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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- Analysis of Profitability Ratios
- Analysis of Liquidity Ratios
- Analysis of Solvency Ratios
- Analysis of Long-term (Investment) Activity Ratios
- Enterprise Value to EBITDA (EV/EBITDA)
- Net Profit Margin since 2005
- Price to Earnings (P/E) since 2005
- Price to Book Value (P/BV) since 2005
- Analysis of Revenues
- Aggregate Accruals
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Short-term Activity Ratios (Summary)
ONEOK Inc., 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 volatility over the analyzed period. It declined from 21.52 in 2018 to a low of 13.4 in 2019, slightly increased in 2020 to 13.77, then rose significantly to 21.1 in 2021 and further to 30.84 in 2022. This suggests improved efficiency in managing inventory in the later years.
- Receivables Turnover
- The receivables turnover ratio decreased from 15.38 in 2018 to a low of 10.29 in 2020, suggesting slower collection of receivables during that period. It improved somewhat subsequently, rising to 11.47 in 2021 and further to 14.61 in 2022, indicating enhanced collections efficiency by the end of the period.
- Payables Turnover
- The payables turnover ratio displayed a generally increasing trend, declining from 8.44 in 2018 to 5.61 in 2019, but then increased to 7.1 in 2020, 9.2 in 2021, and 13.17 in 2022. This pattern may imply a faster pace of settling payables over time, especially notable in the final years.
- Working Capital Turnover
- Data was only available for 2020, where the working capital turnover ratio was 16.26, precluding analysis of trends or changes across the periods.
- Average Inventory Processing Period
- This metric increased from 17 days in 2018 to 27 days in 2019, remained fairly steady at 26 days in 2020, then dropped sharply to 17 days in 2021 and further to 12 days in 2022. This trend suggests a reduction in the time inventory remains in stock starting in 2021, aligning with the increase in inventory turnover ratio.
- Average Receivable Collection Period
- The collection period lengthened from 24 days in 2018 to 35 days in 2020, indicating slower collections during this time. It improved thereafter, decreasing to 32 days in 2021 and 25 days in 2022. These shifts correspond to the pattern observed in receivables turnover.
- Operating Cycle
- The operating cycle extended from 41 days in 2018 to a peak of 61 days in 2020, then shortened to 49 days in 2021 and 37 days in 2022. This indicates improved overall operational efficiency in converting inventory and receivables back into cash after 2020.
- Average Payables Payment Period
- The length of time to pay suppliers increased from 43 days in 2018 to 65 days in 2019, decreased to 51 days in 2020, and continued to shorten to 40 days in 2021 and 28 days in 2022. This reflects a trend toward faster payment to creditors starting after 2019.
- Cash Conversion Cycle
- The cash conversion cycle was negative at -2 and -8 days in 2018 and 2019 respectively, indicating that payables were being managed in a way that payments were made after collections and inventory turnover. It became positive at 10 days in 2020, then slightly improved to 9 days in both 2021 and 2022. This suggests a shift in cash flow timing, with the company taking slightly longer to convert investments in inventory and receivables into cash during the latter part of the period.
Turnover Ratios
Average No. Days
Inventory Turnover
ONEOK Inc., 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 thousands) | ||||||
| Cost of sales and fuel | ||||||
| Inventory | ||||||
| Short-term Activity Ratio | ||||||
| Inventory turnover1 | ||||||
| Benchmarks | ||||||
| Inventory Turnover, Competitors2 | ||||||
| Chevron Corp. | ||||||
| ConocoPhillips | ||||||
| Exxon Mobil Corp. | ||||||
| Occidental Petroleum Corp. | ||||||
| Inventory Turnover, Sector | ||||||
| Oil, Gas & Consumable Fuels | ||||||
| Inventory Turnover, Industry | ||||||
| Energy | ||||||
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 sales and fuel ÷ Inventory
= ÷ =
2 Click competitor name to see calculations.
- Cost of Sales and Fuel
- The cost of sales and fuel experienced significant fluctuations over the five-year period. Initially, there was a marked decline from approximately 9.4 billion USD in 2018 to 5.1 billion USD in 2020. However, this trend reversed sharply in subsequent years, with costs increasing substantially to about 12.3 billion USD in 2021 and further escalating to nearly 17.9 billion USD in 2022. This pattern suggests increased operational activity or rising input costs in the latter years after a period of reduction.
