Analysis of Short-term (Operating) Activity Ratios
Quarterly Data
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 (quarterly data)
Based on: 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
Analysis of the quarterly financial data reveals notable trends in efficiency and liquidity management over the observed periods.
- Inventory turnover
- The inventory turnover ratio shows a generally declining trend beginning at 3.08 and decreasing to 1.53 by the latest period. This suggests a slowing rate of inventory movement relative to sales, indicating potential challenges in inventory management or sales performance affecting the speed at which inventory is converted to revenue.
- Receivables turnover
- The receivables turnover ratio exhibits some fluctuations but overall remains relatively stable with a slight improvement in certain periods. It started near 5.57, dipped slightly in mid-periods, but increased to around 6.49 in the latest period, indicating more efficient collection of receivables and potentially improved cash inflows from customers.
- Payables turnover
- Payables turnover shows a decreasing trend from approximately 4.13 to 1.76 over the timeline. This decline implies the company is taking longer to pay its suppliers, potentially altering cash outflows timing or negotiating extended payment terms.
- Working capital turnover
- The working capital turnover ratio displays high volatility with significant spikes, notably reaching an exceptional high of 24.9 in one quarter. This irregular pattern suggests episodic efficiency in utilizing working capital to generate sales, possibly due to one-time events or adjustments in working capital components.
- Average inventory processing period
- The average inventory processing period generally increases, from approximately 119 days early in the timeline to 238 days at the end. This lengthening period signifies slower inventory turnover and potential accumulation of stock, which may affect liquidity and operational efficiency.
- Average receivable collection period
- This period remains fairly consistent around the mid-60 days mark initially but extends up to 81 days at its peak and returns near 56 days later. While collection efficiency is relatively stable, the peak suggests occasional delays in receivables turnover.
- Operating cycle
- The operating cycle lengthens over time, moving from approximately 185 days to 294 days, indicating an elongation of the period between acquiring inventory and collecting cash from sales. This extension could impact the company’s cash flow and working capital requirements.
- Average payables payment period
- There is a marked increase in the average payables payment period, starting around 88 days and extending substantially to 208 days by the latest quarter. This trend supports the pattern observed in payables turnover and suggests the company is increasingly delaying its payments to suppliers.
- Cash conversion cycle
- The cash conversion cycle remains variable, fluctuating mostly between approximately 60 to 111 days, but without a clear downward or upward trend. This indicates periodic changes in the efficiency of converting resource inputs into cash flows from operations.
Overall, the data indicates that inventory and payables management have become less efficient or more extended over time, while receivables management has improved moderately. Prolonged operating and inventory cycles may create heightened liquidity pressure, despite some improvements in receivables turnover. The fluctuations and spikes in working capital turnover suggest irregular efficiency in managing current assets and liabilities across the periods assessed.
Turnover Ratios
Average No. Days
Inventory Turnover
Albemarle Corp., inventory turnover calculation (quarterly data)
| Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||||||||||||||||||||||||
| Cost of goods sold | 1,303,712) | 1,619,659) | 1,047,991) | 899,169) | 678,698) | 657,610) | 581,293) | 525,479) | 565,604) | 613,727) | 492,812) | 530,690) | 496,827) | 654,053) | 569,880) | 559,138) | 548,578) | 601,315) | 497,211) | 542,518) | 516,650) | |||||||
| Inventories | 3,180,825) | 2,076,031) | 1,614,299) | 1,216,213) | 1,013,793) | 812,920) | 745,598) | 732,563) | 685,779) | 750,237) | 828,080) | 851,256) | 853,500) | 768,984) | 802,434) | 814,022) | 756,193) | 700,540) | 727,381) | 665,522) | 666,567) | |||||||
| Short-term Activity Ratio | ||||||||||||||||||||||||||||
| Inventory turnover1 | 1.53 | 2.05 | 2.03 | 2.32 | 2.41 | 2.87 | 3.07 | 3.00 | 3.21 | 2.84 | 2.63 | 2.64 | 2.67 | 3.03 | 2.84 | 2.71 | 2.90 | 3.08 | — | — | — | |||||||
| Benchmarks | ||||||||||||||||||||||||||||
| Inventory Turnover, Competitors2 | ||||||||||||||||||||||||||||
| Linde plc | 9.29 | 9.83 | 10.75 | 10.66 | 10.36 | 10.12 | 9.86 | 9.56 | 9.20 | 8.90 | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Sherwin-Williams Co. | 4.76 | 4.88 | 4.99 | 5.08 | 5.07 | 5.92 | 5.99 | 5.84 | 5.39 | 5.37 | — | — | — | — | — | — | — | — | — | — | — | |||||||
Based on: 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
1 Q1 2023 Calculation
Inventory turnover
= (Cost of goods soldQ1 2023
+ Cost of goods soldQ4 2022
+ Cost of goods soldQ3 2022
+ Cost of goods soldQ2 2022)
÷ Inventories
= (1,303,712 + 1,619,659 + 1,047,991 + 899,169)
÷ 3,180,825 = 1.53
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals several noteworthy trends in cost of goods sold (COGS), inventories, and inventory turnover ratios.
