment Period
- This period increases from 27 days in early 2015 to about 40 days in late 2016, indicating the company is taking longer to settle payables. Some variability is observed thereafter, with the period fluctuating between mid-30s to 40 days up to mid-2019, suggesting no significant tightening in payables management.
- Cash Conversion Cycle
- The cash conversion cycle extends from 43 days in early 2015 to a peak of 64 days by late 2016, reflecting inefficiencies in the cash flow cycle. Subsequent periods show a decrease to around 50 days in 2018 and early 2019, followed by a slight increase to 56 days by mid-2019. The reduction indicates improved cash flow management, though it remains above initial 2015 levels.
In summary, the company experienced a phase of deteriorating operational efficiency through 2015 to 2016 across most measured parameters, particularly in inventory and receivables management, as well as longer payable periods. Starting around 2017, many indicators demonstrate stabilization and notable improvement, especially the marked enhancement in working capital turnover and reductions in inventory processing and cash conversion cycles. Collections and payables management appear more variable with modest improvements seen towards the end of the period. These shifts suggest a strategic focus on optimizing working capital and operational cash flows during the latter part of the timeframe analyzed.
Turnover Ratios
Average No. Days
Inventory Turnover
LyondellBasell Industries N.V., inventory turnover calculation (quarterly data)
| Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||
| Cost of sales | ||||||||||||||||||||||||
| Inventories | ||||||||||||||||||||||||
| Short-term Activity Ratio | ||||||||||||||||||||||||
| Inventory turnover1 | ||||||||||||||||||||||||
| Benchmarks | ||||||||||||||||||||||||
| Inventory Turnover, Competitors2 | ||||||||||||||||||||||||
| Linde plc | ||||||||||||||||||||||||
| Sherwin-Williams Co. | ||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31).
1 Q2 2019 Calculation
Inventory turnover
= (Cost of salesQ2 2019
+ Cost of salesQ1 2019
+ Cost of salesQ4 2018
+ Cost of salesQ3 2018)
÷ Inventories
= ( + + + )
÷ =
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals several important trends in cost of sales, inventories, and inventory turnover ratios over the periods observed.
- Cost of Sales
- The cost of sales exhibited fluctuations across the quarters but displayed an overall increasing trend from 2015 to 2018. Starting at approximately $6.4 billion in the first quarter of 2015, it rose to a peak of about $8.5 billion in the third quarter of 2018. There is some seasonal variability apparent, with periodic dips and rises within each year, but the general tendency indicates growth in cost of sales over the analyzed timeframe. In 2019, the cost of sales showed some stabilization around the $7.4 to $7.5 billion range, suggesting a possible plateau after the prior increase.
- Inventories
- Inventory levels were relatively stable with minor fluctuations throughout the period. Beginning around $4.3 billion in early 2015, inventory values hovered mostly between $4.0 billion and $4.6 billion in subsequent years. Notably, inventories slightly decreased during 2016 but began to increase again from late 2017 through 2018, peaking near $4.6 billion. The rise towards the end of the series may indicate an accumulation of stock, potentially preparing for anticipated demand or reflecting slower sales.
- Inventory Turnover Ratio
- The inventory turnover ratio demonstrated a declining trend from 8.38 in the first quarter of 2015 to a low of approximately 5.62 in the third quarter of 2016, indicating a slower movement of inventory relative to sales during this period. However, from late 2016 onwards, the ratio began a recovery trend, reaching around 7.5 in mid-2018. This improvement suggests more efficient inventory management or higher sales relative to inventory. The ratio slightly declined again by mid-2019 to about 6.66 but remained above the lower levels seen in 2016.
In summary, the company experienced increasing costs of sales over the longer term with some seasonal variations. Inventory levels were moderately stable but showed an increasing tendency in the later periods. The inventory turnover ratio's decline in early years followed by recovery indicates fluctuations in operational efficiency, possibly reflecting changes in market conditions or supply chain management practices. The data suggests that after a period of slower inventory movement, efforts to enhance turnover were somewhat successful, though ratios did not return to the initial levels seen in early 2015.
Receivables Turnover
LyondellBasell Industries N.V., receivables turnover calculation (quarterly data)
| Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||
| Sales and other operating revenues | ||||||||||||||||||||||||
| Accounts receivable | ||||||||||||||||||||||||
| Short-term Activity Ratio | ||||||||||||||||||||||||
| Receivables turnover1 | ||||||||||||||||||||||||
| Benchmarks | ||||||||||||||||||||||||
| Receivables Turnover, Competitors2 | ||||||||||||||||||||||||
| Linde plc | ||||||||||||||||||||||||
| Sherwin-Williams Co. | ||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31).
