Alphabet Inc. (NASDAQ:GOOG)

The analysis of the financial ratios over the examined periods reveals distinct trends across the key metrics of receivables turnover, payables turnover, working capital turnover, average receivable collection period, and average payables payment period.

Receivables Turnover

This ratio shows a fluctuating but overall stable trend, ranging generally between approximately 6.4 and 8.1. After an initial increase from 5.9 to above 7.0 around 2020-2021, the ratio peaks slightly above 8.0 by late 2022 before gradually declining to about 6.7-7.1 in the most recent quarters. This pattern suggests some variation in the efficiency of collecting receivables but no drastic long-term changes in turnover velocity.

Payables Turnover

There is notable volatility in payables turnover, with values oscillating between a low of around 15.2 and a high peak of nearly 33.9. From 2020 through 2022, the turnover experienced significant spikes particularly mid-2022, indicative of accelerated payment activity. However, following these spikes, the ratio decreased and settled in a mid- to high-teens range through 2024-2025. This variability might reflect changing payment policies or cash management strategies responding to operational demands or market conditions.

Working Capital Turnover

A consistent upward trajectory is evident in the working capital turnover ratio, starting from about 1.55 in early 2020 and rising steadily to above 5.1 by early 2025. This sustained increase points to improving efficiency in using working capital to generate revenue, suggesting stronger operational performance and enhanced asset utilization over time.

Average Receivable Collection Period

This metric varies between approximately 45 and 62 days, showing some cyclical fluctuation but overall a modest downward trend compared to the initial higher periods around 62 days. The collection period decreased through much of 2021 and 2022 reaching lows near 45 days, before slightly increasing again to around 52-57 days in recent quarters. The fluctuations indicate varying speeds in converting receivables to cash but remain within a moderate range.

Average Payables Payment Period

The average payables payment period generally trends downward from about 24 days in early 2020 to lower values near 11-16 days through 2021 and 2022, with some increases reflecting more extended payment times in subsequent periods, rising to around 20-21 days by late 2024 and early 2025. This suggests a tendency to delay payments slightly in recent periods compared to earlier years, potentially managing cash outflows more strategically.

In summary, working capital turnover demonstrates a clear improvement trend, indicating enhanced operational efficiency. Receivables turnover and collection periods exhibit moderate variability but no strong directional shift, implying stable credit and collection management. Payables turnover and payment periods display higher volatility and a tendency towards shorter payment cycles earlier on, followed by some elongation more recently, possibly reflecting adaptive cash flow management aligned with operational priorities.

The quarterly financial data reveals several significant trends over the analyzed periods. Revenues exhibit a general upward trajectory, increasing from approximately $41.2 billion in March 2020 to a peak of around $96.5 billion in December 2024, despite some fluctuations. A notable surge occurs between late 2020 and the end of 2021, followed by continued growth with some modest volatility in the final years.

Accounts receivable, net, show a parallel overall increase but with more variability across quarters. Starting at about $21.8 billion in March 2020, the figure grows substantially, reaching a high of roughly $52.3 billion in March 2025. The pattern suggests substantial growth in credit extended to customers, although there are periodic declines indicating possible collection efforts or seasonal effects.

The receivables turnover ratio, available from September 2020 onward, fluctuates mostly between approximately 6.4 and 8.1. This ratio's movement indicates varying efficiency in collecting receivables. Higher ratios observed in the middle of the period suggest improved collection speed, while the dips toward the later quarters imply a slight slowdown in receivables turnover efficiency.

Revenues

Demonstrate a notable upward trend with steady quarterly growth interspersed with seasonal or cyclical fluctuations. Revenue nearly doubles over the multi-year span.

Accounts Receivable, Net

Increases significantly aligned with revenue growth, suggesting expanded sales on credit. Fluctuations may reflect shifting credit policies or collection cycles.

Receivables Turnover Ratio

Ranges between approximately 6.4 and 8.1, showing periods of both strengthening and weakening efficiency in accounts receivable collections, without a clear long-term upward or downward trend.

The financial data reveals notable fluctuations and trends in cost of revenues, accounts payable, and payables turnover over multiple quarters.

Cost of Revenues

The cost of revenues shows an overall upward trajectory with some volatility throughout the analyzed period. From March 2020 to December 2020, there was a clear increase from approximately $18.98 billion to $26.08 billion, indicating rising operational expenses or sales volume. This trend continued into 2021, where cost values peaked near $33 billion by the end of the year. Although costs fluctuated in subsequent quarters, the general pattern was rising, reaching near $40.6 billion by December 2024 before a slight decline to around $36.4 billion by March 2025. This pattern suggests growth in business scale alongside periodic cost management efforts.

Accounts Payable

Accounts payable exhibited more variable behavior compared to cost of revenues. Starting near $4.1 billion in March 2020, payables saw an increase with some intermittent declines and recoveries. Notably, accounts payable peaked at $7.5 billion in December 2023 and subsequently showed a rising trend through the end of 2025, surpassing $8 billion by March 2025. There is evidence of seasonal or cyclical fluctuations, but the overall movement indicates increasing liabilities or supplier credit over time.

