FedEx Corp. (NYSE:FDX)

The analysis of the financial turnover and period ratios over the examined quarters reveals distinct trends in operational efficiency and working capital management.

Inventory Turnover

The inventory turnover ratio shows a notable increase starting from 121.01 in May 2020 and rising steadily to peak around 150.76 in February 2022. Following this peak, there is a gradual decline to approximately 136.74 by February 2024, before recovering modestly to near 146.67 in August 2025. This trend indicates an initial enhancement in inventory management efficiency followed by some weakening and partial recovery.

Receivables Turnover

The receivables turnover ratio exhibits moderate fluctuations, starting at 6.85 in May 2020, peaking at 8.85 in August 2021, and then generally stabilizing in the range between 7.69 and 8.85 across the following periods. The overall pattern implies periodic improvements in the collection efficiency of accounts receivables, with some volatility.

Payables Turnover

The payables turnover ratio fluctuates with a minimum near 19.74 in May 2020 and reaching as high as 27.5 in August 2023. This suggests variable payment practices, with periods of faster payment cycles notably in 2023, followed by some deceleration. It reflects a changing approach to supplier payment timings, possibly balancing cash flow needs and supplier relationships.

Working Capital Turnover

The working capital turnover ratio demonstrates significant growth from 8.17 in February 2020 to a peak of 29.55 in February 2025, with some oscillations along the way. This sharp increase indicates a considerable improvement in using working capital to generate sales, pointing to enhanced overall operational efficiency and capital utilization.

Average Inventory Processing Period

Inventory processing days remain relatively stable and low, mostly at 2 to 3 days across all periods. Such consistency corroborates the high inventory turnover rates and suggests efficient inventory handling practices.

Average Receivable Collection Period

The collection period generally decreases from about 56 days in February 2020 to a range close to 42–47 days in later periods, indicating improved efficiency in receivables collection, contributing to better cash flow.

Operating Cycle

The operating cycle shortens from about 59 days in February 2020 to approximately 44–49 days in subsequent quarters, reflecting improved coordination between inventory turnover and receivable collections.

Average Payables Payment Period

The payables payment period exhibits minor fluctuations, maintaining around 15 to 18 days, with a brief reduction to 13 days in August 2023. This relative stability shows consistent payment terms management, with occasional acceleration in payments.

Cash Conversion Cycle

The cash conversion cycle decreases from around 41 days in February 2020 to a range of 27 to 34 days in following quarters. This improvement reveals more efficient conversion of investments in inventory and receivables into cash, thereby enhancing liquidity and operational cash flow.

In summary, the data points to marked improvements in turnover ratios and reductions in operating and cash conversion cycles, denoting enhanced operational efficiency and working capital management over the period. Some volatility in payables payment and receivables turnover suggests adaptive adjustments in financial policies likely aimed at balancing liquidity and supplier/customer relationships.

The analysis of the quarterly financial data reveals several significant patterns and trends across the reported periods.

Revenue Trends

Revenue exhibits a general upward trajectory from August 31, 2019, at approximately $17,048 million to a peak near Q2 2022 at $24,394 million. Following this high point, revenue demonstrates a moderate decline and stabilization, fluctuating slightly but maintaining levels around $22,000 to $22,500 million through to August 31, 2025. Notable increments occur between early 2020 and late 2021, reflecting consistent growth in this period, while the subsequent plateau suggests market or operational stabilization.

Spare Parts, Supplies, and Fuel Expenses

These costs remain relatively stable throughout the quarters, fluctuating modestly between $568 million and $655 million. There is a slight rise observed towards the middle of the dataset, particularly noticeable from February 2022 to November 2022, where these expenses peak around $647 to $655 million before declining slightly in the later periods. The relative steadiness of these costs suggests effective cost control or consistent usage patterns relative to operational activities.

Inventory Turnover Ratio

The inventory turnover ratio begins at a high level above 120 in mid-2020 and exhibits an increasing trend reaching approximately 150 by early 2022. Post this peak, a gradual decline follows, falling to around 136 in mid-2024. Subsequently, the ratio shows minor fluctuations but maintains a level above 140 towards August 2025. This pattern indicates initially improving inventory management efficiency or faster turnover, followed by a mild reduction in turnover speed, yet remaining strong relative to the initial periods.

