Activity ratios measure how efficiently a company performs day-to-day tasks, such us the collection of receivables and management of inventory.

Short-term Activity Ratios (Summary)
Inventory Turnover
Receivables Turnover
Payables Turnover
Working Capital Turnover
Average Inventory Processing Period
Average Receivable Collection Period
Operating Cycle
Average Payables Payment Period
Cash Conversion Cycle

Waste Management Inc., short-term (operating) activity ratios (quarterly data)

	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019	Dec 31, 2018	Sep 30, 2018	Jun 30, 2018	Mar 31, 2018
Turnover Ratios
Inventory turnover	82.30	80.73	80.02	76.82	75.33	78.25	78.51	82.13	89.58	87.72	91.28	89.17	90.68	88.67	90.62	92.23
Receivables turnover	7.87	7.46	7.52	7.70	7.26	7.78	8.00	8.39	7.93	7.69	7.59	8.25	7.72	7.58	7.95	8.56
Payables turnover	8.08	7.27	7.24	7.86	8.33	10.36	10.25	9.24	8.92	10.59	10.45	10.41	8.92	9.72	10.93	11.43
Working capital turnover	—	—	—	371.45	—	27.22	—	6.04	5.04	6.01	7.69	—	—	—	—	—
Average No. Days
Average inventory processing period	4	5	5	5	5	5	5	4	4	4	4	4	4	4	4	4
Add: Average receivable collection period	46	49	49	47	50	47	46	44	46	47	48	44	47	48	46	43
Operating cycle	50	54	54	52	55	52	51	48	50	51	52	48	51	52	50	47
Less: Average payables payment period	45	50	50	46	44	35	36	39	41	34	35	35	41	38	33	32
Cash conversion cycle	5	4	4	6	11	17	15	9	9	17	17	13	10	14	17	15

Inventory Turnover: The inventory turnover ratio shows a gradually declining trend from early 2018 through 2020, decreasing from over 90 to the mid-70s range. There is a slight recovery observed in 2021, where the ratio rises back to above 80 by the end of the year. This indicates that inventory was turning over less frequently in 2020, potentially pointing to slower sales or increased inventory levels, followed by modest improvement in 2021.
Receivables Turnover: The receivables turnover experienced minor fluctuations without a strong directional trend. It generally hovered between approximately 7.5 and 8.5 over the period. Although there was a mild dip in mid-2020, turnover ratios largely remained stable, suggesting consistent effectiveness in collecting accounts receivable throughout the timeframe.
Payables Turnover: The payables turnover ratio exhibited notable variability and downward pressure over the analyzed quarters. It started above 11 in early 2018, decreased to below 9 by the end of that year, briefly rebounded in 2019, but progressively declined again in 2020 and 2021, dropping towards the 7 level by the end of 2021. This suggests the company extended its payment terms or delayed payments to suppliers over time.
Working Capital Turnover: Data for working capital turnover is sparse and irregular, with some extreme values observed, particularly a very high figure of 371.45 in mid-2020. Such spikes may reflect transient operational or accounting anomalies. Overall, with limited data points, definitive trend conclusions are not feasible, but variability indicates changes in how efficiently working capital is used.
Average Inventory Processing Period: The average inventory processing period remained steady at 4 days through 2018 and 2019, increasing slightly to 5 days during 2020 and 2021 before returning to 4 days at the end of 2021. This slight lengthening of inventory holding times corresponds with the observed dip in inventory turnover during 2020.
Average Receivable Collection Period: The receivable collection period mostly fluctuated within a narrow band of 43 to 50 days. Periodic increases align with reduced receivables turnover, particularly during 2020 and parts of 2021, signaling somewhat slower collections in those quarters.
Operating Cycle: The operating cycle, combining inventory and receivables periods, showed a moderate upward trend from around 47 days in early 2018 to a peak of 55 days in late 2020, before reducing slightly to 50 days by the end of 2021. This extending cycle indicates a lengthening time to convert inventory and receivables into cash during the pandemic period, with some normalization thereafter.
Average Payables Payment Period: The average payables payment period increased steadily from approximately 32 days in early 2018 to a peak of 50 days in late 2021. This lengthening suggests the company has been increasingly leveraging supplier credit, delaying payments as a possible cash management strategy.
Cash Conversion Cycle: The cash conversion cycle exhibited considerable variation but generally decreased over the period, starting around 15-17 days in early years and declining to as low as 4-6 days in 2021. This decline indicates more efficient management of the cash conversion process, minimizing the time between cash outflow and inflow despite the complexities introduced during the pandemic.

