Union Pacific Corp. (NYSE:UNP)

The analysis of the financial ratios and related metrics over the reviewed quarters reveals several discernible patterns and trends.

Inventory Turnover

The inventory turnover ratio exhibits a generally stable range with minor fluctuations from the earliest recorded data point of 30.62 to values oscillating around the low 30s. Notable peaks occurred at 35.11 and 34.44 in early 2022 and 2023, respectively, followed by a slight decline but maintaining levels above 29. This pattern suggests a consistent efficiency in inventory management, with periodic improvements in turnover speed.

Receivables Turnover

This ratio shows a slight downward trend between 2020 and mid-2022, dropping from approximately 12.98 to a low near 11.42, indicating a slower collection rate. Subsequently, there is a recovery phase where the turnover improves again, reaching up to 13.56 before moderating to around 12.3 in the most recent periods. These shifts reflect variability in receivables management and customer payment behaviors across the periods.

Working Capital Turnover

Data for working capital turnover is sparse with a very high value recorded early on at 476.41 and a much lower figure of 114.4 appearing later. The presence of missing intermediate data limits trend analysis, but the large disparity suggests differing methods of calculation, changes in working capital structure, or data irregularities.

Average Inventory Processing Period

The average number of days to process inventory remains highly consistent at approximately 11 to 12 days. Minor deviations do not indicate significant shifts in inventory processing efficiency, reflecting steady operational performance in managing stock.

Average Receivable Collection Period

The average receivable collection period increased from around 28 days to a peak of 33 days between 2020 and 2024. After this peak, a modest improvement occurs with the period reducing back to around 29–30 days. This trend highlights a temporary delay in collections, potentially influenced by external economic conditions, followed by a return towards more typical collection timing.

Operating Cycle

The operating cycle duration generally oscillates between 38 and 45 days, with slight increases observed mid-data set and a subsequent return to prior levels. This consistency indicates stable overall efficiency in the conversion of inventory and receivables into cash.

Overall, the data indicate that both inventory and receivables turnover demonstrate resilience with modest fluctuations reflective of operational and market conditions. Inventory management is notably steady, while receivables collection experienced more variation. The operating cycle remains steady, supporting the view of effective operational controls throughout the periods analyzed. Limited data on working capital turnover prevents conclusive interpretation of that metric.

Operating Revenues

Operating revenues exhibited significant fluctuations across the observed periods. Starting at 5,229 million USD in March 2020, there was a notable dip to 4,244 million USD in June 2020, likely influenced by external economic conditions during that time. Following this trough, revenues generally trended upward, reaching a peak of 6,566 million USD in September 2022. Subsequently, revenues experienced some moderation, stabilizing around the 6,000 to 6,100 million USD range in the more recent quarters, with minor fluctuations. The data suggests a recovery and growth phase post-mid 2020, followed by a period of stabilization toward the end of the measured timeframe.

Materials and Supplies

Expenditures on materials and supplies showed relatively modest variation in absolute terms, beginning at 692 million USD in March 2020 and experiencing small, incremental increases overall. The values fluctuated within a range roughly between 621 million USD and 807 million USD, with a tendency to rise in tandem with operating revenues until late 2022. After this, spending on materials and supplies appeared stable, with occasional minor increases and decreases but maintaining a general upward bias, suggestive of cost management aligned with operational scale.

Inventory Turnover

Inventory turnover ratios were not reported for earlier periods but were available from September 2020 onward. These ratios fluctuated around the low 30s, indicating a consistent efficiency in inventory management. The highest recorded turnover was 35.11 in March 2021, while the lowest was approximately 29.29 in June 2020. Despite some quarter-to-quarter variability, inventory turnover remained relatively stable, suggesting consistent inventory control practices and efficient asset utilization throughout the timeframe.

