Union Pacific Corp. (NYSE:UNP)

Inventory Turnover

The inventory turnover ratio demonstrates some fluctuations over the observed periods. Beginning at 29.29 in early 2021, the ratio increased to a peak of 35.11 by the end of 2021, indicating an improvement in inventory management or faster sales. However, subsequent quarters show a slight downward adjustment, with values generally oscillating around the low 30s. The most recent figures from 2024 to 2025 show relative stability, with the ratio hovering between approximately 31 and 32.5. This suggests the company maintains consistent inventory efficiency, albeit without the strong upward momentum observed in late 2021.

Receivables Turnover

The receivables turnover ratio shows a modest overall increase throughout the periods. Starting near 12 in early 2021, it slightly declined during mid-2022, reaching a low of 11.42, before recovering and reaching levels above 12.5 in 2023 and maintaining this higher turnover through 2024 and 2025. This trend indicates a generally improved ability to collect receivables efficiently over time, with some temporary softening observed in the middle periods.

Working Capital Turnover

Data for working capital turnover is largely unavailable, with only one reported figure showing an unusually high ratio of 114.4 in one quarter. This isolated value limits the ability to assess any meaningful trends or patterns in this metric during the analyzed timeframe.

Average Inventory Processing Period

The average inventory processing period remains stable and short throughout the periods, largely fluctuating between 10 and 12 days. This consistent performance suggests the company efficiently manages its inventory turnover with little variability in inventory holding times across quarters and years.

Average Receivable Collection Period

The average receivable collection period displays more variability. Initially stable at around 29-30 days, it increased to about 32-33 days during 2022 and early 2023, indicating a somewhat slower collection of receivables. More recent periods show a return to approximately 29-31 days, signaling an improvement in collection speed back to levels closer to those observed at the beginning of the timeframe.

Operating Cycle

The operating cycle combines the inventory processing and receivable collection periods and reflects their cumulative duration. The cycle length varies between 38 and 45 days across periods, with an observable peak around 44-45 days in 2022 and early 2024. The operating cycle is shorter in early 2023 and toward the end of the dataset, ranging near 39-41 days. Overall, the operating cycle exhibits moderate fluctuation but remains steady within a narrow range, suggesting a consistent operational tempo.

Operating Revenues Trend

The operating revenues exhibit a general pattern of growth from early 2021 to mid-2022, rising from approximately 5,001 million USD to a peak near 6,566 million USD by September 2022. This increase indicates a positive expansion in business activity over this period. However, following this peak, revenues show some volatility and a slight decline in late 2022, dropping to around 6,180 million USD by December 2022. In 2023, revenues fluctuate moderately, generally staying within the range of 5,940 million to 6,159 million USD, suggesting a period of relative stabilization but without a clear upward or downward trend. Moving into 2024 and early 2025, the revenues demonstrate modest growth, reaching approximately 6,244 million USD by September 2025. Overall, the revenue trajectory reflects a period of initial growth, mid-term volatility, and recent stabilization with a slight upward bias.

Materials and Supplies Costs

The costs associated with materials and supplies increase gradually from 659 million USD in early 2021 to a high of about 807 million USD around mid-2024. This upward movement parallels the growth in revenues but at a less volatile pace. There are minor fluctuations throughout the quarters, with occasional dips and rises, but the overall pattern suggests rising input costs or increased consumption of materials and supplies to support operational activities. The data also indicates that the company may be experiencing pressure in materials costs toward the latter periods under review.

Inventory Turnover Ratio

The inventory turnover ratio exhibits fluctuations within a moderate range between roughly 29 and 35 over the analyzed periods. It shows an upward trend in the first year, peaking around 35.11 by the end of 2021, which suggests improved efficiency in inventory management during this time. After the peak, the ratio decreases and stabilizes, fluctuating mostly between 29 and 33 through 2022 to 2025, indicating periodic variations in how effectively inventory is converted into sales. These fluctuations may be influenced by changing demand patterns or inventory management strategies. The ratio does not show a consistent long-term improvement or decline but suggests maintained operational efficiency at a reasonable level.

