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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Short-term Activity Ratios (Summary)
Yahoo! Inc., short-term (operating) activity ratios
Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).
- Receivables Turnover
- The receivables turnover ratio shows a gradual decreasing trend from 4.94 in 2012 to 4.47 in 2014, followed by a slight recovery in subsequent years, ending at 4.77 in 2016. This suggests that the company experienced some decline in the efficiency of collecting receivables until 2014, after which collection efficiency improved moderately.
- Payables Turnover
- The payables turnover ratio exhibits significant volatility over the period. It increased from 8.77 in 2012 to 9.78 in 2013, then sharply dropped to 5.45 in 2014. A rebound occurred in 2015 to 9.96, followed by a substantial rise to 15.85 in 2016. This variability indicates fluctuating payment patterns to suppliers, with a marked acceleration in payments by 2016.
- Working Capital Turnover
- The working capital turnover ratio displays a declining trend throughout the period, from 1.14 in 2012 down to 0.76 in 2016. This decline suggests a decreasing effectiveness in utilizing working capital to generate sales, pointing to either increased working capital or decreasing sales efficiency relative to the available working capital.
- Average Receivable Collection Period (Days)
- The average receivable collection period shows a slight increase from 74 days in 2012 to a peak of 82 days in 2014, followed by stabilization around 77 days in 2015 and 2016. This pattern aligns with the receivables turnover trend and indicates that the company took longer to collect receivables during 2014, then improved slightly but did not fully return to earlier efficiency levels.
- Average Payables Payment Period (Days)
- The average payables payment period fluctuated considerably, decreasing from 42 days in 2012 to 37 days in 2013, then rising markedly to 67 days in 2014. It reverted back to 37 days in 2015 and further decreased to 23 days in 2016. This indicates that the company extended its payment terms during 2014 but then accelerated payments to suppliers in the last two years, paying off liabilities more rapidly by 2016.
Turnover Ratios
Average No. Days
Receivables Turnover
Yahoo! Inc., receivables turnover calculation, comparison to benchmarks
| Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Revenue | ||||||
| Accounts receivable, net of allowance | ||||||
| Short-term Activity Ratio | ||||||
| Receivables turnover1 | ||||||
| Benchmarks | ||||||
| Receivables Turnover, Competitors2 | ||||||
| Accenture PLC | ||||||
| Adobe Inc. | ||||||
| Cadence Design Systems Inc. | ||||||
| CrowdStrike Holdings Inc. | ||||||
| Fair Isaac Corp. | ||||||
| International Business Machines Corp. | ||||||
| Intuit Inc. | ||||||
| Microsoft Corp. | ||||||
| Oracle Corp. | ||||||
| Palantir Technologies Inc. | ||||||
| Palo Alto Networks Inc. | ||||||
| Salesforce Inc. | ||||||
| ServiceNow Inc. | ||||||
| Synopsys Inc. | ||||||
| Workday Inc. | ||||||
Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).
1 2016 Calculation
Receivables turnover = Revenue ÷ Accounts receivable, net of allowance
= ÷ =
2 Click competitor name to see calculations.
- Revenue
-
The revenue shows fluctuating behavior over the five-year period examined. Beginning at approximately $4.99 billion in 2012, it decreases to around $4.68 billion in 2013 and slightly further to $4.62 billion in 2014. Subsequently, it rebounds to about $4.97 billion in 2015 and continues to rise to approximately $5.17 billion by the end of 2016. This pattern indicates a period of initial decline followed by a recovery and growth phase in the later years.
- Accounts Receivable, Net of Allowance
-
The net accounts receivable value rises consistently over the analyzed timeframe, starting from roughly $1.01 billion in 2012 to about $1.08 billion in 2016. The increase is gradual, reflecting steady growth in the amounts owed to the company, which may be linked to the corresponding fluctuations in revenue.
- Receivables Turnover Ratio
-
The receivables turnover ratio shows a slight downward trend from 4.94 in 2012 to 4.47 in 2014, suggesting a slower collection pace during this interval. However, a partial recovery is observed afterwards with the ratio rising to 4.74 in 2015 and maintaining a similar level at 4.77 in 2016. These changes imply some improvement in efficiency in managing receivables following the initial decline.
- Summary
-
Overall, the data reflects a complex interplay between revenue generation and receivables management. The initial decrease in revenue is accompanied by a reduced efficiency in receivables collection, as indicated by the falling turnover ratio. Nevertheless, both revenue and receivables turnover show improvement in the latter years, suggesting enhanced operational performance and potentially better credit or collection policies. The steady increase in accounts receivable, however, warrants attention despite the improvement in turnover, as it could impact liquidity and working capital management.
