Ford Motor Co. (NYSE:F)

The analyzed financial ratios and periods reveal several notable trends in the operational efficiency and working capital management over the course of nearly six years. The metrics examined include inventory turnover, receivables turnover, payables turnover, working capital turnover, as well as related period measures such as inventory processing, receivable collection, payables payment, operating and cash conversion cycles.

Inventory Turnover

This ratio shows some variability, generally oscillating between approximately 7.8 and 10.6. A peak is observed around March 2025 at 10.6, indicating relatively faster inventory movement during that period compared to earlier years when values hovered closer to 8-9. The trend suggests periodic improvements in inventory management efficiency, though fluctuations imply sensitivity to market or internal factors.

Receivables Turnover

The receivables turnover exhibits moderate volatility with values ranging from roughly 8.75 to 14.36. The peak in September 2020 at 14.36 likely reflects accelerated collections during that time, whereas lower values around mid-2024 and later periods suggest comparatively slower receivable conversion. The general trend indicates fluctuations but no strong directional shift over the full timeline.

Payables Turnover

This ratio remains relatively stable with values typically between about 4.7 and 6.6. Occasional upward spikes, such as 6.57 in March 2025, point to periods of faster payable settlement. The overall range indicates consistent management of payables with moderate efficiency and limited volatility.

Working Capital Turnover

Working capital turnover exhibits a clear upward trend, improving from the low 6’s in early 2020 to peaks above 14 by mid-2025. This trend reflects increasing efficiency in utilizing working capital to generate revenue, signaling better operational leverage over time. The sustained rise after 2021 particularly emphasizes enhanced working capital management.

Average Inventory Processing Period

The days required for inventory processing fluctuate between about 34 and 47 days, with no definitive upward or downward trend but rather cyclical variations. Periods with lower days typically coincide with higher inventory turnover ratios, consistent with faster inventory movement.

Average Receivable Collection Period

A generally stable range between 25 and 42 days is observed, with occasional increases around mid-2024. The occasional lengthening of this period could indicate temporary easing in credit collection efforts or customer payment timing variability.

Operating Cycle

The operating cycle, representing the sum of average inventory processing and receivable collection periods, consistently measures between roughly 65 and 86 days. Some increases after 2020 suggest longer operational spans before cash realization, but this remains relatively stable overall.

Average Payables Payment Period

The payable payment period shows moderate variability with a range generally between 56 and 77 days. Occasional declines in days suggest periods where the company opted to settle payables faster, enhancing supplier relationships but potentially using cash more quickly.

Cash Conversion Cycle

The cash conversion cycle displays more variability, fluctuating from negative values (indicating a favorable state where payables are paid after receivables are collected) to positive values up to 20 days. Negative cycles early in the period and occasional positive spikes later reflect nuanced cash flow management and timing differences in payables and receivables.

In summary, the company exhibits generally sound working capital and operational cycle management, with an improving trend in working capital turnover suggesting enhanced efficiency. Inventory and receivable management show variability without strong directional shifts, while payables management remains consistent. The cash conversion cycle’s oscillations indicate flexible cash flow strategies adapting to operational and market conditions over time.

Cost of Sales

The cost of sales exhibited considerable volatility over the period under review. A sharp decline was observed in mid-2020, reaching a low point in the second quarter. This was followed by a steady recovery through late 2020 and into early 2021. The overall trend from 2021 to the end of 2024 shows fluctuations with intermittent peaks, specifically in the fourth quarters of multiple years. The highest figures appear in the later quarters of 2024 and early 2025, indicating increased production or higher input costs toward the end of the timeline.

Inventories

Inventories initially declined from March to June 2020, likely reflecting operational adjustments. However, from mid-2020 through early 2021, inventories grew significantly, peaking in the second quarter of 2023. This upward trend suggests increased stockpiling or accumulation of raw materials and finished goods. Post mid-2023, inventories display a mixed pattern with some quarters showing declines, particularly in late 2023 and into 2024, possibly indicating efforts to reduce inventory levels or improved inventory turnover. The variability reflects dynamic inventory management responding to market conditions and supply chain factors.

