Analysis of Short-term (Operating) Activity Ratios
Activity ratios measure how efficiently a company performs day-to-day tasks, such us the collection of receivables and management of inventory.
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- Income Statement
- Statement of Comprehensive Income
- Cash Flow Statement
- Analysis of Long-term (Investment) Activity Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Net Profit Margin since 2005
- Return on Equity (ROE) since 2005
- Price to Operating Profit (P/OP) since 2005
- Analysis of Debt
- Aggregate Accruals
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Short-term Activity Ratios (Summary)
Booking Holdings Inc., short-term (operating) activity ratios
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
- Receivables Turnover
- The receivables turnover ratio shows a declining trend from 12.85 in 2020 to 6.57 in 2023, with a slight recovery to 7.42 in 2024. This indicates that the company’s efficiency in collecting receivables has decreased over the years but shows some improvement in the most recent period.
- Payables Turnover
- Payables turnover similarly decreased markedly from 9.25 in 2020 to 6.14 in 2023, followed by a slight increase to 6.21 in 2024. This trend suggests that the company is taking longer to pay its suppliers, potentially managing cash outflows more conservatively.
- Working Capital Turnover
- The working capital turnover ratio experienced steady growth from 0.77 in 2020 to a peak of 5.77 in 2023, before dipping to 4.9 in 2024. This marked increase implies a significantly improved efficiency in using working capital to generate sales, although the small decline in 2024 could indicate emerging constraints or operational changes.
- Average Receivable Collection Period
- The average receivable collection period has lengthened from 28 days in 2020 to 56 days in 2023, with a reduction to 49 days in 2024. This aligns with the receivables turnover trend and suggests slower collection processes, potentially increasing credit risk or reflecting more lenient credit terms.
- Average Payables Payment Period
- The average payables payment period extended from 39 days in 2020 to 59 days in both 2023 and 2024. This indicates that the company is consistently delaying payments to suppliers, which could be a strategic move to optimize cash flow.
Turnover Ratios
Average No. Days
Receivables Turnover
Booking Holdings Inc., receivables turnover calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Revenues | ||||||
| Accounts receivable, net of allowance for expected credit losses | ||||||
| Short-term Activity Ratio | ||||||
| Receivables turnover1 | ||||||
| Benchmarks | ||||||
| Receivables Turnover, Competitors2 | ||||||
| Airbnb Inc. | ||||||
| Chipotle Mexican Grill Inc. | ||||||
| McDonald’s Corp. | ||||||
| Starbucks Corp. | ||||||
| Receivables Turnover, Sector | ||||||
| Consumer Services | ||||||
| Receivables Turnover, Industry | ||||||
| Consumer Discretionary | ||||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Receivables turnover = Revenues ÷ Accounts receivable, net of allowance for expected credit losses
= ÷ =
2 Click competitor name to see calculations.
The financial data reveals several notable trends across the analyzed periods. Revenues demonstrate a strong upward trajectory from US$6,796 million in 2020 to US$23,739 million in 2024, indicating substantial growth over the five-year span.
Accounts receivable, net of allowance for expected credit losses, also show an increasing pattern, rising from US$529 million in 2020 to US$3,199 million in 2024. This growth in receivables corresponds with the revenue increase, which is expected as higher sales typically lead to higher outstanding receivables.
However, the receivables turnover ratio presents a different trend. It declines from 12.85 in 2020 to a low of 6.57 in 2023 before slightly recovering to 7.42 in 2024. The decreasing turnover ratio suggests that while revenues and receivables are growing, the company may be taking longer to collect its receivables over time. The slight improvement in 2024 could indicate some recovery or better collection efficiency compared to the previous year, but the ratio remains significantly lower than the 2020 level.
- Revenues
- Consistent and strong growth over five years, almost tripling from 2020 to 2024.
- Accounts Receivable
- Steady increase aligning with revenue growth, rising approximately sixfold from 2020 to 2024.
