AmerisourceBergen Corp. (NYSE:ABC)

Inventory Turnover

The inventory turnover ratio showed an overall increasing trend from 12.97 in 2017 to 14.8 in 2022, peaking at 15.77 in 2019. This indicates an improvement in inventory management efficiency, with a slight decline noticed in 2021 before rebounding in 2022.

Receivables Turnover

The receivables turnover ratio decreased from 14.86 in 2017 to 12.93 in 2022. The decline was more marked after 2019, reaching a low of 11.78 in 2021, suggesting a slower collection of receivables over the period.

Payables Turnover

The payables turnover ratio exhibited a slight fluctuation, increasing from 5.85 in 2017 to a peak of 6.15 in 2019, then declining to 5.45 in 2021 before a modest recovery to 5.73 in 2022. This pattern reflects changes in how quickly the company is settling its payables.

Average Inventory Processing Period

The average inventory processing period decreased from 28 days in 2017 to as low as 23 days in 2019, indicating more efficient inventory handling. However, it rose back to 27 days in 2021 before slightly declining to 25 days in 2022.

Average Receivable Collection Period

The average receivable collection period remained stable at 25 days from 2017 to 2019 but increased to 27 days in 2020 and further to 31 days in 2021, then improved slightly to 28 days in 2022. This suggests a lengthening in the time taken to collect receivables during this interval, with some recuperation in the final year.

Operating Cycle

The operating cycle reduced from 53 days in 2017 to 48 days in 2019, reflecting improved operational efficiency. It then increased steadily to 58 days in 2021 before decreasing to 53 days in 2022, indicating some variability in operational processes.

Average Payables Payment Period

The average payables payment period shortened from 62 days in 2017 to 59 days in 2019, then lengthened to 67 days in 2021 before slightly decreasing to 64 days in 2022. This trend suggests the company extended the time taken to pay suppliers during the later years.

Cash Conversion Cycle

The cash conversion cycle remained consistently negative throughout the period, ranging between -9 and -11 days. The most negative values occurred in 2019, 2020, and 2022 at -11 days, indicating that the company was effectively managing its cash conversion by collecting cash before paying its obligations.

Cost of Goods Sold

The cost of goods sold exhibits a consistent upward trend over the analyzed period. Starting at approximately 148.6 billion USD in 2017, it increased annually to reach about 230.3 billion USD by 2022. This indicates a substantial growth in the volume or cost of goods handled by the company, with the highest year-on-year increase occurring between 2021 and 2022.

Inventories

Inventory levels show fluctuations throughout the period, starting at roughly 11.46 billion USD in 2017, peaking at around 15.57 billion USD in 2022. Notably, inventories declined slightly in 2019 before increasing again in subsequent years. This pattern suggests variable inventory management and possible adjustments to meet changing demand or operational strategies.

Inventory Turnover Ratio

The inventory turnover ratio, representing how efficiently inventory is utilized, varied between 12.97 and 15.77 over the years. The ratio increased from 12.97 in 2017 to its peak at 15.77 in 2019, indicating improved efficiency in inventory management during that period. However, it dipped to 13.47 in 2021 before rising again to 14.8 in 2022, showing some variability but generally maintaining a relatively efficient turnover rate.

Summary and Insights

The financial data reflects growth in operations as evidenced by the rising cost of goods sold. Inventory management appears to have been generally effective, with fluctuations that may correspond to operational adjustments or market conditions. The inventory turnover ratio suggests that, despite some variability, the company predominantly maintains an efficient use of its inventory. Overall, the data points to increasing business volume accompanied by adaptive inventory practices.

Revenue

The revenue showed a consistent upward trend over the six-year period analyzed. Starting at approximately 153.1 billion USD in 2017, revenue increased annually, reaching about 238.6 billion USD in 2022. This represents substantial growth, indicating steady expansion of the company's sales or services during these years.

Accounts Receivable, Less Allowances for Returns and Credit Losses

Accounts receivable also exhibited a steady increase throughout the period. Beginning at around 10.3 billion USD in 2017, it gradually rose each year to reach approximately 18.5 billion USD by 2022. This growth in receivables is consistent with rising revenue but suggests a growing amount of credit extended to customers or possibly lengthening collection periods.

Receivables Turnover Ratio

The receivables turnover ratio declined from 14.86 in 2017 to a low of 11.78 in 2021, before slightly improving to 12.93 in 2022. This decline suggests that the company is collecting its receivables less frequently or over longer periods as sales increase, indicating potential easing in credit terms or delays in cash collection. The partial rebound in 2022 may signal an improvement in collection efficiency.