Turnover Ratios

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Average No. Days

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Waste Management Inc., inventory turnover calculation (quarterly data)

	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019	Dec 31, 2018	Sep 30, 2018	Jun 30, 2018	Mar 31, 2018
Selected Financial Data (US$ in millions)
Operating costs	2,955)	2,906)	2,736)	2,514)	2,500)	2,332)	2,180)	2,329)	2,314)	2,441)	2,443)	2,298)	2,379)	2,373)	2,313)	2,184)
Parts and supplies	135)	132)	126)	124)	124)	117)	118)	116)	106)	109)	104)	105)	102)	103)	100)	98)
Short-term Activity Ratio
Inventory turnover¹	82.30	80.73	80.02	76.82	75.33	78.25	78.51	82.13	89.58	87.72	91.28	89.17	90.68	88.67	90.62	92.23

¹ Q4 2021 Calculation
Inventory turnover = (Operating costs_{Q4 2021} + Operating costs_{Q3 2021} + Operating costs_{Q2 2021} + Operating costs_{Q1 2021}) ÷ Parts and supplies
= (2,955 + 2,906 + 2,736 + 2,514) ÷ 135 = 82.30

Operating Costs: The operating costs demonstrate an overall upward trend across the analyzed periods from March 2018 through December 2021. Beginning at approximately $2.18 billion in the first quarter of 2018, the costs gradually increased with some fluctuations, reaching around $2.96 billion by the final quarter of 2021. Notable rises were observed particularly in the later part of 2020 and throughout 2021, reflecting a significant escalation in expenses compared to earlier years.
Parts and Supplies: Expenditure on parts and supplies exhibited a steady increase over the period. Starting near $98 million in the first quarter of 2018, the amount gradually ascended to approximately $135 million by the last quarter of 2021. This gradual upward movement indicates progressively higher spending on parts and supplies, possibly correlating with increased operational activities or inflationary pressures on procurement costs.
Inventory Turnover Ratio: The inventory turnover ratio showed a declining trend from early 2018 through 2020, moving from around 92.23 to a low near 75.33 by December 2020. This decline suggests slower turnover of inventory, implying either growing inventory levels or decreased sales velocity during this period. However, starting in 2021, the ratio reversed direction and increased moderately, reaching about 82.3 by the end of 2021. The recovery indicates an improvement in inventory management or sales performance relative to inventory levels in the more recent quarters.

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Waste Management Inc., receivables turnover calculation (quarterly data)

	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019	Dec 31, 2018	Sep 30, 2018	Jun 30, 2018	Mar 31, 2018
Selected Financial Data (US$ in millions)
Operating revenues	4,678)	4,665)	4,476)	4,112)	4,067)	3,861)	3,561)	3,729)	3,846)	3,967)	3,946)	3,696)	3,842)	3,822)	3,739)	3,511)
Accounts receivable, net of allowance for doubtful accounts	2,278)	2,323)	2,195)	2,025)	2,097)	1,927)	1,888)	1,846)	1,949)	2,010)	2,017)	1,830)	1,931)	1,943)	1,838)	1,700)
Short-term Activity Ratio
Receivables turnover¹	7.87	7.46	7.52	7.70	7.26	7.78	8.00	8.39	7.93	7.69	7.59	8.25	7.72	7.58	7.95	8.56

¹ Q4 2021 Calculation
Receivables turnover = (Operating revenues_{Q4 2021} + Operating revenues_{Q3 2021} + Operating revenues_{Q2 2021} + Operating revenues_{Q1 2021}) ÷ Accounts receivable, net of allowance for doubtful accounts
= (4,678 + 4,665 + 4,476 + 4,112) ÷ 2,278 = 7.87

The operating revenues exhibit a generally increasing trend over the observed periods, with some fluctuations. From the start of the series, revenues rose from 3511 million USD in March 2018 to a peak of 4678 million USD by December 2021. Despite a dip during mid-2020, likely attributable to external market conditions, the revenues recovered strongly in subsequent quarters, indicating resilience and growth potential over the longer term.

Accounts receivable, net of allowance for doubtful accounts, similarly show an overall upward trajectory, increasing from 1700 million USD at the beginning to a high of 2323 million USD in September 2021 before slightly retracting to 2278 million USD by the end of 2021. This suggests an expanding credit extension or sales growth levels contributing to higher receivables, which align with the revenue increases but also necessitate close monitoring to maintain healthy cash flow.

