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.
Short-term Activity Ratios (Summary)
Twitter Inc., short-term (operating) activity ratios (quarterly data)
Based on: 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 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).
The financial data reveals several notable trends over the examined periods regarding key operational efficiency metrics, namely receivables turnover, payables turnover, working capital turnover, and respective collection and payment periods.
- Receivables Turnover
- The receivables turnover ratio exhibits moderate fluctuations with a general pattern of increase and decrease across quarters. Initially, it increased from 4.18 to 4.61 in the first three quarters of 2018 before dipping to 3.86 in the fourth quarter. A recovery follows with values around 4.6 to 4.9 in 2019 but again declined at the end of that year. A notable peak is observed in the first two quarters of 2020, reaching 5.53, followed by a downward trend in the latter half of 2020. The ratio then stabilizes around 4.6 to 4.7 during 2021 but rises significantly in early 2022, peaking at over 5.5 and maintaining a high level thereafter. This suggests improved efficiency in collecting receivables in recent quarters.
- Average Receivable Collection Period
- The average collection period inversely correlates with the receivables turnover ratio, starting relatively high at 87 days in early 2018, decreasing to a low near 74 days by late 2018, and then spiking to over 95 days at year-end 2018. Collection periods again shorten substantially during the first half of 2020, reaching a low of 66 days, before lengthening significantly towards the end of 2020 to above 100 days. Subsequently, collection periods stabilize around 77 to 79 days in 2021 and improve further to the mid-60 day range in early 2022. These trends align with the turnover behavior, indicating periods of faster and slower receivable management.
- Payables Turnover
- The payables turnover ratio demonstrates more pronounced variability. It dips from 6.26 in early 2018 to a low of 5.11 in mid-2019 but then surges to values above 7 and even reaching 13.38 by mid-2022. Such an increasing payoff frequency suggests accelerating payment cycles to suppliers over time. The sharp increase in 2022 particularly indicates a strategy or operational change geared toward quicker disbursements.
- Average Payables Payment Period
- This metric inversely mirrors the payables turnover trend. Payment periods started at 58 days in early 2018, fluctuated widely, reaching highs near 75 days in mid-2021, then dropped sharply to just under 30 days by mid-2022. This reduction corroborates the sharp increase in payables turnover, reflecting a significant decrease in the time taken to settle obligations.
- Working Capital Turnover
- Working capital turnover shows a gradual upward trend over the entire period. Starting at 0.52 in early 2018, the ratio exhibits mild fluctuations initially but demonstrates steady growth from 0.5 to 0.84 from late 2020 into mid-2022. This rising turnover indicates improved efficiency in utilizing working capital to generate revenue, highlighting enhanced operational performance.
Overall, the data portrays improving efficiency in managing receivables and working capital over time, particularly evident from 2020 onwards. The company appears to have accelerated its payables payments significantly in recent quarters, possibly reflecting changes in supplier relationships or cash management strategies. The interplay between collection and payment periods suggests a concerted effort to optimize working capital cycles, which could be a strategic response to evolving business conditions.
Turnover Ratios
Average No. Days
Receivables Turnover
Twitter Inc., receivables turnover calculation (quarterly data)
| Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||||||||||||||||||||
| Revenue | 1,176,660) | 1,200,984) | 1,567,220) | 1,283,817) | 1,190,427) | 1,036,018) | 1,289,041) | 936,233) | 683,438) | 807,637) | 1,007,341) | 823,717) | 841,381) | 786,890) | 908,836) | 758,111) | 710,541) | 664,871) | ||||||
| Accounts receivable, net of allowance for doubtful accounts | 972,591) | 948,142) | 1,217,404) | 1,014,208) | 954,265) | 850,075) | 1,041,743) | 747,548) | 600,777) | 656,377) | 850,184) | 684,186) | 719,904) | 684,220) | 788,700) | 621,943) | 614,944) | 611,840) | ||||||
| Short-term Activity Ratio | ||||||||||||||||||||||||
| Receivables turnover1 | 5.38 | 5.53 | 4.17 | 4.73 | 4.67 | 4.64 | 3.57 | 4.59 | 5.53 | 5.30 | 4.07 | 4.91 | 4.58 | 4.62 | 3.86 | 4.61 | 4.39 | 4.18 | ||||||
| Benchmarks | ||||||||||||||||||||||||
| Receivables Turnover, Competitors2 | ||||||||||||||||||||||||
| Alphabet Inc. | 7.79 | 7.79 | 6.55 | 7.03 | 6.89 | 7.02 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Comcast Corp. | 10.18 | 9.77 | 9.69 | 9.50 | 9.81 | 9.48 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Meta Platforms Inc. | 10.36 | 10.51 | 8.40 | 9.29 | 8.96 | 9.19 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Trade Desk Inc. | 0.73 | 0.73 | 0.59 | 0.69 | 0.68 | 0.65 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Walt Disney Co. | 5.57 | 4.90 | 5.04 | 4.76 | 4.66 | 4.32 | 5.15 | 5.53 | 5.38 | 4.39 | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 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).