- Inventory
- Inventory levels showed some variability but remained within a relatively narrow range compared to costs. Inventory rose modestly from roughly 438 million USD at the end of 2018 to over 506 million USD in 2019, then dropped to about 371 million USD in 2020. Subsequently, inventory increased again to around 581 million USD by 2021 and held steady in 2022. The stability of inventory in the final two years indicates a consistent level of stockholding despite the fluctuations in cost of sales.
- Inventory Turnover Ratio
- The inventory turnover ratio mirrored some of the trends observed in the cost of sales and inventory levels. Starting at 21.52 in 2018, the ratio declined significantly to 13.4 in 2019 and remained relatively stable at 13.77 in 2020. A sharp increase followed, bringing the turnover ratio back up to 21.1 in 2021 and reaching a peak of 30.84 in 2022. This rebound implies improved efficiency in managing inventory relative to sales or possibly changes in sales volume or cost structure. The high turnover rate in 2022 suggests a more rapid movement of inventory during this period.
Receivables Turnover
ONEOK Inc., 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 thousands) | ||||||
| Revenues | ||||||
| Accounts receivable, net | ||||||
| Short-term Activity Ratio | ||||||
| Receivables turnover1 | ||||||
| Benchmarks | ||||||
| Receivables Turnover, Competitors2 | ||||||
| Chevron Corp. | ||||||
| ConocoPhillips | ||||||
| Exxon Mobil Corp. | ||||||
| Occidental Petroleum Corp. | ||||||
| Receivables Turnover, Sector | ||||||
| Oil, Gas & Consumable Fuels | ||||||
| Receivables Turnover, Industry | ||||||
| Energy | ||||||
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 = Revenues ÷ Accounts receivable, net
= ÷ =
2 Click competitor name to see calculations.
- Revenues
- The reported revenues exhibit a fluctuating but overall increasing trend over the five-year period. Starting at approximately $12.6 billion in 2018, revenues declined steadily to about $8.5 billion by 2020, reflecting a significant downturn over these three years. However, a pronounced recovery is observed from 2020 onward, with revenues surging to approximately $16.5 billion in 2021 and further increasing to nearly $22.4 billion in 2022. This recent growth surpasses previous years, indicating a strong rebound and expansion in operations or market conditions.
- Accounts Receivable, Net
- The net accounts receivable demonstrate a relatively stable level from 2018 through 2020, fluctuating near the $820 million mark. In 2021, a marked increase is noted as the balance rises sharply to about $1.44 billion, continuing to grow moderately to approximately $1.53 billion in 2022. This upward movement in receivables corresponds with the increased revenues during the same period, suggesting higher sales on credit and potentially lengthened collection periods or greater business volume.
- Receivables Turnover Ratio
- The receivables turnover ratio shows a declining trend from 15.38 in 2018 to 10.29 in 2020, indicating a slowing pace in collecting receivables during this timeframe. This deterioration in turnover suggests that the company took longer to collect payments on credit sales, which could be tied to market or operational stresses. The ratio rebounds to 11.47 in 2021 and climbs further to 14.61 in 2022, reflecting improved collection efficiency or tighter credit controls coinciding with the revenue recovery.
