Analysis of Short-term (Operating) Activity Ratios
Activity ratios measure how efficiently a company performs day-to-day tasks, such us the collection of receivables and management of inventory.
Short-term Activity Ratios (Summary)
International Business Machines Corp., short-term (operating) activity ratios
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
| Short-term activity ratio | Description | The company |
|---|---|---|
| Inventory turnover | An activity ratio calculated as cost of goods sold divided by inventory. | International Business Machines Corp. inventory turnover ratio improved from 2021 to 2022 and from 2022 to 2023. |
| Receivables turnover | An activity ratio equal to revenue divided by receivables. | International Business Machines Corp. receivables turnover ratio improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023 not reaching 2021 level. |
| Payables turnover | An activity ratio calculated as cost of goods sold divided by payables. | International Business Machines Corp. payables turnover ratio increased from 2021 to 2022 but then slightly decreased from 2022 to 2023 not reaching 2021 level. |
| Short-term activity ratio | Description | The company |
|---|---|---|
| Average inventory processing period | An activity ratio equal to the number of days in the period divided by inventory turnover over the period. | International Business Machines Corp. number of days of inventory outstanding improved from 2021 to 2022 and from 2022 to 2023. |
| Average receivable collection period | An activity ratio equal to the number of days in the period divided by receivables turnover. | |
| Operating cycle | Equal to average inventory processing period plus average receivables collection period. | International Business Machines Corp. operating cycle improved from 2021 to 2022 and from 2022 to 2023. |
| Average payables payment period | An estimate of the average number of days it takes a company to pay its suppliers; equal to the number of days in the period divided by payables turnover ratio for the period. | International Business Machines Corp. number of days of payables outstanding decreased from 2021 to 2022 but then increased from 2022 to 2023 not reaching 2021 level. |
| Cash conversion cycle | A financial metric that measures the length of time required for a company to convert cash invested in its operations to cash received as a result of its operations; equal to average inventory processing period plus average receivables collection period minus average payables payment period. | International Business Machines Corp. cash conversion cycle improved from 2021 to 2022 and from 2022 to 2023. |
Inventory Turnover
International Business Machines Corp., inventory turnover calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Cost | 27,560) | 27,843) | 25,864) | 38,045) | 40,659) | |
| Inventory | 1,161) | 1,552) | 1,649) | 1,839) | 1,619) | |
| Short-term Activity Ratio | ||||||
| Inventory turnover1 | 23.74 | 17.94 | 15.68 | 20.69 | 25.11 | |
| Benchmarks | ||||||
| Inventory Turnover, Competitors2 | ||||||
| Cadence Design Systems Inc. | 2.39 | 2.90 | 2.65 | 4.02 | 4.77 | |
| Microsoft Corp. | 26.35 | 16.74 | 19.81 | 24.32 | 20.80 | |
| Oracle Corp. | 45.52 | 28.27 | 55.32 | 37.62 | 24.98 | |
| Synopsys Inc. | 3.75 | 5.02 | 3.76 | 4.13 | 5.32 | |
| Inventory Turnover, Sector | ||||||
| Software & Services | 38.34 | 26.70 | 28.04 | 31.72 | 31.12 | |
| Inventory Turnover, Industry | ||||||
| Information Technology | 7.93 | 8.56 | 10.33 | 11.06 | 11.23 | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Inventory turnover = Cost ÷ Inventory
= 27,560 ÷ 1,161 = 23.74
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Inventory turnover | An activity ratio calculated as cost of goods sold divided by inventory. | International Business Machines Corp. inventory turnover ratio improved from 2021 to 2022 and from 2022 to 2023. |
Receivables Turnover
International Business Machines Corp., receivables turnover calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Revenue | 61,860) | 60,530) | 57,350) | 73,620) | 77,147) | |
| Notes and accounts receivable, trade, net of allowances | 7,214) | 6,541) | 6,754) | 7,132) | 7,870) | |
| Short-term Activity Ratio | ||||||
| Receivables turnover1 | 8.57 | 9.25 | 8.49 | 10.32 | 9.80 | |
| Benchmarks | ||||||
| Receivables Turnover, Competitors2 | ||||||
| Accenture PLC | 6.00 | 5.87 | 5.74 | 6.16 | 5.79 | |
| Adobe Inc. | 8.73 | 8.53 | 8.41 | 9.20 | 7.28 | |
| Autodesk Inc. | 5.21 | 6.13 | 5.89 | 5.02 | 5.42 | |
| Cadence Design Systems Inc. | 8.36 | 7.32 | 8.85 | 7.93 | 7.67 | |
