Verizon Communications Inc. (NYSE:VZ)

Inventory Turnover

The inventory turnover ratio exhibits fluctuations over the measured periods. It started at a high of 28.51 and peaked at 40.24 in mid-2020, followed by a decline to 15.61 in mid-2022. Subsequent quarters show a recovery trend, with the ratio rising again to around 29.87 in late 2023, before stabilizing around the mid to high 20s by mid-2025. This suggests variations in the efficiency of inventory management, with noticeable improvements in turnover rates after mid-2022.

Receivables Turnover

The receivables turnover ratio shows moderate stability with slight variation across the periods. Starting at 5.36, it moderately increased until early 2021, peaking at 6.25 in late 2020, then gradually decreasing to values just above 5 by mid-2025. The relatively stable ratios imply a consistent pace of collections with minor fluctuations over time.

Working Capital Turnover

The working capital turnover ratio presents an anomalous spike to 141.27 in mid-2020, contrasting sharply with a value of 8.59 at the start of the recorded data. However, there are no other data points following this spike, preventing trend analysis. The abnormal peak may indicate an unusual operational event or reporting anomaly during that quarter.

Average Inventory Processing Period

The average inventory processing period shows an initial decrease from 13 days to 9 days in mid-2020 and remains low through late 2020. It then increases significantly to 20-23 days during most of 2021 and 2022, reflecting slower inventory turnover. From late 2022 onwards, the period fluctuates around 12 to 17 days, with a slight shortening trend towards mid-2025, indicating improved inventory handling efficiency during the later quarters.

Average Receivable Collection Period

This metric reveals a gradual increase in the days required for receivable collection, rising from 68 days in early 2020 to a peak of 71 days in late 2023 and maintaining this level through mid-2025. The increasing trend suggests a lengthening of the credit collection cycle, which could impact cash flow if sustained.

Operating Cycle

The operating cycle, which combines inventory processing and receivables collection periods, initially decreased from 81 days to 67 days between early and late 2020, indicating improved operational efficiency. However, starting from early 2021, it begins to extend again, reaching up to 88 days in 2022 and maintaining values mostly above 80 days thereafter. This increase signifies a slower overall conversion of inventory and receivables into cash over time.

The analysis of the quarterly financial data reveals several observable trends in the cost of services and wireless equipment, inventories, and inventory turnover over the periods under review.

Cost of services and wireless equipment

This item exhibits a generally fluctuating pattern over the observed quarters. Starting at 12,296 million US dollars in March 2020, the cost sees some decreases and increases within subsequent quarters, notably rising to a peak of 15,762 million US dollars in December 2022. The cost then declines in early 2023 but surges again towards the end of 2023 and early 2024, with values oscillating around the 13,000 to 15,000 million US dollar range. By mid-2025, the cost stands at approximately 13,885 million US dollars, indicating variability but no clear long-term upward or downward trend.

Inventories

Inventories start at 1,633 million US dollars in March 2020 and show considerable volatility throughout the periods. After declining to 1,289 million US dollars in June 2020, inventories increase substantially, reaching a high of 3,659 million US dollars in March 2022. Subsequently, inventories demonstrate a downward trajectory with fluctuations, declining to around 2,137 million US dollars by June 2025. This pattern suggests periods of significant inventory buildup followed by reduction phases, reflecting possible operational adjustments or demand shifts.

Inventory turnover

The inventory turnover ratio displays variations aligned inversely with the inventory levels. Early values are missing for initial periods but begin reporting at 28.51 in March 2021, peaking at 40.24 in June 2021. This high turnover indicates efficient inventory management during that time. However, the ratio declines significantly by December 2021 to 18.43 and remains relatively lower through 2022, suggesting slower movement of inventory. In 2023 and 2024, turnover improves with values mostly ranging between 24 and 29, indicating enhanced efficiency in inventory utilization. By mid-2025, the ratio stabilizes around 24 to 26, reflecting a modest but steady inventory management performance.

Overall, the data reflect fluctuating cost structures and inventory levels, with inventory turnover ratios suggesting periods of both efficient and less efficient inventory management. These patterns may be indicative of seasonal demand effects, supply chain dynamics, or strategic operational decisions affecting cost and inventory management.

