Microsoft Excel LibreOffice Calc

Raytheon Co. (RTN)

Analysis of Short-term (Operating) Activity Ratios

Beginner level

Activity ratios measure how efficiently a company performs day-to-day tasks, such us the collection of receivables and management of inventory.

Short-term Activity Ratios (Summary)

Raytheon Co., short-term (operating) activity ratios

Microsoft Excel LibreOffice Calc
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Turnover Ratios
Inventory turnover 25.82 32.11 27.23 27.68 41.78
Receivables turnover 16.42 19.15 19.76 19.89 21.99
Payables turnover 9.97 12.56 11.81 12.53 13.84
Working capital turnover 7.03 6.37 5.66 6.31 5.23
Average No. Days
Average inventory processing period 14 11 13 13 9
Add: Average receivable collection period 22 19 18 18 17
Operating cycle 36 30 31 31 26
Less: Average payables payment period 37 29 31 29 26
Cash conversion cycle -1 1 0 2 0

Based on: 10-K (filing date: 2019-02-13), 10-K (filing date: 2018-02-14), 10-K (filing date: 2017-02-15), 10-K (filing date: 2016-02-10), 10-K (filing date: 2015-02-11).

Short-term activity ratio Description The company
Inventory turnover An activity ratio calculated as cost of goods sold divided by inventory. Raytheon Co.’s inventory turnover ratio improved from 2016 to 2017 but then deteriorated significantly from 2017 to 2018.
Receivables turnover An activity ratio equal to revenue divided by receivables. Raytheon Co.’s receivables turnover ratio deteriorated from 2016 to 2017 and from 2017 to 2018.
Payables turnover An activity ratio calculated as cost of goods sold divided by payables. Raytheon Co.’s payables turnover ratio increased from 2016 to 2017 but then decreased significantly from 2017 to 2018.
Working capital turnover An activity ratio calculated as revenue divided by working capital. Raytheon Co.’s working capital turnover ratio improved from 2016 to 2017 and from 2017 to 2018.
Short-term activity ratio Description The company
Average inventory processing period An activity ratio equal to the number of days in the period divided by inventory turnover over the period. Raytheon Co.’s number of days of inventory outstanding improved from 2016 to 2017 but then deteriorated significantly from 2017 to 2018.
Average receivable collection period An activity ratio equal to the number of days in the period divided by receivables turnover. Raytheon Co.’s number of days of receivables outstanding deteriorated from 2016 to 2017 and from 2017 to 2018.
Operating cycle Equal to average inventory processing period plus average receivables collection period. Raytheon Co.’s operating cycle improved from 2016 to 2017 but then deteriorated significantly from 2017 to 2018.
Average payables payment period An estimate of the average number of days it takes a company to pay its suppliers; equal to the number of days in the period divided by payables turnover ratio for the period. Raytheon Co.’s number of days of payables outstanding decreased from 2016 to 2017 but then increased from 2017 to 2018 exceeding 2016 level.
Cash conversion cycle A financial metric that measures the length of time required for a company to convert cash invested in its operations to cash received as a result of its operations; equal to average inventory processing period plus average receivables collection period minus average payables payment period. Raytheon Co.’s cash conversion cycle deteriorated from 2016 to 2017 but then improved from 2017 to 2018 exceeding 2016 level.

Inventory Turnover

Raytheon Co., inventory turnover calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Selected Financial Data (US$ in millions)
Cost of sales, products and services 19,573  19,076  17,947  17,574  17,295 
Inventories 758  594  659  635  414 
Short-term Activity Ratio
Inventory turnover1 25.82 32.11 27.23 27.68 41.78
Benchmarks
Inventory Turnover, Competitors2
Boeing Co. 1.30 1.71 1.87 1.74 1.64
General Dynamics Corp. 4.93 4.67 7.13 7.53 7.76
Lockheed Martin Corp. 15.51 10.14 9.03 8.25 14.00
Northrop Grumman Corp. 35.63 25.45 22.95 22.16 24.77
United Technologies Corp. 4.96 4.45 4.76 4.97 4.81
Inventory Turnover, Sector
Aerospace & Defense 3.01 3.50 3.67 3.44 3.52
Inventory Turnover, Industry
Industrials 4.19 4.43 4.49 4.28 4.56

Based on: 10-K (filing date: 2019-02-13), 10-K (filing date: 2018-02-14), 10-K (filing date: 2017-02-15), 10-K (filing date: 2016-02-10), 10-K (filing date: 2015-02-11).

