Philip Morris International Inc. (NYSE:PM)

Inventory Turnover

Inventory turnover demonstrates an overall increasing trend starting from a value of 1 in March 2021, peaking at 1.54 in December 2022. This increase suggests an improvement in how efficiently inventory is managed during this period. Following this peak, values drop moderately to a range between 1.1 and 1.31 in 2023 but resume an upward movement into 2024, moving between 1.2 and 1.43 before gradually declining in mid-2025.

Receivables Turnover

Receivables turnover exhibits variability throughout the observed timeframe, beginning at 9.88 in March 2021 and experiencing fluctuations mainly between values of 7.82 and 10.16. Higher turnover values indicate quicker collection of receivables, with peaks observed in March 2022, March 2024, and March 2025. However, some periods, such as mid-2022 and latter half of 2024, reveal decreases, signaling slower receivable collections during those intervals.

Payables Turnover

Payables turnover fluctuates moderately, starting at 3.44 in March 2021. It sees increases into late 2021, dips around March 2022, then rises again with frequent oscillations around the 3.3 to 3.8 range through 2024. This pattern indicates variability in the timing of payments to suppliers but generally maintains a stable level of payables management with slight improvement in efficiency in some quarters.

Working Capital Turnover

Working capital turnover data is limited and only reported up to September 2021, showing a declining trend from 15.29 in March 2021 to 10.52 in September 2021. This downward shift suggests decreased efficiency in generating sales from working capital during this interval, although no subsequent data is available for further analysis.

Average Inventory Processing Period

This metric reveals a consistent shortening of the inventory processing period from 366 days in March 2021 to 237 days by December 2022, indicating faster inventory turnover. However, a reversal occurs with periods extending back to over 300 days intermittently through 2023, before resuming a decreasing trend again in 2024, reflecting fluctuations in inventory management efficiency.

Average Receivable Collection Period

The receivable collection period generally oscillates between 36 and 47 days, with prolonged periods above 40 days in many quarters. This indicates variability in how quickly receivables are collected, with no clear sustained improvement or deterioration; notable shorter collection periods occur around March 2022 and March 2024, suggesting some gains in collection efficiency at those points.

Operating Cycle

The operating cycle shows a steady decline from 403 days in March 2021 to 281 days by December 2022, reflecting overall improvement in the time taken to convert inventory and receivables into cash. However, in 2023 and beyond, the cycle exhibits fluctuations, rising again to over 300 days in some quarters before decreasing again toward late 2024, indicating mixed operational efficiency in that period.

Average Payables Payment Period

This period varies between approximately 96 and 130 days, with a general oscillation rather than a distinct trend. Peaks such as 130 days in December 2021 and troughs near 96 days in late 2024 suggest strategic timing adjustments in paying suppliers but no consistent directional shift in payment behavior.

Cash Conversion Cycle

The cash conversion cycle demonstrates a general decline from 297 days in March 2021 to a low of 170 days in December 2022, indicating improved liquidity management and faster conversion of resources to cash. This is followed by an increase peaking at 249 days in March 2023, after which the cycle declines again through 2024, reaching near 188 days before a slight increase in mid-2025. These fluctuations suggest variability in cash flow timing and operational efficiency throughout the analyzed periods.

The cost of sales displays a fluctuating pattern over the observed periods, with noticeable troughs and peaks. Early in the timeline, the cost declined from 2402 million to 2179 million US dollars but then experienced an upward trajectory peaking at 3211 million US dollars by the end of 2022. Subsequently, the cost shows variability but generally remains elevated compared to the initial periods, with intermittent decreases and increases leading to 3279 million US dollars by the mid-2025 period.

Inventories follow an irregular movement throughout the timeline. Initially, inventories decreased from 9045 million US dollars to a low near 7153 million US dollars by the third quarter of 2022, indicating a possible reduction in stock levels or more efficient inventory management. Following this low point, inventories rose sharply to over 10,700 million US dollars by the end of 2025, suggesting accumulation or stockpiling of goods. The general trend indicates significant volatility with alternating decreases and increases, particularly after mid-2022.

Inventory turnover ratio data is partially available, starting only from early 2021. This ratio illustrates a general improvement in the company's efficiency in managing inventory relative to sales. The ratio grows from 1.00 in early 2021 to a peak of approximately 1.54 by late 2022, showing an enhancement in inventory utilization. Following this peak, turnover ratios moderate somewhat but remain above the initial level, settling around values between 1.22 and 1.43 towards the latter periods. This suggests a sustained relatively high inventory management efficiency compared to earlier periods.

Cost of Sales

Exhibits cyclical volatility, with a notable increase through 2022 and fluctuating but generally elevated figures through 2025 compared to early 2020 levels.

