United Airlines Holdings Inc. (NASDAQ:UAL)

The analysis of the financial ratios and related metrics over the observed periods reveals several notable trends in the company's operational efficiency and cash management.

Inventory Turnover

The inventory turnover ratio shows a significant improvement starting from a value of 16.48 in early 2020, with a consistent upward trend reaching a peak around 40.82 in late 2022. Since then, it has slightly declined but remains high in the mid-30s range through 2025. This indicates an enhanced efficiency in managing inventory, with quicker inventory processing times as supported by the reduction in average inventory processing period from 22 days to about 10-11 days over the same timeframe.

Receivables Turnover

Receivables turnover ratio initially decreased from 11.86 to a low around 7.63 in mid-2020 but then showed a marked recovery and continuous improvement. It peaks near 28.3 in early 2024 before stabilizing in the mid-20s range through 2025. Correspondingly, the average receivable collection period decreased from 31 days to roughly 15 days towards the end of 2023 and then slightly fluctuates but remains within the range of 13 to 16 days, highlighting faster collection of receivables over time.

Payables Turnover

Payables turnover ratio experienced a decline early in the period from 9.63 to approximately 5.77, then improved steadily to a high near 14 by early 2024, before stabilizing mid- to low-teens. The average payables payment period decreased from 38 days to a range around 26-30 days, suggesting the company has been able to manage its payments with greater regularity and timing, potentially negotiating better payment terms or optimizing cash outflows.

Working Capital Turnover

The working capital turnover ratio displays volatility with some extreme values, notably a substantial spike reaching over 681 in late 2022. These sharp fluctuations suggest periods of unusual working capital utilization efficiency, possibly due to extraordinary operational or accounting factors. Post-2022 data is incomplete or missing for this metric, limiting a firm conclusion on recent trends.

Operating Cycle

The operating cycle, which sums inventory and receivables processing times, shows a marked decrease from 53 days in early 2020 to roughly 24-27 days from 2023 onwards. This improvement underscores enhanced operational efficiency with reduced time to convert inventory and receivables into cash.

Cash Conversion Cycle

The cash conversion cycle exhibits a strong downward trend, moving from positive values (up to 17 days) in early periods to consistently negative values starting around late 2021 and continuing through 2025. Negative cash conversion cycle values imply that the company is effectively using payables financing to fund its operations, receiving cash from customers faster than it pays suppliers, thus improving liquidity and working capital management.

Overall, the data reflects a robust improvement in operational efficiency characterized by faster inventory turnover and receivables collection, alongside prudent management of payables. The shortening operating and cash conversion cycles illustrate a strengthening cash flow position and more efficient use of working capital resources in recent years.

Operating Revenue

The operating revenue showed significant volatility in 2020, dropping sharply to a low of $1,475 million in the second quarter due to external disruptions likely affecting operations. From mid-2020 onward, there was a consistent recovery trend, with revenues increasing steadily through 2021 and into early 2022. After peaking at $14,484 million in the third quarter of 2023, revenues fluctuated modestly but remained relatively high, staying above $13 billion through 2025. Overall, the trajectory reflects a strong rebound and stabilization at levels approaching or exceeding pre-2020 figures by the end of the observed period.

Aircraft Fuel, Spare Parts, and Supplies, Net

Expenditure on aircraft fuel, spare parts, and supplies exhibited a downward trend during the first half of 2020, aligning with lower operating activity. Starting in late 2020, these costs began a consistent upward progression, rising from $912 million in mid-2021 to a peak near $1,680 million in the middle of 2024. After this peak, costs stabilized around $1,540–$1,600 million through 2025. This increase parallels the recovery in operating revenue, indicating higher operational activity and possibly inflationary pressures on fuel and related costs over time.

Inventory Turnover Ratio

The inventory turnover ratio data begins in the third quarter of 2020, with an initial value of 16.48. It then experienced a steady increase throughout 2021 and 2022, reaching a high of 40.82 in the second quarter of 2023. Following this peak, the ratio slightly declined but remained robust, fluctuating between approximately 32.73 and 37.48 through 2025. This increase suggests improved efficiency in inventory management, with more rapid use and replacement of inventories over time, consistent with the rebound and growth in operational activity.

Operating Revenue Trends

Operating revenue demonstrates a clear recovery and growth trajectory following a significant decline in early 2020. Initially, revenue dropped sharply to 1,475 million USD in June 2020 from 7,979 million USD in March 2020, reflecting a severe impact on operations. Thereafter, a progressive increase is observed through the quarters, with revenue reaching 8,192 million USD by December 2021. The upward trend continues beyond 2021, peaking periodically above 15,000 million USD in mid-2024 and 2025. Despite some fluctuations, the overall pattern shows sustained growth and nearing or surpassing pre-2020 levels by 2023 and beyond.