Summary

The overall financial data reflect a company that experienced substantial revenue growth in the early phase, followed by a period of stabilization with some volatility. Rising materials and supplies costs point to increased operational expenses, potentially impacting margins unless offset by further efficiency gains. The inventory turnover ratio indicates sustained, though variable, inventory management efficiency without major deterioration, supporting the company’s ability to manage working capital effectively amid changing business conditions. These patterns suggest a company in a mature stage with stabilized revenues and ongoing focus on cost control and operational efficiency.

The analysis of the quarterly financial data reveals several key trends in the company's operating revenues, accounts receivable, and receivables turnover ratios over the examined periods.

Operating Revenues

Operating revenues have demonstrated a general upward trend from the first quarter of 2021 through the end of 2025. Starting at $5,001 million in March 2021, revenues increased steadily, reaching a peak around the third quarter of 2022 with $6,566 million. Thereafter, revenues fluctuated moderately, with slight declines in late 2022 and early 2023, but rebounded consistently from late 2023 onward. By the final quarter shown, revenues were approximately $6,244 million, reflecting sustained growth overall despite some short-term volatility.

Accounts Receivable, Net

The accounts receivable balance exhibits a generally increasing pattern from $1,610 million in March 2021 to a peak exceeding $2,160 million in March 2024. Following this peak, the balance trends downward toward the later periods, declining to approximately $1,921 million by September 2025. The rising balance over the initial periods may indicate expanding credit sales or longer collection periods, while the subsequent decline suggests improved collection efficiency or reduced credit sales volume.

Receivables Turnover Ratio

The receivables turnover ratio shows some variability but remains relatively stable in a range generally between 11 and 13 times per year. It started near 12 at the beginning of 2021, decreased slightly during 2022, and increased again in the early quarters of 2023. Fluctuations appear to correspond inversely with changes in accounts receivable, indicating that periods of higher receivable balances tend to accompany lower turnover ratios and vice versa. The ratio toward the end of 2025 suggests a modest improvement in collection efficiency relative to earlier periods.

In summary, the company experienced overall revenue growth across the periods analyzed, accompanied by fluctuating but generally elevated accounts receivable balances, reflecting changes in credit management and sales patterns. The receivables turnover ratios indicate a relatively consistent collection performance with some improvement toward the more recent quarters. These indicators collectively point to effective revenue generation and receivables management, albeit with occasional short-term variances that merit continued monitoring.

Working Capital

The working capital values demonstrate significant fluctuations with a general trend of negative balances throughout the periods. Initially, the working capital starts at -1,152 million USD and worsens to -2,193 million USD by the end of 2021. Although there is some recovery in early 2024 with a positive value of 211 million USD, negative working capital resumes thereafter, reaching -2,269 million USD at mid-2025 before showing slight improvement. The fluctuations suggest ongoing challenges in managing short-term assets and liabilities efficiently, with occasional improvements that are not sustained.

Operating Revenues

Operating revenues exhibit a generally positive but somewhat volatile trend. Starting at 5,001 million USD in the first quarter of 2021, revenues rise consistently until reaching a peak of 6,566 million USD in the third quarter of 2022. Following this peak, revenues fluctuate modestly but remain near the 6,000 million USD mark through to the end of 2025. This pattern indicates stable revenue generation with periods of growth and mild declines, reflecting a mature operational environment with some sensitivity to external or cyclical factors.

Working Capital Turnover

The only recorded value of the working capital turnover ratio is 114.4, noted in 2024. This extremely high ratio, if accurate, implies highly efficient utilization of working capital to generate sales during this period; however, its singular data point and the overall negative trend and volatility in working capital figures suggest this could be an anomaly or require further verification. Without additional data points, no definite trend can be inferred regarding working capital turnover.

Overall Analysis

The financial data indicate persistent challenges with working capital management alongside stable and moderately increasing operating revenues. Negative working capital levels may imply liquidity concerns or aggressive short-term financing strategies, which could impact operational flexibility. Revenue stability points to consistent demand or effective market positioning. The absence of comprehensive working capital turnover data limits full assessment of operational efficiency relating to working capital, suggesting a need for improved data reporting in this area.

Inventory Turnover

The inventory turnover ratio has exhibited variability over the observed period. During 2021, there was a generally increasing trend from 29.29 at the beginning of the year to a peak of 35.11 by year-end. In 2022, the ratio declined, fluctuating between approximately 29.66 and 33.57. The year 2023 saw a slight recovery with values mostly in the low 30s, though the trend did not return to the peak levels of late 2021. From early 2024 through mid-2025, the ratio stabilized, generally staying within the 29.9 to 32.5 range. This indicates a moderate and steady rate of inventory turnover in the most recent quarters.