- Cost of Goods Sold (COGS)
- The COGS exhibits fluctuations over the analyzed periods. Initially, values remained relatively stable between approximately $497 million and $654 million from 2018 through early 2020. However, starting in 2020, a noticeable increase appears, with intermittent declines, but the overall trajectory moves upward. The peak is reached in March 2023, with COGS exceeding $1.3 billion, indicating a substantial rise in costs associated with goods sold over the five-year span.
- Inventories
- Inventory levels show a general upward trend throughout the periods. Beginning near $666 million at the end of Q1 2018, inventory values progressively increase, with occasional minor dips, reaching over $3.1 billion by March 2023. The acceleration in inventory growth is particularly marked after 2021, reflecting a strategic accumulation of stock or possible supply chain dynamics. This rising inventory could suggest efforts to meet anticipated demand or buffer against supply disruptions.
- Inventory Turnover Ratio
- The inventory turnover ratio, calculated for most periods starting from Q1 2019, demonstrates a declining pattern over time. Initial ratios hover around 3.0, indicating that inventory turned over about three times per year. From 2019 onwards, there is a gradual decrease, with the ratio dropping below 2.0 in 2022 and further down to 1.53 by Q1 2023. This decline implies that inventories are turning over less frequently, potentially reflecting slower sales relative to inventory levels or increased inventory holding periods.
- Correlations and Implications
- The simultaneous increase in inventory levels alongside rising COGS, coupled with the declining inventory turnover ratio, suggests that while sales or production costs are increasing, the company is also accumulating larger inventory stocks that are not being converted to sales as rapidly as before. This may point to challenges in inventory management or shifts in market demand. The reduced turnover could also lead to increased holding costs or risks of obsolescence if inventory is not sold efficiently.
Receivables Turnover
Albemarle Corp., receivables turnover calculation (quarterly data)
| Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||||||||||||||||||||||||
| Net sales | 2,580,252) | 2,620,978) | 2,091,805) | 1,479,593) | 1,127,728) | 894,204) | 830,566) | 773,896) | 829,291) | 879,147) | 746,868) | 764,049) | 738,845) | 992,564) | 879,747) | 885,052) | 832,064) | 921,699) | 777,748) | 853,874) | 821,629) | |||||||
| Trade accounts receivable, less allowance for doubtful accounts | 1,351,915) | 1,190,970) | 1,035,117) | 962,215) | 658,733) | 556,922) | 520,746) | 455,222) | 532,964) | 530,838) | 516,166) | 517,626) | 518,703) | 612,651) | 637,037) | 624,808) | 603,542) | 605,712) | 550,788) | 571,032) | 606,968) | |||||||
| Short-term Activity Ratio | ||||||||||||||||||||||||||||
| Receivables turnover1 | 6.49 | 6.15 | 5.40 | 4.50 | 5.51 | 5.98 | 6.36 | 7.09 | 6.04 | 5.89 | 6.28 | 6.52 | 6.74 | 5.86 | 5.52 | 5.47 | 5.61 | 5.57 | — | — | — | |||||||
| Benchmarks | ||||||||||||||||||||||||||||
| Receivables Turnover, Competitors2 | ||||||||||||||||||||||||||||
| Linde plc | 7.02 | 7.32 | 7.34 | 6.79 | 6.56 | 6.84 | 6.82 | 6.67 | 6.70 | 6.54 | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Sherwin-Williams Co. | 7.77 | 8.64 | 7.48 | 6.97 | 7.29 | 8.48 | 7.57 | 7.58 | 7.82 | 8.84 | — | — | — | — | — | — | — | — | — | — | — | |||||||
Based on: 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
1 Q1 2023 Calculation
Receivables turnover
= (Net salesQ1 2023
+ Net salesQ4 2022
+ Net salesQ3 2022
+ Net salesQ2 2022)
÷ Trade accounts receivable, less allowance for doubtful accounts
= (2,580,252 + 2,620,978 + 2,091,805 + 1,479,593)
