Qualcomm Inc. (NASDAQ:QCOM)

The analysis of the financial ratios and periods reveals several notable trends over the examined quarters. There is a clear evolution in how efficiently the company manages its inventory, payables, and working capital, which reflects its operational and financial dynamics.

Inventory Turnover

The inventory turnover ratio shows a declining trend from early 2020 through the end of 2022, falling from above 4.1 to below 2.5. This suggests that inventory is being sold and replaced less frequently over that period. However, starting in early 2023, the ratio stabilizes and begins a modest recovery, rising gradually to slightly above 3 by late 2025, indicating improved inventory management or increased sales velocity relative to inventory levels.

Payables Turnover

There is a significant fluctuation in payables turnover. From 2020 into 2021, the ratio increased moderately, indicating faster payment to suppliers. In late 2022 and early 2023, the ratio spikes sharply, reaching values above 12, which implies very rapid payments or lower payables balances during this period. Following this peak, the ratio declines but remains elevated compared to earlier years, indicating a sustained higher payment frequency to creditors than in the earlier periods.

Working Capital Turnover

The working capital turnover ratio exhibits a general rising trend from 2020 through mid-2022, highlighting improving efficiency in generating revenue from working capital. This peak is followed by a decline starting in late 2022, with ratios dropping steadily through 2024. The trend levels off somewhat in 2025 but remains below the previous peak levels, reflecting potential challenges in optimizing working capital utilization during that later timeframe.

Average Inventory Processing Period

The inventory processing period, expressed in days, mirrors the inverse pattern of the inventory turnover ratio. It increased steadily from about 83 days in early 2021 to approximately 148 days in late 2023, indicating slower inventory movement and longer holding periods. There is a gradual decline afterward through 2025, signaling somewhat improved inventory turnover speed, yet the period remains longer than in the initial years.

Average Payables Payment Period

The average payables payment period fluctuates considerably, decreasing from around 80 days in 2020 to a low near 29 days in early 2023. This suggests faster payments to suppliers, resulting in shorter credit terms or better supplier relationships. Following this trough, the payment period gradually lengthens, ending near 50 days by mid-2025, though still shorter than early period levels, indicating some relaxation in payment speed but sustaining relatively prompt supplier payments.

Overall, the company experienced a phase of lengthening inventory days and reduced inventory turnover until late 2023, then showed signs of reverting toward more efficient inventory management. Payables dynamics point to a period of highly accelerated payments followed by a return to more moderate payment cycles. Working capital turnover shows fluctuation, peaking in mid-2022 and declining thereafter, reflecting shifts in operational efficiency and capital management effectiveness.

The financial data display several notable trends across the periods analyzed. The cost of revenues initially increased from the end of 2020 through late 2022, reaching a peak near the last quarter of 2022. Following this peak, the cost of revenues showed fluctuations but generally remained elevated through 2025, with some periods of slight contraction. This pattern indicates increased production or sales costs, stabilizing at a higher level compared to early years.

Inventories demonstrated a consistent upward trend from the end of 2020 through late 2022, with values increasing significantly, indicating accumulation of stock over time. After peaking around late 2022, inventory values declined slightly but remained high, showing some stabilization. Toward 2025, inventories again trend upward, suggesting ongoing focus on stock buildup or slow turnover in certain periods.

The inventory turnover ratio, which measures how efficiently inventory is managed relative to cost of revenues, shows a declining pattern from the end of 2020 until late 2022, indicating a slowdown in inventory movement relative to sales or production costs. After reaching its lowest point, the ratio begins to improve gradually starting in late 2022 through 2025, suggesting enhanced management or faster turnover of inventory in recent quarters. Despite this improvement, turnover remains lower than initial levels observed at the start of the period.

Cost of Revenues

Shows an increasing trend from 2020 to the end of 2022, followed by fluctuations but generally maintaining elevated levels through 2025.

Inventories

Consistent growth from 2020 to late 2022 with significant accumulation, followed by stabilization and some renewed growth towards 2025.

Inventory Turnover

Declining trend reflecting slower inventory movement up to late 2022; subsequent gradual improvement indicating better inventory efficiency but still below early period levels.

The quarterly financial data reveals several notable trends in cost of revenues, trade accounts payable, and payables turnover over the observed periods.

Cost of Revenues

There is a generally increasing trend in the cost of revenues from the beginning of the period, starting at $3,489 million in late 2020 and peaking around $5,161 million in late 2024. The cost rose steadily through 2021 and into early 2022, reaching values over $4,800 million. Following a dip and some fluctuations in late 2022 and early 2023, the cost once again climbed, maintaining levels between approximately $4,300 million to $5,000 million by 2025. This reflects an overall growth in production or acquisition costs, possibly correlated with increased sales or inflationary effects on input prices.

Trade Accounts Payable

Trade accounts payable demonstrated significant variability throughout the timeline. Initially, payables increased from around $2,429 million at the end of 2020 to peak at $3,796 million by the third quarter of 2022, indicating potentially elongated payment terms or increased purchases on credit. However, a sharp decline occurred in late 2022 and early 2023, dropping to a low near $1,430 million. After this decline, payables recovered gradually to just above $2,700 million by the third quarter of 2025. This fluctuation might suggest changes in supplier payment policies, cash management strategies, or seasonal purchasing patterns.

Payables Turnover

The payables turnover ratio exhibits an overall upward movement, with some pronounced fluctuations. Early in the dataset, turnover hovered around 4.3 to 5.2 times per year. By late 2022 and early 2023, this ratio surged sharply to a high of approximately 12.5, implying accelerated payment to suppliers during that interval. After this peak, the turnover rate decreased but remained elevated relative to the initial periods, generally fluctuating between about 6.4 and 8.2 times per year through 2025. The rising turnover ratio suggests an increasingly efficient payment cycle or a strategic focus on quicker settlement of payables, possibly to leverage early payment discounts or strengthen supplier relationships.