1 2018 Calculation
Inventory turnover = Cost of sales, products and services ÷ Inventories
= 19,573 ÷ 758 = 25.82

2 Click competitor name to see calculations.

Short-term activity ratio Description The company
Inventory turnover An activity ratio calculated as cost of goods sold divided by inventory. Raytheon Co.’s inventory turnover ratio improved from 2016 to 2017 but then deteriorated significantly from 2017 to 2018.

Receivables Turnover

Raytheon Co., receivables turnover calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Selected Financial Data (US$ in millions)
Net sales 27,058  25,348  24,069  23,247  22,826 
Receivables, net 1,648  1,324  1,218  1,169  1,038 
Short-term Activity Ratio
Receivables turnover1 16.42 19.15 19.76 19.89 21.99
Benchmarks
Receivables Turnover, Competitors2
Boeing Co. 26.07 8.88 10.71 11.03 11.74
General Dynamics Corp. 9.63 8.56 8.68 9.13 7.62
Lockheed Martin Corp. 22.00 5.93 5.76 5.72 7.75
Northrop Grumman Corp. 20.78 6.49 7.43 8.28 8.55
United Technologies Corp. 4.66 4.75 4.99 5.27 5.75
Receivables Turnover, Sector
Aerospace & Defense 11.47 7.05 7.61 7.93 8.50
Receivables Turnover, Industry
Industrials 7.92 6.39 6.59 6.57 7.01

Based on: 10-K (filing date: 2019-02-13), 10-K (filing date: 2018-02-14), 10-K (filing date: 2017-02-15), 10-K (filing date: 2016-02-10), 10-K (filing date: 2015-02-11).

1 2018 Calculation
Receivables turnover = Net sales ÷ Receivables, net
= 27,058 ÷ 1,648 = 16.42

2 Click competitor name to see calculations.

Short-term activity ratio Description The company
Receivables turnover An activity ratio equal to revenue divided by receivables. Raytheon Co.’s receivables turnover ratio deteriorated from 2016 to 2017 and from 2017 to 2018.

Payables Turnover

Raytheon Co., payables turnover calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Selected Financial Data (US$ in millions)
Cost of sales, products and services 19,573  19,076  17,947  17,574  17,295 
Accounts payable 1,964  1,519  1,520  1,402  1,250 
Short-term Activity Ratio
Payables turnover1 9.97 12.56 11.81 12.53 13.84
Benchmarks
Payables Turnover, Competitors2
Boeing Co. 6.30 6.23 7.21 7.59 7.19
General Dynamics Corp. 9.27 7.73 9.89 12.90 12.14
Lockheed Martin Corp. 19.35 31.02 25.52 20.74 25.70
Northrop Grumman Corp. 10.68 11.95 12.05 13.95 14.08
United Technologies Corp. 4.51 4.59 5.54 5.88 6.81
Payables Turnover, Sector
Aerospace & Defense 7.42 7.73 8.72 9.23 9.45
Payables Turnover, Industry
Industrials 6.66 6.77 7.32 7.68 7.41

Based on: 10-K (filing date: 2019-02-13), 10-K (filing date: 2018-02-14), 10-K (filing date: 2017-02-15), 10-K (filing date: 2016-02-10), 10-K (filing date: 2015-02-11).

1 2018 Calculation
Payables turnover = Cost of sales, products and services ÷ Accounts payable
= 19,573 ÷ 1,964 = 9.97

2 Click competitor name to see calculations.

Short-term activity ratio Description The company
Payables turnover An activity ratio calculated as cost of goods sold divided by payables. Raytheon Co.’s payables turnover ratio increased from 2016 to 2017 but then decreased significantly from 2017 to 2018.