Payables Turnover
Yahoo! Inc., payables turnover calculation, comparison to benchmarks
| Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Cost of revenue | ||||||
| Accounts payable | ||||||
| Short-term Activity Ratio | ||||||
| Payables turnover1 | ||||||
| Benchmarks | ||||||
| Payables Turnover, Competitors2 | ||||||
| Accenture PLC | ||||||
| Adobe Inc. | ||||||
| Cadence Design Systems Inc. | ||||||
| CrowdStrike Holdings Inc. | ||||||
| Fair Isaac Corp. | ||||||
| International Business Machines Corp. | ||||||
| Intuit Inc. | ||||||
| Microsoft Corp. | ||||||
| Oracle Corp. | ||||||
| Palantir Technologies Inc. | ||||||
| Palo Alto Networks Inc. | ||||||
| Salesforce Inc. | ||||||
| ServiceNow Inc. | ||||||
| Synopsys Inc. | ||||||
| Workday Inc. | ||||||
Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).
1 2016 Calculation
Payables turnover = Cost of revenue ÷ Accounts payable
= ÷ =
2 Click competitor name to see calculations.
- Cost of Revenue
- The cost of revenue displayed significant fluctuations over the observed period. It decreased from approximately 1.62 billion US dollars in 2012 to about 1.35 billion in 2013, followed by a further reduction to roughly 1.30 billion in 2014. After 2014, the cost of revenue showed a notable increase, rising sharply to approximately 2.08 billion in 2015 and further to about 2.72 billion in 2016. The initial downward trend was reversed in the latter years, indicating increased costs associated with generating revenue from 2015 onward.
- Accounts Payable
- Accounts payable values exhibited variability throughout the timeframe. Starting at around 185 million US dollars in 2012, they declined to nearly 138 million in 2013. There was an increase in 2014 reaching roughly 238 million, followed by a decrease in subsequent years to about 209 million in 2015 and further down to approximately 172 million in 2016. This pattern indicates fluctuations in liabilities owed to suppliers, with a peak in 2014 before declining in the later years.
- Payables Turnover Ratio
- The payables turnover ratio showed irregular behavior, beginning at 8.77 in 2012 and improving to 9.78 in 2013, indicating a faster rate of payment to suppliers. However, in 2014, the ratio dropped significantly to 5.45, suggesting slower payment cycles. Subsequently, the ratio recovered to 9.96 in 2015 and further increased substantially to 15.85 in 2016. The latter sharp rise indicates a considerable acceleration in paying off accounts payable during the last recorded year.
- Overall Insights
- The data reveals a complex dynamic between cost of revenue and payables management. While costs initially decreased, the marked increase after 2014 may reflect expansion or increased operational expenses. Concurrently, accounts payable peaked in 2014 but declined thereafter, with the payables turnover indicating improved payment efficiency in 2015 and especially 2016. The sharp increase in the payables turnover ratio, coupled with rising costs, suggests a strategic emphasis on quicker supplier payments despite higher revenue-related expenses in recent years.
Working Capital Turnover
Yahoo! Inc., working capital turnover calculation, comparison to benchmarks
| Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Current assets | ||||||
| Less: Current liabilities | ||||||
| Working capital | ||||||
| Revenue | ||||||
| Short-term Activity Ratio | ||||||
| Working capital turnover1 | ||||||
| Benchmarks | ||||||
| Working Capital Turnover, Competitors2 | ||||||
| Accenture PLC | ||||||
| Adobe Inc. | ||||||
| Cadence Design Systems Inc. | ||||||
| CrowdStrike Holdings Inc. | ||||||
| Fair Isaac Corp. | ||||||
| International Business Machines Corp. | ||||||
| Intuit Inc. | ||||||
| Microsoft Corp. | ||||||
| Oracle Corp. | ||||||
| Palantir Technologies Inc. | ||||||
| Palo Alto Networks Inc. | ||||||
| Salesforce Inc. | ||||||
| ServiceNow Inc. | ||||||
| Synopsys Inc. | ||||||
| Workday Inc. | ||||||
Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).
1 2016 Calculation
Working capital turnover = Revenue ÷ Working capital
= ÷ =
2 Click competitor name to see calculations.
- Working Capital
- The working capital of the company showed a generally increasing trend over the five-year period. Starting from approximately 4.36 billion US dollars at the end of 2012, it decreased to around 3.69 billion in 2013, but then increased steadily to reach approximately 6.84 billion US dollars by the end of 2016. This suggests an improvement in the company's short-term liquidity position, particularly after the dip in 2013.
- Revenue
- Revenue exhibited some fluctuations but ultimately showed a slight upward trend. It started at approximately 4.99 billion US dollars in 2012, decreased over the next two years to about 4.62 billion US dollars by the end of 2014, before rising again to nearly 5.17 billion US dollars in 2016. The overall movement indicates some volatility, but the revenue nearly returned to the initial level observed in 2012 by the end of the period.