1 Q2 2019 Calculation
Receivables turnover
= (Sales and other operating revenuesQ2 2019
+ Sales and other operating revenuesQ1 2019
+ Sales and other operating revenuesQ4 2018
+ Sales and other operating revenuesQ3 2018)
÷ Accounts receivable
= ( + + + )
÷ =
2 Click competitor name to see calculations.
The financial data reveals several notable trends in key operational metrics over the observed periods.
- Sales and Other Operating Revenues
- Revenues generally increased from the first quarter of 2015 through early 2018, rising from approximately $8.2 billion to a peak of around $10.2 billion in the second quarter of 2018. This upward trend suggests a period of growth and expansion. However, revenues declined in the last quarters of 2018 and the first quarters of 2019, dropping to roughly $8.8 to $9.0 billion, indicating some volatility or potential market pressures during that later timeframe.
- Accounts Receivable
- The accounts receivable balance exhibited a steady growth trend over the same period, increasing from about $3.1 billion in early 2015 to nearly $4.1 billion by the third quarter of 2018. There was a slight decrease observed afterward into mid-2019, though receivables remained above $3.6 billion. This upward trajectory in receivables aligns with the general increase in sales but also implies a higher amount of credit extended to customers over time.
- Receivables Turnover Ratio
- The receivables turnover ratio experienced a declining trend from 2015 to 2018, moving from approximately 13.8 times in the first quarter of 2015 down to around 9.3 to 9.6 times in 2017 and early 2018. This decline indicates that accounts receivable were being collected less frequently during this period. In 2019, the ratio showed some recovery, increasing again to above 10 times, which may reflect improved collection efficiency or changes in credit policies.
Overall, the company demonstrated growth in operating revenues and a corresponding increase in accounts receivable, with a decreasing turnover ratio suggesting a lengthening of the collection period until early 2018. The subsequent partial rebound in turnover ratio alongside a modest decline in receivables during 2019 could indicate enhanced working capital management or adjustments in credit terms to address collection challenges.
Payables Turnover
LyondellBasell Industries N.V., payables turnover calculation (quarterly data)
| Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||
| Cost of sales | ||||||||||||||||||||||||
| Accounts payable | ||||||||||||||||||||||||
| Short-term Activity Ratio | ||||||||||||||||||||||||
| Payables turnover1 | ||||||||||||||||||||||||
| Benchmarks | ||||||||||||||||||||||||
| Payables Turnover, Competitors2 | ||||||||||||||||||||||||
| Linde plc | ||||||||||||||||||||||||
| Sherwin-Williams Co. | ||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31).
1 Q2 2019 Calculation
Payables turnover
= (Cost of salesQ2 2019
+ Cost of salesQ1 2019
+ Cost of salesQ4 2018
+ Cost of salesQ3 2018)
÷ Accounts payable
= ( + + + )
÷ =
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals several notable trends and patterns in cost of sales, accounts payable, and payables turnover ratios over the examined periods.
- Cost of Sales
- The cost of sales demonstrates a fluctuating but generally upward trend over the examined timeline. Starting at 6,379 million US dollars in March 2015, it peaks intermittently with notable increases toward the end of several years. For instance, it rises to 7,528 million in December 2017 and reaches an even higher level of 8,499 million in September 2018 before decreasing somewhat to 7,446 million by June 2019. This indicates overall growth in the company's operational scale or cost structure despite some quarter-to-quarter variability.
- Accounts Payable
- Accounts payable figures also show variability, albeit with a less consistent pattern than cost of sales. Beginning at 2,631 million US dollars in March 2015, there is a gradual increase over time with occasional declines. For example, accounts payable drop in the mid-2017 quarters but later increase to a peak of 3,555 million in September 2018. By the mid-2019 period, the level slightly retracts to around 3,115 million. The overall upward trend suggests expanding payables, which may correspond with higher procurement volume or extended payment terms.
- Payables Turnover Ratio
- The payables turnover ratio, which measures how many times payables are paid and replaced during a period, declines notably from 13.58 in March 2015 to a range between approximately 9.09 and 11.18 in subsequent quarters. This decline implies a slower turnover of payables on average, indicating the company may be taking longer to settle its obligations. Notable fluctuations exist with the ratio dipping to a low around 9.09 in September 2018 and recovering partially toward 10.54 by June 2019, suggesting variability in payment patterns.