Payables Turnover Ratio

Payables turnover experienced significant variability, reflecting changes in how quickly the company settled its short-term obligations. Early in the dataset, turnover ratios increased from about 15.16 to a peak above 22 by the end of 2020. In 2021, the ratio varied substantially, reaching highs above 30 during some quarters, indicating faster payment cycles. However, thereafter, turnover generally declined, settling around 17-18 by the end of the period. The decline could suggest lengthening payment terms or slower payments to vendors in recent periods.

The financial data reveals several notable trends over the observed periods.

Working Capital

Working capital demonstrates a generally decreasing trend from March 31, 2020, through March 31, 2025. Starting at 106,829 million USD in early 2020, the working capital initially fluctuated mildly, reaching a peak around the end of 2021 at approximately 123,889 million USD. After this peak, a steady decline ensued throughout 2022 to 2025, dropping to 70,398 million USD by March 31, 2025. This suggests a consolidation or reduction in current assets relative to current liabilities over time, potentially reflecting changes in operational efficiency or liquidity management.

Revenues

Revenues show a cyclical but overall upward trend across the same timeframe. In early 2020, revenues stood at 41,159 million USD. There is a general pattern of increases each year with notable seasonal fluctuations, including a significant jump toward the end of 2021 (75,325 million USD) and further increases through 2023 and early 2024, peaking at 96,469 million USD in late 2024 before a slight drop to 90,234 million USD by March 2025. This indicates a growing revenue base with strong seasonal peaks, possibly aligned with product launches or market cycles.

Working Capital Turnover

The working capital turnover ratio exhibits a consistent upward trend, increasing from approximately 1.55 in late 2020 to 5.11 by early 2025. This ratio's rise signifies improving efficiency in utilizing working capital to generate revenues. The ratio more than triples over the period, highlighting enhanced asset management and operational performance relative to revenue generation.

In summary, despite a reduction in the absolute amount of working capital, revenue growth and increasing working capital turnover indicate a more efficient use of available capital to drive higher sales volume. The combination of declining working capital with rising revenues and turnover ratio suggests optimized liquidity management and operational effectiveness throughout the analyzed periods.

Receivables Turnover Ratio

The receivables turnover ratio exhibits fluctuations over the observed periods, generally oscillating between 5.9 and 8.13. Starting from a value of 5.9 in March 2021, there is a noticeable increase reaching a peak of 8.13 in December 2022. Following this peak, the ratio undergoes a soft decline and stabilizes around the mid to high 6 range by the end of the forecasted period in March 2025.

This pattern indicates periods of improved efficiency in collecting receivables, particularly around late 2022, followed by a moderate decrease in efficiency but maintaining relatively strong turnover compared to earlier periods. The increase in turnover suggests that the company improved its ability to convert receivables into cash more rapidly during the observed timeframe, with a slight moderation afterward.

Average Receivable Collection Period

The average collection period inversely correlates to the receivables turnover ratio, fluctuating between 45 and 62 days. Beginning at 62 days in March 2021, the period shortens significantly to a low of 45 days by December 2022, indicating faster collection times. After this low point, the collection period slightly increases and stabilizes near the low 50s by March 2025.

This trend confirms the improvement in receivables management efficiency, with the company reducing the time needed to collect payments during the middle of the analyzed timeline, followed by a modest increase indicating a slight slowdown but still better than initial periods.

Overall Insights

Both metrics together suggest an overall improvement in receivables management during the observed periods, reaching peak efficiency around late 2022, followed by moderate normalization. The oscillations imply responsiveness to operational or market conditions affecting collection times and cash flow management. Maintaining these improved levels compared to earlier years indicates enhanced liquidity and credit management practices over the medium term.

The payables turnover ratio experienced significant fluctuations over the observed periods. Beginning from a value of 15.16 in the earliest reported quarter, it showed an overall increasing trend peaking at 33.89 before declining to 17.53 in the most recent quarter. Notably, the turnover ratio reached its highest point around mid-2022, indicating a rapid payment cycle at that time. Subsequently, the ratio declined, suggesting a slowdown in the frequency of payables turnover towards the end of the timeline.

The average payables payment period, measured in days, exhibits an inverse trend relative to the payables turnover ratio, as expected. Initially reported at 24 days, it decreased steadily to as low as 11 days, corresponding inversely to the peak in payables turnover. After this trough, the payment period increased again towards the later quarters, reaching 21 days in the most recent period. This pattern suggests that the company initially accelerated its payment process but subsequently allowed longer durations to settle payables.

Payables Turnover Ratio

Displayed a rising trend through late 2020 to mid-2022, peaking sharply at 33.89. Post-peak, the ratio demonstrated a general downward trend to 17.53 by early 2025, indicating a reduced payment velocity.

Average Payables Payment Period

Showed a general decline from 24 days to a minimum of 11 days around mid-2022, corresponding inversely with the turnover peak. Thereafter, it increased gradually up to 21 days toward early 2025, reflecting slower payables settlement.

Trend Relationship

The inverse relationship between the two metrics is consistent throughout, reflecting typical payable management dynamics where higher turnover ratios correspond with shorter payment periods and vice versa.

In summary, the data reveals that the company optimized payables payment speed until mid-2022, then progressively extended payment intervals. These shifts might reflect changes in working capital management strategy or external financial conditions affecting supplier payment terms or cash flow management.