Inventory Turnover

Inventory turnover ratios were not available for 2020 but from 2021 onward, the ratios generally oscillate between 7.8 and 10.6. The ratio shows moderate cyclical behavior, improving perceptibly in some quarters (notably Q1 2025 with a value of 10.6) and diminishing slightly in others. The pattern suggests periods of efficient inventory utilization alternating with stretches of comparatively slower movement of inventory. The relatively stable turnover ratio within this range may indicate consistent inventory management practices despite external challenges.

Overall Insights

The combined data reveal a company experiencing fluctuating cost pressures alongside strategic inventory adjustments. Cost of sales fluctuations align with inventory build-ups and drawdowns, suggesting tactical responses to demand variability or supply chain disruptions. Inventories appear to be managed actively, with buildup phases possibly ahead of increased sales expectations or supply constraints, and drawdown phases reflecting sales execution or supply normalization. Inventory turnover consistency reinforces that operational efficiency in inventory management remains a focus amid these changes.

Revenue Trends

The quarterly revenues, excluding Ford Credit, exhibit considerable volatility over the analyzed period. Initially, revenues decreased sharply from 31,353 million USD in March 2020 to 16,632 million USD in June 2020, likely reflecting external economic disruptions during that period. Subsequently, revenues rebounded strongly, peaking multiple times above 40,000 million USD in the quarters ending December 2022 and June 2023.

Despite these peaks, there is a degree of fluctuation with revenues falling back to around the 37,000–39,000 million USD range in more recent quarters. Towards the end of the period, revenues appear relatively stable but have not consistently surpassed previous highs. Notably, some quarters in 2025 show a drop to the 37,000 million USD range before rising again above 46,000 million USD, indicating variability persists.

Trade and Other Receivables

Trade and other receivables, net of allowances, display a general upward trajectory throughout the timeline. Starting at 6,625 million USD in March 2020, they more than doubled to approximately 19,199 million USD by September 2025. This steady increase suggests expanding credit sales or slower collections, which may warrant attention regarding working capital management.

Some periods show temporary dips or slower growth in receivables, such as between March and June 2023, but the overall trend remains upward. The increase in receivables correlates broadly with rising revenues, though a disparity in growth rates between these two metrics should be monitored closely.

Receivables Turnover Ratio

The receivables turnover ratio experienced notable fluctuations. Starting at 11.60 at the beginning of the available data, it declined to a low of approximately 8.75 in September 2025, indicating a potential slowdown in the efficiency of collection processes over time.

Periods of higher turnover ratios occurred sporadically, notably in late 2020 and early 2021, but no sustained improvement is evident. The general downward trend toward the later quarters suggests increasing days sales outstanding, which may impact liquidity and warrants closer monitoring.

Overall Analysis

The financial data reveal a company experiencing significant revenue fluctuations alongside steadily increasing receivables balances. The declining trend in receivables turnover ratio indicates a reduction in collection efficiency that, combined with growing receivables, may pose risks to cash flow management.

The temporal revenue peaks suggest seasonality or external factors influencing sales performance, while the ongoing increase in receivables highlights a potential need to strengthen credit controls or accelerate collections to sustain liquidity.

Cost of Sales

The cost of sales demonstrates a fluctuating yet generally increasing trend over the observed periods. Starting from approximately $30.5 billion in the first quarter of 2020, it notably dropped in the second quarter of 2020 to around $17.9 billion, likely reflecting an external disruption or operational slowdown during that time. Following this decline, the cost of sales recovered and consistently increased through subsequent quarters, reaching a peak exceeding $44 billion by the third quarter of 2025. This upward trend suggests escalating production or acquisition costs, potentially aligned with increased sales volumes or rising input prices over the years.