In summary, the cost of sales and accounts payable generally trend upwards over the period, reflecting growth in business scale or operational activity. Conversely, the declining payables turnover ratio suggests slower payment cycles, which could impact cash flow management. The interplay between these metrics indicates an expansion phase coupled with evolving supplier payment dynamics.
Working Capital Turnover
LyondellBasell Industries N.V., working capital turnover calculation (quarterly data)
| Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||
| Current assets | ||||||||||||||||||||||||
| Less: Current liabilities | ||||||||||||||||||||||||
| Working capital | ||||||||||||||||||||||||
| Sales and other operating revenues | ||||||||||||||||||||||||
| Short-term Activity Ratio | ||||||||||||||||||||||||
| Working capital turnover1 | ||||||||||||||||||||||||
| Benchmarks | ||||||||||||||||||||||||
| Working Capital Turnover, Competitors2 | ||||||||||||||||||||||||
| Linde plc | ||||||||||||||||||||||||
| Sherwin-Williams Co. | ||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31).
1 Q2 2019 Calculation
Working capital turnover
= (Sales and other operating revenuesQ2 2019
+ Sales and other operating revenuesQ1 2019
+ Sales and other operating revenuesQ4 2018
+ Sales and other operating revenuesQ3 2018)
÷ Working capital
= ( + + + )
÷ =
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals several key trends and shifts in the company's operational efficiency and liquidity position over the examined periods.
- Working Capital
- Working capital demonstrates a generally declining trend from early 2015 through mid-2019. Starting at a peak of 6,761 million USD in the second quarter of 2015, it decreased gradually with some fluctuations, reaching a notably lower figure around 3,274 million USD by the first quarter of 2019. This decreasing pattern suggests a tightening in the company's net short-term assets relative to its short-term liabilities over time, which might imply intensified management of current assets and liabilities or increased operational pressures affecting liquidity.
- Sales and Other Operating Revenues
- Revenues exhibited some volatility but generally increased until early 2018, peaking above 10,000 million USD in mid-2018. Following this peak, there was a slight decline and stabilization around the 8,700 to 9,000 million USD range in mid-2019. Despite fluctuations, the overall upward trend through 2017 and into early 2018 indicates periods of revenue growth, possibly driven by higher sales volumes or pricing improvements, before a moderation period.
- Working Capital Turnover Ratio
- This ratio shows how efficiently the working capital is utilized in generating sales. Initially, the turnover was high, close to 6.48 in the first quarter of 2015, then it experienced a consistent decline through 2017, reaching a low point near 4.8 by the first quarter of 2018. However, beginning in 2018, there is a strong upward trend, with the ratio sharply increasing to above 11 by the first quarter of 2019, indicating a marked improvement in working capital efficiency. This suggests that despite a reduction in absolute working capital levels, the company became more effective at generating sales from a smaller base of working capital, possibly through better inventory control, receivables management, or payables optimization.
In summary, while working capital has declined significantly over the period, the company has managed to maintain and grow sales revenue, culminating in a substantially improved working capital turnover ratio by 2019. This reflects an enhanced operational efficiency in leveraging working capital to support sales, despite tighter liquidity conditions.
Average Inventory Processing Period
LyondellBasell Industries N.V., average inventory processing period calculation (quarterly data)
| Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||||||||||||||||||||
| Inventory turnover | ||||||||||||||||||||||||
| Short-term Activity Ratio (no. days) | ||||||||||||||||||||||||
| Average inventory processing period1 | ||||||||||||||||||||||||
| Benchmarks (no. days) | ||||||||||||||||||||||||
| Average Inventory Processing Period, Competitors2 | ||||||||||||||||||||||||
| Linde plc | ||||||||||||||||||||||||
| Sherwin-Williams Co. | ||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31).
1 Q2 2019 Calculation
Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ =
2 Click competitor name to see calculations.
The inventory turnover ratio generally shows a declining trend from the first quarter of 2015 through the third quarter of 2016, decreasing from 8.38 to a low of 5.62. This indicates a reduction in the frequency at which inventory was sold and replaced during this period. Following this decline, there is a gradual recovery trend observed from late 2016 onward, where the turnover ratio increases, reaching levels above 7.0 between the first quarter of 2018 and the second quarter of 2019, signaling improved efficiency in inventory management.