1 Q2 2022 Calculation
Receivables turnover
= (RevenueQ2 2022
+ RevenueQ1 2022
+ RevenueQ4 2021
+ RevenueQ3 2021)
÷ Accounts receivable, net of allowance for doubtful accounts
= (1,176,660 + 1,200,984 + 1,567,220 + 1,283,817)
÷ 972,591 = 5.38
2 Click competitor name to see calculations.
- Revenue Trends
- The revenue exhibited a general upward trend from March 31, 2018, through December 31, 2021, with fluctuations across quarters. Starting at approximately $665 million in early 2018, revenue increased steadily, reaching a peak of about $1.57 billion by the end of 2021. Some quarters showed declines compared to the preceding quarters, notably in early 2019 and 2020, but overall, the trajectory was positive. In 2022, revenue appeared to slightly decrease in the first half compared to the peak quarters of 2021, dropping to approximately $1.17 billion by June 2022.
- Accounts Receivable Trends
- Accounts receivable, net of allowance for doubtful accounts, also showed an increasing pattern similar to revenue. Beginning at around $612 million in March 2018, values rose gradually with some quarterly variations, reaching a high of approximately $1.22 billion by December 2021. The increase in receivables appears consistent with revenue expansion but with occasional drops such as in the middle of 2019 and mid-2022. The figures suggest a growing amount of outstanding customer balances alongside revenue growth.
- Receivables Turnover Ratio Analysis
- The receivables turnover ratio, which measures how efficiently the company collects its receivables, showed notable volatility. Starting at 4.18 in early 2018, the ratio fluctuated, with peaks occurring around mid-2020 at approximately 5.53, indicating improved collection efficiency during that period. Conversely, it declined to lows around 3.57 by the end of 2020, suggesting slower collection cycles. The ratio rebounded through 2021, stabilizing around 4.6-4.7 before increasing again in 2022, reaching above 5.3 in March 2022, indicating enhanced efficiency in receivables management during that timeframe.
- Overall Insights
- The data reflects consistent growth in core business metrics such as revenue and accounts receivable over the analyzed period, with some short-term fluctuations in both. The receivables turnover ratio's variability suggests changes in credit policy or collection practices over time, with periods of both acceleration and slowdown in collections. Recent data indicates a positive move toward faster receivables turnover, potentially improving cash flow despite slight declines in revenue in early 2022. The overall financial trends suggest an expanding business with ongoing efforts to manage credit and collections effectively.
Payables Turnover
Twitter Inc., payables turnover calculation (quarterly data)
| Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||||||||||||||||||||
| Cost of revenue | 540,676) | 507,450) | 515,091) | 484,479) | 416,932) | 381,008) | 432,924) | 361,388) | 288,039) | 284,037) | 314,008) | 281,057) | 277,965) | 264,011) | 268,345) | 243,644) | 230,185) | 222,823) | ||||||
| Accounts payable | 153,092) | 189,524) | 203,171) | 207,912) | 325,446) | 219,899) | 194,281) | 241,102) | 162,160) | 183,921) | 161,148) | 150,785) | 206,282) | 172,169) | 145,186) | 116,685) | 161,300) | 137,968) | ||||||
| Short-term Activity Ratio | ||||||||||||||||||||||||
| Payables turnover1 | 13.38 | 10.15 | 8.85 | 8.25 | 4.89 | 6.65 | 7.03 | 5.17 | 7.20 | 6.29 | 7.06 | 7.24 | 5.11 | 5.84 | 6.65 | 7.84 | 5.46 | 6.26 | ||||||
| Benchmarks | ||||||||||||||||||||||||
| Payables Turnover, Competitors2 | ||||||||||||||||||||||||
| Alphabet Inc. | 27.29 | 33.89 | 18.38 | 22.54 | 20.72 | 18.72 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Comcast Corp. | 3.23 | 3.16 | 3.09 | 3.16 | 3.10 | 3.03 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Meta Platforms Inc. | 5.82 | 7.25 | 5.55 | 9.80 | 20.49 | 20.92 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Netflix Inc. | 36.53 | 28.76 | 20.70 | 25.28 | 25.56 | 29.17 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Trade Desk Inc. | 0.16 | 0.17 | 0.13 | 0.16 | 0.16 | 0.17 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 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).