Payables Turnover
ONEOK Inc., payables turnover calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Cost of sales and fuel | ||||||
| Accounts payable | ||||||
| Short-term Activity Ratio | ||||||
| Payables turnover1 | ||||||
| Benchmarks | ||||||
| Payables Turnover, Competitors2 | ||||||
| Chevron Corp. | ||||||
| ConocoPhillips | ||||||
| Exxon Mobil Corp. | ||||||
| Occidental Petroleum Corp. | ||||||
| Payables Turnover, Sector | ||||||
| Oil, Gas & Consumable Fuels | ||||||
| Payables Turnover, Industry | ||||||
| Energy | ||||||
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 sales and fuel ÷ Accounts payable
= ÷ =
2 Click competitor name to see calculations.
- Cost of Sales and Fuel Trends
- The cost of sales and fuel exhibited a fluctuating pattern over the five-year period. Starting at approximately $9.42 billion in 2018, the figure declined significantly in the subsequent two years, reaching a low of around $5.11 billion in 2020. This decrease was followed by a sharp increase to approximately $12.26 billion in 2021 and further rising to about $17.91 billion in 2022. This considerable growth in the last two years suggests an escalation in operational expenses or changes in market conditions impacting the cost structure.
- Accounts Payable Trends
- Accounts payable showed relative stability with minor fluctuations. The balance increased from roughly $1.12 billion in 2018 to a peak of about $1.21 billion in 2019, then declined sharply to approximately $719 million in 2020. The amount rebounded in 2021 to around $1.33 billion and further increased slightly to about $1.36 billion in 2022. Overall, the values indicate some variability but no consistent upward or downward trend over the period.
- Payables Turnover Ratio Analysis
- The payables turnover ratio demonstrated notable variation. It decreased from 8.44 in 2018 to 5.61 in 2019, indicating a slower rate of accounts payable turnover. The ratio increased to 7.1 in 2020, then continued to rise significantly in the following years, reaching 9.2 in 2021 and peaking at 13.17 in 2022. This trend suggests an acceleration in the rate at which payables are being settled, potentially reflecting improved efficiency in managing payment obligations or changing credit terms with suppliers.
- Overall Insights
- The observed data reflects a dynamic operational environment. While costs showed a marked decrease mid-period followed by a substantial rise, accounts payable did not mirror this trend closely, indicating possible changes in payment policies or supplier relationships. The increasing payables turnover ratio in the latter years signifies faster payment cycles, which might impact cash flow management. The combination of rising costs and quicker payments could pose challenges or opportunities depending on the company's working capital strategies.
Working Capital Turnover
ONEOK Inc., working capital turnover calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Current assets | ||||||
| Less: Current liabilities | ||||||
| Working capital | ||||||
| Revenues | ||||||
| Short-term Activity Ratio | ||||||
| Working capital turnover1 | ||||||
| Benchmarks | ||||||
| Working Capital Turnover, Competitors2 | ||||||
| Chevron Corp. | ||||||
| ConocoPhillips | ||||||
| Exxon Mobil Corp. | ||||||
| Occidental Petroleum Corp. | ||||||
| Working Capital Turnover, Sector | ||||||
| Oil, Gas & Consumable Fuels | ||||||
| Working Capital Turnover, Industry | ||||||
| Energy | ||||||
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 = Revenues ÷ Working capital
= ÷ =
2 Click competitor name to see calculations.
- Working Capital
- The working capital exhibited significant fluctuations over the observed periods. Initially, there was a negative working capital of -709,804 thousand USD in 2018, which improved marginally to -549,964 thousand USD in 2019. Notably, in 2020, working capital shifted to a positive value of 525,228 thousand USD, indicating a substantial improvement in the short-term financial position. However, this trend reversed sharply afterward, with working capital declining to -810,245 thousand USD in 2021 and slightly improving to -503,852 thousand USD in 2022. Overall, the working capital shows volatility and lacks a consistent positive trend.
- Revenues
- Revenues showed a declining trend from 12,593,196 thousand USD in 2018 to 8,542,242 thousand USD in 2020, reflecting a downward slope over the first three years. A marked recovery took place in 2021 with revenues rising to 16,540,309 thousand USD and continuing to increase significantly to 22,386,892 thousand USD in 2022. This pattern suggests a strong rebound and growth in revenue generation after the low point in 2020.
- Working Capital Turnover
- Working capital turnover data is only available for 2020, where it stood at 16.26. This figure indicates how efficiently working capital is being utilized to generate revenue during that year, but due to the absence of data for other years, it is not possible to assess trends or performance changes in this ratio over time.