÷ 1,351,915 = 6.49
2 Click competitor name to see calculations.
- Net Sales
- Net sales exhibit a fluctuating but generally upward trend over the analyzed quarters. Initially, values ranged between approximately 777 million and 993 million US dollars during 2018 and 2019, with a notable dip starting in early 2020 coinciding with global economic challenges, reaching a low near 739 million. From mid-2020 onward, net sales progressively improved, surging significantly in 2022 and early 2023, peaking around 2.62 billion US dollars in December 2022 before slightly tapering off to approximately 2.58 billion in the first quarter of 2023.
- Trade Accounts Receivable, Less Allowance for Doubtful Accounts
- The trade accounts receivable balance closely follows the trend in net sales but with more gradual increases. Starting near 607 million in early 2018, the balance slightly declined through mid-2021, reaching a low around 455 million in June 2021. Subsequently, a strong upward trajectory is observed from late 2021 through early 2023, with balances almost tripling from that low point to over 1.35 billion in the first quarter of 2023, indicating expanded credit sales or longer collection cycles during this period.
- Receivables Turnover Ratio
- The receivables turnover ratio, available primarily from late 2018 onwards, displays some volatility, generally fluctuating between approximately 5.5 and 7.1 times annually. The ratio peaks notably at 7.09 in the third quarter of 2021, suggesting more efficient collection during that period. However, a declining trend follows through 2022 with a significant drop to 4.5 in the first quarter of 2022, indicating slower collections or longer customer payment terms. The ratio recovers thereafter, rising to 6.49 by the first quarter of 2023, which reflects improved efficiency in managing receivables despite increased sales.
Payables Turnover
Albemarle Corp., payables turnover calculation (quarterly data)
| Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||||||||||||||||||||||||
| Cost of goods sold | 1,303,712) | 1,619,659) | 1,047,991) | 899,169) | 678,698) | 657,610) | 581,293) | 525,479) | 565,604) | 613,727) | 492,812) | 530,690) | 496,827) | 654,053) | 569,880) | 559,138) | 548,578) | 601,315) | 497,211) | 542,518) | 516,650) | |||||||
| Accounts payable | 2,771,076) | 2,052,001) | 1,651,866) | 1,091,583) | 845,710) | 647,986) | 545,922) | 535,153) | 492,532) | 483,221) | 465,644) | 523,160) | 573,075) | 574,138) | 527,052) | 558,839) | 482,433) | 522,516) | 474,229) | 460,442) | 481,726) | |||||||
| Short-term Activity Ratio | ||||||||||||||||||||||||||||
| Payables turnover1 | 1.76 | 2.07 | 1.99 | 2.58 | 2.89 | 3.60 | 4.19 | 4.11 | 4.47 | 4.42 | 4.67 | 4.30 | 3.98 | 4.06 | 4.32 | 3.95 | 4.54 | 4.13 | — | — | — | |||||||
| Benchmarks | ||||||||||||||||||||||||||||
| Payables Turnover, Competitors2 | ||||||||||||||||||||||||||||
| Linde plc | 6.49 | 6.49 | 6.50 | 5.66 | 5.40 | 5.01 | 5.44 | 5.14 | 5.30 | 4.97 | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Sherwin-Williams Co. | 5.13 | 5.26 | 4.53 | 4.10 | 4.13 | 4.74 | 4.07 | 4.21 | 4.50 | 4.57 | — | — | — | — | — | — | — | — | — | — | — | |||||||
Based on: 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
1 Q1 2023 Calculation
Payables turnover
= (Cost of goods soldQ1 2023
+ Cost of goods soldQ4 2022
+ Cost of goods soldQ3 2022
+ Cost of goods soldQ2 2022)
÷ Accounts payable
= (1,303,712 + 1,619,659 + 1,047,991 + 899,169)
÷ 2,771,076 = 1.76
2 Click competitor name to see calculations.
The cost of goods sold (COGS) exhibits a fluctuating pattern over the quarters from March 2018 to March 2023. Initially, the COGS ranged between approximately 497 million and 657 million US dollars, with some seasonal ups and downs. From March 2020 onwards, there is a noticeable increasing trend, peaking significantly in March 2023 at about 1.3 billion US dollars. This sharp rise in recent periods suggests increased production costs, expanded operations, or inflationary pressures affecting the cost structure.