1 Q2 2022 Calculation
Payables turnover
= (Cost of revenueQ2 2022
+ Cost of revenueQ1 2022
+ Cost of revenueQ4 2021
+ Cost of revenueQ3 2021)
÷ Accounts payable
= (540,676 + 507,450 + 515,091 + 484,479)
÷ 153,092 = 13.38
2 Click competitor name to see calculations.
- Cost of Revenue
- The cost of revenue demonstrates an overall upward trend from March 31, 2018, through June 30, 2022. Initially at 222,823 thousand USD in early 2018, the figure shows moderate fluctuations in subsequent quarters but increases notably from the second half of 2020, reaching a peak of 540,676 thousand USD by mid-2022. This progression indicates rising expenses associated with generating revenue, potentially reflecting increased operational scale or higher input costs.
- Accounts Payable
- The accounts payable balance exhibits volatility over the observed periods. Starting at 137,968 thousand USD in early 2018, it shows marked fluctuations with significant peaks and declines. For example, a peak appears around mid-2021 at 325,446 thousand USD, followed by a general decreasing trend towards mid-2022, where it settles near 153,092 thousand USD. This pattern suggests variability in short-term obligations to suppliers, which may be influenced by changes in purchasing policies, payment terms, or operational activity cycles.
- Payables Turnover Ratio
- The payables turnover ratio displays considerable variability across the quarters examined. The ratio fluctuates between approximately 4.89 and 13.38 times per year, exhibiting a generally increasing trend from early 2021 onward. The ratio's rise to 13.38 times by mid-2022 implies an accelerated rate of settling payables, indicating a more efficient or possibly more stringent payment process. Earlier periods show alternating lower and higher turnover rates, reflecting changing management or operational strategies related to accounts payable.
Working Capital Turnover
Twitter Inc., working capital turnover calculation (quarterly data)
| Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||||||||||||||||||||
| Current assets | 7,273,581) | 7,476,068) | 7,918,370) | 8,649,234) | 9,728,141) | 9,863,742) | 8,637,108) | 8,589,579) | 8,495,287) | 8,467,579) | 7,620,075) | 6,624,451) | 7,512,783) | 7,255,785) | 7,111,036) | 6,719,760) | 6,540,504) | 5,409,235) | ||||||
| Less: Current liabilities | 1,017,263) | 1,136,707) | 1,343,867) | 2,114,981) | 2,257,919) | 2,036,693) | 1,952,826) | 1,935,103) | 841,107) | 710,020) | 832,476) | 762,627) | 1,733,738) | 1,621,679) | 1,516,311) | 1,457,646) | 594,419) | 528,654) | ||||||
| Working capital | 6,256,318) | 6,339,361) | 6,574,503) | 6,534,253) | 7,470,222) | 7,827,049) | 6,684,282) | 6,654,476) | 7,654,180) | 7,757,559) | 6,787,599) | 5,861,824) | 5,779,045) | 5,634,106) | 5,594,725) | 5,262,114) | 5,946,085) | 4,880,581) | ||||||
| Revenue | 1,176,660) | 1,200,984) | 1,567,220) | 1,283,817) | 1,190,427) | 1,036,018) | 1,289,041) | 936,233) | 683,438) | 807,637) | 1,007,341) | 823,717) | 841,381) | 786,890) | 908,836) | 758,111) | 710,541) | 664,871) | ||||||
| Short-term Activity Ratio | ||||||||||||||||||||||||
| Working capital turnover1 | 0.84 | 0.83 | 0.77 | 0.73 | 0.60 | 0.50 | 0.56 | 0.52 | 0.43 | 0.45 | 0.51 | 0.57 | 0.57 | 0.56 | 0.54 | 0.54 | 0.45 | 0.52 | ||||||
| Benchmarks | ||||||||||||||||||||||||
| Working Capital Turnover, Competitors2 | ||||||||||||||||||||||||
| Alphabet Inc. | 2.51 | 2.33 | 2.08 | 1.96 | 1.84 | 1.69 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Comcast Corp. | — | — | — | 165.10 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Meta Platforms Inc. | 3.54 | 3.13 | 2.59 | 1.95 | 1.59 | 1.46 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Netflix Inc. | 91.06 | 84.84 | — | 20.95 | 15.57 | 12.30 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Trade Desk Inc. | 0.91 | 0.92 | 0.93 | 1.03 | 1.02 | 0.99 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Walt Disney Co. | 41.96 | 25.38 | 26.13 | 9.70 | 9.36 | 7.30 | 7.58 | 6.70 | — | — | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 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).
