Verizon Communications Inc. (NYSE:VZ)

Inventory Turnover

The inventory turnover ratio demonstrated a clear downward trend from March 2021 (40.24) to March 2022 (15.61), indicating a deceleration in the rate at which inventory is sold or used. Following this decline, the ratio experienced fluctuations, with some recovery periods such as in June 2023 (29.87) and June 2024 (29.31), though it did not return to early 2021 levels. Generally, the turnover oscillated between approximately 15 and 30, suggesting variable inventory management efficiency over the observed periods.

Receivables Turnover

The receivables turnover ratio remained relatively stable over the period, fluctuating modestly between roughly 5.2 and 6.3. Starting at 5.76 in March 2021, it peaked near 6.25 in June 2021 before showing a gradual slight decrease toward the later dates, settling near 5.3 by March 2025. This indicates a consistent but somewhat declining speed in collecting receivables, implying a relatively steady credit management performance with marginal weakening towards the end.

Working Capital Turnover

Data for working capital turnover were only available for March 31, 2021, at 141.27, with no subsequent observations. Without additional data, no trend analysis or insights can be drawn regarding changes in the efficiency of using working capital within this timeframe.

Average Inventory Processing Period

The average inventory processing period showed an increase from 9 days in early 2021 up to a peak of 23 days around mid-2022, aligning with the low inventory turnover ratios observed at that time. Post-peak, the period declined back to a range between 12 and 15 days in subsequent quarters, indicating an improvement in inventory handling speed. However, some variability remained with occasional rises, such as 18 days in March 2025, reflecting fluctuating inventory processing efficiency.

Average Receivable Collection Period

The average collection period maintained relative stability around 60 to 65 days from 2021 through early 2023. After that, there was a gradual increase in the collection period, peaking at 71 days multiple times from late 2023 through 2025. This lengthening of the collection period corresponds with the slight decline in receivables turnover, suggesting slower cash conversion from receivables in the later years.

Operating Cycle

The operating cycle, calculated as the sum of inventory processing and receivable collection periods, exhibited an overall upward trend from 72 days in March 2021 to a range mostly between 80 and 88 days from 2022 onwards. The lengthening of the operating cycle correlates closely with longer inventory processing and receivable collection periods, reflecting an extended duration for converting resources into cash flow. This suggests a moderate decrease in operational efficiency over the observed period.

Cost of Services and Wireless Equipment

The cost of services and wireless equipment demonstrates a somewhat fluctuating but generally stable pattern over the periods analyzed. Initial values around 13,522 million US dollars in early 2021 gradually rose to peaks near 15,762 million US dollars at the end of 2022, signaling increased expenditure or sales volume during this phase. Following this peak, there is a decline around early 2023, with some quarterly variability thereafter. Toward the end of the series, a cyclical trend appears, with values oscillating between approximately 13,000 and 15,500 million US dollars. This pattern could indicate seasonal factors or changing market dynamics influencing cost structures.

Inventories

Inventories exhibit a marked increasing trend from early 2021 to mid-2022, rising from roughly 1,303 million US dollars to over 3,600 million US dollars, more than doubling during this interval. Subsequently, inventory levels decline noticeably toward early 2023, followed by fluctuations in the range of approximately 1,800 to 2,700 million US dollars until late 2025. This suggests an initial buildup of stock, possibly in response to anticipated demand or supply chain considerations, with later adjustments indicative of efforts to optimize inventory levels or respond to market conditions.

Inventory Turnover Ratio

The inventory turnover ratio shows a distinct downward trend from 40.24 in early 2021 to a low near 15.61 by early 2022, reflecting slower movement of inventory during this period. After this trough, the ratio increases again through 2023, reaching values around 26 to 29, before experiencing variability in subsequent periods. These fluctuations suggest changes in either sales efficiency or inventory management practices. The overall pattern indicates an initial deterioration in how quickly inventory is converted into sales, followed by a recovery and moderate stabilization, yet with some volatility implying ongoing adjustments to operational strategies.