The receivables turnover ratio exhibits some variability but tends to hover within the range of approximately 7.2 to 8.6 throughout the periods. It shows a declining trend from a high of 8.56 in the first quarter of 2018 down to around 7.26 by the end of 2020, reflecting a slower collection pace on receivables during that timeframe. However, the ratio appears to stabilize and shows a slight improvement subsequently, reaching 7.87 by the last quarter of 2021. While not drastic, these fluctuations suggest periodic changes in the efficiency of receivables collection and possibly credit policy adjustments or customer payment behavior impacts.

Operating Revenues: Show consistent growth with minor downturn in mid-2020, followed by a strong recovery and sustained increase through 2021.
Accounts Receivable, Net: Increase over time, paralleling revenue growth, indicating expanding credit sales and necessitating monitoring of receivables management.
Receivables Turnover: Trend indicates some weakening in collection efficiency through 2020 but stabilization and modest improvement towards the end of the period.

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Waste Management Inc., payables turnover calculation (quarterly data)

	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019	Dec 31, 2018	Sep 30, 2018	Jun 30, 2018	Mar 31, 2018
Selected Financial Data (US$ in millions)
Operating costs	2,955)	2,906)	2,736)	2,514)	2,500)	2,332)	2,180)	2,329)	2,314)	2,441)	2,443)	2,298)	2,379)	2,373)	2,313)	2,184)
Accounts payable	1,375)	1,466)	1,393)	1,212)	1,121)	884)	904)	1,031)	1,065)	903)	908)	899)	1,037)	940)	829)	791)
Short-term Activity Ratio
Payables turnover¹	8.08	7.27	7.24	7.86	8.33	10.36	10.25	9.24	8.92	10.59	10.45	10.41	8.92	9.72	10.93	11.43

¹ Q4 2021 Calculation
Payables turnover = (Operating costs_{Q4 2021} + Operating costs_{Q3 2021} + Operating costs_{Q2 2021} + Operating costs_{Q1 2021}) ÷ Accounts payable
= (2,955 + 2,906 + 2,736 + 2,514) ÷ 1,375 = 8.08

Operating Costs: The operating costs exhibit a general upward trend over the observed quarterly periods. Starting at approximately 2,184 million US dollars in the first quarter of 2018, costs increase with minor fluctuations, reaching a peak of around 2,955 million US dollars by the last quarter of 2021. Notably, there is a slight dip in mid-2020, followed by a sharper increase continuing into 2021. This pattern suggests rising operational expenses, possibly linked to expansion, inflationary pressures, or increased input costs during the latter years.
Accounts Payable: Accounts payable values also show an overall increasing pattern across the time frame. Beginning at 791 million US dollars in early 2018, they grow steadily, with some short-term volatility, to a peak value of approximately 1,466 million US dollars by the third quarter of 2021 before a slight decline by year-end 2021. The increases in accounts payable indicate higher credit purchases or deferred cash outflows, which may be a reflection of increased business activity or negotiations of payment terms with suppliers.
Payables Turnover Ratio: The payables turnover ratio displays a declining trend during the period under review. Initially, the ratio is relatively high at 11.43 in early 2018, indicating quicker payment cycles to suppliers. Over time, the ratio decreases to a low of around 7.24 in the third quarter of 2021, with a minor uptick to 8.08 by the end of 2021. This decline suggests that the company is taking longer to settle its payables, which could be a deliberate cash management strategy or a result of liquidity constraints. The notable drop in turnover ratio coincides with increases in accounts payable balances, reinforcing the observation of extended payment terms.

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Waste Management Inc., working capital turnover calculation (quarterly data)

	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019	Dec 31, 2018	Sep 30, 2018	Jun 30, 2018	Mar 31, 2018
Selected Financial Data (US$ in millions)
Current assets	3,069)	3,184)	3,226)	3,327)	3,540)	3,357)	5,106)	5,635)	6,209)	5,560)	4,836)	2,488)	2,645)	2,675)	2,471)	2,491)
Less: Current liabilities	4,082)	4,102)	3,683)	3,285)	3,553)	2,806)	5,772)	3,070)	3,144)	2,989)	2,846)	3,612)	3,108)	3,070)	3,305)	3,373)
Working capital	(1,013)	(918)	(457)	42)	(13)	551)	(666)	2,565)	3,065)	2,571)	1,990)	(1,124)	(463)	(395)	(834)	(882)