Accounts payable values also show variability alongside COGS but with a more pronounced upward trajectory, especially from March 2021 forward. Accounts payable rose from just under 500 million US dollars in early 2018 to exceed 2.7 billion US dollars by March 2023. This substantial increase may indicate extended payment terms, higher purchase volumes, or changes in supplier arrangements.
The payables turnover ratio, available only from December 2018 onwards, provides insight into the efficiency with which the company is managing its payables. Initially, the ratio fluctuates moderately around values between approximately 3.9 and 4.7, indicating relatively consistent payment speeds. However, from early 2022, the turnover ratio declines steadily, dropping to as low as 1.76 by March 2023. This decline suggests that the company is taking longer to pay its suppliers or that payables are growing faster relative to cost of goods sold, aligning with the observed increase in accounts payable balances.
- Cost of Goods Sold
- Displayed volatility with a significant overall increase, especially marked in the final year of the dataset, reaching over double the early period values.
- Accounts Payable
- Marked steady increase over time, with a particularly sharp rise in recent quarters, exceeding 2.7 billion US dollars by the last period.
- Payables Turnover Ratio
- Initial stability followed by a consistent decrease from 2022 onwards, indicating slower payment cycles or expanding payables relative to COGS.
The financial data collectively points to expanding operational scale or higher input costs alongside lengthening durations to settle payables. This may reflect strategic supplier financing, liquidity management considerations, or market conditions affecting payment terms. Monitoring these trends is crucial for assessing working capital efficiency and supply chain dynamics going forward.
Working Capital Turnover
Albemarle Corp., working capital turnover calculation (quarterly data)
| Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||||||||||||||||||||||||
| Current assets | 6,657,575) | 5,186,917) | 4,296,971) | 3,350,104) | 2,336,483) | 2,007,981) | 2,078,106) | 2,151,354) | 2,009,394) | 2,206,184) | 2,227,012) | 2,292,409) | 2,155,181) | 2,225,109) | 1,969,752) | 2,036,637) | 1,987,176) | 1,998,421) | 2,059,577) | 2,283,070) | 2,158,725) | |||||||
| Less: Current liabilities | 3,505,369) | 2,741,015) | 2,487,951) | 1,781,762) | 2,103,338) | 1,874,335) | 1,591,042) | 984,928) | 953,256) | 1,801,849) | 1,612,739) | 1,420,803) | 1,192,926) | 1,408,996) | 1,421,243) | 1,399,981) | 1,278,191) | 1,183,173) | 1,127,009) | 1,041,661) | 868,860) | |||||||
| Working capital | 3,152,206) | 2,445,902) | 1,809,020) | 1,568,342) | 233,145) | 133,646) | 487,064) | 1,166,426) | 1,056,138) | 404,335) | 614,273) | 871,606) | 962,255) | 816,113) | 548,509) | 636,656) | 708,985) | 815,248) | 932,568) | 1,241,409) | 1,289,865) | |||||||
| Net sales | 2,580,252) | 2,620,978) | 2,091,805) | 1,479,593) | 1,127,728) | 894,204) | 830,566) | 773,896) | 829,291) | 879,147) | 746,868) | 764,049) | 738,845) | 992,564) | 879,747) | 885,052) | 832,064) | 921,699) | 777,748) | 853,874) | 821,629) | |||||||
| Short-term Activity Ratio | ||||||||||||||||||||||||||||
| Working capital turnover1 | 2.78 | 2.99 | 3.09 | 2.76 | 15.55 | 24.90 | 6.80 | 2.77 | 3.05 | 7.74 | 5.28 | 3.87 | 3.63 | 4.40 | 6.41 | 5.37 | 4.77 | 4.14 | — | — | — | |||||||
| Benchmarks | ||||||||||||||||||||||||||||
| Working Capital Turnover, Competitors2 | ||||||||||||||||||||||||||||
| Linde plc | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Sherwin-Williams Co. | — | — | 1,022.67 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
Based on: 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
1 Q1 2023 Calculation
Working capital turnover
= (Net salesQ1 2023
+ Net salesQ4 2022
+ Net salesQ3 2022
+ Net salesQ2 2022)
÷ Working capital
= (2,580,252 + 2,620,978 + 2,091,805 + 1,479,593)