The financial data reveals several key trends over the reported quarters. Operating revenues exhibit fluctuations without a clear linear trend, reflecting periodic declines and recoveries. Initial quarters show revenues around the low 33,000 million USD range, followed by a dip near 32,500 million USD in mid-2023 and a subsequent rise above 35,000 million USD by the end of 2024. However, revenues appear to moderate again slightly in early 2025.

Accounts receivable, net, generally show an upward trajectory across the timeline. Starting from approximately 22,500 million USD in early 2021, the figures steadily increase to exceed 26,000 million USD by mid-2025. This indicates a growing amount of outstanding payments due to the company, which aligns with the fluctuating revenue figures but suggests a gradual accumulation of receivables on the balance sheet.

The receivables turnover ratio reflects efficiency in collecting accounts receivable and exhibits a declining pattern over the period. It starts at around 5.76 times in early 2021, peaks briefly above 6 in mid-2021, and then consistently trends downward to just above 5 times towards mid-2025. This decline in turnover suggests the company is taking longer on average to collect its receivables, which may imply less effective credit and collection policies or slower customer payments over time.

Operating Revenues

Fluctuate in the 32,000 to 35,500 million USD range with no sustained growth trend. Periodic decreases especially evident during 2023, followed by some recovery in subsequent quarters.

Accounts Receivable, Net

Steadily increase over the periods, rising by approximately 15% from early 2021 to mid-2025, indicating greater outstanding customer balances.

Receivables Turnover Ratio

Declines from near 6.25 to approximately 5.2, suggestive of lengthening collection periods and potential liquidity concerns related to credit management.

Overall, while revenue levels remain relatively stable with short-term fluctuations, the continuous rise in accounts receivable coupled with a declining receivables turnover ratio suggests a potential easing of collection effectiveness. This trend warrants monitoring to ensure that the increasing receivables do not adversely impact cash flows or indicate credit risk accumulation.

The analysis of the quarterly financial data reveals several notable trends in the company's liquidity and revenue generation over the observed periods.

Working Capital

The working capital figures demonstrate a persistent negative trend beginning from the second quarter of 2021. Initially positive at $917 million in the first quarter of 2021, working capital then sharply declined into negative territory, reaching as low as approximately -$24.3 billion by the fourth quarter of 2024. Throughout 2023 and 2024, the working capital fluctuates considerably but remains deeply negative, indicating ongoing liquidity challenges or high levels of current liabilities relative to current assets. The improvement seen in the first quarter of 2025 with a less negative figure around -$15.5 billion suggests a partial but insufficient recovery.

Operating Revenues

Operating revenues show comparatively stable performance with minor fluctuations over the quarters. Quarterly revenues mostly hover between $32.5 billion and $35.7 billion. Slight declines are evident during the early part of 2023, dropping close to $32.6 billion in the second quarter, followed by moderate recovery later in the year and into 2024. Revenues demonstrate a gradual upward trend into the fourth quarter of 2024, peaking around $35.7 billion. However, revenues slightly retract in early 2025 but generally maintain a consistent level, suggesting steady demand and operational activity despite liquidity constraints.

Working Capital Turnover

Working capital turnover is only reported for the first quarter of 2021, with a very high value of 141.27. The absence of subsequent data points limits the ability to analyze trends or correlate this ratio meaningfully with other financial metrics. The initial high ratio may reflect relatively efficient use of working capital at that time, contrasting with later deteriorations in working capital.

In summary, the company faces significant working capital deficits across multiple quarters, which could indicate liquidity stress or strategic asset/liability management decisions. Despite this, operating revenues remain relatively stable and show a modest upward tendency toward the end of the observed period, pointing towards sustained core business performance. The lack of updated working capital turnover data prevents a comprehensive assessment of operational efficiency changes over time.

Inventory Turnover Ratio Trends

The inventory turnover ratio exhibits notable fluctuations throughout the observed periods. Initially, there is a decline from 40.24 at the start to a low of 15.61 in March 2022. Following this reduction, the ratio experiences a recovery phase, climbing back to peaks around the mid-to-high twenties in several quarters, such as 29.87 in June 2023 and 29.31 in June 2024. However, the ratio again dips to lower levels such as 20.67 by September 2025. This oscillating pattern suggests variability in how efficiently inventory is managed over time, with periods indicating robust turnover followed by slower inventory movement.