Payables

Accounts payable values have varied somewhat irregularly but maintain a pattern of gradual increase over the period. Beginning near $18.4 billion in early 2020, payables experienced some short-term declines and rises, for example, decreasing to about $16.4 billion in the second quarter of 2020 and then rising to over $21 billion in the third quarter of the same year. A general upward movement is evident, culminating in payables close to $28 billion by the third quarter of 2025. These changes could reflect changes in credit terms, supplier dynamics, or purchasing volume increases over time.

Payables Turnover Ratio

The payables turnover ratio exhibits variability within a range generally between 4.7 and 6.6 times per year. Starting around 5.08 in the third quarter of 2020, the ratio fluctuates, with occasional peaks near 6.57 in the third quarter of 2025. The ratio’s periodic rises and falls indicate varying pace in settling payables, where higher turnover suggests quicker payment cycles to suppliers and lower turnover indicates extended payment periods. The overall trend points to moderately efficient management of payables with little indication of a consistent acceleration or delay in payment patterns.

Working Capital

The working capital figures demonstrate a general declining trend from March 31, 2020, through June 30, 2025, with fluctuations in between. Starting at approximately $29.8 billion in early 2020, working capital experienced a noticeable decrease through 2022, reaching lows around $14.0 billion in mid-2025. There are intermittent periods of partial recovery, such as late 2022 and early 2023, but the overall trajectory remains downward. This trend may imply tightening liquidity or a change in operational asset and liability management over the period.

Company Revenues Excluding Ford Credit

Revenues excluding Ford Credit show a pattern of cyclical fluctuations with an upward momentum. Beginning at approximately $31.4 billion in Q1 2020, revenues fell sharply in the following quarter to about $16.6 billion, likely reflecting significant operational disruptions. A recovery phase follows, with quarterly revenues generally strengthening and surpassing pre-disruption levels by 2023. The quarterly levels trend upwards, peaking near $47.2 billion by Q4 2025. Despite intermediate quarters with minor dips, the overall direction is growth, suggesting an expansion in core business activities or improved market conditions.

Working Capital Turnover

Working capital turnover metrics started being reported after mid-2020, with values rising steadily over time. Initial values around 5.9 times increased significantly, reaching approximately 12.5 times by late 2025. This increasing turnover indicates more efficient use of working capital to generate revenue. The general upward trend in this ratio coupled with declining working capital suggests the company is generating higher sales relative to its working capital base, implying improved operational efficiency or possibly tighter working capital constraints driving higher turnover.

Overall Insights

The data reveals a scenario where revenues excluding Ford Credit recover and grow robustly after an initial drop, indicative of a strong rebound and business expansion. Concurrently, the diminishing working capital paired with a rising working capital turnover ratio points to enhanced efficiency in utilizing short-term assets and liabilities. However, the declining working capital reserves may also signal increased financial pressure or intentional management decisions to optimize capital structure, warranting further examination of risk factors related to liquidity. The interplay of these metrics reflects a company adapting to changing economic conditions and possibly restructuring working capital usage while driving top-line growth.

Inventory Turnover

The inventory turnover ratio displays variability over the reported periods, generally fluctuating between approximately 7.8 and 10.6. Notably, the ratio started at 10.43 and then decreased to a low close to 7.81 in the middle of the period before increasing again towards the end, reaching above 9.9. This pattern suggests moderate fluctuations in how effectively inventory is being managed, with no consistent upward or downward trend but rather cyclical variations possibly influenced by external factors such as market demand or supply chain dynamics.

Average Inventory Processing Period

The average inventory processing period, expressed in days, inversely correlates with the inventory turnover ratio, varying between 34 and 47 days. The data shows that during periods when inventory turnover fell, the processing period tended to lengthen, and vice versa. For example, the highest processing duration near 47 days coincides with a lower turnover of approximately 7.81. Toward the end of the timeline, the processing period shortens to about 37 days, aligning with an increase in the turnover ratio, which suggests more efficient inventory management.