Inventories

Shows significant variability, with a drop to a low point around late 2022, followed by a marked increase up to 2025, indicating swings between inventory reduction and accumulation.

Inventory Turnover Ratio

Demonstrates an improving trend in inventory management efficiency from 2021 onward, peaking in late 2022, followed by a modest decline but maintaining levels above those at the start of measurement.

The financial data reveals several trends in the quarterly performance and receivables management over the observed periods.

Net Revenues

Net revenues exhibit a generally upward trajectory from March 31, 2020, to June 30, 2025. Initial values around 7,153 million USD increased with fluctuations, reaching above 10,000 million USD by mid-2025. Despite some quarterly variability, revenue shows strong growth overall, suggesting expanding sales or pricing improvements.

Trade Receivables, Less Allowances

Trade receivables show a rising trend over the period. From approximately 2,785 million USD in March 2020, balances increase to nearly 5,000 million USD by mid-2025. The rise is not strictly linear, with some quarters showing decreases, but overall receivables growth outpaces revenue growth in certain periods. This may indicate changes in credit policy, collection practices, or customer payment behavior.

Receivables Turnover Ratio

The receivables turnover ratio, available starting from September 2020, fluctuates between roughly 7.8 and 10.2. This ratio peaked notably around December 2020 and early 2024, indicating faster collections during these periods. Conversely, some dips below 8 suggest slower turnover in certain quarters, which could reflect elongated collection cycles or increased credit risk.

In summary, the company demonstrates robust revenue growth coupled with increasing trade receivables. The fluctuation in receivables turnover points to varying efficiency in managing credit and collections, with certain periods indicating improved turnover and others suggesting potential challenges in receivables management.

Cost of sales

The cost of sales exhibits a fluctuating but generally upward trend over the periods analyzed. Starting at $2,402 million in March 2020, it experiences several increases and decreases, peaking notably at $3,462 million in December 2023. The values maintain a relatively high level beyond this point, with some minor decreases and increases, ending at $3,279 million in June 2025. The overall pattern suggests rising costs, potentially reflecting increased production expenses or changes in sales volume over time.

Accounts payable

Accounts payable demonstrates an overall increasing trend from $2,073 million in March 2020 to a high of $4,143 million in December 2023. After this peak, the values fluctuate somewhat, with slight declines and rises, but remain elevated relative to the early periods. By June 2025, accounts payable stands at $3,870 million, indicating generally higher liabilities towards suppliers or accrued expenses compared to earlier years.

Payables turnover

The payables turnover ratio is provided from December 2020 onward and fluctuates within a moderate range. Initially, the ratio declines from 3.44 in December 2020 to 2.80 in December 2021, indicating slower payment or higher average payables relative to costs. Subsequently, it increases again, peaking at 3.81 in December 2024, before slightly decreasing toward the end of the period. These variations suggest changes in payment efficiency or terms with suppliers, with the company at times accelerating payments and at other times extending them.

Working capital

The working capital figures exhibit significant volatility throughout the observed periods. Initially, there is a notable increase from 277 million US dollars in early 2020 to a peak of 2,859 million in mid-2021. Subsequently, a sharp decline begins, with working capital values turning negative by September 2021 and deepening further into negative territory through 2022 and 2023. The lowest recorded working capital is -7,717 million US dollars at the end of 2022. Although some recovery occurs in the following quarters, values remain negative and continue to fluctuate widely, reaching -5,891 million by the first quarter of 2025.

Net revenues

Net revenues display a relatively stable and upward trend with some short-term fluctuations. Starting at 7,153 million US dollars in the first quarter of 2020, revenues display minor declines in mid-2020, followed by recovery and growth into 2021. By 2023, revenues have increased significantly, surpassing 9,000 million US dollars, and continuing this upward momentum through to early 2025, peaking at 10,140 million US dollars. This indicates consistent revenue growth despite the fluctuations apparent in working capital.

Working capital turnover ratio

The working capital turnover ratio is provided only for a few quarters in 2020, showing high values of 15.29 and 10.81, respectively, followed by a taper to 10.52. The absence of this ratio in subsequent periods suggests either unavailability of data or diminished relevance due to the substantial negative working capital values seen later, which could impair meaningful calculation or interpretation.

General observations

There is a clear divergence between working capital and net revenues trends. While net revenues steadily grow, working capital deteriorates sharply after mid-2021, indicating potential liquidity or operational efficiency challenges. This pattern may suggest increasing use of current liabilities or inventory management issues that are not directly impacting revenue generation but could affect the company's short-term financial stability. The withdrawal and non-reporting of the working capital turnover ratio in later periods reinforce concerns regarding working capital management during this timeframe.