Operating revenues	4,678)	4,665)	4,476)	4,112)	4,067)	3,861)	3,561)	3,729)	3,846)	3,967)	3,946)	3,696)	3,842)	3,822)	3,739)	3,511)
Short-term Activity Ratio
Working capital turnover¹	—	—	—	371.45	—	27.22	—	6.04	5.04	6.01	7.69	—	—	—	—	—

¹ Q4 2021 Calculation
Working capital turnover = (Operating revenues_{Q4 2021} + Operating revenues_{Q3 2021} + Operating revenues_{Q2 2021} + Operating revenues_{Q1 2021}) ÷ Working capital
= (4,678 + 4,665 + 4,476 + 4,112) ÷ -1,013 = —

Working Capital: Working capital displays significant volatility across the observed periods. Initially, there is a negative working capital trend from March 2018 through March 2019, with a notable deepening from -882 million to -1124 million dollars. Subsequently, a positive reversal occurs mid-2019, peaking at 3065 million dollars by December 2019. However, entering 2020, the values drop sharply, turning negative again at -666 million by June 2020, fluctuating around zero for the remainder of the year, and reverting to negative values in 2021, ending at -1013 million dollars in December 2021. Overall, working capital demonstrates instability with alternating periods of surplus and deficit.
Operating Revenues: Operating revenues show a consistent upward trend over the entire period under review. Starting at 3511 million dollars in March 2018, revenues grow steadily to reach 4678 million dollars by December 2021. Although there is a slight dip during the early 2020 quarters coinciding with global economic disruptions, the recovery is swift and strong, with notable growth particularly evident in 2021. This steady increase suggests robust business expansion and resilience in revenue generation.
Working Capital Turnover: Working capital turnover ratios are sporadically reported and exhibit high variability. The data available from mid-2019 shows values decreasing from 7.69 in September 2019 to 5.04 in March 2020, before increasing again to 6.04 in June 2020. A striking outlier appears at 27.22, followed by an exceptional 371.45 in an unspecified quarter, indicating abnormal fluctuations or data irregularities possibly related to significant changes in working capital or revenues. The limited and inconsistent data points restrict comprehensive analysis but generally suggest variable efficiency in utilizing working capital to generate sales.

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Waste Management Inc., average inventory processing period calculation (quarterly data)

	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019	Dec 31, 2018	Sep 30, 2018	Jun 30, 2018	Mar 31, 2018
Selected Financial Data
Inventory turnover	82.30	80.73	80.02	76.82	75.33	78.25	78.51	82.13	89.58	87.72	91.28	89.17	90.68	88.67	90.62	92.23
Short-term Activity Ratio (no. days)
Average inventory processing period¹	4	5	5	5	5	5	5	4	4	4	4	4	4	4	4	4

¹ Q4 2021 Calculation
Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ 82.30 = 4

Inventory Turnover Ratio: The inventory turnover ratio demonstrates a generally declining trend from the first quarter of 2018 through the end of 2020. Initially, the ratio fluctuates slightly around the low 90s but begins a more pronounced downward trajectory starting in early 2020, reaching a low point of 75.33 in December 2020. This decline indicates a reduction in how frequently inventory is sold and replaced over those periods.; From the first quarter of 2021 onwards, the turnover ratio shows a moderate recovery, increasing steadily to 82.3 by December 2021. Despite this improvement, the ratio remains below the levels observed in prior years, suggesting that inventory turnover has not returned fully to its earlier higher frequency.
Average Inventory Processing Period: The average inventory processing period remains consistently stable at approximately 4 days for the majority of the periods under review, including all quarters in 2018 and 2019 and the initial quarters of 2020. Starting from the second quarter of 2020, this period increases to 5 days and remains at this elevated level through the majority of 2021.; Only at the end of 2021 does the processing period return to 4 days, reflecting a slight improvement in the speed of inventory processing. The temporary extension in inventory processing time during 2020 and most of 2021 may be associated with operational adjustments or external factors impacting inventory handling efficiency.
Combined Insights: The inverse relationship observed between inventory turnover ratio and processing period during 2020 and 2021 highlights operational challenges that may have affected inventory management efficiencies. The lower turnover and higher processing period suggest that inventory was held longer, potentially implying slower sales or delays in the supply chain during this timeframe.; The subsequent partial recovery in turnover ratio coupled with the eventual reduction in processing period at the close of 2021 suggests improvements in inventory management and operational processes. However, the inventory turnover has yet to fully return to the higher levels seen in the earlier part of the dataset, indicating potential ongoing constraints or a strategic shift in inventory handling.