Overall Analysis

The trends in inventory turnover and processing days indicate that the company's effectiveness in managing inventory experiences periodic fluctuations rather than a smooth trend. Inventory is generally cycled between just over a month to about six weeks, with occasional increases in processing time reflecting temporary inefficiencies. The relationship between turnover and processing days aligns with expectations: higher turnover corresponds with shorter inventory holding periods. This dynamic implies responsiveness to operational conditions, though opportunities may exist to stabilize processes for more consistent performance.

Receivables Turnover

The receivables turnover ratio displays notable fluctuations over the reported periods. Initially observed at 11.6 for the period ending March 31, 2020, it slightly declined to 11.31 in June 2020. A notable increase occurred in September 2020, reaching 14.36, indicating enhanced efficiency in collecting receivables at that time. Subsequently, the ratio decreased steadily to 11.45 by December 2020, and further to a lower range around 9.22 to 9.66 during the periods between June and December 2022.

From early 2023 onward, the ratio mostly oscillated between approximately 9.48 and 11.08, with occasional dips and rises. The period ending September 2024 saw a relative peak of 11.73, suggesting improved collection efficiency during that quarter. However, the turnover ratio showed a gradual decline toward the end of the timeline, falling to 8.75 by September 2025 before slightly recovering to 9.19 in the last recorded quarter. Overall, the trend suggests variability in collections efficiency with intermittent improvements but a general tendency towards moderate turnover rates in the recent years.

Average Receivable Collection Period (Number of Days)

The average collection period in days complements the turnover ratio by indicating the time required to collect receivables. Starting at 31 days in March 2020, the number increased to 32 days in June and then decreased to 25 days by September 2020, aligning with the peak in turnover ratio during the same period and indicating faster collections.

Post-September 2020, the days outstanding increased to 32 in December 2020 and continued a gradual upward trend, reaching as high as 40 days in September 2022. This pattern is consistent with the declining receivables turnover during this period, reflecting longer durations to collect receivables.

From late 2022 into early 2023, the collection period decreased moderately, stabilizing in the mid-30s to low 40s range. Notably, in June 2024 the collection period escalated again to 41 days, corresponding with a dip in turnover ratio. The collection days fluctuated toward the later quarters, with the highest value recorded at 42 days in September 2025, indicating a lengthening of the receivable collection cycle.

Summary Insights

The analysis reveals an inverse relationship between receivables turnover and the average collection period, as expected. Periods with higher turnover ratios correspond to fewer days outstanding, and vice versa. The trends indicate that the company's effectiveness in collecting receivables experienced variability over the reported timeline, with some periods showing enhanced cash conversion efficiency while others displayed signs of slower collections and potential liquidity impacts.

Recent data suggests a modest decline in collection efficiency, as reflected in the slight reduction in turnover ratio and a simultaneous increase in the average collection period. This may warrant focused attention to credit and collection policies to mitigate risks associated with extended receivables periods.

Inventory Processing Period

The average inventory processing period exhibited fluctuations over the observed quarters. Starting at 35 days in the first reported quarter, it increased to a peak of 47 days by mid-2022. Subsequent quarters saw a relatively stable range between 38 to 45 days, with slight decreases towards the end, reaching 37 days in the latest quarter. This suggests variability in inventory turnover efficiency, with periods of slower processing followed by moderate improvements.

Receivable Collection Period

The average receivable collection period showed variability as well, beginning at 31 days, then increasing to a high of 42 days in late 2025. The figure reached several intermediate peaks, such as 40 days in mid-2022 and again near the end of 2025. A decline was observed in early 2023 and mid-2023 quarters, indicating some improvement in receivables collection efficiency temporarily. Overall, the trend indicates some challenges in consistently reducing receivables days.