÷ 3,152,206 = 2.78
2 Click competitor name to see calculations.
- Working Capital
- The working capital shows a fluctuating pattern over the analyzed period. Starting at approximately 1.29 billion US dollars in March 2018, it exhibits a declining trend through 2018 and 2019, reaching a low point of around 133 million US dollars in December 2021. After this trough, a significant recovery is observed, with working capital rising sharply to over 3.15 billion US dollars by December 2022 and maintaining strong levels into March 2023, where it reaches approximately 3.15 billion US dollars. This recovery phase indicates a potential improvement in asset management or liquidity position.
- Net Sales
- Net sales show a generally upward trajectory despite some variability. From around 822 million US dollars in March 2018, net sales exhibit modest growth and seasonal fluctuations until early 2020, with quarterly figures mostly ranging from 740 million to just under 1 billion US dollars. Starting from 2021, a strong growth trend becomes apparent, accelerating significantly in 2022, reaching a peak of approximately 2.62 billion US dollars in December 2022 before slightly decreasing but remaining high at around 2.58 billion US dollars in March 2023. This suggests improved sales performance and possible market expansion or increased demand.
- Working Capital Turnover
- The working capital turnover ratio, available from the end of 2018 onward, displays considerable volatility. After a moderate level of approximately 4.14 to 6.41 through 2018 and 2019, the ratio spikes dramatically in March 2022 to 24.9, followed by a decline but remaining above 15 in June 2022. Subsequently, the ratio decreases significantly, stabilizing in the range of 2.7 to 3.1 for most of 2022 and early 2023. The spike corresponds with the period when working capital was particularly low while net sales surged, indicating a temporary sharp increase in how effectively working capital was being used to generate sales. The later normalization suggests a rebalancing of working capital relative to sales levels.
- Summary of Trends and Insights
- Overall, the data reveals a phase of working capital contraction through 2018 and 2019 into early 2022, followed by a robust increase in working capital from mid-2022 onward. In parallel, net sales have steadily increased with a notable acceleration starting in 2021, reaching new highs in 2022 and early 2023. The working capital turnover ratio indicates periods of efficiency volatility, with an exceptional peak in early 2022 aligning with peak sales and minimal working capital. This suggests strategic inventory or receivables management adjustments during that period. Following this, the ratio decreased as working capital was replenished. The combined picture is one of growing sales accompanied by evolving working capital management practices aimed at supporting growth while maintaining liquidity.
Average Inventory Processing Period
Albemarle Corp., average inventory processing period calculation (quarterly data)
| Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||||||||||||||||||||||||
| Inventory turnover | 1.53 | 2.05 | 2.03 | 2.32 | 2.41 | 2.87 | 3.07 | 3.00 | 3.21 | 2.84 | 2.63 | 2.64 | 2.67 | 3.03 | 2.84 | 2.71 | 2.90 | 3.08 | — | — | — | |||||||
| Short-term Activity Ratio (no. days) | ||||||||||||||||||||||||||||
| Average inventory processing period1 | 238 | 178 | 179 | 158 | 151 | 127 | 119 | 122 | 114 | 128 | 139 | 138 | 137 | 120 | 129 | 135 | 126 | 119 | — | — | — | |||||||
| Benchmarks (no. days) | ||||||||||||||||||||||||||||
| Average Inventory Processing Period, Competitors2 | ||||||||||||||||||||||||||||
| Linde plc | 39 | 37 | 34 | 34 | 35 | 36 | 37 | 38 | 40 | 41 | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Sherwin-Williams Co. | 77 | 75 | 73 | 72 | 72 | 62 | 61 | 62 | 68 | 68 | — | — | — | — | — | — | — | — | — | — | — | |||||||
Based on: 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
1 Q1 2023 Calculation
Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ 1.53 = 238
2 Click competitor name to see calculations.
- Inventory Turnover
- The inventory turnover ratio exhibits a general decreasing trend over the observed quarters. Beginning at 3.08 in March 2019, the ratio gradually declines with minor fluctuations, reaching 1.53 by March 2023. This decline indicates a slowdown in the rate at which inventory is sold and replaced, suggesting potential challenges in inventory management or demand fulfillment toward the later periods.