In summary, revenue growth is evident until early 2022, followed by a stabilization phase, while spare parts and fuel costs maintain proportional consistency relative to operational scale. Inventory management efficiency improves significantly through early 2022 but experiences a slight decrease thereafter, still remaining robust. These trends collectively suggest a period of expansion and optimization followed by consolidation and steady operational performance.

Revenue Trends

Revenue exhibited a generally positive trajectory over the analyzed periods, starting at 17,048 million USD in August 2019 and peaking around mid-2022 at approximately 24,394 million USD. Subsequently, revenue showed a slight decline toward 22,244 million USD by August 2025, displaying some fluctuations without a strong directional trend after the peak. The data suggests moderate growth initially, a high point in 2022, and stabilization with minor decreases thereafter.

Receivables, less Allowances

The net receivables increased from 9,312 million USD in August 2019 to an apex near 12,069 million USD by August 2021. Following this period, the receivables fluctuated but maintained a general range between approximately 10,000 and 11,500 million USD, showing moderate variability. This pattern indicates possible changes in credit policy or customer payment behaviors over time, with more stabilized levels during the later periods.

Receivables Turnover Ratio

The receivables turnover ratio began at around 6.85 in May 2020 and generally increased, reaching a peak of 8.85 by May 2023. Following this peak, the turnover ratio showed some volatility but remained within a relatively higher range compared to the earlier periods, fluctuating mostly between 7.69 and 8.85. This indicates an overall improvement in the efficiency of collecting receivables, reflecting potentially enhanced credit management or quicker customer payments.

Integrated Insights

The growth in revenue up to mid-2022, along with rising and then stabilized receivables, suggests increased sales accompanied by credit extension to customers. The concurrent improvement in receivables turnover ratios implies that collection processes became more effective during this time, contributing to cash flow management. However, post-peak fluctuations in revenue and receivables, coupled with a slightly declining turnover ratio, may warrant monitoring for potential risks linked to credit management and revenue stabilization in the medium term.

The revenue figures demonstrate a general upward trend between August 2019 and May 2022, increasing from approximately $17,048 million to nearly $24,394 million. This growth phase reflects a period of expansion in the company's operations. However, from August 2022 onward, revenue shows fluctuations and a mild declining trend, falling to around $22,244 million by August 2025. These fluctuations suggest potential market volatility or operational challenges impacting stable revenue growth during this later period.

Accounts payable balances reveal a gradual increase from $3,179 million in August 2019 to a peak near $4,190 million in November 2021, indicating a buildup in short-term liabilities. Subsequent to this peak, payables fluctuate moderately, showing some periods of decrease and increase, but generally maintaining values between $3,600 million and $4,200 million through August 2025. Such variability in payables suggests adjustments in supplier payment policies or operational cash management.

The payables turnover ratio data, available from May 2020 onwards, generally ranges between approximately 19.7 and 27.5. The ratio reflects the number of times accounts payable are paid off during the period. Notably, there is an increase in turnover ratio around August 2023 at 27.5, indicating a faster payment cycle, which may imply improved liquidity or strategic supplier relationship management. Conversely, the ratio dips towards 20.98 by August 2025, suggesting a slower payment pace. Overall, the payables turnover generally remains stable with some cyclical variations that could be tied to changing operational or market conditions.

In summary, while revenue experienced notable growth through the middle of the observed period followed by some decline and stabilization, accounts payable and payables turnover reveal dynamic working capital management. The company appears to have balanced short-term liabilities effectively with varying payment practices over time, potentially adapting to shifts in cash flow or supplier terms in response to broader economic factors.

Revenue Trend

Growth from 2019 to early 2022, followed by mild decline and variability.

Accounts Payable

Gradual increase peaking in late 2021; moderate fluctuations thereafter.

Payables Turnover Ratio

Relatively stable with a notable peak in mid-2023 indicating faster payments, and declining by mid-2025.