Operating Cycle

The operating cycle exhibited a closely correlated pattern with the individual inventory and receivable periods. Starting at 66 days and peaking at 86 days in mid-2024, it reflected the combined impact of lengthening periods in both inventory processing and receivables collection. Notably, the operating cycle remained elevated, generally above 70 days, with some decline to 65 days in early 2025 before rising again. This pattern implies that working capital turnover faced pressure intermittently throughout the period.

Overall Analysis

The trends suggest periods of operational inefficiency in managing inventory and receivables, affecting the overall operating cycle duration. Variability in inventory processing and receivables collection periods indicates fluctuating performance in turnover and cash conversion. While short-term improvements are evident in some quarters, the general pattern points to challenges in maintaining consistent improvements in liquidity and working capital management.

Payables Turnover Ratio

Over the observed period, the payables turnover ratio shows noticeable fluctuations. Starting at 5.08 and dipping to 4.75, the ratio then rises substantially to 6.27 before declining again towards the end of the year. Throughout the following years, the ratio generally maintains a range between roughly 4.7 and 6.6. Notably, peaks are seen around the end of certain quarters, such as 6.1, 6.57, and a subsequent decrease thereafter. This pattern suggests varying speeds at which payables are settled, with periods of quicker turnover indicating more rapid payments to creditors interspersed with slower payment intervals.

Average Payables Payment Period

The average payables payment period, measured in days, generally exhibits an inverse relationship to the payables turnover ratio, as expected. Beginning around 72 days, the period extends to a high of 77 days before decreasing sharply to 58 days at one point. Through subsequent quarters, the period oscillates mostly between 60 and 75 days, with periodic shortenings and lengthenings. The trend toward slightly shorter payment periods in more recent quarters indicates a modest acceleration in settling payables, potentially reflecting improved liquidity management or altered payment policies.

Overall Insights

The interplay between the payables turnover ratio and average payment period reflects the company's dynamic management of its payables over time. Fluctuations suggest responses to operational cash flow considerations, supply chain negotiations, or broader economic factors influencing payment timings. The gradual trend towards higher turnover ratios coupled with shorter payment periods in recent quarters may indicate strengthened financial discipline or improved cash position, contributing positively to supplier relationships and possibly leading to more favorable credit terms.

Inventory Processing Period

The average inventory processing period remained unavailable for early quarters but shows a range of 34 to 47 days from mid-2020 onwards. Peaks occurred around June 2020 and June 2022 at 42 and 47 days respectively, indicating periods of slower inventory turnover. Conversely, the lowest periods around March 2025 and September 2025 suggest some improvement in inventory efficiency during those times. Overall, the inventory days exhibit moderate volatility without a clear long-term upward or downward trend.

Receivable Collection Period

The receivable collection period demonstrated variability, fluctuating mainly between 25 and 42 days. Initially, from June 2020 to December 2021, the period hovered around the low 30s, with a notable dip to 25 days in September 2020. Later, the period increased, reaching its peak near 42 days in September 2025, implying slower receivables collection towards the end of the timeline. This upward drift at the end may suggest deteriorating credit or collection policies.

Payables Payment Period

The average payables payment period ranged from 56 to 77 days over the reported quarters, with the highest values occurring between June 2020 and December 2021, peaking at 77 days. Thereafter, the payables period generally declined, reaching its lower values around March to September 2025. The shortening of the payables period suggests accelerated payments to suppliers, potentially reflecting changes in supplier relationships or cash management strategies.

Cash Conversion Cycle

Data for the cash conversion cycle started from December 2020, displaying values ranging from -6 to 20 days. The initial negative and low positive values suggest relatively efficient working capital management during that period. However, an increasing trend appeared with a peak of 20 days in June 2024, indicating a lengthening cash conversion cycle and thus more capital tied up in operations. Following the peak, the cycle decreased moderately to around 15 days by the end of the period. This fluctuating cash conversion performance points to variability in managing the timing between inventory, receivables, and payables.