- Average Inventory Processing Period
- The average inventory processing period, measured in days, corresponds inversely with the inventory turnover ratio. Initially around 119 days in March 2019, the processing time shows an increasing trend, extending to 238 days by March 2023. This increase reflects a lengthening duration for inventory to move through the system, which may imply buildup of stock or slower sales cycles.
- Overall Insights
- The inverse relationship between inventory turnover and average inventory processing period is consistent with typical inventory management principles. The lengthening processing period coupled with reduced turnover suggests that the company might be experiencing reduced sales velocity or overstocking issues in recent periods. This could warrant further investigation into operational efficiency, demand forecasting, or market dynamics affecting inventory movement.
Average Receivable Collection Period
Albemarle Corp., average receivable collection period calculation (quarterly data)
| Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||||||||||||||||||||||||
| Receivables turnover | 6.49 | 6.15 | 5.40 | 4.50 | 5.51 | 5.98 | 6.36 | 7.09 | 6.04 | 5.89 | 6.28 | 6.52 | 6.74 | 5.86 | 5.52 | 5.47 | 5.61 | 5.57 | — | — | — | |||||||
| Short-term Activity Ratio (no. days) | ||||||||||||||||||||||||||||
| Average receivable collection period1 | 56 | 59 | 68 | 81 | 66 | 61 | 57 | 51 | 60 | 62 | 58 | 56 | 54 | 62 | 66 | 67 | 65 | 66 | — | — | — | |||||||
| Benchmarks (no. days) | ||||||||||||||||||||||||||||
| Average Receivable Collection Period, Competitors2 | ||||||||||||||||||||||||||||
| Linde plc | 52 | 50 | 50 | 54 | 56 | 53 | 54 | 55 | 54 | 56 | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Sherwin-Williams Co. | 47 | 42 | 49 | 52 | 50 | 43 | 48 | 48 | 47 | 41 | — | — | — | — | — | — | — | — | — | — | — | |||||||
Based on: 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
1 Q1 2023 Calculation
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ 6.49 = 56
2 Click competitor name to see calculations.
- Receivables Turnover Ratio
- The receivables turnover ratio demonstrates moderate fluctuations over the observed periods. Starting from approximately 5.57 in early 2018, the ratio exhibits a slight upward trend through 2020, peaking around 7.09 in the third quarter of 2021. Post this peak, the ratio declines gradually, reaching about 4.5 in the first quarter of 2022. Subsequently, it rebounds to reach 6.49 by the first quarter of 2023. This pattern indicates periods of improving efficiency in collecting receivables, particularly notable in mid-2021, followed by a period of reduced turnover in early 2022, and a recovery thereafter.
- Average Receivable Collection Period (Days)
- This metric generally reflects an inverse relationship with the receivables turnover ratio, as expected. The average collection period decreases from 66 days in early 2018 to a low of 51 days in the third quarter of 2021, aligning with the increased turnover ratio observed during the same period. However, there is a notable increase to 81 days in the first quarter of 2022, indicating a slowdown in receivables collection. Following this peak, the collection period decreases once again to 56 days by the first quarter of 2023, suggesting an improvement in receivables management and collection efficiency.
- Overall Trends and Insights
- Over the analyzed timeframe, the company’s receivables turnover and average collection period reflect a cycle of efficiency gains culminating in late 2021, followed by a temporary decline in early 2022. The significant increase in collection days during that period may indicate challenges in collections possibly related to external factors such as market conditions or operational disruptions. The subsequent recovery in both metrics through early 2023 suggests that the company effectively addressed these challenges, restoring more favorable receivables management performance. These trends provide useful insight into the company's working capital efficiency and credit management policies over time.
