Union Pacific Corp. (NYSE:UNP)

Inventory Turnover

The inventory turnover ratio has shown a slight declining trend from 35.11 in 2021 to 31.53 in 2024, following a peak in 2021. This indicates a decrease in the frequency of inventory being sold and replaced over the years, suggesting a possible moderation in inventory management efficiency.

Receivables Turnover

The receivables turnover ratio has fluctuated modestly between 11.63 and 13.15 across the periods. After a decline in 2023 to 11.63, it rebounded to 12.8 in 2024, reflecting relatively stable but somewhat variable effectiveness in collecting receivables.

Payables Turnover

Payables turnover ratio has exhibited variability, decreasing from 31.92 in 2020 to 28.63 in 2024 with intermittent fluctuations. This may indicate a tendency toward taking longer to settle payables in recent years, which can impact cash flow management.

Working Capital Turnover

Working capital turnover was reported only in 2020 as 476.41, with no data available in subsequent years, preventing analysis of trend or performance in this metric.

Average Inventory Processing Period

The average inventory processing period decreased from 12 days in 2020 to 10 days in 2021, and then gradually increased back to 12 days by 2024. This pattern suggests an initial improvement in inventory handling speed, followed by a return to earlier levels.

Average Receivable Collection Period

The average receivable collection period has seen minor fluctuations, moving between 28 and 31 days. A slight increase to 31 days was observed in 2023, followed by a reduction to 29 days in 2024, indicating generally steady collection efficiency with some short-term variability.

Operating Cycle

The operating cycle remained relatively stable around 39 to 42 days over the reported periods. A small increase to 42 days in 2023 suggests a slight extension in the combined inventory and receivables processing times before cash is realized.

Average Payables Payment Period

The average payables payment period increased from 11 days in 2020 to 13 days from 2021 through 2024, indicating a deliberate lengthening of payment delays to suppliers, which could be a strategy to improve internal liquidity.

Cash Conversion Cycle

The cash conversion cycle has fluctuated within a narrow band from 26 to 29 days. After reaching a low of 26 days in 2021, it increased to 29 in 2023 before slightly declining to 28 in 2024, suggesting a generally consistent duration for converting investments in inventory and receivables back into cash.

The annual financial data demonstrates several notable trends over the five-year period. Operating revenues have exhibited a generally increasing trajectory, rising steadily from 19,533 million US dollars at the end of 2020 to a peak of 24,875 million US dollars at the end of 2022. Following this peak, revenues experienced a slight decline in 2023, dropping to 24,119 million US dollars, before stabilizing somewhat in 2024 at 24,250 million US dollars.

Materials and supplies costs show a modest but consistent upward trend over the same period. These costs increased from 638 million US dollars in 2020 to 769 million US dollars in 2024. The rise is steady and gradual, indicating a potentially increasing expenditure on raw materials and supplies used in operations.

Inventory turnover ratio has declined gradually over the years, falling from 30.62 in 2020 to 31.53 in 2024. This downward trend suggests a slowing rate of inventory movement, indicating that inventory is being converted into sales at a slightly reduced pace as the years progress.

Operating Revenues

Increasing from 2020 through 2022, peaking in 2022, followed by a slight decline and stabilization in 2023 and 2024.

Materials and Supplies Costs

Consistently increasing at a gradual rate over the entire period from 2020 to 2024.

Inventory Turnover

Gradual decline, indicating slower inventory movement or longer holding periods across the five years.

Overall, the data suggest robust revenue growth up to 2022 with some signs of market or operational pressures thereafter, as reflected in the slight revenue decline and inventory turnover slowdown. Meanwhile, increasing material costs may impact profitability and operational efficiency, warranting close monitoring in subsequent periods.

Operating Revenues

The operating revenues exhibit a positive growth trend from 2020 through 2024. Starting at $19,533 million in 2020, revenues increased steadily, peaking at $24,875 million by the end of 2022. There is a slight decline observed in 2023, with revenues decreasing to $24,119 million, but this is followed by a minor recovery in 2024, reaching $24,250 million. Overall, the revenue shows resilience and consistent expansion over the five-year period, albeit with a small setback in 2023.

Accounts Receivable, Net

Accounts receivable have shown a continuous upward trend from $1,505 million in 2020 to a peak of $2,073 million in 2023. However, in 2024, there is a noticeable decrease to $1,894 million. This suggests an improvement in the management of receivables or collection efficiency in the latest period after a few years of growth. The rising trend until 2023 could indicate increased sales on credit or slower collections in earlier years, while the dip in 2024 may reflect tighter credit policies or better cash collection processes.