Working Capital Turnover

Raytheon Co., working capital turnover calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Selected Financial Data (US$ in millions)
Current assets 12,136  11,326  10,678  9,812  10,292 
Less: Current liabilities 8,288  7,348  6,427  6,126  5,930 
Working capital 3,848  3,978  4,251  3,686  4,362 
 
Net sales 27,058  25,348  24,069  23,247  22,826 
Short-term Activity Ratio
Working capital turnover1 7.03 6.37 5.66 6.31 5.23
Benchmarks
Working Capital Turnover, Competitors2
Boeing Co. 16.21 10.50 7.66 5.39 8.20
General Dynamics Corp. 10.49 5.92 12.05 14.80 8.44
Lockheed Martin Corp. 31.53 10.58 18.41 21.55 37.47
Northrop Grumman Corp. 21.40 2.75 19.99 26.83 10.46
United Technologies Corp. 16.08 7.07 8.62 13.72 9.49
Working Capital Turnover, Sector
Aerospace & Defense 15.14 7.02 9.41 9.00 9.48
Working Capital Turnover, Industry
Industrials 7.46 5.08 5.16 5.68 2.66

Based on: 10-K (filing date: 2019-02-13), 10-K (filing date: 2018-02-14), 10-K (filing date: 2017-02-15), 10-K (filing date: 2016-02-10), 10-K (filing date: 2015-02-11).

1 2018 Calculation
Working capital turnover = Net sales ÷ Working capital
= 27,058 ÷ 3,848 = 7.03

2 Click competitor name to see calculations.

Short-term activity ratio Description The company
Working capital turnover An activity ratio calculated as revenue divided by working capital. Raytheon Co.’s working capital turnover ratio improved from 2016 to 2017 and from 2017 to 2018.

Average Inventory Processing Period

Raytheon Co., average inventory processing period calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Selected Financial Data
Inventory turnover 25.82 32.11 27.23 27.68 41.78
Short-term Activity Ratio (no. days)
Average inventory processing period1 14 11 13 13 9
Benchmarks (no. days)
Average Inventory Processing Period, Competitors2
Boeing Co. 280 213 195 210 223
General Dynamics Corp. 74 78 51 48 47
Lockheed Martin Corp. 24 36 40 44 26
Northrop Grumman Corp. 10 14 16 16 15
United Technologies Corp. 74 82 77 73 76
Average Inventory Processing Period, Sector
Aerospace & Defense 121 104 99 106 104
Average Inventory Processing Period, Industry
Industrials 87 82 81 85 80

Based on: 10-K (filing date: 2019-02-13), 10-K (filing date: 2018-02-14), 10-K (filing date: 2017-02-15), 10-K (filing date: 2016-02-10), 10-K (filing date: 2015-02-11).

1 2018 Calculation
Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ 25.82 = 14

2 Click competitor name to see calculations.

Short-term activity ratio Description The company
Average inventory processing period An activity ratio equal to the number of days in the period divided by inventory turnover over the period. Raytheon Co.’s number of days of inventory outstanding improved from 2016 to 2017 but then deteriorated significantly from 2017 to 2018.

Average Receivable Collection Period

Raytheon Co., average receivable collection period calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Selected Financial Data
Receivables turnover 16.42 19.15 19.76 19.89 21.99
Short-term Activity Ratio (no. days)
Average receivable collection period1 22 19 18 18 17
Benchmarks (no. days)
Average Receivable Collection Period, Competitors2
Boeing Co. 14 41 34 33 31
General Dynamics Corp. 38 43 42 40 48
Lockheed Martin Corp. 17 62 63 64 47
Northrop Grumman Corp. 18 56 49 44 43
United Technologies Corp. 78 77 73 69 63
Average Receivable Collection Period, Sector
Aerospace & Defense 32 52 48 46 43
Average Receivable Collection Period, Industry
Industrials 46 57 55 56 52

Based on: 10-K (filing date: 2019-02-13), 10-K (filing date: 2018-02-14), 10-K (filing date: 2017-02-15), 10-K (filing date: 2016-02-10), 10-K (filing date: 2015-02-11).

1 2018 Calculation
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ 16.42 = 22

2 Click competitor name to see calculations.

Short-term activity ratio Description The company
Average receivable collection period An activity ratio equal to the number of days in the period divided by receivables turnover. Raytheon Co.’s number of days of receivables outstanding deteriorated from 2016 to 2017 and from 2017 to 2018.