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Waste Management Inc., average receivable collection period calculation (quarterly data)

	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019	Dec 31, 2018	Sep 30, 2018	Jun 30, 2018	Mar 31, 2018
Selected Financial Data
Receivables turnover	7.87	7.46	7.52	7.70	7.26	7.78	8.00	8.39	7.93	7.69	7.59	8.25	7.72	7.58	7.95	8.56
Short-term Activity Ratio (no. days)
Average receivable collection period¹	46	49	49	47	50	47	46	44	46	47	48	44	47	48	46	43

¹ Q4 2021 Calculation
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ 7.87 = 46

Receivables Turnover: The receivables turnover ratio displays a generally declining trend from March 2018 through December 2021. Starting at 8.56 in the first quarter of 2018, it decreased gradually with some fluctuations, reaching its lowest point of 7.26 in the fourth quarter of 2020 before slightly recovering to 7.87 by the end of 2021. This indicates a modest reduction in the efficiency with which receivables are collected over the period.
Average Receivable Collection Period: The average number of days to collect receivables shows an inverse pattern relative to the receivables turnover ratio. The collection period starts at 43 days in March 2018 and increases to a peak of 50 days in the last quarter of 2020. After this peak, the period decreases slightly to 46 days by December 2021. This trend suggests a lengthening in the time customers take to pay on average, indicating potential challenges in accounts receivable management.
Overall Analysis: The observed trends imply a gradual decline in collection efficiency over the reported quarters. The increase in collection days combined with the decline in turnover ratio points towards possible deteriorations in credit control or changes in customer payment behaviors. Despite some recovery in the final quarters, the overall pattern signifies heightened risk regarding the timely collection of receivables during the timeframe analyzed.

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Waste Management Inc., operating cycle calculation (quarterly data)

No. days

	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019	Dec 31, 2018	Sep 30, 2018	Jun 30, 2018	Mar 31, 2018
Selected Financial Data
Average inventory processing period	4	5	5	5	5	5	5	4	4	4	4	4	4	4	4	4
Average receivable collection period	46	49	49	47	50	47	46	44	46	47	48	44	47	48	46	43
Short-term Activity Ratio
Operating cycle¹	50	54	54	52	55	52	51	48	50	51	52	48	51	52	50	47

¹ Q4 2021 Calculation
Operating cycle = Average inventory processing period + Average receivable collection period
= 4 + 46 = 50

Average Inventory Processing Period: The average inventory processing period maintained a consistent duration of 4 days from March 2018 through September 2019. Starting from June 2020, this period increased to 5 days and remained steady at that level until December 2021, with a slight reversion to 4 days in the final quarter of 2021. This suggests a modest lengthening in inventory processing time during most of 2020 and 2021 before improving again at the end of that period.
Average Receivable Collection Period: The average receivable collection period exhibited variability throughout the observed timeline. It initially rose from 43 days in March 2018 to a peak of 48 days by September 2018. Following some fluctuations, it generally hovered around the mid to upper 40-day range, reaching another high of 50 days in December 2020. During 2021, collection days remained in the high 40s, slightly declining to 46 days by December 2021. Overall, the trend indicates some increases in receivable days with partial improvement towards the end of the data period.
Operating Cycle: The operating cycle, calculated as the sum of inventory processing and receivable collection periods, reflected changes aligned with its components. It started at 47 days in March 2018, gradually rising to 52 days by September 2018. The cycle then showed minor fluctuations but stayed near 50 days for much of 2019 and early 2020. It increased to a peak of 55 days in December 2020, influenced by the simultaneous lengthening in both inventory and receivables periods. In 2021, the operating cycle stabilized in the low-to-mid 50-day range before decreasing back to 50 days at the end of the period. This pattern suggests that working capital tied up in operations extended during 2020 and most of 2021, then slightly contracted by the end of 2021.

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Waste Management Inc., average payables payment period calculation (quarterly data)

	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019	Dec 31, 2018	Sep 30, 2018	Jun 30, 2018	Mar 31, 2018
Selected Financial Data
Payables turnover	8.08	7.27	7.24	7.86	8.33	10.36	10.25	9.24	8.92	10.59	10.45	10.41	8.92	9.72	10.93	11.43
Short-term Activity Ratio (no. days)
Average payables payment period¹	45	50	50	46	44	35	36	39	41	34	35	35	41	38	33	32

¹ Q4 2021 Calculation
Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ 8.08 = 45

The payables turnover ratio demonstrates a fluctuating trend over the observed periods, starting at a high point of 11.43 and generally declining with some intermittent recoveries. Initially, there is a noticeable decrease from 11.43 to 8.92 by the end of 2018, followed by a temporary rise to just above 10 in mid-2019, and then a gradual descent towards values below 8 by late 2021. This indicates a reduction in the frequency with which payables are settled over time.

