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.
Short-term Activity Ratios (Summary)
Albemarle Corp., short-term (operating) activity ratios
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
| Short-term activity ratio | Description | The company |
|---|---|---|
| Inventory turnover | An activity ratio calculated as cost of goods sold divided by inventory. | Albemarle Corp. inventory turnover ratio improved from 2020 to 2021 but then deteriorated significantly from 2021 to 2022. |
| Receivables turnover | An activity ratio equal to revenue divided by receivables. | Albemarle Corp. receivables turnover ratio improved from 2020 to 2021 and from 2021 to 2022. |
| Payables turnover | An activity ratio calculated as cost of goods sold divided by payables. | Albemarle Corp. payables turnover ratio decreased from 2020 to 2021 and from 2021 to 2022. |
| Working capital turnover | An activity ratio calculated as revenue divided by working capital. | Albemarle Corp. working capital turnover ratio improved from 2020 to 2021 but then deteriorated significantly from 2021 to 2022. |
| Short-term activity ratio | Description | The company |
|---|---|---|
| Average inventory processing period | An activity ratio equal to the number of days in the period divided by inventory turnover over the period. | Albemarle Corp. number of days of inventory outstanding improved from 2020 to 2021 but then deteriorated significantly from 2021 to 2022. |
| Average receivable collection period | An activity ratio equal to the number of days in the period divided by receivables turnover. | Albemarle Corp. number of days of receivables outstanding improved from 2020 to 2021 and from 2021 to 2022. |
| Operating cycle | Equal to average inventory processing period plus average receivables collection period. | Albemarle Corp. operating cycle improved from 2020 to 2021 but then deteriorated significantly from 2021 to 2022. |
| Average payables payment period | An estimate of the average number of days it takes a company to pay its suppliers; equal to the number of days in the period divided by payables turnover ratio for the period. | Albemarle Corp. number of days of payables outstanding increased from 2020 to 2021 and from 2021 to 2022. |
| Cash conversion cycle | A financial metric that measures the length of time required for a company to convert cash invested in its operations to cash received as a result of its operations; equal to average inventory processing period plus average receivables collection period minus average payables payment period. | Albemarle Corp. cash conversion cycle improved from 2020 to 2021 and from 2021 to 2022. |
Inventory Turnover
Albemarle Corp., inventory turnover calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Cost of goods sold | 4,245,517) | 2,329,986) | 2,134,056) | 2,331,649) | 2,157,694) | |
| Inventories | 2,076,031) | 812,920) | 750,237) | 768,984) | 700,540) | |
| Short-term Activity Ratio | ||||||
| Inventory turnover1 | 2.05 | 2.87 | 2.84 | 3.03 | 3.08 | |
| Benchmarks | ||||||
| Inventory Turnover, Competitors2 | ||||||
| Linde plc | 9.83 | 10.12 | 8.90 | 9.81 | — | |
| Inventory Turnover, Industry | ||||||
| Materials | 4.83 | 5.07 | 4.81 | 5.16 | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Inventory turnover = Cost of goods sold ÷ Inventories
= 4,245,517 ÷ 2,076,031 = 2.05
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Inventory turnover | An activity ratio calculated as cost of goods sold divided by inventory. | Albemarle Corp. inventory turnover ratio improved from 2020 to 2021 but then deteriorated significantly from 2021 to 2022. |
Receivables Turnover
Albemarle Corp., receivables turnover calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net sales | 7,320,104) | 3,327,957) | 3,128,909) | 3,589,427) | 3,374,950) | |
| Trade accounts receivable, less allowance for doubtful accounts | 1,190,970) | 556,922) | 530,838) | 612,651) | 605,712) | |
| Short-term Activity Ratio | ||||||
| Receivables turnover1 | 6.15 | 5.98 | 5.89 | 5.86 | 5.57 | |
| Benchmarks | ||||||
| Receivables Turnover, Competitors2 | ||||||
| Linde plc | 7.32 | 6.84 | 6.54 | 6.53 | — | |
| Receivables Turnover, Industry | ||||||
| Materials | 9.52 | 9.46 | 8.19 | 8.42 | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Receivables turnover = Net sales ÷ Trade accounts receivable, less allowance for doubtful accounts
= 7,320,104 ÷ 1,190,970 = 6.15
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Receivables turnover | An activity ratio equal to revenue divided by receivables. | Albemarle Corp. receivables turnover ratio improved from 2020 to 2021 and from 2021 to 2022. |
Payables Turnover
Albemarle Corp., payables turnover calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Cost of goods sold | 4,245,517) | 2,329,986) | 2,134,056) | 2,331,649) | 2,157,694) | |
| Accounts payable | 2,052,001) | 647,986) | 483,221) | 574,138) | 522,516) | |
| Short-term Activity Ratio | ||||||
| Payables turnover1 | 2.07 | 3.60 | 4.42 | 4.06 | 4.13 | |
| Benchmarks | ||||||
| Payables Turnover, Competitors2 | ||||||
| Linde plc | 6.49 | 5.01 | 4.97 | 5.10 | — | |
| Payables Turnover, Industry | ||||||
| Materials | 6.06 | 5.70 | 5.92 | 6.05 | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Payables turnover = Cost of goods sold ÷ Accounts payable
= 4,245,517 ÷ 2,052,001 = 2.07
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Payables turnover | An activity ratio calculated as cost of goods sold divided by payables. | Albemarle Corp. payables turnover ratio decreased from 2020 to 2021 and from 2021 to 2022. |
Working Capital Turnover
Albemarle Corp., working capital turnover calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Current assets | 5,186,917) | 2,007,981) | 2,206,184) | 2,225,109) | 1,998,421) | |
| Less: Current liabilities | 2,741,015) | 1,874,335) | 1,801,849) | 1,408,996) | 1,183,173) | |