- Receivables Turnover Ratio
- Declining trend indicating slower collection periods, with a modest improvement in the final year but remaining below initial levels.
Payables Turnover
Booking Holdings Inc., payables turnover calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Revenues | ||||||
| Accounts payable | ||||||
| Short-term Activity Ratio | ||||||
| Payables turnover1 | ||||||
| Benchmarks | ||||||
| Payables Turnover, Competitors2 | ||||||
| Airbnb Inc. | ||||||
| Chipotle Mexican Grill Inc. | ||||||
| McDonald’s Corp. | ||||||
| Starbucks Corp. | ||||||
| Payables Turnover, Sector | ||||||
| Consumer Services | ||||||
| Payables Turnover, Industry | ||||||
| Consumer Discretionary | ||||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Payables turnover = Revenues ÷ Accounts payable
= ÷ =
2 Click competitor name to see calculations.
- Revenues
- The revenues of the company have exhibited a consistent upward trend over the five-year period. Starting at $6,796 million in 2020, revenues increased significantly every year, reaching $10,958 million in 2021, $17,090 million in 2022, $21,365 million in 2023, and $23,739 million in 2024. This pattern indicates strong growth momentum and expanding business operations.
- Accounts Payable
- Accounts payable showed a similar upward trajectory, rising from $735 million in 2020 to $3,824 million in 2024. The growth in payables suggests higher procurement or operating activity in conjunction with increased revenue generation. The increase has been steady, reflecting scaling vendor obligations or extended payment terms.
- Payables Turnover
- The payables turnover ratio experienced a gradual decline from 9.25 in 2020 to 6.14 in 2023, with a slight increase to 6.21 in 2024. This decreasing ratio suggests that the company is taking longer to pay its suppliers over time, which could be indicative of increased bargaining power, changes in payment policies, or cash flow management strategies. The minor uptick in 2024 may signal a stabilization or a shift in payment practices.
Working Capital Turnover
Booking Holdings Inc., working capital turnover calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current assets | ||||||
| Less: Current liabilities | ||||||
| Working capital | ||||||
| Revenues | ||||||
| Short-term Activity Ratio | ||||||
| Working capital turnover1 | ||||||
| Benchmarks | ||||||
| Working Capital Turnover, Competitors2 | ||||||
| Airbnb Inc. | ||||||
| Chipotle Mexican Grill Inc. | ||||||
| McDonald’s Corp. | ||||||
| Starbucks Corp. | ||||||
| Working Capital Turnover, Sector | ||||||
| Consumer Services | ||||||
| Working Capital Turnover, Industry | ||||||
| Consumer Discretionary | ||||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Working capital turnover = Revenues ÷ Working capital
= ÷ =
2 Click competitor name to see calculations.
- Working Capital
- The working capital demonstrated a decreasing trend from 2020 to 2023, starting at $8,781 million in 2020 and declining to $3,704 million in 2023. However, there was a noticeable recovery in 2024, with working capital increasing to $4,844 million. Despite this rebound, the 2024 figure remains significantly lower than the 2020 level.
- Revenues
- The revenues show a robust and consistent upward trajectory over the period. Starting at $6,796 million in 2020, revenues more than tripled by 2024, reaching $23,739 million. This steady increase suggests strong growth in the company’s operational scale and sales volume year-over-year.
- Working Capital Turnover
- The working capital turnover ratio indicates improved efficiency in using working capital to generate revenue. The ratio rose from 0.77 in 2020 to a peak of 5.77 in 2023, reflecting increasingly effective management of current assets relative to sales. Although the ratio dropped slightly to 4.9 in 2024, it remained substantially elevated compared to 2020, indicating sustained improvements in asset utilization efficiency.