Average Inventory Processing Period

The average inventory processing period has remained relatively stable throughout the entire timeframe, fluctuating narrowly between 10 and 12 days. Early in 2021, the processing period decreased slightly from 12 to 10 days, coinciding with the peak in inventory turnover ratio. Following this, the processing period returned to about 11-12 days consistently from mid-2021 onward through 2025. This stability suggests consistent inventory management practices with no significant changes in the time taken to process inventory.

Summary of Insights

The data reveals that inventory management, as reflected by turnover ratio and processing period, has shown resilience with only moderate fluctuations. The peak in inventory turnover at the end of 2021, alongside a shortened processing period, may point to periods of increased operational efficiency or stronger sales. Subsequent normalization of the turnover ratio with a steady processing period suggests a return to standard inventory cycles. Overall, the company appears to maintain efficient inventory handling with stable processing times, helping sustain inventory turnover at a reasonable and consistent level.

Receivables Turnover Ratio

The receivables turnover ratio demonstrates moderate fluctuations over the observed periods. Initially, it shows a slight increasing trend from 11.99 to 12.66 between March and December 2021. This is followed by a decline to 11.42 in June 2022 before rising again to peak at 13.56 in June 2023. Thereafter, it experiences some volatility but generally maintains levels around 11.14 to 12.80 through to mid-2025. The fluctuations indicate periodic variability in the efficiency of credit sales collection.

Average Receivable Collection Period

The average collection period exhibits an inverse relationship with the receivables turnover ratio, as expected. Early in the timeline, it remains steady at approximately 29 to 30 days through 2021. There is an increase to around 32-33 days in early to mid-2024, signifying slightly slower collections. The period improves back to roughly 29-30 days by 2025. This oscillation reflects changes in the debtor management processes or credit policies being implemented at different times.

Overall Insights

The data suggests that while the company maintains relatively stable receivables management, it experiences short-term fluctuations which may be influenced by external factors such as market conditions, seasonal impacts, or internal credit strategies. The turnover ratio’s peaks and troughs correspond with similar inversely proportional movements in collection days, indicating consistent adherence to expected financial principles. Maintaining receivables turnover around 12 and collection periods close to 30 days suggests effective working capital management, with only moderate deviations over the several years analyzed.

The analysis of the quarterly financial metrics reveals notable trends in the company's inventory management, receivables collection, and overall operating cycle over the observed periods.

Average Inventory Processing Period

The inventory processing period demonstrates relative stability throughout the quarters, fluctuating modestly between 10 and 12 days. Initially, there is a slight downward trend from 12 days to 10 days within 2021, suggesting an improvement in inventory turnover efficiency. However, from early 2022 onward, the period mostly stabilizes around 11 to 12 days, indicating consistent management of inventory levels without significant acceleration or delay. Minor fluctuations within a day indicate operational steadiness in inventory handling.

Average Receivable Collection Period

The receivable collection period exhibits more variability compared to inventory processing. Starting at 30 days in early 2021, it slightly decreases to 28 days by the end of 2021, implying improved efficiency in collecting receivables. However, the period then increases again in 2022 and early 2023, peaking at 33 days in March 2024. Following this peak, the collection period declines gradually back toward 29 days by late 2025. This pattern suggests periods of both tightening and loosening credit collections policies or customer payment behaviors, reflecting changing market or operational conditions affecting cash inflows.

Operating Cycle

The operating cycle closely mirrors the behaviors seen in its components. It decreases from 42 days down to 39 days by the end of 2021, aligning with improved inventory and receivables turnover. The cycle then rises to a peak of 45 days in early 2024, consistent with the lengthening receivable collection period. Following this, the operating cycle stabilizes around 41 days through 2025. This indicates that overall operational efficiency, encompassing inventory and receivables management, experiences phases of enhancement and temporary slowdown but generally maintains a steady state near the early 2020s levels by the end of the observation period.

In summary, the company maintains a relatively stable inventory turnover timeframe but encounters fluctuations in the receivables collection duration, which subsequently impact the total operating cycle. These insights highlight that while inventory control remains consistent, efforts or external factors influencing collections require closer attention due to their greater variability and impact on operational liquidity.