Cost of Goods Sold

The cost of goods sold demonstrated a consistent upward trend over the six-year period examined. Starting at approximately $148.6 billion in 2017, the figure steadily increased each year, reaching around $230.3 billion by 2022. This growth indicates an expanding scale of operations or increased purchasing costs over time.

Accounts Payable

Accounts payable also exhibited a rising trend, increasing from about $25.4 billion in 2017 to nearly $40.2 billion in 2022. This growth aligns with the increase in cost of goods sold, suggesting that the company’s liabilities toward suppliers have grown proportionately with its purchasing activities.

Payables Turnover Ratio

The payables turnover ratio fluctuated modestly across the observed periods. Beginning at 5.85 in 2017, it increased slightly to a peak of 6.15 in 2019, then declined to 5.45 in 2021 before rising again to 5.73 in 2022. These variations imply minor changes in payment efficiency or credit terms with suppliers. Despite the fluctuations, the ratio remained within a narrow range, indicating relative stability in the speed at which the company settles its accounts payable.

The financial data indicates several notable trends in key metrics over the six-year period from 2017 to 2022.

Working Capital

Working capital exhibits a consistently negative value throughout the period, reflecting potential reliance on liabilities exceeding short-term assets. The negative working capital decreased in magnitude from -2,514,866 thousand in 2017 to -797,375 thousand in 2020, indicating an improvement in liquidity or operational efficiency up to that point. However, a reversal occurred in 2021 and 2022, with working capital deteriorating sharply to -2,556,032 thousand and further to -3,888,197 thousand respectively. This worsening suggests growing short-term liquidity pressure or increased current liabilities relative to current assets at the end of these years.

Revenue

Revenue demonstrates a steady and continuous increase across all years. Starting at approximately 153.1 billion USD in 2017, revenue rose consistently each year, reaching around 238.6 billion USD by 2022. This represents a significant growth trajectory, highlighting expanding sales or market presence. The increase each year ranges roughly between 7% and 12%, underscoring solid top-line growth during this period.

Working Capital Turnover

The working capital turnover ratio is not provided for any of the years, limiting the ability to assess the efficiency of the company in utilizing working capital to generate sales. Absence of this ratio data restricts deeper analysis into operational efficiency related to working capital management.

In summary, the company experienced robust revenue growth over the six-year period, reflecting expanding operational scale or market share. Concurrently, working capital showed marked volatility, with an initial reduction in negative working capital followed by a pronounced deterioration in the last two years, signaling possible increased pressure on short-term financial stability. The missing working capital turnover data limits a full assessment of capital efficiency but trends suggest a potential area requiring monitoring given the worsening working capital position.

Inventory Turnover

Over the six-year period, the inventory turnover ratio demonstrates an overall fluctuating trend with an initial increase followed by some variability. Starting at 12.97 in 2017, the ratio increased to a peak of 15.77 in 2019, indicating a more efficient conversion of inventory into sales during this period. Subsequently, there was a decline in 2020 to 14.67 and a further decrease to 13.47 in 2021, suggesting a temporary reduction in inventory management efficiency. However, in 2022, the ratio improved again to 14.8, signaling a rebound in inventory turnover performance.

Average Inventory Processing Period

The average inventory processing period generally shows an inverse relationship to the inventory turnover ratio, consistent with expected industry dynamics. Starting at 28 days in 2017, it decreased to 27 days in 2018 and reached the shortest period of 23 days in 2019, aligning with the peak inventory turnover. After 2019, the period extended to 25 days in 2020 and further to 27 days in 2021, indicating slower inventory processing during these years. In 2022, this period shortened slightly to 25 days, corresponding with the observed improvement in inventory turnover.

Insights

The data reflects a cycle of enhanced inventory management efficiency peaking in 2019, followed by challenges in 2020 and 2021, likely influenced by external factors affecting supply chain or demand. The partial recovery in 2022 indicates efforts to regain operational efficiency. The correlation between the inventory turnover ratio and average inventory processing period confirms consistent inventory dynamics, where improvements in turnover correspond to a quicker inventory processing duration and vice versa.

The financial data presents key metrics related to the management of receivables over a six-year period.

Receivables Turnover

The receivables turnover ratio shows a declining trend from 14.86 in 2017 to a low of 11.78 in 2021, indicating a decrease in the efficiency with which the company collects its receivables over this timeframe. In 2022, there is a slight recovery to 12.93, though the ratio remains below earlier years.

Average Receivable Collection Period

The average number of days to collect receivables corresponds inversely to the turnover ratio. It remained stable at 25 days from 2017 through 2019, then increased to 27 days in 2020 and peaked at 31 days in 2021, suggesting an elongation in the collection process. In 2022, this period shortened somewhat to 28 days, reflecting some improvement but still indicating slower collection than in earlier years.