| CrowdStrike Holdings Inc. | 3.58 | 3.94 | 3.66 | 2.92 | — | |
| Intuit Inc. | 35.48 | 28.53 | 24.64 | 51.54 | 77.98 | |
| Microsoft Corp. | 4.35 | 4.48 | 4.42 | 4.47 | 4.26 | |
| Oracle Corp. | 7.22 | 7.13 | 7.48 | 7.04 | 7.69 | |
| Palantir Technologies Inc. | 6.10 | 7.38 | 8.08 | 6.96 | — | |
| Palo Alto Networks Inc. | 2.80 | 2.57 | 3.43 | 3.29 | 4.98 | |
| Salesforce Inc. | 2.92 | 2.72 | 2.73 | 2.77 | 2.70 | |
| ServiceNow Inc. | 4.41 | 4.20 | 4.24 | 4.48 | 4.14 | |
| Synopsys Inc. | 6.17 | 6.38 | 7.40 | 4.72 | 6.07 | |
| Receivables Turnover, Sector | ||||||
| Software & Services | 5.15 | 5.22 | 5.25 | 5.60 | 5.59 | |
| Receivables Turnover, Industry | ||||||
| Information Technology | 7.42 | 7.45 | 7.54 | 7.94 | 7.56 | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Receivables turnover = Revenue ÷ Notes and accounts receivable, trade, net of allowances
= 61,860 ÷ 7,214 = 8.57
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Receivables turnover | An activity ratio equal to revenue divided by receivables. | International Business Machines Corp. receivables turnover ratio improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023 not reaching 2021 level. |
Payables Turnover
International Business Machines Corp., payables turnover calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Cost | 27,560) | 27,843) | 25,864) | 38,045) | 40,659) | |
| Accounts payable | 4,132) | 4,051) | 3,955) | 4,908) | 4,896) | |
| Short-term Activity Ratio | ||||||
| Payables turnover1 | 6.67 | 6.87 | 6.54 | 7.75 | 8.30 | |
| Benchmarks | ||||||
| Payables Turnover, Competitors2 | ||||||
| Accenture PLC | 17.41 | 16.37 | 15.03 | 22.48 | 18.16 | |
| Adobe Inc. | 7.50 | 5.71 | 5.98 | 5.63 | 7.98 | |
| Autodesk Inc. | 4.71 | 3.46 | 2.75 | 3.88 | 2.81 | |
| Cadence Design Systems Inc. | 4.77 | 7.89 | — | — | — | |
| CrowdStrike Holdings Inc. | 13.25 | 8.05 | 19.03 | 105.30 | — | |
| Intuit Inc. | 4.93 | 3.26 | 2.70 | 4.52 | 4.26 | |
| Microsoft Corp. | 3.64 | 3.30 | 3.44 | 3.68 | 4.57 | |
| Oracle Corp. | 11.27 | 6.74 | 10.54 | 12.46 | 13.78 | |
| Palantir Technologies Inc. | 35.56 | 9.12 | 4.53 | 21.55 | — | |
| Palo Alto Networks Inc. | 14.43 | 13.43 | 22.41 | 15.72 | 11.03 | |
| Salesforce Inc. | — | — | — | — | — | |
| ServiceNow Inc. | 15.25 | 5.74 | 15.20 | 28.83 | 15.04 | |
| Synopsys Inc. | 7.84 | 28.30 | 31.44 | 26.49 | 38.00 | |
| Payables Turnover, Sector | ||||||
| Software & Services | 6.22 | 5.52 | 5.70 | 6.60 | 7.58 | |
| Payables Turnover, Industry | ||||||
| Information Technology | 4.79 | 4.25 | 4.63 | 4.92 | 4.90 | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Payables turnover = Cost ÷ Accounts payable
= 27,560 ÷ 4,132 = 6.67
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Payables turnover | An activity ratio calculated as cost of goods sold divided by payables. | International Business Machines Corp. payables turnover ratio increased from 2021 to 2022 but then slightly decreased from 2022 to 2023 not reaching 2021 level. |
Working Capital Turnover
International Business Machines Corp., working capital turnover calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current assets | 32,908) | 29,118) | 29,539) | 39,165) | 38,420) | |
| Less: Current liabilities | 34,122) | 31,505) | 33,619) | 39,869) | 37,701) | |
| Working capital | (1,214) | (2,387) | (4,080) | (704) | 719) | |
| Revenue | 61,860) | 60,530) | 57,350) | 73,620) | 77,147) | |
| Short-term Activity Ratio | ||||||
| Working capital turnover1 | — | — | — | — | 107.30 | |
| Benchmarks | ||||||
| Working Capital Turnover, Competitors2 | ||||||
| Accenture PLC | 11.93 | 15.07 | 12.77 | 8.71 | 9.85 | |
| Adobe Inc. | 6.85 | 20.28 | 9.09 | 4.89 | — | |
| Autodesk Inc. | — | — | — | — | — | |
| Cadence Design Systems Inc. | 10.61 | 9.92 | 4.01 | 3.94 | 4.70 | |
| CrowdStrike Holdings Inc. | 1.46 | 1.25 | 0.61 | 0.71 | — | |
| Intuit Inc. | 8.13 | 8.98 | 3.85 | 1.73 | 4.17 | |
| Microsoft Corp. | 2.65 | 2.66 | 1.76 | 1.30 | 1.19 | |
| Oracle Corp. | — | 3.50 | 1.29 | 1.12 | 1.42 | |
| Palantir Technologies Inc. | 0.66 | 0.78 | 0.70 | 0.66 | — | |
| Palo Alto Networks Inc. | — | — | — | 1.40 | 1.80 | |
| Salesforce Inc. | 62.21 | 24.95 | 5.11 | 15.29 | — | |
| ServiceNow Inc. | 21.77 | 11.16 | 21.76 | 5.76 | 46.69 | |
| Synopsys Inc. | 13.12 | 21.34 | 10.65 | 9.00 | — | |
| Working Capital Turnover, Sector | ||||||
| Software & Services | 5.36 | 4.80 | 2.77 | 2.19 | 2.37 | |
| Working Capital Turnover, Industry | ||||||
| Information Technology | 5.80 | 6.44 | 4.32 | 3.29 | 3.49 | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Working capital turnover = Revenue ÷ Working capital