The analysis of the quarterly financial data reveals several notable trends in key metrics over the observed period.

Working Capital

Working capital exhibits variability with periods of increase and decrease. Initially, there is a decline from 3,082 million USD in August 2019 to 2,216 million USD in February 2020. This is followed by a sharp increase peaking at 9,150 million USD in November 2020. After this peak, working capital gradually declines with some fluctuations, falling to around 2,975 million USD in May 2025 before a slight rise again to 3,820 million USD in August 2025. The general trend suggests significant volatility possibly linked to operational or investment activities.

Revenue

Revenue demonstrates a generally upward trend with moderate fluctuations. Starting at 17,048 million USD in August 2019, it progressively increases reaching a high of 24,394 million USD in May 2022. Post this peak, there is a slight decline and stabilization in revenue figures, hovering around 21,000 to 22,000 million USD from late 2022 through to mid-2025. This pattern indicates sustained business activity with some impact possibly from market conditions or competitive factors.

Working Capital Turnover

Working capital turnover, calculated as the ratio of revenue to working capital, shows an increasing trajectory throughout the periods where data is available. Beginning around 11.46 in May 2020, the ratio climbs substantially, reaching over 29.55 by February 2025 before slightly decreasing to 23.19 in May 2025. This increase highlights enhanced efficiency in utilizing working capital to generate revenue, despite the fluctuations in the absolute working capital values.

In summary, the data indicate that while working capital has experienced significant variability, revenue has maintained a relatively stable upward direction until a moderate recent stabilization. The rising working capital turnover ratio reflects improving operational efficiency and better management of working capital relative to revenue generation over time.

The inventory turnover ratio exhibits a generally increasing trend from May 31, 2020, through the subsequent periods, indicating an improvement in the efficiency with which inventory is managed and sold. Starting near 121.01, the ratio climbs steadily to peak values around 150.76 during early 2022, reflecting faster sales cycles and potentially higher demand or improved inventory controls during this time. After reaching these peaks, the ratio experiences minor fluctuations but remains relatively high, mostly staying above 140 through mid-2025, which suggests sustained inventory efficiency.

In contrast, the average inventory processing period shows stability over the observed periods, consistently hovering mostly between 2 and 3 days. This relatively short and stable duration aligns well with the high inventory turnover ratios, implying a quick movement of inventory through the system. The minor variations between 2 and 3 days do not suggest significant changes in operational processes or inventory handling times during the analyzed timeframe.

Inventory turnover ratio

Increases from approximately 121 in mid-2020 to around 150 by early 2022, indicating enhanced inventory efficiency.

Post-peak, stabilizes above 140 with some fluctuations, maintaining relatively high turnover through mid-2025.

Average inventory processing period

Remains stable between 2 and 3 days across all periods, reflecting consistent inventory handling and quick processing times.

The short processing period supports the high turnover ratios observed, suggesting efficient inventory management.

The receivables turnover ratio and the average receivable collection period provide insight into the efficiency of the company's credit and collection policies over the observed periods.

Receivables turnover ratio

The receivables turnover ratio began recording data from the period ending May 31, 2020, starting at 6.85. Over subsequent quarters, this ratio showed a generally upward trend, rising steadily to peak at 8.85 around February 28, 2023. Following this peak, there was some fluctuation but the ratio largely remained above 7.7, suggesting consistent effectiveness in collection efficiency. Toward the final periods, there is a slight downward movement, dropping to 7.69 by August 31, 2025. Nonetheless, compared to the initial periods, the overall increase indicates improved turnover of receivables.

Average receivable collection period

This metric, which measures the average number of days to collect receivables, mirrors the inverse pattern of receivables turnover. It started at 53 days in the earliest recorded period (May 31, 2020), then showed a steady decline to a low of 41 days around August 31, 2023 and May 31, 2024. This reduction implies faster collection cycles. In the later periods, the collection period exhibited minor increases, reaching 47 days by August 31, 2025, indicating some lengthening in collection time but still reflecting improvement compared to early data points.