Operating Cycle

Raytheon Co., operating cycle calculation, comparison to benchmarks

No. days

Microsoft Excel LibreOffice Calc
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Selected Financial Data
Average inventory processing period 14 11 13 13 9
Average receivable collection period 22 19 18 18 17
Short-term Activity Ratio
Operating cycle1 36 30 31 31 26
Benchmarks
Operating Cycle, Competitors2
Boeing Co. 294 254 229 243 254
General Dynamics Corp. 112 121 93 88 95
Lockheed Martin Corp. 41 98 103 108 73
Northrop Grumman Corp. 28 70 65 60 58
United Technologies Corp. 152 159 150 142 139
Operating Cycle, Sector
Aerospace & Defense 153 156 147 152 147
Operating Cycle, Industry
Industrials 133 139 136 141 132

Based on: 10-K (filing date: 2019-02-13), 10-K (filing date: 2018-02-14), 10-K (filing date: 2017-02-15), 10-K (filing date: 2016-02-10), 10-K (filing date: 2015-02-11).

1 2018 Calculation
Operating cycle = Average inventory processing period + Average receivable collection period
= 14 + 22 = 36

2 Click competitor name to see calculations.

Short-term activity ratio Description The company
Operating cycle Equal to average inventory processing period plus average receivables collection period. Raytheon Co.’s operating cycle improved from 2016 to 2017 but then deteriorated significantly from 2017 to 2018.

Average Payables Payment Period

Raytheon Co., average payables payment period calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Selected Financial Data
Payables turnover 9.97 12.56 11.81 12.53 13.84
Short-term Activity Ratio (no. days)
Average payables payment period1 37 29 31 29 26
Benchmarks (no. days)
Average Payables Payment Period, Competitors2
Boeing Co. 58 59 51 48 51
General Dynamics Corp. 39 47 37 28 30
Lockheed Martin Corp. 19 12 14 18 14
Northrop Grumman Corp. 34 31 30 26 26
United Technologies Corp. 81 80 66 62 54
Average Payables Payment Period, Sector
Aerospace & Defense 49 47 42 40 39
Average Payables Payment Period, Industry
Industrials 55 54 50 48 49

Based on: 10-K (filing date: 2019-02-13), 10-K (filing date: 2018-02-14), 10-K (filing date: 2017-02-15), 10-K (filing date: 2016-02-10), 10-K (filing date: 2015-02-11).

1 2018 Calculation
Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ 9.97 = 37

2 Click competitor name to see calculations.

Short-term activity ratio Description The company
Average payables payment period An estimate of the average number of days it takes a company to pay its suppliers; equal to the number of days in the period divided by payables turnover ratio for the period. Raytheon Co.’s number of days of payables outstanding decreased from 2016 to 2017 but then increased from 2017 to 2018 exceeding 2016 level.

Cash Conversion Cycle

Raytheon Co., cash conversion cycle calculation, comparison to benchmarks

No. days

Microsoft Excel LibreOffice Calc
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Selected Financial Data
Average inventory processing period 14 11 13 13 9
Average receivable collection period 22 19 18 18 17
Average payables payment period 37 29 31 29 26
Short-term Activity Ratio
Cash conversion cycle1 -1 1 0 2 0
Benchmarks
Cash Conversion Cycle, Competitors2
Boeing Co. 236 195 178 195 203
General Dynamics Corp. 73 74 56 60 65
Lockheed Martin Corp. 22 86 89 90 59
Northrop Grumman Corp. -6 39 35 34 32
United Technologies Corp. 71 79 84 80 85
Cash Conversion Cycle, Sector
Aerospace & Defense 104 109 105 112 108
Cash Conversion Cycle, Industry
Industrials 78 85 86 93 83

Based on: 10-K (filing date: 2019-02-13), 10-K (filing date: 2018-02-14), 10-K (filing date: 2017-02-15), 10-K (filing date: 2016-02-10), 10-K (filing date: 2015-02-11).

1 2018 Calculation
Cash conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= 14 + 22 – 37 = -1

2 Click competitor name to see calculations.

Short-term activity ratio Description The company
Cash conversion cycle A financial metric that measures the length of time required for a company to convert cash invested in its operations to cash received as a result of its operations; equal to average inventory processing period plus average receivables collection period minus average payables payment period. Raytheon Co.’s cash conversion cycle deteriorated from 2016 to 2017 but then improved from 2017 to 2018 exceeding 2016 level.