The inventory turnover ratio demonstrates a general upward trend from early 2020 through 2025, indicating improving efficiency in the management of inventory over the analyzed quarters. Beginning at a baseline of 1.00 in March 2020, this ratio progressively increased, reaching a peak of 1.54 in December 2022. Following this peak, the ratio showed some fluctuations but remained relatively high, oscillating between 1.1 and 1.43 through 2024 and into mid-2025. These variations suggest periods of both intensified and slightly reduced inventory turnover activity, but the overall trend points to strengthened inventory utilization.

Correspondingly, the average inventory processing period, measured in days, exhibits an inverse relationship to the inventory turnover ratio, as expected. Starting from a high of 366 days in March 2020, the processing period steadily decreased to 237 days by December 2022, denoting faster inventory cycles. After this low, the inventory processing period experienced some increases and decreases, rising again to approximately 316-330 days in early 2023 before declining again to around 255 days by mid-2024. Thereafter, it gradually rose again, reaching near 299 days by mid-2025. This fluctuation pattern indicates some variability in the speed of inventory turnover, yet the longer-term movement suggests improvement compared to the initial period.

Overall, the data depicts improved inventory efficiency over the period analyzed, with quicker inventory cycles reflected by increasing turnover ratios and decreasing processing periods in the initial years. The observed fluctuations in the latter period may reflect changing market conditions, supply chain adjustments, or strategic inventory management shifts, leading to occasional slowing and acceleration in inventory movement. Nonetheless, the longer-term progression signals a positive development in controlling inventory levels and managing turnover effectively.

Inventory Turnover Ratio

Increased from 1.00 in early 2020 to a peak of 1.54 at the end of 2022, then fluctuated between approximately 1.1 and 1.43 through mid-2025.

Average Inventory Processing Period (days)

Decreased from 366 days in March 2020 to 237 days in December 2022, then experienced moderate fluctuations with periods up to 330 days and lows around 255 days through mid-2025.

Trend Interpretation

Overall improvements in inventory efficiency, marked by quicker turnover and reduced processing times in the early years, followed by moderate variability potentially due to operational or market factors, while maintaining enhanced efficiency relative to the initial timeframe.

Receivables Turnover Ratio

The receivables turnover ratio exhibits notable fluctuations over the reported periods. It started at a higher value, recorded as 9.88 in the earliest available quarter, and experienced a decline to its lower levels around 8.5 to 8.65 in subsequent quarters. Midway through the timeline, a moderate recovery is evident with values increasing to above 8.8, peaking at 10.16 at one point. However, towards the end of the series, the ratio declines again, falling to approximately 7.82 by the latest quarter. Overall, the ratio demonstrates cyclical behavior with periods of both strengthening and weakening turnover efficiency.

Average Receivable Collection Period

The average collection period shows an inverse pattern compared to the receivables turnover ratio, reflecting seasonal and periodic variations in the days required to collect receivables. Initially, the period starts near 37 days and increases to peaks above 44 days during mid-cycle periods. Values oscillate mostly between the high 30s and mid-40s throughout the quarters, indicating variability in collection efficiency. Notably, the highest days recorded are 47 towards the end of the timeline, signaling a lengthening in receivable collection at the most recent points. The fluctuations suggest alternating periods of more rapid and slower cash collection from receivables.

Relationship Between Ratios

The inverse relationship between the receivables turnover ratio and the average collection period is evident, as expected. When the turnover ratio increases, indicating faster turnover of receivables, the average collection period correspondingly decreases, reflecting fewer days needed to collect receivables. Conversely, when the turnover ratio dips, the collection period lengthens. This dynamic underlines consistent business cycles affecting credit management and receivable collections.

Summary Insight

The data reveal a relatively stable but somewhat fluctuating receivables management performance across the reported periods. Although no extreme volatility is seen, the trend indicates periodic challenges in maintaining consistent receivable collection efficiency. The recent increase in average collection days coupled with the decline in turnover ratio could indicate emerging areas for attention in credit policies or collection practices to optimize liquidity and working capital.

The data reveals notable dynamics in the inventory processing period, receivable collection period, and overall operating cycle over multiple quarters.

Average Inventory Processing Period

This metric demonstrates a generally declining trend from 366 days in March 2021 to a low of 237 days by December 2022, indicating improved efficiency in inventory turnover. However, after this low point, the period exhibits variability, increasing again to 316 days in March 2023 followed by fluctuations around the 260 to 300 days range. By mid-2025, the period settles near 299 days, suggesting a stabilization after previous oscillations.

Average Receivable Collection Period

The collectible period shows less stability with values fluctuating between 36 and 47 days. After reaching 37 days in March 2021, the duration rises and peaks multiple times at around 44 to 47 days, notably in quarters such as September 2022 and June 2025. Periods at the lower end, around 36 to 37 days, appear sporadically, such as in early 2020 and early 2023, reflecting inconsistent but moderate variations in receivables management.