Overall, the data suggest that the company enhanced the efficiency of its receivables management over the observed timeframe. The rising receivables turnover ratio alongside the decreasing average collection period indicates a stronger ability to convert credit sales into cash more quickly, although some recent periods show slight reversals in this trend. These fluctuations should be monitored to maintain collection effectiveness.

The analysis of the financial cycle-related metrics over the observed periods reveals distinct trends and fluctuations.

Average Inventory Processing Period

The average inventory processing period shows a relatively stable pattern, mostly fluctuating between 2 and 3 days. The values initially appear at 3 days, then briefly decrease to 2 days from August 2021 through November 2022, with occasional returns to 3 days afterward. Overall, this suggests consistent efficiency in inventory processing with minor short-term variations.

Average Receivable Collection Period

The average receivable collection period demonstrates a gradual downward trend over the observed timeframe. Beginning around 53 to 56 days in the earlier periods, it declines steadily to average around 41 to 47 days in later periods, indicating improved effectiveness in collecting receivables and potentially enhanced cash flow management. Minor fluctuations are present but the overall direction is towards shorter collection times.

Operating Cycle

The operating cycle, which combines inventory processing and receivable collection periods, follows a similar downward trend. Initial values in the mid to high 50-day range progressively decrease to about 44 to 49 days towards the end of the series. This trend reflects improvements in the overall operational efficiency, reducing the duration from inventory acquisition to cash collection.

Payables turnover ratio

The payables turnover ratio data begins from May 31, 2020. Initially, the ratio was 21.17 and showed a slight increase to 21.41 in the subsequent quarter. However, it then experienced a downward trend to 20.02 by February 28, 2021, and further decreased to 19.74 by May 31, 2021. Following this dip, the ratio displayed a consistent increasing trend, reaching a peak of 27.5 in August 31, 2024. After this peak, the ratio declined again, fluctuating between approximately 20.98 and 24.37 in the quarters leading up to August 31, 2025. Overall, the payables turnover ratio demonstrates moderate volatility with periods of increase and decrease but trends upward over the entire period analyzed.

Average payables payment period (number of days)

The average payables payment period data, which also starts from May 31, 2020, shows relative stability within the range of 13 to 18 days. Initially, the payment period was at 17 days, with minor fluctuations between 15 and 18 days through May 31, 2023. From May 31, 2023, onwards, the payment period decreased slightly and reached a low of 13 days in August 31, 2024, indicating quicker payments during that quarter. Subsequently, it mostly stabilized around 15 to 17 days. This suggests a moderate but consistent efficiency in payables management, without dramatic changes over the observed quarters.

Average Inventory Processing Period

The average inventory processing period displayed a stable trend around 3 days for most quarters, beginning from May 2020. Notably, a reduction to 2 days occurred intermittently between November 2021 and August 2022 and again between February 2023 and November 2023. This slight variability suggests efforts to improve inventory turnover efficiency, although the period generally remained short and consistent.

Average Receivable Collection Period

This period showed a general decreasing trend from 53-56 days during mid-2019 and early 2020 down to the low 40s from late 2021 through mid-2024. The collection period peaked around February 2020 at 56 days and subsequently improved, reaching values as low as 41 days in multiple quarters. This indicates enhanced effectiveness or stricter credit policies in collecting receivables over time, leading to better cash flow management.

Average Payables Payment Period

The payable payment period remained relatively steady, fluctuating mostly between 15 and 18 days throughout the observed timeframe. There was a slight decrease to 13 days in August 2023, but generally, the company managed to keep payables payment within a narrow range. This consistency suggests stable payment practices with suppliers without significant extension or reduction in payment terms.

Cash Conversion Cycle

The cash conversion cycle exhibited a downward trend starting from around 40-41 days in late 2019 and early 2020 to a low near 27-28 days in early and mid-2023. Although some fluctuations reoccurred toward 30-34 days in later quarters, the overall pattern illustrates improved operational efficiency in converting investments in inventory and receivables into cash. The reduction of the cash conversion cycle reflects favorable liquidity and working capital management.