The financial data demonstrates several notable trends over the observed periods. Working capital exhibits fluctuations with a general upward trajectory from the end of 2020 through early 2025, rising from approximately 10.6 billion US dollars to around 16.6 billion US dollars by the later quarters. Although there are intermittent decreases, notably around mid-2022 and mid-2024, the overall pattern suggests an accumulation of working capital over time, potentially indicating improved current asset management or changes in liabilities.

Revenues show a degree of variability across the quarters, with values ranging between approximately 7.9 billion US dollars and 11.7 billion US dollars. A peak appears in late 2021 and again toward the end of 2024 and early 2025. However, revenues do not demonstrate consistent growth; instead, they oscillate, potentially reflecting the cyclical nature of sales or market conditions affecting demand and pricing.

The working capital turnover ratio displays a significant decline over the time frame. Initially, the ratio increases sharply from around 2.53 to a high of nearly 5.88 by mid-2022, signaling more efficient use of working capital to generate revenue in the earlier part of the period. Following this peak, the ratio steadily declines to approximately 2.53 by mid-2025, suggesting reduced efficiency or a relative increase in working capital compared to revenue generation in the latter periods.

Working Capital

Generally increased from approximately 10.6 billion to 16.6 billion US dollars, indicating expanded capacity in current assets or changes in liabilities with some short-term fluctuations.

Revenues

Displayed variability without steady growth, peaking periodically near 11.7 billion US dollars, possibly due to market volatility or seasonal factors.

Working Capital Turnover

Initially rose significantly, suggesting improved efficiency in using working capital to generate revenues, but declined in the latter half, implying a decrease in turnover efficiency relative to the size of working capital.

Overall, the data suggests that while working capital accumulates over time, revenue growth is uneven, and efficiency in converting working capital into revenue peaks mid-period before declining. This pattern may warrant further examination to understand operational or market factors influencing capital management and revenue performance.

Inventory Turnover Ratio

The inventory turnover ratio exhibited a notable declining trend over the observed periods. Starting at 4.17 in late 2020, the ratio increased slightly in the first quarter of 2021 but then consistently decreased, reaching a low point of 2.47 by the third quarter of 2023. This decline indicates a reduction in the frequency at which the company sells and replaces its inventory. Beginning from late 2023, the ratio showed signs of recovery, gradually increasing to approximately 3.02 by the third quarter of 2025, suggesting an improvement in inventory management or sales efficiency towards the end of the period.

Average Inventory Processing Period

The average inventory processing period, measured in days, moved inversely to the inventory turnover ratio, as expected. Initially, the period decreased from 88 days at the end of 2020 to around 83 days in the first quarter of 2021, signaling faster inventory turnover. However, following this period, the processing time increased steadily, peaking at approximately 148 days in the third quarter of 2023, indicating slower inventory movement and potentially higher inventory levels or slower sales. Subsequently, the processing period decreased gradually, reaching about 121 days by the third quarter of 2025, which aligns with the improved turnover ratio observed in the same timeframe.

Overall Insights

The data reflects a period of inventory management challenges starting from early 2021 through 2023, characterized by slowing inventory turnover and longer holding periods. This pattern could reflect broader business conditions such as decreased demand, supply chain disruptions, or strategic shifts increasing inventory levels. The gradual improvement from late 2023 onwards indicates corrective measures or market recovery that allowed for enhanced inventory circulation and operational efficiency, though turnover levels remained below those observed at the beginning of the period.

The analysis of the payables turnover ratio and the average payables payment period over the indicated quarterly periods reveals a dynamic interplay between how quickly liabilities are settled and the frequency of payables turnover.

Payables Turnover Ratio

Initially, the payables turnover ratio shows a moderate upward trend, rising from 4.38 to a peak of 5.19 by September 2021, indicating a gradual increase in the rate at which the company pays off its suppliers during this period. This is followed by a slight decline and subsequent stabilization around the mid-4 range through 2022.

A notable surge occurs starting in December 2022, where the ratio jumps dramatically from 7.17 to a high of 12.5 by March 2023, implying a significant acceleration in payment frequency. After this peak, the ratio declines yet remains elevated relative to earlier periods, fluctuating between approximately 6.37 and 8.20 through to September 2025. This suggests the company's payment behavior stabilized at a higher turnover level compared to the earlier years.

Average Payables Payment Period

Conversely, the average payables payment period mirrors the turnover ratio trends inversely. Starting at 83 days, it steadily declines to 70 days by September 2021, reflecting quicker payment cycles. The period then somewhat increases again to 85 days at December 2021 before decreasing steadily through 2022.

In December 2022, the payment period shrinks sharply to 51 days and reaches a minimal 29 days by March 2023, aligning with the noted peak in turnover ratio. Post-March 2023, the payment period gradually lengthens to around 57 days, then gently shortens again to the mid-40s by September 2025. This behavior indicates a more variability in payment timing with a tendency towards shorter payment intervals compared to the beginning of the data series.

Overall Insights

The data highlights a substantial shift in the company's payables management starting late 2022, marked by a stronger focus on expedited payments as evidenced by the dramatic changes in both ratios. This could reflect strategic changes in supplier negotiations, liquidity management, or operational cash flow adjustments.

Following this shift, both metrics stabilized at elevated turnover rates and reduced payment periods relative to pre-2022 levels, suggesting enhanced efficiency in accounts payable processes or changes in the supplier base or credit terms.