Mosaic Co. (NYSE:MOS)

Inventory Turnover

The inventory turnover ratio fluctuated over the analyzed periods, showing an initial decline from 3.31 to 2.96 between early 2018 and mid-2019, followed by a notable increase peaking around 4.5 in late 2020. After this peak, the ratio gradually declined again to near 3 by mid-2022. This suggests variability in inventory management efficiency, with periods of faster inventory movement interspersed with slower turnover phases.

Receivables Turnover

The receivables turnover ratio demonstrated some volatility, beginning around 11, rising to approximately 13 in mid-2018 and mid-2019, then gradually decreasing post-2020 to values closer to 7 by mid-2022. The decreasing trend in recent periods indicates a potential lengthening of collection periods or slower recovery of receivables.

Payables Turnover

The payables turnover ratio showed moderate fluctuations, ranging from about 7 to 12 across the timeframe. There was a notable spike to 11.82 in early 2020, followed by a drop and then a sharp increase again to 11.52 by mid-2022. This suggests variability in how quickly the company is settling its payables, potentially reflecting changes in payment policies or supplier terms.

Working Capital Turnover

Working capital turnover experienced significant variability. It trended upward from 4.79 in early 2018 to a peak exceeding 24 in late 2020 and early 2021, before declining sharply and fluctuating again in 2022. The extreme values in late 2020 imply extraordinary efficiency in using working capital during that period, which reverted closer to earlier levels afterward, indicating fluctuating operational leverage or changes in capital structure.

Average Inventory Processing Period

The average inventory processing period decreased from about 110 days in early 2018 to a low around 81 days in late 2020, implying improved inventory turnover efficiency. Subsequently, it increased again reaching 124 days by mid-2022, indicating slower inventory processing and possible challenges in inventory management or demand variability.

Average Receivable Collection Period

The average receivable collection period generally rose over time, starting near 33 days in early 2018, maintaining around 30 days until 2020, then increasing steadily to 50 days by mid-2022. This upward trend suggests increasing delays in collection of receivables, which can impact cash flow.

Operating Cycle

The operating cycle lengthened over the period analyzed, moving from approximately 143 days in early 2018 to about 168 days by mid-2022. After a decline to around 116 days in 2020, the trend reversed and showed a steady increase, reflecting lengthier combined inventory and receivables periods before cash inflow.

Average Payables Payment Period

The average payables payment period saw fluctuations, ranging from about 31 days to 50 days, with a notable increase to 50 days by late 2021, suggesting a tendency to delay payments to suppliers more recently. This extended payment period may indicate efforts to preserve cash.

Cash Conversion Cycle

The cash conversion cycle exhibited a declining trend reaching its lowest point near 80 days in late 2020, followed by an increase to over 130 days by early 2022, then a slight decrease thereafter. The initial decline indicates improved cash flow efficiency, while the subsequent increase points to more extended durations between cash outflow and inflow, reflecting potential challenges in working capital management.

The quarterly financial data indicates several notable trends in cost of goods sold (COGS), inventories, and inventory turnover ratios over the analyzed periods.

Cost of Goods Sold (COGS)

COGS exhibits a fluctuating but generally increasing pattern from March 2018 to June 2022. Initial values around 1.69 billion USD rise to peaks exceeding 3.5 billion USD in mid-2022. Notable increases are observed in the latter quarters, especially between late 2021 and mid-2022, suggesting increased production costs or higher sales volume. The data show multiple fluctuations, reflecting potential seasonal or market-driven variations.

Inventories

Inventory levels show an overall upward trend across the periods. Starting from approximately 2.06 billion USD in early 2018, inventories increase steadily to approximately 3.64 billion USD by mid-2022. Despite some declines in certain quarters (notably around 2019 and 2020), the general trend points to accumulation of stock over time. The sharp growth in inventories toward 2022 suggests the company may be building up stock in response to anticipated demand or supply chain considerations.

Inventory Turnover Ratio

The inventory turnover ratio, which measures how efficiently inventory is managed, demonstrates moderate volatility with a slight declining trend in recent periods. Early values range from about 3.3 to 4.5 times per year, with peaks around 4.5 in late 2020. However, starting from late 2021 through mid-2022, the ratio declines to around 3.0, indicating slower inventory movement or higher inventory relative to COGS. This change may imply reduced efficiency in inventory management or changes in sales dynamics.

In summary, the data reveal an increase in both cost of goods sold and inventory levels over time, with inventory turnover ratios indicating a slight reduction in turnover efficiency in the most recent periods. These patterns could reflect changing demand, supply chain strategies, or operational adjustments within the company.