Receivables, Net Trends

Net receivables rise steadily over the period under review, starting at 792 million USD in March 2020 and increasing to 2,433 million USD by September 2025. The growth in receivables is consistent, with periodic incremental increases each quarter. This suggests an expanding scale of operations and possibly higher accounts receivable levels associated with increased sales volume. The increase is somewhat smoother compared to revenue but follows a similar upward trend overall.

Receivables Turnover Ratio Analysis

Receivables turnover ratio data is available from September 2020 forward and shows marked improvements over time. The ratio starts at 11.86, declines briefly during mid-2021 to lows around 7.63–8.14, then steadily rises to reach highs such as 28.3 by March 2024. These fluctuations possibly reflect changes in collection efficiency or credit terms managed by the company, with the latter part of the period indicating enhanced ability to convert receivables into cash more quickly. The higher turnover ratios post-2021 highlight improving operational efficiency in managing credit sales.

Overall Insights

The data reflects a clear pattern of recovery from the downturn experienced in early 2020, followed by periods of strong growth and improving financial management. Operating revenue rebounds impressively, supported by a consistent increase in net receivables. Meanwhile, the receivables turnover ratio trend suggests that the company has improved its effectiveness in receivables collection over the period. These trends collectively indicate enhanced operational conditions and financial discipline, likely driven by increased demand and optimized working capital management as the airline sector stabilizes and grows.

The financial data reveals notable fluctuations and trends in operating revenue, accounts payable, and payables turnover ratios over the observed periods.

Operating Revenue

Operating revenue experienced significant volatility early in the timeline, with a marked decline from US$7,979 million at the end of Q1 2020 to a low of US$1,475 million by Q2 2020. This reduction reflects a period of contraction. Subsequently, the revenue showed a recovery trend, rising to US$8,192 million by Q4 2021. Throughout 2022 and into 2023, revenue remained relatively strong, fluctuating between approximately US$11,429 million and US$14,484 million, indicating sustained operational improvement. The latest quarters towards early 2025 show a slight tapering of revenue levels, with values mostly remaining above US$13,000 million but exhibiting less pronounced growth compared to prior recovery phases.

Accounts Payable

Accounts payable generally trended upward across the observed periods. Starting at US$2,436 million at Q1 2020, it declined initially during the severe contraction phase but then progressively increased from Q1 2021 onward. Notably, from Q1 2022 forward, accounts payable grew steadily, reaching a peak near US$4,920 million by mid-2025. Despite some periodic declines, the general movement suggests an expansion in liabilities payable, potentially correlating with higher operational activity and purchases supporting revenue growth.

Payables Turnover Ratio

This ratio, measured as a unitless figure, showed an upward trend from the available starting data in Q1 2021. Beginning near 9.63, it increased steadily to a peak of approximately 14.01 in Q1 2024, indicating an improvement in the efficiency with which the company was settling its payables relative to cost of goods or purchases. After peaking, the turnover ratio slightly declined but remained within a generally elevated range (approximately 11.79 to 13.97), demonstrating consistent management of payable accounts with somewhat faster payments than earlier periods.

In summary, the data depicts a recovery and growth phase following a sharp initial downturn with operating revenues and accounts payable progressively increasing. The payables turnover ratio suggests improved creditor payment efficiency, which aligns with the revenue growth and expanded operations observed in the later periods. The overall financial pattern indicates a strengthening operational position with attentive management of liabilities over the timeframe analyzed.

Working Capital

The working capital demonstrated significant volatility over the observed periods. Initially, the company exhibited negative working capital of -8182 million USD in Q1 2020, with improvement toward positive values by Q3 and Q4 2020, peaking at 2075 million USD in Q4 2020. This positive trend persisted through the first half of 2021, reaching a high of 6609 million USD in Q2 2021. However, beginning in Q3 2021, a gradual decline resumed, turning negative again by Q1 2023 and continuing downward, reaching -9025 million USD by Q3 2025. This pattern suggests periods of liquidity improvement followed by erosion in working capital, potentially indicating challenges in managing short-term assets and liabilities consistently over time.