| Working capital | 2,445,902) | 133,646) | 404,335) | 816,113) | 815,248) | |
| Net sales | 7,320,104) | 3,327,957) | 3,128,909) | 3,589,427) | 3,374,950) | |
| Short-term Activity Ratio | ||||||
| Working capital turnover1 | 2.99 | 24.90 | 7.74 | 4.40 | 4.14 | |
| Benchmarks | ||||||
| Working Capital Turnover, Competitors2 | ||||||
| Linde plc | — | — | — | — | — | |
| Working Capital Turnover, Industry | ||||||
| Materials | 9.62 | 9.83 | 13.50 | 14.71 | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Working capital turnover = Net sales ÷ Working capital
= 7,320,104 ÷ 2,445,902 = 2.99
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Working capital turnover | An activity ratio calculated as revenue divided by working capital. | Albemarle Corp. working capital turnover ratio improved from 2020 to 2021 but then deteriorated significantly from 2021 to 2022. |
Average Inventory Processing Period
Albemarle Corp., average inventory processing period calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Inventory turnover | 2.05 | 2.87 | 2.84 | 3.03 | 3.08 | |
| Short-term Activity Ratio (no. days) | ||||||
| Average inventory processing period1 | 178 | 127 | 128 | 120 | 119 | |
| Benchmarks (no. days) | ||||||
| Average Inventory Processing Period, Competitors2 | ||||||
| Linde plc | 37 | 36 | 41 | 37 | — | |
| Average Inventory Processing Period, Industry | ||||||
| Materials | 76 | 72 | 76 | 71 | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ 2.05 = 178
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Average inventory processing period | An activity ratio equal to the number of days in the period divided by inventory turnover over the period. | Albemarle Corp. number of days of inventory outstanding improved from 2020 to 2021 but then deteriorated significantly from 2021 to 2022. |
Average Receivable Collection Period
Albemarle Corp., average receivable collection period calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Receivables turnover | 6.15 | 5.98 | 5.89 | 5.86 | 5.57 | |
| Short-term Activity Ratio (no. days) | ||||||
| Average receivable collection period1 | 59 | 61 | 62 | 62 | 66 | |
| Benchmarks (no. days) | ||||||
| Average Receivable Collection Period, Competitors2 | ||||||
| Linde plc | 50 | 53 | 56 | 56 | — | |
| Average Receivable Collection Period, Industry | ||||||
| Materials | 38 | 39 | 45 | 43 | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ 6.15 = 59
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Average receivable collection period | An activity ratio equal to the number of days in the period divided by receivables turnover. | Albemarle Corp. number of days of receivables outstanding improved from 2020 to 2021 and from 2021 to 2022. |
Operating Cycle
Albemarle Corp., operating cycle calculation, comparison to benchmarks
No. days
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Average inventory processing period | 178 | 127 | 128 | 120 | 119 | |
| Average receivable collection period | 59 | 61 | 62 | 62 | 66 | |
| Short-term Activity Ratio | ||||||
| Operating cycle1 | 237 | 188 | 190 | 182 | 185 | |
| Benchmarks | ||||||
| Operating Cycle, Competitors2 | ||||||
| Linde plc | 87 | 89 | 97 | 93 | — | |
| Operating Cycle, Industry | ||||||
| Materials | 114 | 111 | 121 | 114 | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Operating cycle = Average inventory processing period + Average receivable collection period
= 178 + 59 = 237
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Operating cycle | Equal to average inventory processing period plus average receivables collection period. | Albemarle Corp. operating cycle improved from 2020 to 2021 but then deteriorated significantly from 2021 to 2022. |
Average Payables Payment Period
Albemarle Corp., average payables payment period calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Payables turnover | 2.07 | 3.60 | 4.42 | 4.06 | 4.13 | |
| Short-term Activity Ratio (no. days) | ||||||
| Average payables payment period1 | 176 | 102 | 83 | 90 | 88 | |
| Benchmarks (no. days) | ||||||
| Average Payables Payment Period, Competitors2 | ||||||
| Linde plc | 56 | 73 | 73 | 72 | — | |
| Average Payables Payment Period, Industry | ||||||
| Materials | 60 | 64 | 62 | 60 | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ 2.07 = 176
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Average payables payment period | An estimate of the average number of days it takes a company to pay its suppliers; equal to the number of days in the period divided by payables turnover ratio for the period. | Albemarle Corp. number of days of payables outstanding increased from 2020 to 2021 and from 2021 to 2022. |
Cash Conversion Cycle
Albemarle Corp., cash conversion cycle calculation, comparison to benchmarks
No. days
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Average inventory processing period | 178 | 127 | 128 | 120 | 119 | |
| Average receivable collection period | 59 | 61 | 62 | 62 | 66 | |
| Average payables payment period | 176 | 102 | 83 | 90 | 88 | |
| Short-term Activity Ratio | ||||||
| Cash conversion cycle1 | 61 | 86 | 107 | 92 | 97 | |
| Benchmarks | ||||||
| Cash Conversion Cycle, Competitors2 | ||||||
| Linde plc | 31 | 16 | 24 | 21 | — | |
| Cash Conversion Cycle, Industry | ||||||
| Materials | 54 | 47 | 59 | 54 | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Cash conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= 178 + 59 – 176 = 61
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Cash conversion cycle | A financial metric that measures the length of time required for a company to convert cash invested in its operations to cash received as a result of its operations; equal to average inventory processing period plus average receivables collection period minus average payables payment period. | Albemarle Corp. cash conversion cycle improved from 2020 to 2021 and from 2021 to 2022. |