Operating Revenues Trend

Operating revenues displayed variability over the periods analyzed. A notable decline occurred from March 31, 2020 (5,229 million USD) to June 30, 2020 (4,244 million USD), likely reflecting adverse conditions. Following this, revenues generally recovered, peaking around September 30, 2022 at 6,566 million USD. However, there was a subsequent decline towards the end of 2022, dropping to 6,180 million USD by December 31, 2022. In 2023, revenues remained relatively stable but did not surpass earlier peak levels, fluctuating around 6,000 million USD. Early 2024 data shows modest cyclical changes, with revenues around 6,000–6,100 million USD, indicating stabilization without significant growth.

Accounts Receivable, Net Trend

Accounts receivable, net, exhibited an upward trend from 1,669 million USD at March 31, 2020 to a high of approximately 2,073 million USD by December 31, 2023. This increase reflects a growth in credit extended or outstanding collections over time. There was a peak in the third quarter of 2022 at 2,052 million USD, followed by some fluctuations but without a clear downward correction, which suggests consistent credit sales and collection patterns. The slight decrease in mid-2024 to 1,915 million USD followed by a minor rebound indicates some normalization or improved collections towards the latest periods.

Receivables Turnover Ratio Analysis

The receivables turnover ratio, available from September 30, 2020, shows relative stability with values fluctuating between about 11.14 and 13.56. The highest ratio, 13.56, occurs on September 30, 2023, indicating a period of more efficient collections relative to receivables outstanding. A gradual decline to 11.14 by June 30, 2024, suggests a temporary slowdown in collections efficiency or possibly longer credit terms extended to customers. Subsequent recovery to around 12.74 by December 31, 2024, indicates improved management of accounts receivable. Overall, the ratio demonstrates effective management of credit and collections over time, maintaining generally strong turnover rates.

Working Capital

The working capital values demonstrated high volatility over the periods analyzed. Starting with a negative balance of -837 million USD in March 2020, it fluctuated, showing occasional improvements such as reaching 289 million USD in September 2020, but mostly maintaining a negative position throughout. The lowest points were observed towards the end of 2021, with -2193 million USD in December 2021. In 2023, there was some recovery, with March and June figures improving slightly relative to previous lows, yet still remaining negative. By mid-2024, working capital turned positive at 211 million USD, indicating a temporary improvement, but this was followed by a return to negative values in subsequent quarters, reaching -2269 million USD by June 2025. Overall, the trend indicates persistent working capital deficits with brief periods of improvement.

Operating Revenues

Operating revenues showed a generally upward trend throughout the examined quarters. Starting at 5,229 million USD in March 2020, revenues experienced a dip in June 2020 to 4,244 million USD, likely reflective of macroeconomic or sector-specific challenges during that period. Following that, revenues steadily increased from September 2020 onwards, peaking multiple times above 6,000 million USD, with the highest noted values around the mid-2022 and 2023 periods. Revenues remained relatively stable above 6,000 million USD through early 2024 to mid-2025, indicating a recovery and sustained operational income growth over the medium term.

Working Capital Turnover

The working capital turnover ratio was sparsely populated. A notably high value of 476.41 was recorded early in the dataset without corresponding working capital data at that point, and a later value of 114.4 was observed in 2024. These ratios suggest episodes of efficient use of working capital in generating revenues during these periods. However, due to the limited data points and missing information for other quarters, comprehensive trend analysis of this ratio is constrained.

Summary of Trends and Insights

The financial data reflects a challenging liquidity position characterized by consistent negative working capital, with occasional positive blips. Despite the working capital fluctuations, operating revenues demonstrated resilience and growth after the initial impact in early 2020. This suggests that while the company faced working capital management difficulties, possibly due to increased current liabilities or inventory levels, its core operations maintained or expanded revenue generation capacity. The partial availability of working capital turnover ratios hints at periods of capital efficiency, but insufficient data prevents firm conclusions.