- Working Capital Turnover Ratio
- The working capital turnover ratio declined consistently from 1.14 in 2012 to 0.76 in 2016. This ratio measures how efficiently the company generates revenue from its working capital. The decrease suggests that the company generated less revenue per unit of working capital over time, which could imply a less efficient use of its short-term assets or an increase in working capital not accompanied by proportional revenue growth.
- Overall Analysis
- Overall, while the company experienced growth in working capital and a recovery in revenue toward the end of the period, the declining working capital turnover ratio highlights a reduction in operational efficiency regarding the use of working capital. This suggests the company might be holding more current assets relative to sales or facing challenges in converting working capital efficiently into revenue during these years.
Average Receivable Collection Period
Yahoo! Inc., average receivable collection period calculation, comparison to benchmarks
| Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Receivables turnover | ||||||
| Short-term Activity Ratio (no. days) | ||||||
| Average receivable collection period1 | ||||||
| Benchmarks (no. days) | ||||||
| Average Receivable Collection Period, Competitors2 | ||||||
| Accenture PLC | ||||||
| Adobe Inc. | ||||||
| Cadence Design Systems Inc. | ||||||
| CrowdStrike Holdings Inc. | ||||||
| Fair Isaac Corp. | ||||||
| International Business Machines Corp. | ||||||
| Intuit Inc. | ||||||
| Microsoft Corp. | ||||||
| Oracle Corp. | ||||||
| Palantir Technologies Inc. | ||||||
| Palo Alto Networks Inc. | ||||||
| Salesforce Inc. | ||||||
| ServiceNow Inc. | ||||||
| Synopsys Inc. | ||||||
| Workday Inc. | ||||||
Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).
1 2016 Calculation
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ =
2 Click competitor name to see calculations.
- Receivables Turnover
- The receivables turnover ratio shows a declining trend from 4.94 in 2012 to 4.47 in 2014, followed by a slight recovery to 4.77 by 2016. This indicates a decrease in the number of times receivables are collected during the year initially, suggesting slower collection, with some improvement in later years but not returning to the 2012 level.
- Average Receivable Collection Period
- The average collection period increased from 74 days in 2012 to a peak of 82 days in 2014, reflecting a longer duration to collect receivables. Subsequently, the period shortened slightly to 77 days by 2015 and remained stable through 2016. This pattern correlates inversely with the receivables turnover, reinforcing the observation of slower collections during 2013-2014, followed by modest improvements.
- Overall Analysis
- The data suggests that the company experienced a deterioration in receivables management efficiency in the early part of the period, marked by slower collections as shown by both a decreasing receivables turnover and an increasing average collection period. From 2015 onwards, there is evidence of stabilization and some improvement, although the collection efficiency did not fully recover to the initial 2012 levels. Maintaining or improving the receivables turnover in future periods may enhance liquidity and cash flow performance.
Average Payables Payment Period
Yahoo! Inc., average payables payment period calculation, comparison to benchmarks
| Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Payables turnover | ||||||
| Short-term Activity Ratio (no. days) | ||||||
| Average payables payment period1 | ||||||
| Benchmarks (no. days) | ||||||
| Average Payables Payment Period, Competitors2 | ||||||
| Accenture PLC | ||||||
| Adobe Inc. | ||||||
| Cadence Design Systems Inc. | ||||||
| CrowdStrike Holdings Inc. | ||||||
| Fair Isaac Corp. | ||||||
| International Business Machines Corp. | ||||||
| Intuit Inc. | ||||||
| Microsoft Corp. | ||||||
| Oracle Corp. | ||||||
| Palantir Technologies Inc. | ||||||
| Palo Alto Networks Inc. | ||||||
| Salesforce Inc. | ||||||
| ServiceNow Inc. | ||||||
| Synopsys Inc. | ||||||
| Workday Inc. | ||||||
Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).
1 2016 Calculation
Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ =
2 Click competitor name to see calculations.
- Payables Turnover
- The payables turnover ratio demonstrates notable fluctuations over the five-year span. Starting at 8.77 in 2012, the ratio increased to 9.78 in 2013, indicating a faster rate of paying off suppliers. However, there was a significant decline to 5.45 in 2014, suggesting slower payments during that year. Subsequently, the ratio rebounded sharply to 9.96 in 2015 and further increased to 15.85 in 2016, reflecting an accelerating trend in supplier payments and possibly improved liquidity or stronger payment discipline towards the end of the period.
- Average Payables Payment Period
- The average payables payment period inversely mirrors the payables turnover trend. The period decreased from 42 days in 2012 to 37 in 2013, consistent with faster payments. In 2014, it rose considerably to 67 days, indicating delayed payments to suppliers. This was followed by a sharp reduction back to 37 days in 2015 and an even shorter period of 23 days in 2016. The decreasing payment period in the latter years corresponds with the increasing payables turnover ratio, confirming a pattern of accelerated payments and potentially improved cash management efficiency.