Receivables Turnover Ratio

The receivables turnover ratio fluctuated over the period, starting at 12.98 in 2020 and showing a slight decline to 12.66 in 2021. This was followed by a rise to 13.15 in 2022, indicating improved efficiency in collecting receivables relative to sales during that year. However, in 2023, the ratio dropped more significantly to 11.63, corresponding with the peak in accounts receivable and a dip in operating revenues, which suggests slower collection or longer credit terms during that year. In 2024, this ratio improved again to 12.8, indicating a recovery in collection efficiency consistent with the reduced accounts receivable balance observed.

Operating Revenues

Operating revenues demonstrated a general upward trend from 2020 to 2024. Starting at 19,533 million US dollars in 2020, revenues increased steadily to reach 24,875 million in 2022. A slight decline occurred in 2023, falling to 24,119 million, followed by a marginal recovery to 24,250 million in 2024. Overall, the data indicates robust growth with some volatility in the later periods.

Accounts Payable

Accounts payable increased consistently over the observed periods, beginning at 612 million US dollars in 2020 and rising to 847 million by 2024. This steady increase suggests an expanding scale of operations or potentially longer payment terms with suppliers.

Payables Turnover Ratio

The payables turnover ratio exhibited some fluctuations but showed a slight downward trend overall. The ratio decreased from 31.92 in 2020 to 28.63 in 2024, with minor variations across years. The decline in this ratio may indicate a lengthening of the payment cycle or changes in supplier payment dynamics.

The financial data reveals several key trends over the five-year period ending in 2024. Operating revenues have generally shown growth from 2020 through 2024, although a slight decrease is observed in 2023 compared to 2022. The increase from 19,533 million US$ in 2020 to 24,250 million US$ in 2024 indicates overall expansion in revenue generation, despite minor fluctuations in the latter years.

Working capital presents a contrasting trend. In 2020, working capital was positive at 41 million US$, but from 2021 onwards, it turned negative and remained so through 2024. The trajectory of working capital values shows a declining trend in the negative territory, reaching as low as -2,193 million US$ in 2021 and fluctuating thereafter but not recovering to positive values. This negative working capital suggests potential liquidity challenges or strategic management of current liabilities and assets that could impact operational flexibility.

The working capital turnover ratio is only reported for the year 2020, where it is extraordinarily high at 476.41. Since no subsequent data is available, it is not possible to comment on trends or changes, but the high ratio in 2020 aligns with the low level of working capital at that time.

Operating Revenues

Consistent growth observed from 2020 through 2022, rising from 19,533 million to 24,875 million US$.

A slight decrease occurred in 2023 to 24,119 million US$, followed by a minor recovery in 2024 to 24,250 million US$.

Working Capital

Positive in 2020 but turned negative starting 2021, indicating a shift in liquidity position.

Worst value recorded in 2021 at -2,193 million US$, followed by some reduction in negative balance without returning to positive territory.

The persistent negative values through 2024 suggest ongoing challenges in current asset and liability management.

Working Capital Turnover

Exceptionally high in 2020, but data for subsequent years is not available for trend analysis.

The analysis of the inventory turnover ratio over the observed five-year period reveals a fluctuating but generally declining trend following a peak in 2021. Specifically, the ratio increased from 30.62 in 2020 to 35.11 in 2021, indicating improved efficiency in inventory management during that year. However, this was followed by a gradual decrease to 33.57 in 2022, 32.46 in 2023, and further down to 31.53 in 2024, suggesting a slowdown in the frequency with which inventory is sold and replaced.

Correspondingly, the average inventory processing period, measured in days, displays a slightly inverse trend to the inventory turnover ratio. Beginning at 12 days in 2020, the period shortens to 10 days in 2021, aligning with the peak turnover. Subsequently, the processing period lengthens to 11 days in 2022 and 2023, and returns to 12 days by 2024. This shift indicates a modest increase in the time stock remains before being sold, consistent with the declining turnover ratio.

Inventory Turnover Ratio

Peaked in 2021, then gradually decreased through 2024, suggesting a reduction in turnover frequency after initial improvement.

Average Inventory Processing Period

Shortened in 2021 reflecting higher efficiency, before gradually lengthening back to the initial level of 12 days by 2024.

Interpretation

The trends indicate that although there was an improvement in inventory management efficiency in 2021, this was not sustained in the subsequent years. The slower turnover and longer processing period towards 2024 may imply changes in demand, stock management, or other operational factors impacting inventory performance.

The analysis of the receivables turnover ratio and average receivable collection period over the five-year span reveals notable fluctuations and some stability in the company's management of receivables.