The operating revenues exhibit a pattern of fluctuation over the periods analyzed. Starting from a value of 31,610 million USD in March 2020, revenues slightly decreased mid-2020 but then increased to peak at 35,681 million USD by December 2024. The values generally fluctuate within a range around the low 30,000s to mid-35,000s million USD, with a visible upward trajectory towards the end of the examined timeline.

The net accounts receivable figures show a somewhat cyclical pattern with periodic rises and falls. Initial values around 23,797 million USD in March 2020 dipped to about 21,257 million USD in June 2021 before rising again to 26,275 million USD by June 2025. This trend indicates variation in the amount of receivables outstanding, with a general upward movement in the later periods, reflecting possibly increased sales or slower collections.

Receivables turnover ratios, available from March 2021 onwards, reflect a decline over time. Beginning at 5.36, the ratio rises to approximately 6.25 by September 2021, indicating improved collections relative to receivables at that point. However, from that peak, it gradually declines to around 5.21 by June 2025. This diminishing turnover ratio suggests a slower conversion of receivables into cash over the recent periods, potentially reflecting longer collection periods or changes in credit terms.

Summary of Trends

Operating Revenues

Overall fluctuating but with an upward trend across the quarterly periods, peaking near the end of the data range.

Accounts Receivable, Net

Exhibited periodic changes but with an upward trend in later periods, indicating increased outstanding receivables.

Receivables Turnover Ratio

Showing an initial rise followed by a steady decline, implying slower collection of receivables over time.

Working Capital

The working capital exhibits significant volatility over the reported periods, with values predominantly negative throughout most quarters. In early 2020, the working capital was negative (-352 million USD) and further declined to -1553 million USD by mid-2020. A sharp improvement occurred in the third and fourth quarters of 2020, reaching a positive peak at 2387 million and dramatically rising to 14,934 million USD. However, from 2021 onward, the values reverted to negative territory, fluctuating between approximately -4452 million and -17,558 million USD. The lowest levels seem to occur around late 2024 and early 2025, where values dipped beyond -24,000 million USD. Although there are some fluctuations, the general trend in recent years indicates sustained negative working capital, reflecting potential liquidity pressures or increased short-term liabilities relative to current assets.

Operating Revenues

Operating revenues have shown a relatively stable and moderately increasing trend over the analyzed quarters. Beginning at 31,610 million USD in Q1 2020, revenues fluctuated within a narrow range around 30,000 to 35,000 million USD in 2020 and 2021. The highest recorded revenues during this interval were approximately 35,130 million USD in Q4 2021. In the subsequent periods, revenues maintained consistency with some minor variation, generally staying between roughly 32,000 and 35,600 million USD. Periodic quarter-to-quarter dips and recoveries are evident but do not indicate any prolonged declining trend. Overall, operating revenues demonstrate resilience and relative stability over the five-year timeframe.

Working Capital Turnover

Working capital turnover ratio data is largely absent, with only two values reported for the last two quarters of 2020: 8.59 and 141.27. This sparse data limits the ability to analyze turnover trends or efficiency of working capital utilization. The significant jump from 8.59 to 141.27 may indicate irregularities or exceptional operational circumstances during those periods; however, due to the lack of further data points, no definitive trend or conclusion can be drawn regarding working capital turnover.

Summary of Trends

Overall, operating revenues have been relatively stable with moderate increases over the period, suggesting consistent sales or service performance. In contrast, the working capital has displayed pronounced volatility and largely negative values post-2020, which could highlight challenges in managing short-term assets and liabilities or reflect strategic financing activities. The lack of comprehensive working capital turnover data prevents deeper insights into operational efficiency linked to working capital. These divergent patterns imply stable revenue generation but potential financial liquidity or operational management issues related to working capital.

Inventory Turnover Ratio

The inventory turnover ratio data begins from March 31, 2020, with initial missing values until the March 31, 2020, quarter. From that point forward, the ratio shows considerable variability over the observed periods. It reached a peak of 40.24 around June 30, 2020, followed by a general declining trend toward a low of approximately 15.61–15.71 between June and September 2022. Subsequently, the ratio increases again, reaching values close to high twenties in several quarters around 2023 and 2024. This pattern indicates fluctuations in how often inventory is sold and replaced, with periods of faster turnover interspersed with slower turnover phases.