Operating Cycle
Albemarle Corp., operating cycle calculation (quarterly data)
No. days
| Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||||||||||||||||||||||||
| Average inventory processing period | 238 | 178 | 179 | 158 | 151 | 127 | 119 | 122 | 114 | 128 | 139 | 138 | 137 | 120 | 129 | 135 | 126 | 119 | — | — | — | |||||||
| Average receivable collection period | 56 | 59 | 68 | 81 | 66 | 61 | 57 | 51 | 60 | 62 | 58 | 56 | 54 | 62 | 66 | 67 | 65 | 66 | — | — | — | |||||||
| Short-term Activity Ratio | ||||||||||||||||||||||||||||
| Operating cycle1 | 294 | 237 | 247 | 239 | 217 | 188 | 176 | 173 | 174 | 190 | 197 | 194 | 191 | 182 | 195 | 202 | 191 | 185 | — | — | — | |||||||
| Benchmarks | ||||||||||||||||||||||||||||
| Operating Cycle, Competitors2 | ||||||||||||||||||||||||||||
| Linde plc | 91 | 87 | 84 | 88 | 91 | 89 | 91 | 93 | 94 | 97 | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Sherwin-Williams Co. | 124 | 117 | 122 | 124 | 122 | 105 | 109 | 110 | 115 | 109 | — | — | — | — | — | — | — | — | — | — | — | |||||||
Based on: 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
1 Q1 2023 Calculation
Operating cycle = Average inventory processing period + Average receivable collection period
= 238 + 56 = 294
2 Click competitor name to see calculations.
- Average Inventory Processing Period
- The average inventory processing period shows a generally increasing trend over the observed quarters. Starting at 119 days in March 2019, it experiences gradual fluctuations, with notable rises toward the later periods. By March 2023, the period reaches 238 days, doubling the value observed at the beginning of the dataset. This indicates that the company is taking progressively longer to process inventory, which could suggest changes in inventory management efficiency, possible supply chain delays, or strategic shifts in inventory holding.
- Average Receivable Collection Period
- The average receivable collection period exhibits some variability throughout the quarters, starting at 66 days in March 2019 and showing a tendency to decrease in the mid-periods, reaching a low of 51 days in June 2021. However, from September 2021 onward, there is a general increase, peaking at 81 days in March 2022 before declining again to 56 days by March 2023. This pattern reflects fluctuations in how quickly the company collects receivables, with periods of extended collection times possibly indicating credit policy adjustments or customer payment behavior changes, followed by improvements toward the end of the period.
- Operating Cycle
- The operating cycle closely mirrors the trend observed in the inventory processing period, as it integrates both inventory and receivables metrics. Starting at 185 days in March 2019, there is an upward trajectory with intermittent variation. Notably, the cycle extends significantly in the latter part of the dataset, reaching a high of 294 days by March 2023. This increase suggests that the total time taken from inventory acquisition through to cash collection has lengthened considerably, potentially affecting working capital requirements and liquidity management.
Average Payables Payment Period
Albemarle Corp., average payables payment period calculation (quarterly data)
| Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||||||||||||||||||||||||
| Payables turnover | 1.76 | 2.07 | 1.99 | 2.58 | 2.89 | 3.60 | 4.19 | 4.11 | 4.47 | 4.42 | 4.67 | 4.30 | 3.98 | 4.06 | 4.32 | 3.95 | 4.54 | 4.13 | — | — | — | |||||||
| Short-term Activity Ratio (no. days) | ||||||||||||||||||||||||||||
| Average payables payment period1 | 208 | 176 | 184 | 141 | 126 | 102 | 87 | 89 | 82 | 83 | 78 | 85 | 92 | 90 | 84 | 92 | 80 | 88 | — | — | — | |||||||
| Benchmarks (no. days) | ||||||||||||||||||||||||||||
| Average Payables Payment Period, Competitors2 | ||||||||||||||||||||||||||||
| Linde plc | 56 | 56 | 56 | 64 | 68 | 73 | 67 | 71 | 69 | 73 | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Sherwin-Williams Co. | 71 | 69 | 81 | 89 | 88 | 77 | 90 | 87 | 81 | 80 | — | — | — | — | — | — | — | — | — | — | — | |||||||
Based on: 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
1 Q1 2023 Calculation
Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ 1.76 = 208
2 Click competitor name to see calculations.
- Payables Turnover Ratio
- The payables turnover ratio displays a general downward trend from 2018 to 2023. Starting at 4.13 in March 2018, it increased slightly to peak near 4.67 in December 2020. After this peak, the ratio consistently declined, reaching a low of 1.76 by March 2023. This decline suggests the company has been increasingly slower in settling its payables over the observed period.