1 Q2 2022 Calculation
Working capital turnover
= (RevenueQ2 2022
+ RevenueQ1 2022
+ RevenueQ4 2021
+ RevenueQ3 2021)
÷ Working capital
= (1,176,660 + 1,200,984 + 1,567,220 + 1,283,817)
÷ 6,256,318 = 0.84
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals several key trends in working capital, revenue, and working capital turnover over the observed periods.
- Working Capital
- Working capital showed an overall upward trajectory from March 2018 through the end of 2019, increasing from approximately $4.88 billion to nearly $6.79 billion. This reflects a strengthening liquidity position over that period. However, from early 2020 onwards, working capital exhibited fluctuations with some decline and partial recoveries, peaking again around March 2021 at about $7.83 billion before gradually declining to approximately $6.26 billion by June 2022.
- Revenue
- Revenue experienced generally positive growth with some volatility. From March 2018 to December 2018, revenue increased steadily from $665 million to $909 million. After a slight decline in early 2019, it rose significantly by the end of 2019, reaching over $1 billion. The year 2020 showed fluctuations with a low mid-year revenue around $683 million but a strong rebound to nearly $1.29 billion by December 2020. Through 2021, revenue continued to grow robustly, peaking at about $1.57 billion in December. The first half of 2022, however, showed a decline in revenue, dropping to around $1.18 billion by June.
- Working Capital Turnover
- This ratio indicates efficiency in using working capital to generate revenue. It initially declined from 0.52 in March 2018 to 0.45 in mid-2018, but then stabilized in the range of 0.54 to 0.57 through late 2019. From early 2020, the ratio decreased to a low of 0.43 mid-year but improved steadily thereafter. The growth was particularly notable in 2021 and into 2022, with the turnover increasing from 0.5 in March 2021 to approximately 0.84 by June 2022. This suggests improved efficiency in utilizing working capital despite some fluctuations in revenue and working capital levels.
In summary, while working capital demonstrated volatility especially after 2019, revenue experienced growth with periodic fluctuations, peaking at the end of 2021 before some contraction in early 2022. The working capital turnover ratio improved significantly in the latter periods, indicating enhanced operational efficiency in revenue generation relative to working capital invested.
Average Receivable Collection Period
Twitter Inc., average receivable collection period calculation (quarterly data)
| Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||||||||||||||||||||
| Receivables turnover | 5.38 | 5.53 | 4.17 | 4.73 | 4.67 | 4.64 | 3.57 | 4.59 | 5.53 | 5.30 | 4.07 | 4.91 | 4.58 | 4.62 | 3.86 | 4.61 | 4.39 | 4.18 | ||||||
| Short-term Activity Ratio (no. days) | ||||||||||||||||||||||||
| Average receivable collection period1 | 68 | 66 | 88 | 77 | 78 | 79 | 102 | 79 | 66 | 69 | 90 | 74 | 80 | 79 | 95 | 79 | 83 | 87 | ||||||
| Benchmarks (no. days) | ||||||||||||||||||||||||
| Average Receivable Collection Period, Competitors2 | ||||||||||||||||||||||||
| Alphabet Inc. | 47 | 47 | 56 | 52 | 53 | 52 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Comcast Corp. | 36 | 37 | 38 | 38 | 37 | 38 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Meta Platforms Inc. | 35 | 35 | 43 | 39 | 41 | 40 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Trade Desk Inc. | 500 | 497 | 616 | 529 | 538 | 558 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Walt Disney Co. | 65 | 74 | 72 | 77 | 78 | 84 | 71 | 66 | 68 | 83 | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 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).
1 Q2 2022 Calculation
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ 5.38 = 68
2 Click competitor name to see calculations.
The receivables turnover ratio demonstrates fluctuations over the observed periods with an overall tendency to increase towards the later stages. Initially, the ratio begins around 4.18 in the first quarter of 2018 and peaks notably at 5.53 in the second quarter of 2020, indicating a faster collection of receivables during that time. However, there is a dip following this peak, with the ratio decreasing to as low as 3.57 by the end of 2020, which suggests a slower turnover of receivables. The ratio recovers again in subsequent quarters, stabilizing close to 5.5 by mid-2022.