Average Inventory Processing Period
ONEOK Inc., 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 | ||||||
| Chevron Corp. | ||||||
| ConocoPhillips | ||||||
| Exxon Mobil Corp. | ||||||
| Occidental Petroleum Corp. | ||||||
| Average Inventory Processing Period, Sector | ||||||
| Oil, Gas & Consumable Fuels | ||||||
| Average Inventory Processing Period, Industry | ||||||
| Energy | ||||||
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 experienced notable fluctuations over the analyzed period. Initially, it declined significantly from 21.52 in 2018 to around 13.4-13.77 in 2019 and 2020. However, a substantial recovery occurred thereafter, with the ratio rising sharply to 21.1 in 2021 and then reaching a peak of 30.84 by the end of 2022. This pattern suggests that the company improved the efficiency of managing and selling its inventory, particularly in the final two years.
- Average Inventory Processing Period
- The average inventory processing period exhibited an inverse trend compared to the inventory turnover ratio. It increased from 17 days in 2018 to a peak of 27 days in 2019 and 26 days in 2020, indicating slower inventory movement during those years. Subsequently, the period shortened markedly to 17 days in 2021 and further declined to 12 days by the end of 2022. This shortening period corroborates the improvement in inventory turnover, reflecting a faster cycle of inventory processing in the later years.
- Overall Analysis
- The observed trends suggest a period of challenge or strategic adjustment in inventory management during 2019-2020, followed by a strong operational improvement phase starting in 2021. The sharp increase in inventory turnover and concurrent decrease in the average inventory processing period indicate enhanced inventory management efficiency, potentially contributing to better liquidity and reduced holding costs.
Average Receivable Collection Period
ONEOK Inc., 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 | ||||||
| Chevron Corp. | ||||||
| ConocoPhillips | ||||||
| Exxon Mobil Corp. | ||||||
| Occidental Petroleum Corp. | ||||||
| Average Receivable Collection Period, Sector | ||||||
| Oil, Gas & Consumable Fuels | ||||||
| Average Receivable Collection Period, Industry | ||||||
| Energy | ||||||
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 demonstrates a notable fluctuation over the five-year period. Initially, there was a decline from 15.38 in 2018 to 10.29 in 2020, indicating a reduction in the efficiency of collecting receivables. This downward trend suggests that the company took longer to collect payments from customers during this timeframe. However, from 2020 onwards, there was a recovery, with the ratio increasing to 14.61 by the end of 2022, approaching the level seen in 2018. This improvement reflects enhanced collection efficiency in the most recent periods.
- Average Receivable Collection Period
- The average receivable collection period inversely mirrors the trend observed in the receivables turnover ratio. It lengthened from 24 days in 2018 to a peak of 35 days in 2020, highlighting a slowdown in the collection process and potentially greater credit risk or more extended payment terms. Subsequently, the collection period shortened to 25 days by the end of 2022, indicating a return to quicker collection times. The improvement post-2020 suggests refined credit policies or more effective collection efforts.
- Overall Trend and Insight
- Between 2018 and 2020, the company experienced a decline in receivables management efficiency, evidenced by decreasing turnover and increasing collection days. From 2021 onwards, the trend reversed, showing recovery and improved operational performance in managing receivables. These changes could be attributable to external factors affecting customers' payment behavior or internal adjustments in credit control and receivables processes.
Operating Cycle
ONEOK Inc., 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 | ||||||
| Chevron Corp. | ||||||
| ConocoPhillips | ||||||
| Exxon Mobil Corp. | ||||||
| Occidental Petroleum Corp. | ||||||
| Operating Cycle, Sector | ||||||
| Oil, Gas & Consumable Fuels | ||||||
| Operating Cycle, Industry | ||||||
| Energy | ||||||
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 exhibited variability over the five-year span, beginning at 17 days in 2018 and peaking at 27 days in 2019. It remained relatively stable at 26 days in 2020, then notably decreased to 17 days in 2021, reaching its lowest point of 12 days in 2022. This trend indicates an overall improvement in inventory turnover efficiency, particularly in the last two years.