Correspondingly, the average inventory processing period, expressed in number of days, moves inversely to the inventory turnover ratio. It increases from 44 days in early 2015 to a peak of 65 days in the third quarter of 2016, reflecting a longer duration to process inventory during that timeframe. After the peak, this period decreases, indicating faster inventory processing, and stabilizes around the early 50-day range in subsequent periods through mid-2019.
- Inventory Turnover
- Trend shows an initial decline indicating slower inventory movement followed by a recovery and improvement in turnover efficiency from late 2016 onward.
- Average Inventory Processing Period
- Initially rises, reflecting extended inventory holding periods, then declines and stabilizes, pointing toward better inventory management and quicker turnover in recent periods.
Average Receivable Collection Period
LyondellBasell Industries N.V., average receivable collection period calculation (quarterly data)
| Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||||||||||||||||||||
| Receivables turnover | ||||||||||||||||||||||||
| Short-term Activity Ratio (no. days) | ||||||||||||||||||||||||
| Average receivable collection period1 | ||||||||||||||||||||||||
| Benchmarks (no. days) | ||||||||||||||||||||||||
| Average Receivable Collection Period, Competitors2 | ||||||||||||||||||||||||
| Linde plc | ||||||||||||||||||||||||
| Sherwin-Williams Co. | ||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31).
1 Q2 2019 Calculation
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ =
2 Click competitor name to see calculations.
The financial data reveals significant trends in the company's management of receivables over the observed periods.
- Receivables Turnover Ratio
- The receivables turnover ratio shows a general declining trend from March 31, 2015, when it was 13.81, decreasing steadily through the subsequent quarters and reaching lower values around 9.28 to 9.81 by mid-2019. This decline indicates that the company is collecting receivables less frequently throughout each year, suggesting a potential slowdown in credit collection efficiency over time.
- Average Receivable Collection Period
- Correspondingly, the average receivable collection period, measured in days, exhibits an increasing pattern. It started at 26 days in March 2015 and generally rose, peaking at 39 days around March 2017 and March 2018, before fluctuating slightly but remaining elevated near 35 to 38 days by mid-2019. This increase in days confirms the trend implied by the turnover ratio; the company is taking longer to collect its outstanding receivables.
Overall, the data suggests a lengthening in the credit cycle, with the company experiencing slower collections over the periods examined. This could reflect changes in customer payment behavior, the company's credit policies, or external economic factors impacting receivable management efficiency.
Operating Cycle
LyondellBasell Industries N.V., operating cycle calculation (quarterly data)
No. days
| Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||||||||||||||||||||
| Average inventory processing period | ||||||||||||||||||||||||
| Average receivable collection period | ||||||||||||||||||||||||
| Short-term Activity Ratio | ||||||||||||||||||||||||
| Operating cycle1 | ||||||||||||||||||||||||
| Benchmarks | ||||||||||||||||||||||||
| Operating Cycle, Competitors2 | ||||||||||||||||||||||||
| Linde plc | ||||||||||||||||||||||||
| Sherwin-Williams Co. | ||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31).
1 Q2 2019 Calculation
Operating cycle = Average inventory processing period + Average receivable collection period
= + =
2 Click competitor name to see calculations.
The analysis of the financial cycle ratios reveals notable trends and fluctuations over the examined periods.
- Average Inventory Processing Period
- The inventory processing period exhibited an overall increasing trend from early 2015 through 2016, rising from 44 days in March 2015 to a peak of 65 days in September 2016. This was followed by a gradual decline in 2017 and 2018, stabilizing around low 50-day values by the end of 2018 and early 2019. The initial increase suggests a lengthening in the time inventory was held, potentially indicating slower turnover or operational adjustments, while the subsequent decline reflects improvements or efficiencies in inventory management.
- Average Receivable Collection Period
- The receivable collection period showed a less consistent pattern but generally higher levels over time. It began at 26 days in March 2015, increasing to the mid-to-high 30s from 2016 onwards, with some fluctuations between 33 and 39 days in later periods. This indicates a general elongation in the time taken to collect receivables, which could imply changes in credit policies, customer payment behavior, or economic factors impacting collections.
- Operating Cycle
- The operating cycle, combining both inventory processing and receivables collection periods, followed a trajectory that closely resembles the inventory trend but at a higher absolute level. It increased steadily from 70 days in March 2015 to a peak of 102 days in September 2016, then followed a downward trend reaching a low of 84 days in June 2019 before slightly increasing again to 92 days by mid-2019. This reflects the combined effect of inventory and receivables management, with the operating cycle mirroring the elongation and subsequent shortening observed in the other ratios.