Correspondingly, the average payables payment period exhibits an increasing trend, moving from 32 days to approximately 50 days by the end of the period under review. This reflects an elongation in the duration taken to settle payables, particularly becoming more pronounced from 2020 onwards. The period extended from the low 30s in early 2018 to the mid-to-high 40s and 50s between 2020 and 2021, suggesting a tendency to delay payments or extended credit terms.

Payables turnover ratio: Shows a general decline from above 11 to around 7-8 in late 2021, indicating a slower rate of payment turnover over time.
Average payables payment period: Inversely correlates with the payables turnover, increasing from just over 30 days to near 50 days, signifying longer payment intervals.
Overall trend: The inverse movement between the two ratios points to a strategic or operational shift towards extending payment periods, possibly reflecting cash flow management practices or changes in supplier terms.

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Waste Management Inc., cash conversion cycle calculation (quarterly data)

No. days

	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019	Dec 31, 2018	Sep 30, 2018	Jun 30, 2018	Mar 31, 2018
Selected Financial Data
Average inventory processing period	4	5	5	5	5	5	5	4	4	4	4	4	4	4	4	4
Average receivable collection period	46	49	49	47	50	47	46	44	46	47	48	44	47	48	46	43
Average payables payment period	45	50	50	46	44	35	36	39	41	34	35	35	41	38	33	32
Short-term Activity Ratio
Cash conversion cycle¹	5	4	4	6	11	17	15	9	9	17	17	13	10	14	17	15

¹ Q4 2021 Calculation
Cash conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= 4 + 46 – 45 = 5

Average inventory processing period: The inventory processing period remained stable at 4 days from early 2018 through early 2020. A slight increase to 5 days occurred during mid to late 2020 and persisted into 2021, before returning to 4 days by the end of 2021. This indicates a brief lengthening in the time inventory remained in process, followed by a return to prior efficiency levels.
Average receivable collection period: The receivable collection period exhibited moderate fluctuations throughout the examined quarters. Starting near 43 days in early 2018, it increased to peaks around 48 days by late 2018, then showed variability around the mid-40s mark through 2019 and 2020. A slight upward trend is observed in 2020 and 2021, reaching values close to 50 days at several points, before a modest reduction back to 46 days by the fourth quarter of 2021. This volatility suggests occasional challenges in receivable collection efficiency, with a tendency towards longer collection times in recent periods.
Average payables payment period: Payables payment periods generally increased over the timespan. Beginning around 32 days in early 2018, the period extended gradually with fluctuations, peaking at approximately 50 days in mid to late 2021, before slightly declining to 45 days at the end of 2021. This extension implies that the company took longer to settle payables over time, potentially improving cash management but possibly affecting supplier relationships.
Cash conversion cycle: The cash conversion cycle displayed notable variability while trending downward overall. Starting at 15 days in early 2018, it decreased to a low of 6 days by early 2021, reflecting improved operational efficiency in converting resources into cash. Minor increases to 15 and 17 days occurred intermittently, notably in mid-2020, but the cycle shortened again toward the end of the period, finishing at 5 days in late 2021. This pattern suggests enhanced working capital management, reducing the time cash is tied up in the operational cycle.

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Waste Management Inc. (NYSE:WM)

Analysis of Short-term (Operating) Activity Ratios
Quarterly Data

Short-term Activity Ratios (Summary)

Turnover Ratios

Average No. Days

Inventory Turnover

Receivables Turnover

Payables Turnover

Working Capital Turnover

Average Inventory Processing Period

Average Receivable Collection Period

Operating Cycle

Average Payables Payment Period

Cash Conversion Cycle

Waste Management Inc. (NYSE:WM)

Analysis of Short-term (Operating) Activity Ratios Quarterly Data

Short-term Activity Ratios (Summary)

Turnover Ratios

Average No. Days

Inventory Turnover

Receivables Turnover

Payables Turnover

Working Capital Turnover

Average Inventory Processing Period

Average Receivable Collection Period

Operating Cycle

Average Payables Payment Period

Cash Conversion Cycle

Analysis of Short-term (Operating) Activity Ratios
Quarterly Data