Average Inventory Processing Period Trends

The average inventory processing period, expressed in days, inversely correlates with the inventory turnover ratio as expected. Initially, the processing period is relatively short at 9 days but extends steadily to a peak of 23 days in mid-2022. This elongation aligns with the period of reduced turnover efficiency. Subsequently, the processing period shortens again, reaching around 12-15 days in multiple quarters, reflecting improved inventory processing speed. In the latter periods, there is a slight increase again, with values reaching up to 18 days by the end of the data series, indicating some slowing in processing relative to earlier improvements.

General Observations and Insights

The data reveals periods of both efficiency gains and declines in inventory management. The inverse relationship between turnover and processing period remains consistent, confirming typical inventory dynamics. The marked reduction in turnover and corresponding rise in processing days during early 2022 may indicate operational challenges, supply chain issues, or shifts in inventory policy. The subsequent partial recovery suggests corrective measures or seasonal influences boosting turnover and reducing processing time. Still, the variability signals ongoing challenges in sustaining optimal inventory management performance over the medium term.

Receivables Turnover

The receivables turnover ratio exhibits a general declining trend from March 2021 through December 2024, beginning at 5.76 and gradually falling to approximately 5.16 by December 2024. There is some fluctuation within this period; for example, a modest increase occurs early in 2021, peaking at 6.25 in June 2021, followed by a steady decrease. After December 2024, there is a slight recovery observed, with the ratio increasing to around 5.3 by September 2025. This pattern indicates a marginally decreasing efficiency in collecting receivables over the long term, with potential modest improvement towards the end of the period analyzed.

Average Receivable Collection Period

Corresponding to the trend in receivables turnover, the average receivable collection period generally lengthens over the examined quarters. Starting at 63 days in March 2021, the collection period fluctuates slightly but shows an upward movement, reaching a peak of 71 days in the fourth quarter of 2024. This indicates that, on average, it is taking longer for the company to collect payments from customers. Following this peak, the collection period stabilizes around 69 to 70 days through to September 2025, suggesting that the longer collection times persist but do not significantly worsen beyond that point.

Overall Insights

The inverse relationship between the receivables turnover ratio and the average collection period is consistent throughout the data. The gradual decline in receivables turnover alongside increasing collection periods suggests a potential slowdown in the efficiency of accounts receivable management. Longer collection periods may impact the company’s cash flow and working capital. The slight improvement in receivables turnover observed near the end of the timeline could reflect some corrective measures or changing market conditions but does not fully reverse the previous trend of extended collection days.

Average Inventory Processing Period

The average inventory processing period exhibited noticeable fluctuations over the observed timeframe. Starting at 9 days in the first quarter of 2021, it increased significantly to peak at 23 days in mid-2022. Subsequently, this period demonstrated a declining trend, reducing to 14 days by early 2024. However, some variability persisted, with occasional increases such as 17 days in the third quarter of 2024 and 18 days towards the end of the observation period in late 2025. Overall, the trend reflects intermittent inefficiencies or operational adjustments in inventory management.

Average Receivable Collection Period

The average receivable collection period remained relatively stable but showed a gradual upward trend. Beginning at 63 days in early 2021, there were minor fluctuations within the 58 to 65 day range through 2021 and 2022. From 2023 onward, the period consistently edged higher, reaching approximately 71 days by mid-2025. This increase suggests a lengthening in the time taken to collect receivables, which could impact cash flow and working capital efficiency.

Operating Cycle

The operating cycle mirrored the combined effect of the inventory processing and receivable collection periods. It started at 72 days in early 2021, rising to a peak of 88 days in mid-2022. Following that peak, there was a moderate decline to about 75 days in early 2023, with some oscillations observed through 2024 and 2025. Towards the end of the period, the operating cycle stabilized around the mid to high 80s, indicating that the overall time to convert inventory and receivables into cash remained extended with limited improvement.