Receivables Turnover Ratio

The ratio starts at 12.98 in 2020 and shows a slight decline to 12.66 in 2021. It then increases marginally to 13.15 in 2022, indicating an improvement in the efficiency of collecting receivables. However, this is followed by a significant decrease to 11.63 in 2023, suggesting a weakening in turnover. In 2024, the ratio rebounds to 12.8, displaying a recovery but not reaching the initial 2020 level. Overall, the ratio depicts some volatility with a tendency toward maintained efficiency though with a noticeable dip in 2023.

Average Receivable Collection Period

This metric correlates inversely with the receivables turnover. Starting at 28 days in 2020, it slightly increases to 29 days in 2021, then decreases back to 28 days in 2022. In 2023, the collection period extends to 31 days, reflecting a slower collection process consistent with the decrease in the turnover ratio. By 2024, it reduces again to 29 days, indicating a partial return to improved collection efficiency.

Overall Trends and Insights

The data shows that the company experienced an overall stable management of receivables through 2020 to 2022, with slight improvement in turnover efficiency. The year 2023 marked a downturn in receivables management effectiveness, with a longer average collection period and a reduced turnover ratio, potentially indicating collection challenges or changes in credit policies. The partial recovery in 2024 suggests corrective actions or normalizing conditions that improved receivables management, though not fully matching earlier performance levels.

Average Inventory Processing Period

The average inventory processing period demonstrated a subtle fluctuation over the five-year span. Initially, there was a decrease from 12 days in 2020 to 10 days in 2021, indicating improved inventory turnover efficiency during that period. However, from 2021 onwards, the metric gradually increased, returning to 12 days by the end of 2024, suggesting a slight decline in inventory management effectiveness in the latter years.

Average Receivable Collection Period

The average receivable collection period exhibited minor variability. Starting at 28 days in 2020, it increased slightly to 29 days in 2021, reverted to 28 days in 2022, then rose to 31 days in 2023 before decreasing again to 29 days in 2024. These changes imply modest volatility in the collection of receivables, with a peak in collection duration in 2023 followed by some recovery in 2024.

Operating Cycle

The operating cycle remained relatively stable, fluctuating within a narrow range between 39 and 42 days across the period. Beginning at 40 days in 2020, it slightly decreased to 39 days for two consecutive years, then extended to 42 days in 2023 before contracting slightly to 41 days in 2024. Overall, these figures indicate consistent operational efficiency with minor variations possibly driven by changes in inventory processing and receivable collection durations.

Payables Turnover

The payables turnover ratio demonstrates a fluctuating trend over the five-year period. Beginning at 31.92 in 2020, the ratio decreases to 28.99 in 2021, rises again to 31.73 in 2022, and then declines to 28.18 in 2023 before experiencing a slight increase to 28.63 in 2024. This pattern indicates variability in the company’s efficiency in paying off its suppliers, with no consistent upward or downward trajectory.

Average Payables Payment Period

The average payables payment period exhibits a general increase from 11 days in 2020 to 13 days in 2021, stabilizing at 13 days through to 2024 after a brief dip to 12 days in 2022. This suggests a tendency toward a longer duration in settling payables, implying a potential extension in the company's payment terms or cash management strategy.

Summary

The data reveals a moderate variability in how quickly payables turnover occurs alongside a gradual extension in the payment period. While the company’s payables turnover does not demonstrate a clear directional change, the increment in average payment days may indicate a strategic approach to manage cash outflows more flexibly over recent years.

Average Inventory Processing Period

The inventory processing period fluctuated modestly over the five-year span. It started at 12 days in 2020, dropped to a low of 10 days in 2021, then slightly increased back to 12 days by 2024. This indicates a relatively stable inventory turnover rate with a brief improvement in 2021.

Average Receivable Collection Period

The accounts receivable collection period exhibited minor variability, ranging from 28 to 31 days. It was 28 days in 2020, peaked at 31 days in 2023, and decreased to 29 days by 2024. This suggests a generally consistent collection process with some temporary lengthening in 2023.

Average Payables Payment Period

The payment period for accounts payable showed a gradual lengthening trend. Starting at 11 days in 2020, it increased to 13 days by 2021 and remained steady at that level through 2024. This may reflect a strategic extension of payment terms or improved cash management.

Cash Conversion Cycle

The cash conversion cycle remained relatively stable across the period. It declined from 29 days in 2020 to 26 days in 2021, slightly increased thereafter to 29 days in 2023, and ended at 28 days in 2024. This stability suggests consistent efficiency in working capital management despite fluctuations in individual components.