Operating Revenue

Operating revenue showed a clear recovery and growth trajectory from the low point in Q2 2020 (1475 million USD) early in the dataset. Revenue increased substantially through 2020 and 2021, peaking in Q2 2022 at 12877 million USD. After slight fluctuations in late 2022 and early 2023, there was renewed growth, with quarterly revenues frequently exceeding 14000 million USD from Q2 2023 onward, reaching a maximum of 15236 million USD in Q2 2025. This upward trend reflects a strengthening revenue base, signaling successful top-line recovery and expansion efforts in the periods following 2020.

Working Capital Turnover

Data for working capital turnover ratios are sparse and only available for a few intervals in 2020 and 2021. The ratios were relatively high, ranging from 2.21 to an extreme 681.14. The highest values, particularly 681.14, suggest either an exceptionally high turnover relative to small or fluctuating working capital or potentially data irregularities. Due to limited data points and inconsistent reporting, this ratio does not provide a reliable measure of efficiency over the full timeline but highlights periods of strong revenue generation relative to working capital levels during late 2020 and early 2021.

Overall Insights

The data indicates that while operating revenue has significantly improved and demonstrated robust growth following the initial downturn likely linked to external disruptions, working capital management has faced challenges. The volatility and eventual sustained negative working capital values raise concerns about the company's short-term financial stability and liquidity management in recent years. The discrepancy between growing revenues and weakening working capital suggests that increased sales may be placing pressure on operational liquidity or that obligations are growing faster than current assets. Continuous monitoring and improvement in working capital strategies may be necessary to support the sustained revenue growth and overall financial health.

Inventory Turnover

The inventory turnover ratio exhibited a general upward trend from 2020 to 2025, indicating improved efficiency in managing inventory. Starting at 16.48 in March 2020, the ratio saw fluctuations during 2020 and 2021, with a notable dip to 11.54 in June 2020 followed by recovery to 20.79 by the end of 2021. From 2022 onwards, the ratio consistently increased, reaching a peak of 40.82 in June 2023. Subsequently, the turnover ratio stabilized, maintaining levels around 34 to 37 through 2024 and into early 2025.

This pattern suggests enhanced inventory management, with the company turning over its inventory more frequently over time, thereby potentially reducing holding costs and increasing responsiveness to demand. The slight moderation after mid-2023 indicates a normalization phase following rapid improvement.

Average Inventory Processing Period

The average inventory processing period, measured in days, mirrored the movement in the inventory turnover ratio but inversely, as expected. Initially hovering around 22 to 32 days in early 2020, the processing period progressively shortened over the analyzed periods. By the end of 2021, it had decreased significantly to 10 days and later stabilized around 9 to 11 days through 2023 and 2024.

From 2024 into the first half of 2025, the average processing period held steady at approximately 10 days, reflecting sustained efficiency in processing inventory. The decline in days indicates the company has reduced the time inventory remains in stock, which aligns with the observed increase in inventory turnover ratio and signifies efficient inventory management practices.

Summary

Overall, the company has demonstrated significant improvements in inventory management between 2020 and 2025. The upward trend in inventory turnover combined with a decreasing and then stable average processing period points to enhanced operational efficiencies, potentially contributing to better liquidity and reduced storage costs.

The trends also imply that the company adapted well following disruptions in 2020, progressively optimizing inventory levels and processing speeds. The stabilization of both metrics in recent periods suggests that these improvements have been sustained over time.

The analysis of the quarterly financial data reveals significant trends in the management of receivables over the observed periods.

Receivables Turnover Ratio

The receivables turnover ratio, starting in March 2021, exhibits overall improvement with fluctuations across quarters. Initially, the ratio registered at 11.86, then declined to 7.63 and 8.14 in the subsequent quarters of 2021, indicating slower collections during that time. However, a subsequent upward trend is observed as the ratio increased substantially from 11.62 in the last quarter of 2021 to reach peaks above 25 by early 2023. This suggests increasingly efficient collection of receivables over time. Despite some quarterly variability, including slight dips, the general pattern points to enhanced turnover, peaking near 28.3 in the first quarter of 2024 before stabilizing in the mid-20s to high 20s till the end of the data series in late 2025.

Average Receivable Collection Period

The average collection period inversely correlates with the turnover ratio, as expected. Initial values in early 2021 were around 31 days, showing a slower collection phase. This period increased to 48 days mid-2021, reflecting delayed collections, and then started a consistent decline, reaching a minimum of approximately 13 to 15 days by 2024 and maintaining that range through 2025. This suggests a progressive reduction in the time taken to collect receivables, aligning with the improvement in turnover ratio. The period stabilizes around two weeks in recent quarters, indicating effective credit and collection policies.