- Summary of Trends
- Overall, the data illustrate substantial revenue growth accompanied by declining working capital until 2023, which could suggest tighter management of current assets or potential liquidity constraints during that period. The improvement in working capital turnover ratio confirms enhanced operational efficiency. The partial recovery of working capital in 2024, coupled with the slight decrease in turnover ratio, might indicate a strategic balance between liquidity and efficiency was achieved. The trends suggest the company has effectively scaled operations while continuously optimizing working capital utilization over the analyzed period.
Average Receivable Collection Period
Booking Holdings Inc., average receivable collection period calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Receivables turnover | ||||||
| Short-term Activity Ratio (no. days) | ||||||
| Average receivable collection period1 | ||||||
| Benchmarks (no. days) | ||||||
| Average Receivable Collection Period, Competitors2 | ||||||
| Airbnb Inc. | ||||||
| Chipotle Mexican Grill Inc. | ||||||
| McDonald’s Corp. | ||||||
| Starbucks Corp. | ||||||
| Average Receivable Collection Period, Sector | ||||||
| Consumer Services | ||||||
| Average Receivable Collection Period, Industry | ||||||
| Consumer Discretionary | ||||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ =
2 Click competitor name to see calculations.
An analysis of the given financial data from December 31, 2020, through December 31, 2024, indicates a clear trend regarding the company's receivables management.
- Receivables Turnover Ratio
- The receivables turnover ratio demonstrates a declining trend from 12.85 in 2020 to 6.57 in 2023, followed by a slight improvement to 7.42 in 2024. This ratio, which measures how efficiently a company collects its receivables, shows that the company was progressively slower in collecting its outstanding debts during this period, as evidenced by the near halving of the turnover ratio from 2020 to 2023.
- Average Receivable Collection Period
- Consistent with the turnover ratio, the average receivable collection period increased significantly from 28 days in 2020 to 56 days in 2023, implying a longer duration to collect receivables. There is an observable decrease to 49 days in 2024, indicating an improvement in collections but still substantially longer than the initial period in 2020.
- Overall Interpretation
- The simultaneous decrease in the receivables turnover ratio and increase in the average collection period over the observed years suggests a deterioration in the efficiency of receivables collection, peaking in 2023. The partial recovery in 2024 indicates steps might have been taken to enhance collection processes or credit policies. Nevertheless, these values suggest a need for continued focus on receivables management to improve liquidity and reduce credit risk.
Average Payables Payment Period
Booking Holdings Inc., average payables payment period calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Payables turnover | ||||||
| Short-term Activity Ratio (no. days) | ||||||
| Average payables payment period1 | ||||||
| Benchmarks (no. days) | ||||||
| Average Payables Payment Period, Competitors2 | ||||||
| Airbnb Inc. | ||||||
| Chipotle Mexican Grill Inc. | ||||||
| McDonald’s Corp. | ||||||
| Starbucks Corp. | ||||||
| Average Payables Payment Period, Sector | ||||||
| Consumer Services | ||||||
| Average Payables Payment Period, Industry | ||||||
| Consumer Discretionary | ||||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ =
2 Click competitor name to see calculations.
- Payables Turnover
- The payables turnover ratio displays a declining trend over the five-year period from 2020 to 2024, decreasing from 9.25 in 2020 to 6.21 in 2024. This decline suggests that the company is taking longer to pay its suppliers or that the volume of payables relative to cost of goods sold has increased. The most significant drop occurred between 2020 and 2021, with a gradual decrease thereafter.
- Average Payables Payment Period
- The average payables payment period shows a consistent upward trend, increasing from 39 days in 2020 to 59 days in 2024. This indicates that the company is extending its payment terms or delaying payments to suppliers over time. The increase is most notable between 2020 and 2021, after which the payment period stabilizes around 59 days in the final two periods.
- Insights
- The inverse relationship between payables turnover and average payables payment period is evident, as the extended payment period corresponds with the decreasing payables turnover ratio. This trend could imply improved cash flow management or changes in supplier payment strategies. However, if prolonged payment terms persist, it may also affect supplier relationships or credit terms.