- Average Receivable Collection Period
- The average receivable collection period showed an increasing trend from 24 days in 2018 to a peak of 35 days in 2020. Following this, there was a gradual reduction to 32 days in 2021 and a more significant decrease to 25 days in 2022. This pattern suggests initial challenges in receivables management that improved substantially in the most recent year.
- Operating Cycle
- The operating cycle lengthened from 41 days in 2018 to its maximum of 61 days in 2020, reflecting a combination of extended inventory processing and receivable collection periods. Afterward, the cycle shortened to 49 days in 2021 and further to 37 days in 2022, indicating enhanced operational efficiency with quicker conversion of inventory and receivables into cash.
Average Payables Payment Period
ONEOK Inc., 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 | ||||||
| Chevron Corp. | ||||||
| ConocoPhillips | ||||||
| Exxon Mobil Corp. | ||||||
| Occidental Petroleum Corp. | ||||||
| Average Payables Payment Period, Sector | ||||||
| Oil, Gas & Consumable Fuels | ||||||
| Average Payables Payment Period, Industry | ||||||
| Energy | ||||||
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 exhibits significant variability over the analyzed period. It starts at 8.44 in 2018, declines notably to 5.61 in 2019, then rebounds to 7.1 in 2020. Subsequently, it rises sharply to 9.2 in 2021 and reaches the highest point of 13.17 by 2022. This trend indicates an overall improvement in the rate at which payables are being settled, suggesting increased efficiency in managing short-term obligations during the latter years.
- Average Payables Payment Period
- Corresponding to the changes in payables turnover, the average payables payment period shows an inverse pattern. Beginning at 43 days in 2018, it extends markedly to 65 days in 2019. This duration then shortens to 51 days in 2020, followed by a further reduction to 40 days in 2021, and finally reaching 28 days by 2022. The decreasing payment period over these years implies a faster payment process to suppliers, reinforcing the interpretation of improved liquidity and operational efficiency.
Cash Conversion Cycle
ONEOK Inc., 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 | ||||||
| Chevron Corp. | ||||||
| ConocoPhillips | ||||||
| Exxon Mobil Corp. | ||||||
| Occidental Petroleum Corp. | ||||||
| Cash Conversion Cycle, Sector | ||||||
| Oil, Gas & Consumable Fuels | ||||||
| Cash Conversion Cycle, Industry | ||||||
| Energy | ||||||
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 fluctuated over the five-year span. It increased from 17 days in 2018 to a peak of 27 days in 2019, remained relatively stable at 26 days in 2020, then sharply decreased to 17 days in 2021 and further declined to 12 days by 2022. This trend indicates an initial slowdown in inventory turnover followed by a significant improvement in inventory management efficiency towards the end of the period.
- Average Receivable Collection Period
- The average receivable collection period showed an overall increase from 24 days in 2018 to a high of 35 days in 2020, indicating slower collection from customers during these years. However, this period then decreased to 32 days in 2021 and further improved to 25 days by 2022, suggesting enhanced collection effectiveness and improved cash flow management in the latter years.
- Average Payables Payment Period
- The average payables payment period exhibited considerable variation. It surged from 43 days in 2018 to 65 days in 2019, showing a tendency to defer payments longer. This period then decreased to 51 days in 2020, followed by a substantial reduction to 40 days in 2021 and further to 28 days in 2022. The decline in payment period toward the end of the timeline suggests a faster settlement of payables.
- Cash Conversion Cycle
- The cash conversion cycle experienced notable fluctuations. It began with negative values of -2 days in 2018 and -8 days in 2019, indicating that payables were paid after receivables were collected and inventory turnover occurred, contributing to positive liquidity. In 2020, the cycle increased to 10 days and remained slightly elevated at 9 days in both 2021 and 2022, implying a modest delay in conversion of resources into cash compared to the earlier years. Despite this increase, the cash conversion cycle remained relatively short.