The average receivable collection period, expressed in days, inversely correlates with the receivables turnover ratio, reflecting the time taken to collect outstanding receivables. It starts high at 87 days in the first quarter of 2018 and generally trends downward to a low of 66 days in mid-2020, coinciding with the increased turnover ratio. After this period, the collection period lengthens significantly, reaching 102 days at the end of 2020, which corresponds to the dip in turnover ratio during the same timeframe.
Post-2020, the average collection period tends to stabilize, oscillating mostly between 66 and 88 days. The decrease in collection period around mid-2022 to values near 66-68 days aligns with a corresponding increase in turnover ratio, indicating an improvement in the efficiency of collecting receivables during this period.
- Receivables Turnover Ratio
- Overall increase with notable peaks and troughs;
- Highest point at 5.53 during mid-2020 and mid-2022;
- Lower values around late 2018 and end of 2020 suggest slower collection.
- Average Receivable Collection Period
- Generally inverse trend to turnover ratio;
- Lowest collection period around mid-2020 (66 days), indicating faster collections;
- Longest collection period reaching 102 days at end of 2020, indicating slower collections;
- Stabilization observed in recent periods with improved efficiency.
In summary, the analysis reveals variability in receivables management efficiency over the periods, with significant improvements noted around mid-2020 and mid-2022. The fluctuations imply episodic challenges in receivables collection, particularly around late 2020, followed by recovery and enhanced collection performance in subsequent quarters.
Average Payables Payment Period
Twitter Inc., average payables payment period calculation (quarterly data)
| Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||||||||||||||||||||
| Payables turnover | 13.38 | 10.15 | 8.85 | 8.25 | 4.89 | 6.65 | 7.03 | 5.17 | 7.20 | 6.29 | 7.06 | 7.24 | 5.11 | 5.84 | 6.65 | 7.84 | 5.46 | 6.26 | ||||||
| Short-term Activity Ratio (no. days) | ||||||||||||||||||||||||
| Average payables payment period1 | 27 | 36 | 41 | 44 | 75 | 55 | 52 | 71 | 51 | 58 | 52 | 50 | 71 | 62 | 55 | 47 | 67 | 58 | ||||||
| Benchmarks (no. days) | ||||||||||||||||||||||||
| Average Payables Payment Period, Competitors2 | ||||||||||||||||||||||||
| Alphabet Inc. | 13 | 11 | 20 | 16 | 18 | 20 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Comcast Corp. | 113 | 116 | 118 | 115 | 118 | 121 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Meta Platforms Inc. | 63 | 50 | 66 | 37 | 18 | 17 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Netflix Inc. | 10 | 13 | 18 | 14 | 14 | 13 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Trade Desk Inc. | 2,230 | 2,184 | 2,728 | 2,308 | 2,256 | 2,205 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 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).
1 Q2 2022 Calculation
Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ 13.38 = 27
2 Click competitor name to see calculations.
- Payables Turnover Ratio
- The payables turnover ratio exhibited variability over the analyzed period, starting at 6.26 in March 2018 and ending at a considerably higher value of 13.38 by June 2022. Notable fluctuations were observed, with the ratio decreasing to a low of 4.89 in June 2021 and peaking at 10.15 in March 2022 before reaching its highest point in the final period. This upward trend in recent quarters suggests an acceleration in the rate at which payables are being settled relative to purchases.
- Average Payables Payment Period
- The average payables payment period, measured in days, inversely mirrors the payables turnover ratio and displays a general downward trend. Initially, in March 2018, the payment period was 58 days and stayed within a range close to this value until mid-2020. A notable increase occurred in June 2021 (75 days), followed by a sharp decline in subsequent quarters, reaching a low of 27 days by June 2022. This indicates a progressively quicker payment to suppliers over time, especially in the most recent periods.
- Overall Analysis
- The inverse relationship between the payables turnover ratio and the payment period is clearly evident throughout the periods. The increasing payables turnover ratio accompanied by a decreasing payment period suggests an improvement in the company's efficiency and liquidity management concerning its payables, reflecting faster payments to creditors. The significant improvements from late 2021 through mid-2022 highlight a strategic or operational shift toward enhanced payment practices.