Operating Cycle

The operating cycle analogously trends downward from a peak of 403 days in March 2021 to approximately 281 days in December 2022, driven largely by the reduced inventory processing period. Thereafter, it increases again, reaching above 360 days by March 2023 and subsequently fluctuating between 296 and 346 days through mid-2025. This pattern suggests periods of operational efficiency followed by some reversal, likely impacted by changes in inventory turnover and receivables collection.

Overall, the reported periods indicate initial operational improvements in inventory and overall cycle durations through 2022, followed by periods of volatility and moderate reversals. The receivables collection period remains relatively volatile throughout, implying challenges in consistent credit management. The operating cycle closely mirrors inventory trends but is also influenced by the receivable management fluctuations, leading to variability in total operational efficiency over time.

Payables turnover ratio

The payables turnover ratio data begins from the quarter ending March 31, 2020, with initial values recorded in the subsequent periods.

Between March 31, 2020, and December 31, 2020, the ratio increased from 3.44 to 3.49, peaking at 3.72 in June 30, 2020, indicating an improvement in the efficiency of managing payables during this period.

From the start of 2021 to the end of 2022, the ratio demonstrated a downward trend from 3.01 in March 31, 2021, to a low near 2.8 in March 31, 2023. This suggests a gradual decrease in the rate at which the company was settling its payables.

Starting in mid-2023, the ratio improved steadily, rising to 3.58 by December 31, 2023, and continued to strengthen into 2024, reaching a peak of 3.81 in September 30, 2024, before slightly stabilizing towards the first half of 2025 around 3.39 to 3.51.

Overall, the pattern shows fluctuations with an initial improvement in 2020, a decline in 2021 and early 2022, followed by a recovery and strengthening of payable turnover efficiency through late 2023 and 2024.

Average payables payment period (number of days)

The average payables payment period data starts later, with values first available in March 31, 2020, showing 106 days.

From early 2020 through the end of 2020, the payment period decreased from 106 days to 105 days, reflecting a faster payment cycle.

However, starting in March 31, 2021, the payment period began increasing, reaching a peak of 130 days by March 31, 2023, indicating that the company took progressively longer to settle its obligations during this span.

After March 31, 2023, a notable reduction followed, with the period decreasing to a low around 96 days by December 31, 2024, signaling improvement in payment velocity and supplier management.

Thereafter, the payment period showed slight variability but largely remained around 100-110 days through the first half of 2025, suggesting a stabilization in payment practices.

Relationship between ratios

The payables turnover ratio and the average payables payment period exhibit an inverse relationship as expected. Periods when the turnover ratio declines correspond to increases in the payment period, and vice versa.

Specifically, the elongation of the payment period from 2021 through early 2023 aligns with a reduction in turnover ratio, indicating slower payments. Conversely, the improvement in turnover ratio through 2023 to 2024 matches the shortening payment period, reflecting enhanced efficiency.

Insights

The fluctuating trends in payables management suggest the company adapted its payment strategy possibly in response to external conditions affecting cash flow or supplier terms.

The period of increasing payment days combined with lower payables turnover may imply a strategic extension of payment terms to conserve cash, followed by a subsequent focus on improving creditor relations and liquidity management as indicated by the reversal in trends post-2023.

Average Inventory Processing Period

Over the observed periods, the average inventory processing period shows a general decline from 366 days in March 2021 to a low of 237 days by December 2022. However, after this trough, there is an observable increase returning to approximately 299 days by June 2025. This indicates an initial improvement in inventory turnover followed by a trend of longer holding periods, which may suggest challenges in inventory management or shifts in demand and supply conditions.

Average Receivable Collection Period

The average receivable collection period exhibits fluctuations but remains within a relatively narrow range between 36 and 47 days throughout the entire timeline. While there is a slight upward trend from 37 days in March 2021 to peaks around 44–47 days in subsequent years, the data does not indicate a consistent deterioration or improvement, suggesting stable but variable efficiency in the company's collection processes.

Average Payables Payment Period

The average payables payment period shows variability with values generally oscillating between 96 and 130 days. Notably, it peaks at 130 days in March 2023 and experiences subsequent decreases and slight increases thereafter, settling near 104 days by June 2025. This pattern reflects a strategic management of payment timing, potentially balancing supplier relationships with cash flow optimization.

Cash Conversion Cycle

The cash conversion cycle demonstrates a significant downward trend from 297 days in March 2021 to a low of 170 days by December 2022, indicating improved operational efficiency and quicker cash recovery over this period. Post this period, however, there is a gradual increase to 238 days by June 2025, signaling a potential erosion of these efficiencies. The decline followed by a moderate rise highlights dynamic changes in working capital components and possibly evolving business conditions.