In summary, the data indicates that the company has successfully improved the efficiency of its receivables management since early 2021. The receivables turnover ratio's increase, combined with the decreasing average collection period, reflects enhanced operational effectiveness and a likely improvement in cash flow management. Although minor fluctuations exist, the overall trend denotes a positive momentum in the company's ability to collect receivables more rapidly and consistently over time.

Inventory Processing Period

The average inventory processing period shows a notable decline from 22 days in the first observed quarter to a low of 9 days by the end of 2022. Following this improvement, the days stabilize around 9 to 11 days through 2023 and into 2024, maintaining a steady level of efficiency in inventory turnover. The last few quarters indicate consistent management with a slight reduction to 10 days by mid-2025.

Receivable Collection Period

The receivable collection period initially experiences an increase, rising sharply from 31 days to 48 days between early and mid-2020, suggesting slower collections during that period. However, there is a subsequent and sustained decline to approximately 15 days by the end of 2022. Beyond this point, the collection period fluctuates moderately around 13 to 17 days, displaying relatively prompt receivables turnover in the later periods up to mid-2025.

Operating Cycle

The operating cycle, which aggregates inventory and receivable periods, follows a similar trajectory, increasing to 80 days during mid-2020, reflecting extended operational timing likely influenced by external factors. Thereafter, it steadies to around 24 to 28 days from the beginning of 2022 onward, indicating enhanced operational efficiency and reduced overall cycle times. This stable trend persists through 2025, with minimal variation, suggesting consistent management of working capital.

Payables Turnover

The payables turnover ratio exhibited a fluctuating trend from March 31, 2021, to September 30, 2025. Initially, it dropped significantly from 9.63 to 5.77 between March and June 2021, indicating slower payments or increased payables during that period. This ratio then gradually rose and stabilized around a range of approximately 9 to 14 from December 2021 onwards. The peak was reached at 14.01 in March 31, 2024, suggesting a higher efficiency in paying off payables at that time, followed by minor fluctuations but generally maintained at a relatively high level till September 2025.

Average Payables Payment Period

The average payables payment period, measured in days, showed an inverse pattern to the payables turnover. Starting at 38 days in March 2021, it increased to a peak of 63 days in June 2021, reflecting a delay in payment timing or extended credit terms. Subsequently, the period shortened steadily, reaching a low point of 26 days multiple times between March 2024 and December 2024. After this, a slight increase in payment period was observed, fluctuating between 27 and 31 days by September 2025, indicating a relatively consistent payment behavior in recent quarters.

Summary of Trends

The overall analysis of payables metrics suggests that the company experienced a period of lengthened payables payment around mid-2021, followed by a trend of improved payment efficiency. The inverse relationship between payables turnover and payment period is evident, with higher turnover ratios corresponding to shorter payment periods. From late 2021 onwards, the company's payable management stabilized with consistent improvements in paying suppliers more promptly, which could positively impact supplier relationships and credit terms.

Average Inventory Processing Period

The average inventory processing period shows a declining trend starting from 2021. It decreases from 22 days in March 2021 to a low of 9 days by March 2023 and remains relatively stable around 10 to 11 days thereafter. This indicates improved efficiency in managing inventory over the observed periods.

Average Receivable Collection Period

There is noticeable variability in the average receivable collection period, with a peak of 48 days in June 2020, followed by a general downward trend. By December 2020, the period drops to 31 days and continues declining to about 14 to 16 days in the most recent periods. This decrease points to faster collection of receivables over time.

Average Payables Payment Period

The average payables payment period exhibits fluctuations, reaching a maximum of 63 days in June 2020 and then gradually reducing to roughly 26 to 31 days from early 2023 onward. This suggests a tightening in payment practices compared to the earlier periods.

Cash Conversion Cycle

The cash conversion cycle initially remains positive but shows a declining trend starting from March 2021, dropping from 15 days to negative values around -7 days by late 2023 and early 2024. The cycle stabilizes near this negative range in recent periods. A negative cash conversion cycle indicates that the company is efficiently managing its working capital, collecting cash from customers before it needs to pay its suppliers.

Overall Insights

Across the analyzed periods, the company demonstrates improved working capital management. Inventory turnover quickens, receivables are collected more rapidly, and payables are paid in a more controlled but progressively shorter time. The transition to a negative cash conversion cycle underscores enhanced liquidity management and operational efficiency. These trends point to stronger cash flow generation capability and suggest increased agility in the company’s financial operations over time.