Overall, the data suggest that the company experienced a lengthening of its operating cycle and associated components until late 2016, likely reflecting operational challenges or strategic shifts. Following this, the company appears to have taken measures that helped reduce these periods somewhat, thus potentially improving liquidity and operational efficiency. However, receivable collection days remained relatively high in the later periods compared to 2015, which might warrant further investigation.
Average Payables Payment Period
LyondellBasell Industries N.V., average payables payment period calculation (quarterly data)
| Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | |||||||
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| Selected Financial Data | ||||||||||||||||||||||||
| Payables turnover | ||||||||||||||||||||||||
| Short-term Activity Ratio (no. days) | ||||||||||||||||||||||||
| Average payables payment period1 | ||||||||||||||||||||||||
| Benchmarks (no. days) | ||||||||||||||||||||||||
| Average Payables Payment Period, Competitors2 | ||||||||||||||||||||||||
| Linde plc | ||||||||||||||||||||||||
| Sherwin-Williams Co. | ||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31).
1 Q2 2019 Calculation
Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ =
2 Click competitor name to see calculations.
The payables turnover ratio demonstrates a general downward trend from early 2015 through mid-2019. Starting at 13.58 in the first quarter of 2015, the ratio declines steadily to levels around 9 to 10 in the latter periods. This indicates that the frequency with which the company settles its payables has decreased over time. A lower payables turnover ratio can signify longer payment cycles or more extended credit terms from suppliers.
Correspondingly, the average payables payment period, expressed in number of days, shows an increasing pattern across the same timeframe. It begins at 27 days in March 2015 and rises gradually, peaking at around 40 days in several quarters between 2016 and 2019. This upward movement reflects a lengthening in the time taken by the company to pay its obligations, corroborating the declining turnover ratio.
Notably, some quarters experience minor reversals or stabilization in these trends. For example, the payment period slightly decreases from 40 days in December 2016 to 38 days in March 2017 and fluctuates mildly thereafter. Similarly, the turnover ratio also exhibits brief recoveries during mid-2017 and mid-2018 before trending down or stabilizing again.
Overall, the data suggests a strategic or operational shift toward slower payments to suppliers, which may impact supplier relationships or cash flow dynamics. The consistency of this trend over multiple years points to an intentional adjustment rather than temporary fluctuations.
Cash Conversion Cycle
LyondellBasell Industries N.V., cash conversion cycle calculation (quarterly data)
No. days
| Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 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 | ||||||||||||||||||||||||
| Linde plc | ||||||||||||||||||||||||
| Sherwin-Williams Co. | ||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31).
1 Q2 2019 Calculation
Cash conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= + – =
2 Click competitor name to see calculations.
The financial data reveals several trends in the company's operational efficiency and working capital management over the observed periods.
- Inventory Processing Period
- The average inventory processing period demonstrated a gradual upward trend from 44 days at the beginning of 2015 to a peak of 65 days in the third quarter of 2016. Following this peak, the period generally declined, reaching about 49–53 days during 2018 before stabilizing around 51–55 days in 2019. This pattern indicates an initial increase in the time taken to process inventory, followed by improvements and stabilization in inventory management efficiency.
- Receivable Collection Period
- The average receivable collection period showed a moderate increase overall, rising from 26 days in early 2015 to approximately 37–39 days during late 2017 and early 2018. Some fluctuations occurred, with slight declines in mid-2019 periods. The increased collection period suggests that the company took longer to collect receivables over time, which may impact liquidity.
- Payables Payment Period
- The average payables payment period increased from 27 days in early 2015, reaching a high near 40 days by late 2016 and early 2019. There were periods of fluctuation, with slight decreases in mid-2017 and mid-2019 to around 33–36 days. The extension in payment period reflects a possible strategy to optimize cash flow by delaying payments to suppliers within reasonable limits.
- Cash Conversion Cycle (CCC)
- The cash conversion cycle closely followed movements in the other components, rising from 43 days in early 2015 to a peak of 64 days in late 2016. After this peak, a steady decline occurred into 2018, reaching about 49–50 days, indicating improved working capital management. However, there was a slight increase back to 56 days by mid-2019. Overall, the CCC's pattern suggests that the company experienced initial pressure on cash flow timing but later made operational adjustments to reduce the duration of cash tied up in working capital.