- Average Payables Payment Period
- The average payables payment period exhibits an inverse trend relative to the payables turnover ratio. Initially fluctuating between 78 and 92 days from 2018 to early 2021, the payment period began to extend considerably starting mid-2021. By March 2023, it had lengthened substantially to 208 days. This extension implies the company is taking increasing time to pay its suppliers, which may indicate a strategic shift in working capital management or potential liquidity pressures.
- Overall Trend Analysis
- The inverse relationship observed between the payables turnover ratio and the average payables payment period is consistent with standard financial principles, where a lower turnover ratio corresponds to a longer payment period. The marked increase in payment days combined with the declining turnover ratio over recent years suggests a clear change in payment behavior, possibly to conserve cash or due to operational challenges. These trends warrant further analysis in the context of the company’s broader financial health and industry conditions.
Cash Conversion Cycle
Albemarle Corp., cash conversion cycle calculation (quarterly data)
No. days
| Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||||||||||||||||||||||||
| Average inventory processing period | 238 | 178 | 179 | 158 | 151 | 127 | 119 | 122 | 114 | 128 | 139 | 138 | 137 | 120 | 129 | 135 | 126 | 119 | — | — | — | |||||||
| Average receivable collection period | 56 | 59 | 68 | 81 | 66 | 61 | 57 | 51 | 60 | 62 | 58 | 56 | 54 | 62 | 66 | 67 | 65 | 66 | — | — | — | |||||||
| Average payables payment period | 208 | 176 | 184 | 141 | 126 | 102 | 87 | 89 | 82 | 83 | 78 | 85 | 92 | 90 | 84 | 92 | 80 | 88 | — | — | — | |||||||
| Short-term Activity Ratio | ||||||||||||||||||||||||||||
| Cash conversion cycle1 | 86 | 61 | 63 | 98 | 91 | 86 | 89 | 84 | 92 | 107 | 119 | 109 | 99 | 92 | 111 | 110 | 111 | 97 | — | — | — | |||||||
| Benchmarks | ||||||||||||||||||||||||||||
| Cash Conversion Cycle, Competitors2 | ||||||||||||||||||||||||||||
| Linde plc | 35 | 31 | 28 | 24 | 23 | 16 | 24 | 22 | 25 | 24 | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Sherwin-Williams Co. | 53 | 48 | 41 | 35 | 34 | 28 | 19 | 23 | 34 | 29 | — | — | — | — | — | — | — | — | — | — | — | |||||||
Based on: 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
1 Q1 2023 Calculation
Cash conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= 238 + 56 – 208 = 86
2 Click competitor name to see calculations.
- Inventory Processing Period
- The average inventory processing period initially shows a slight upward trend from 119 days in March 2019 to 139 days by December 2020, indicating a gradual increase in the time required to process inventory. After this period, the metric declines somewhat, reaching a low of 114 days in June 2021, before rising again steadily through to March 2023, where it peaks at 238 days. This suggests increasing inefficiencies or potentially higher inventory levels being held towards the end of the series.
- Receivable Collection Period
- The average receivable collection period demonstrates moderate fluctuations but exhibits an overall increasing trend from 62 days in March 2019 to 81 days in March 2022, implying lengthening time to collect receivables over this interval. Following this peak, the period decreases to 56 days by March 2023, indicating improvement in collection efficiency in the most recent quarters.
- Payables Payment Period
- The average payables payment period shows variability but trends upward significantly over the entire timeframe. Starting at 88 days in March 2019, it increases consistently, with some fluctuations, reaching a high of 208 days by March 2023. This notable extension suggests the company is taking longer to pay its suppliers, possibly reflecting changes in payment terms, liquidity management strategies, or operational challenges.
- Cash Conversion Cycle
- The cash conversion cycle remains fairly steady with minor oscillations and a general declining trend from 97 days in March 2019, peaking slightly at 119 days in December 2020, before decreasing to 61 days by December 2022. However, there is an uptick again to 86 days by March 2023. The fluctuations indicate varying efficiencies in managing working capital, with improvements observed toward late 2022 followed by a deterioration in early 2023.
- Overall Insights
- The data reflect notable increases in both inventory processing and payables payment periods, potentially signifying increasing inventory holding times and extended supplier payment periods. Despite improvements in receivables collection efficiency in the latest periods, the overall elongation of the payables period may have contributed to managing the cash conversion cycle within a narrower range. Monitoring these trends is essential, as prolonged inventory and payables periods could have implications for liquidity and operational effectiveness.