The financial data reveals several key trends over the observed periods. Net sales exhibit fluctuations with a general upward trajectory, particularly notable in the latter quarters. Initially, sales peaked in the third quarter of 2018 but experienced dips and recoveries in subsequent quarters. From early 2021 onward, there is a marked increase in net sales, culminating in a significant rise by mid-2022.

Receivables, net, including affiliate receivables, show a pattern that somewhat mirrors net sales trends but with some delay and greater volatility. After an increase towards the end of 2018, receivables declined slightly in early 2019 before gradually rising again, with substantial growth evident starting in late 2021 and continuing sharply into 2022. Such growth in receivables could reflect higher sales activity and potentially longer collection periods or increased credit extension.

Receivables turnover, which measures the efficiency of collecting receivables, demonstrates a declining trend over the time frame. Earlier periods show turnover ratios around or above 11, indicating quicker collections relative to sales. However, in more recent quarters, particularly from late 2021 through mid-2022, turnover ratios decrease notably, reaching the lowest values of the period. This decline suggests a slowdown in the collection process or an increase in outstanding receivables relative to sales, potentially highlighting cash flow or credit management challenges.

Net Sales

Overall upward trend with significant growth from early 2021 to mid-2022, despite intermediate fluctuations.

Receivables, Net

Generally increasing over the periods with pronounced rises in late 2021 and into 2022, indicating more credit extended or slower collections.

Receivables Turnover Ratio

Declining trend from an average above 11 down to around 7 in the most recent periods, implying reduced efficiency in receivables collection.

In summary, the data suggest the company has expanded its sales significantly recently, accompanied by a growing receivables balance and decreasing collection efficiency. These developments may warrant closer attention to credit policies and cash flow management to maintain financial stability and operational effectiveness.

The analysis of the quarterly financial metrics over the examined periods reveals several notable trends in cost management and payment practices.

Cost of Goods Sold (COGS)

The cost of goods sold exhibits a fluctuating yet generally upward trajectory over the reported quarters. Initial values around 1.69 million USD in early 2018 rise sharply to peaks exceeding 2.5 million USD by late 2019 and continue increasing into 2022, reaching more than 3.5 million USD by mid-2022. This trend suggests escalating production or procurement expenses, possibly linked to scaling operations or inflationary pressures.

Accounts Payable

Accounts payable amounts display variability with periods of increase and decrease. Starting near 680 thousand USD in early 2018, payables climb gradually through 2019 and then surge sharply from late 2020 into 2021 and beyond, peaking at over 1.5 million USD by mid-2022. This rising trend indicates an increasing reliance on credit from suppliers, possibly reflecting strategic payment deferral or increased purchasing activity.

Payables Turnover Ratio

The payables turnover ratio reveals considerable volatility across quarters, oscillating between approximately 7.2 and 11.8 times annually. Higher turnover ratios are observed in several early periods of 2020 and 2019, indicating faster payment cycles. However, notable declines are visible in late 2021 and 2022, where the ratio dips below 8, reflecting slower payments to suppliers. This fluctuation suggests changes in cash management strategies or working capital optimization attempts.

Overall Insights

The combined movement of rising cost of goods sold and increasing accounts payable alongside a declining payables turnover ratio in recent quarters points to potentially elongating payment terms or cash preservation tactics. The company appears to be managing its supplier payments more slowly while facing higher costs, which may impact liquidity or supplier relationships. Periods of high payables turnover correspond to quicker settlements, suggesting tactical shifts in payment policies in response to operational or market conditions.

The analysis of the financial data reveals several noteworthy trends across the periods under review.

Working Capital

Working capital exhibits a generally declining trend from March 2018 to December 2020, decreasing from approximately $1,620,900 thousand to a low of around $374,700 thousand. This decline is followed by a partial recovery with fluctuations, reaching approximately $1,666,700 thousand by June 2022. The sharp drop observed in 2020, particularly in December, indicates a potential liquidity tightening or increased current liabilities during that period. The subsequent rise suggests improvements in current asset management or reductions in liabilities.

Net Sales

Net sales demonstrate considerable fluctuation with a general upward trajectory over the entire timeframe. Initial sales data show variability between approximately $1,893,700 thousand and $2,928,100 thousand. From 2020 onwards, a clear increasing trend emerges, with sales rising steadily from $1,798,100 thousand in March 2020 to a peak of $5,373,100 thousand by June 2022. This significant increase suggests successful sales growth, possibly driven by market expansion or increased demand.