Inventory Turnover

The inventory turnover ratio exhibits a generally stable pattern with minor fluctuations across the reported periods. Starting from the earliest available data point at 30.62, the ratio experienced slight variations around the low 30s, increasing to a peak of 35.11, followed by minor declines and recoveries. In the most recent periods, the ratio remains near 31, fluctuating modestly without any significant upward or downward trend, indicating relatively consistent efficiency in inventory management over time.

Average Inventory Processing Period

The average inventory processing period, measured in days, shows a stable trend throughout the periods, consistently ranging between 10 and 12 days. Initially, the period is at 12 days, briefly decreases to 10 days indicating faster turnover around March 31, 2022, and returns to 11-12 days in subsequent quarters. The stability of this period suggests a steady pace in inventory processing without major disruptions or improvements.

Overall Analysis

The relationship between the inventory turnover ratio and the average inventory processing period reflects consistency in inventory efficiency. Despite minor variability, the turnover ratio has remained relatively consistent just above 30, implying effective inventory control. The processing period's limited fluctuation further supports this observation, suggesting that inventory is processed within a narrow and steady timeframe. No significant anomalies or trends implying operational disruption or notable improvement are observed across these metrics.

Receivables Turnover Ratio

The receivables turnover ratio shows a generally stable trend over the observed periods, fluctuating between a low of 11.14 and a high of 13.56. After an initial data gap, the ratio started at 12.98 and saw minor declines during 2020 and 2021, reaching 11.42 in September 2022. Subsequently, there was a recovery, with the ratio peaking at 13.56 in September 2023, followed by a moderate decrease and some fluctuations in the subsequent quarters. Overall, the turnover remains within a consistent range, suggesting steady efficiency in collecting receivables.

Average Receivable Collection Period

The average collection period exhibits an inverse pattern relative to the turnover ratio, as expected. Starting at 28 days in early 2020, the days outstanding increased to 32 by mid to late 2022, indicating a slight elongation in the collection cycle. This was followed by improvement, with a reduction to 27 days in September 2023, then a gradual increase again toward 33 days in mid-2024. The collection period remained near the 30-day mark throughout most quarters, indicating a stable credit policy and consistent debtor behavior over time.

Insight Summary

The interplay between the receivables turnover and the collection period points to generally efficient receivables management with minor fluctuations potentially influenced by external economic factors or operational adjustments. The brief deterioration in turnover and lengthening of collection periods in late 2022 and early 2024 might warrant monitoring to ensure that receivables quality and liquidity remain strong. However, the figures return to a stable baseline, reflecting successful maintenance of credit and collection policies.

The data reveals several distinct trends in the operational efficiency metrics over the observed quarterly periods.

Average Inventory Processing Period

Beginning from the available data in early 2021, the average inventory processing period remains relatively stable, fluctuating predominantly between 11 and 12 days. There is a slight decrease observed in some quarters, reaching a low of 10 days in March 2022, followed by a consistent return to around 11 to 12 days thereafter. This indicates a fairly steady inventory turnover pace without significant acceleration or delays over the periods covered.

Average Receivable Collection Period

The average receivable collection period demonstrates modest variability with a general upward trend from 28 days in early 2021 to a peak near 33 days by mid-2024. The values show some quarterly volatility, oscillating between 27 and 33 days, but the longer-term tendency suggests an elongation in the time taken to collect receivables. This could signal a shift towards more extended credit terms or slower customer payments in recent years.

Operating Cycle

The operating cycle, which combines inventory processing and receivable collection periods, generally mirrors the patterns observed in these individual components. The cycle maintains a range roughly between 38 and 45 days through the quarters, with noticeable peaks around mid-2022 and again during 2024. Despite periodic dips to 38 or 39 days, the trend leans towards a gradual increase in the operating cycle length, suggesting a slight decline in overall operational speed in converting inventory to cash.

In summary, the operational metrics show sustained inventory processing efficiency but a mild extension in receivables collection time. This combination leads to a modest lengthening of the operating cycle, which could have implications for working capital management and liquidity if the trend continues.