Average Inventory Processing Period (Days)

The average inventory processing period, which represents the number of days inventory remains before sale, exhibits an inverse pattern relative to the inventory turnover ratio. Starting at around 13 days in early quarters, it decreased to a low of 9 days between June and September 2020. From there, it increased substantially to about 23 days by mid-2022, signifying slower inventory movement. After this peak, the processing period tends to shorten again, fluctuating around 12 to 15 days through the 2023 and 2024 periods, reflecting a modest improvement in inventory efficiency compared to the mid-2022 peak.

Trend Analysis and Insights

Overall, the data indicates an oscillating inventory management cycle with periods marked by rapid inventory movement followed by slower periods. The inverse relationship between the inventory turnover ratio and the average inventory processing period conforms to typical inventory dynamics. Notably, after reaching slower turnover intervals around mid-2022, there is evidence of operational adjustments or market conditions improving inventory velocity toward the later observed quarters. This could suggest management's active response to inventory challenges or changing demand conditions. The variability over the years underscores the importance of continuous monitoring and adjustment in inventory practices to optimize capital use and reduce holding costs.

The receivables turnover ratio exhibits a fluctuating pattern from March 31, 2021, to June 30, 2025. Initially, the ratio increases from 5.36 to a peak of 6.25 by September 30, 2021, indicating improved efficiency in collecting receivables during this period. Following this peak, there is a gradual decline, with values mostly oscillating between approximately 5.16 and 5.96 through the subsequent quarters. By June 30, 2025, the ratio settles near 5.21, suggesting a modest decrease relative to the earlier peak but maintaining a steadier turnover compared to early 2021.

The average receivable collection period inversely correlates with the turnover ratio and demonstrates corresponding trends over the same timeframe. Starting at 68 days as of March 31, 2021, the number of days decreases to 58 by September 30, 2021, highlighting more rapid collection cycles aligned with the turnover ratio's peak. Afterward, the collection period gradually lengthens, rising to 71 days by late 2024 and slightly decreasing to 70 days through mid-2025. This extension in days outstanding suggests a slower collection process over the later periods compared to the earlier part of the dataset.

Overall, the data indicate an initial improvement in receivables management and efficiency through late 2021, followed by a moderate decline or stabilization at a slightly lower performance level. This could imply changes in credit policies, customer payment behaviors, or operational adjustments affecting the timing and efficiency of accounts receivable collections.

Receivables Turnover Ratio

Peaked at 6.25 in September 2021, then declined and stabilized around 5.2–5.9 through mid-2025.

Average Receivable Collection Period

Decreased to 58 days by September 2021, then steadily increased to approximately 70–71 days by 2024–2025.

Trend Insight

Initial efficiency improvements in receivables collection reverted to longer collection periods and lower turnover, indicating a potential shift in collection effectiveness or customer payment timing over the analyzed period.

Average Inventory Processing Period

The average inventory processing period demonstrates some variability with an initial low of 9 days observed in mid-2020, followed by a peak reaching up to 23 days in mid to late 2022. Subsequently, the period shows a decline toward the end of 2023 and fluctuates moderately between 12 and 17 days throughout 2024 and into mid-2025. This pattern suggests intermittent changes in inventory turnover efficiency, indicating occasional slower inventory movement, particularly in 2022, before partial improvement in the following periods.

Average Receivable Collection Period

The average receivable collection period remains relatively stable, oscillating in a narrow range predominantly between 58 and 71 days across the measured quarters. The period peaked around 70 to 71 days from late 2023 into mid-2025, signaling a slight increase in the time taken to collect receivables. Earlier periods in 2020-2021 recorded slightly lower values, generally in the high 50s to low 60s, indicating marginally quicker collection during that timeframe.

Operating Cycle

The operating cycle shows a trend consistent with the combined effects of inventory processing and receivable collection periods. Beginning around 67 to 72 days in mid-2020, the operating cycle extends to its maximum in the range of 85 to 88 days during 2022 and again in parts of 2024. Following this, a small decrease is observed toward the end of 2024 and into mid-2025, stabilizing around 84 to 86 days. The lengthening of the operating cycle during certain intervals suggests increased working capital requirements and a longer time frame to convert input resources into cash flow.