Working Capital Turnover

The working capital turnover ratio exhibits a rising pattern from March 2018 through December 2020, increasing from 4.79 to an exceptional 23.17 at year-end 2020. This sharp increase corresponds with the period when working capital was at its lowest, signifying that sales were generated from a relatively small working capital base. After this peak, the ratio declines substantially and fluctuates between 9.93 and 24.66 through June 2022. These fluctuations reflect changing efficiency in the use of working capital to support sales operations, likely influenced by the volatility in working capital levels and the significant rise in net sales.

In summary, the data indicates a challenging liquidity environment culminating in late 2020 with very low working capital accompanied by robust sales efficiency. Post-2020, working capital recovers, and net sales grow substantially, although the working capital turnover ratio moderates, reflecting a balance between resource availability and sales generation capacity.

Inventory Turnover Trend

The inventory turnover ratio exhibited moderate fluctuation over the observed period. Initially, it remained stable near 3.3 in early 2018, then peaked at 4.01 in the third quarter of 2018. This was followed by a decline in 2019, reaching lows around 2.96 in the second quarter. Subsequently, the ratio improved steadily through 2020 and early 2021, achieving values above 4.3, indicating more efficient inventory management. However, a downward trend reemerged from mid-2021 onwards, with the ratio decreasing to approximately 3.0 by mid-2022.

Average Inventory Processing Period Trend

The average inventory processing period inversely reflected the inventory turnover pattern. It started near 110 days in early 2018, improving to a low of 81 days in the third quarter of 2020, which corresponds to the peak in turnover efficiency. Thereafter, the processing period lengthened again, increasing to 124 days by the second quarter of 2022. This reversal suggests a deceleration in the speed at which inventory moves through the company's operational cycle in recent quarters.

Relationship Between Metrics

There is a clear inverse relationship between the two metrics: as inventory turnover increases, the average processing period decreases, and vice versa. This indicates coherent consistency in the company's inventory management metrics. The peak efficiency phase around 2020 suggests optimal inventory control during that period, while the subsequent decline in turnover coupled with an increasing processing period points to some deterioration in operational efficiency or changing market conditions affecting inventory movement.

Overall Insights

The data reveals that after achieving a period of improved inventory management between 2019 and 2020, the company has faced challenges in maintaining the same level of efficiency. The recent upward trend in days of inventory holding may imply increased stock levels, slower sales, or supply chain delays. Continued monitoring and possibly strategic interventions may be necessary to address the rising processing periods and declining turnover ratios to optimize working capital and operational performance.

Receivables Turnover Ratio

The receivables turnover ratio exhibited fluctuations over the observed quarters. Starting at 10.96 in the first quarter of 2018, it increased to a peak of 13.38 in the second quarter of 2019, indicating an improved efficiency in collecting receivables during that period. However, after this peak, the turnover ratio showed a general declining trend, reaching a low of 7.35 by the second quarter of 2022. This trend suggests that the company's effectiveness in collecting receivables has weakened over recent periods.

Average Receivable Collection Period

The average receivable collection period mirrored the opposite pattern of the turnover ratio, as expected. The number of days decreased from 33 days in the first quarter of 2018 to a low of 27 days in the second quarter of 2019, correlating with the improvement in the receivables turnover. Subsequently, the collection period increased steadily, reaching 50 days by the second quarter of 2022. This increase indicates that it is taking longer for the company to collect its receivables, which could impact cash flow negatively.

Overall Analysis

Over the period analyzed, the company initially improved its receivables management, as evidenced by the rising turnover ratio and declining collection days through mid-2019. However, from late 2019 onward, the trend reversed with a gradual deterioration in receivables efficiency. The lengthening collection period and declining turnover ratio in recent quarters may indicate challenges in the company's credit policies, customer payments, or external market factors affecting collections. The notable increase in collection days during the last few quarters suggests potential liquidity concerns or a need to review credit risk management practices.

The analysis of the quarterly financial data reveals several observable trends related to inventory processing, receivable collection, and overall operating cycle over the examined periods.

Average Inventory Processing Period

The average inventory processing period fluctuated throughout the timeframe. Initially, it remained relatively stable around 110 to 111 days at the start of 2018 but experienced a notable decrease to as low as 81 days by late 2020. After this decline, the period showed a rising trend, reaching a peak of 124 days by early 2022 before slightly decreasing to 118 days mid-2022. This pattern indicates improvements in inventory turnover efficiency up to late 2020, followed by a gradual lengthening of inventory holding times.

Average Receivable Collection Period

The receivable collection period exhibited moderate variability across the quarters. Starting near 33 days in early 2018, it generally remained within the high 20s to mid-30s through 2019 and 2020. However, from early 2021 onwards, the collection period showed a clear upward trend, increasing from 34 days to 50 days by mid-2022. This rise suggests a growing delay in collecting receivables, potentially impacting liquidity.