Overall, the data exhibits a weakening in receivables management between 2017 and 2021, marked by slower collections and diminished turnover. The subsequent slight improvements in 2022 suggest efforts to enhance receivable efficiency, but the metrics have not fully returned to prior performance levels. This pattern may warrant further investigation into credit policies, customer payment behavior, or operational factors impacting collections.

Average Inventory Processing Period

The average inventory processing period exhibited a generally stable pattern with minor fluctuations over the analyzed years. Starting at 28 days in 2017, it slightly decreased to 23 days by 2019, indicating improved inventory turnover efficiency during that period. Following 2019, the period increased marginally to 27 days in 2021 before receding to 25 days in 2022, suggesting a moderate stabilization but with some short-term variability.

Average Receivable Collection Period

The average receivable collection period remained relatively steady at 25 days from 2017 through 2019, reflecting consistent credit collection practices. However, there was a noticeable elongation in 2020 and 2021, reaching a peak of 31 days in 2021. This extension could imply challenges in collections or changes in credit terms during this period. In 2022, the period shortened to 28 days, indicating a partial recovery towards previous efficiency levels.

Operating Cycle

The operating cycle, representing the time between inventory acquisition and cash receipt from sales, closely mirrored the trends observed in the underlying components. It decreased from 53 days in 2017 to a low of 48 days in 2019, pointing to improved operational efficiency. Subsequently, it increased to 58 days in 2021, the highest in the examined period, before decreasing again to 53 days in 2022. This pattern aligns with the variances in the inventory and receivables periods and may reflect external or internal factors impacting the business during these years.

Payables Turnover

The payables turnover ratio started at 5.85 in 2017 and increased slightly to 6.09 in 2018 and further to 6.15 in 2019, indicating a trend towards faster payment to suppliers during this period. However, in 2020, this ratio declined to 5.83, followed by a continued decrease to 5.45 in 2021, suggesting a slower payables cycle. In 2022, the ratio modestly recovered to 5.73, indicating a partial improvement in payment speed but still below the pre-2020 levels.

Average Payables Payment Period

The average payment period in days exhibited a generally inverse relationship to the payables turnover. Starting at 62 days in 2017, the payment period shortened to 60 days in 2018 and 59 days in 2019. This reflects a faster payment to creditors during these years. Following this, the payment period lengthened significantly to 63 days in 2020 and further increased to 67 days in 2021, indicating a slower payment cycle, potentially reflecting cash management adjustments. In 2022, the average payment period decreased slightly to 64 days, suggesting a mild acceleration in payments but still reflecting a more extended payment cycle compared to the pre-2020 timeline.

Summary of Trends

Overall, the data reveal an initial trend towards more rapid payment to suppliers from 2017 through 2019, followed by a notable reversal starting in 2020, likely due to external pressures or strategic cash flow management. The partial recovery in 2022 implies some normalization of payables management but does not entirely return to prior efficiency levels. These patterns suggest cautious financial management of payables in recent years, with possible impacts on supplier relations or liquidity considerations.

Average Inventory Processing Period

The average inventory processing period experienced moderate fluctuations over the years. It decreased from 28 days in 2017 to a low of 23 days in 2019, indicating improved efficiency in inventory turnover during this period. Afterward, the duration slightly increased to 27 days by 2021 but declined again to 25 days in 2022, suggesting a relatively stable but somewhat improved inventory management compared to the initial year.

Average Receivable Collection Period

The average receivable collection period remained stable at 25 days from 2017 through 2019, then increased noticeably to 27 days in 2020 and peaked at 31 days in 2021. This trend implies a lengthening of the time taken to collect receivables, which might indicate more lenient credit policies or slower customer payments during these years. There was some improvement in 2022, with the period declining to 28 days, though still above earlier years.

Average Payables Payment Period

The average payables payment period showed a general increasing trend over the period. It decreased slightly from 62 days in 2017 to 59 days in 2019 but then rose steadily to reach 67 days in 2021, reflecting a longer time taken to settle payables. This could suggest an extension of payment terms or a more strategic use of supplier credit. The period slightly contracted to 64 days in 2022 but remained elevated compared to earlier years.

Cash Conversion Cycle

The cash conversion cycle maintained negative values throughout the analyzed period, ranging between -9 and -11 days. This consistently negative cash conversion cycle indicates the company is able to convert its investments in inventory and receivables into cash more quickly than the time it takes to pay its suppliers. The cycle improved slightly from -9 days in 2017 to -11 days by 2019 and 2020, then reverted to -9 days in 2021 before returning to -11 days in 2022, reflecting a generally efficient working capital management with minor yearly variations.