Operating Cycle

The operating cycle, reflecting the combined effect of inventory processing and receivable collection periods, followed a trend similar to its components. Initially, there was a gradual reduction from 143 days down to around 116 days by late 2020, indicating enhanced operational efficiency. Subsequently, the operating cycle extended substantially, reaching 168 days by mid-2022. This extension corresponds with the noted increases in both inventory processing and receivable collection periods, signaling a lengthening cash conversion cycle and potential pressure on working capital management.

In summary, the data reflect a period of operational improvement up to late 2020, followed by a gradual deterioration in both inventory turnover and receivable collections into 2022. The lengthening operating cycle warrants attention as it may affect the company's liquidity and overall financial health if these trends persist.

Payables Turnover Ratio

The payables turnover ratio exhibits fluctuations over the analyzed periods. Beginning at 10.02 in early 2018, it experienced minor declines and increases, peaking at 11.82 in the first quarter of 2020. Subsequently, a notable decline occurred, reaching a low of 7.26 in late 2021. A brief recovery followed with an increase to 11.52 in early 2022, but it sharply declined again to 7.48 by mid-2022. This indicates variability in the company's efficiency at managing payable accounts, with periods of faster and slower payment cycles.

Average Payables Payment Period (Days)

The average payment period shows a generally inverse trend relative to the payables turnover ratio, as expected. It started at 36 days in March 2018, increased gradually to a peak of 50 days in late 2021, signifying longer payment durations. After reaching this high, there was a sharp decline to 32 days in the first quarter of 2022, followed again by an increase to 49 days by mid-2022. These changes suggest variability in the company’s liquidity management and payment policies, with periods of extended credit utilization followed by efforts to reduce payables duration.

Overall Trends and Insights

The data reflects a dynamic payables management strategy, characterized by cyclic patterns aligning payables turnover with payment periods. Notably, the periods of increasing payment duration correlate with declining turnover ratios, indicating slower payments to suppliers. Variability in these metrics suggests shifts in operational or financial strategies, possibly influenced by external market conditions or internal cash flow management objectives. The significant fluctuations in 2021 and 2022 deserve attention, as they may impact supplier relationships and working capital efficiency.

The analysis of the quarterly financial ratios over the period from March 31, 2018 to June 30, 2022 reveals several noteworthy trends in the company's working capital management and cash flow efficiency.

Average Inventory Processing Period

The average inventory processing period fluctuates significantly across the observed quarters. Starting at 110 days in March 2018, it peaks at 123 days in June 2019, indicating a longer duration of inventory held during that period. Subsequently, a downward trend is seen from late 2019 through 2020, reaching a low of 81 days in September 2020. This suggests an improvement in inventory turnover and efficiency. However, from 2021 onward, there is a general upward movement, ending at 118 days in June 2022, which may imply slower inventory turnover and potential challenges in inventory management during that period.

Average Receivable Collection Period

The receivable collection period shows some variability across the quarters. It starts at 33 days in March 2018 and generally remains stable around the low 30s until early 2021. Notably, there is an increase beginning in late 2021, rising to 45 days in March 2022 and further to 50 days by June 2022. This indicates that the company is taking longer to collect receivables, suggesting either more lenient credit terms or potential difficulties in customer payments during recent periods.

Average Payables Payment Period

Payment timing displays moderate variation, beginning at 36 days in March 2018 and climbing to a high of 50 days in December 2021, reflecting an extended duration in settling payables at that time. However, the figure decreases to 32 days by March 2022, before rising again to 49 days in June 2022. These fluctuations suggest changes in supplier payment policies or shifting negotiating power with vendors throughout the years.

Cash Conversion Cycle

The cash conversion cycle (CCC) exhibits a fluctuating but overall increasing trend over the observed timeframe. Starting at 107 days in March 2018, it declines to a low of 80 days in September 2020, indicating improved operational cash flow efficiency during that interval. Post-2020, the CCC rises again and reaches a peak of 132 days in March 2022, before slightly decreasing to 119 days by June 2022. The recent increase is mainly attributable to longer inventory processing and receivable collection periods, which collectively slow down the conversion of investments in working capital into cash inflows.

In summary, the company's working capital management has experienced significant volatility. Inventory processing efficiency showed initial deterioration followed by improvement until 2020, then reversed to lengthier periods more recently. Receivables collection periods remained mostly steady but increased markedly in the last two quarters, implying slower inflows. Payables payment periods also fluctuated but generally extended until late 2021 with some partial reversal. The net effect is reflected in the cash conversion cycle, which improved up to 2020 but lengthened substantially thereafter, suggesting a degradation in overall cash flow efficiency in the most recent periods.