= 61,860 ÷ -1,214 = —
2 Click competitor name to see calculations.
Average Inventory Processing Period
International Business Machines Corp., average inventory processing period calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Inventory turnover | 23.74 | 17.94 | 15.68 | 20.69 | 25.11 | |
| Short-term Activity Ratio (no. days) | ||||||
| Average inventory processing period1 | 15 | 20 | 23 | 18 | 15 | |
| Benchmarks (no. days) | ||||||
| Average Inventory Processing Period, Competitors2 | ||||||
| Cadence Design Systems Inc. | 152 | 126 | 138 | 91 | 76 | |
| Microsoft Corp. | 14 | 22 | 18 | 15 | 18 | |
| Oracle Corp. | 8 | 13 | 7 | 10 | 15 | |
| Synopsys Inc. | 97 | 73 | 97 | 88 | 69 | |
| Average Inventory Processing Period, Sector | ||||||
| Software & Services | 10 | 14 | 13 | 12 | 12 | |
| Average Inventory Processing Period, Industry | ||||||
| Information Technology | 46 | 43 | 35 | 33 | 33 | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ 23.74 = 15
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Average inventory processing period | An activity ratio equal to the number of days in the period divided by inventory turnover over the period. | International Business Machines Corp. number of days of inventory outstanding improved from 2021 to 2022 and from 2022 to 2023. |
Average Receivable Collection Period
International Business Machines Corp., average receivable collection period calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Receivables turnover | 8.57 | 9.25 | 8.49 | 10.32 | 9.80 | |
| Short-term Activity Ratio (no. days) | ||||||
| Average receivable collection period1 | 43 | 39 | 43 | 35 | 37 | |
| Benchmarks (no. days) | ||||||
| Average Receivable Collection Period, Competitors2 | ||||||
| Accenture PLC | 61 | 62 | 64 | 59 | 63 | |
| Adobe Inc. | 42 | 43 | 43 | 40 | 50 | |
| Autodesk Inc. | 70 | 60 | 62 | 73 | 67 | |
| Cadence Design Systems Inc. | 44 | 50 | 41 | 46 | 48 | |
| CrowdStrike Holdings Inc. | 102 | 93 | 100 | 125 | — | |
| Intuit Inc. | 10 | 13 | 15 | 7 | 5 | |
| Microsoft Corp. | 84 | 81 | 83 | 82 | 86 | |
| Oracle Corp. | 51 | 51 | 49 | 52 | 47 | |
| Palantir Technologies Inc. | 60 | 49 | 45 | 52 | — | |
| Palo Alto Networks Inc. | 130 | 142 | 106 | 111 | 73 | |
| Salesforce Inc. | 125 | 134 | 134 | 132 | 135 | |
| ServiceNow Inc. | 83 | 87 | 86 | 82 | 88 | |
| Synopsys Inc. | 59 | 57 | 49 | 77 | 60 | |
| Average Receivable Collection Period, Sector | ||||||
| Software & Services | 71 | 70 | 70 | 65 | 65 | |
| Average Receivable Collection Period, Industry | ||||||
| Information Technology | 49 | 49 | 48 | 46 | 48 | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ 8.57 = 43
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Average receivable collection period | An activity ratio equal to the number of days in the period divided by receivables turnover. |
Operating Cycle
International Business Machines Corp., operating cycle calculation, comparison to benchmarks
No. days
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Average inventory processing period | 15 | 20 | 23 | 18 | 15 | |
| Average receivable collection period | 43 | 39 | 43 | 35 | 37 | |
| Short-term Activity Ratio | ||||||
| Operating cycle1 | 58 | 59 | 66 | 53 | 52 | |
| Benchmarks | ||||||
| Operating Cycle, Competitors2 | ||||||
| Cadence Design Systems Inc. | 196 | 176 | 179 | 137 | 124 | |
| Microsoft Corp. | 98 | 103 | 101 | 97 | 104 | |
| Oracle Corp. | 59 | 64 | 56 | 62 | 62 | |
| Synopsys Inc. | 156 | 130 | 146 | 165 | 129 | |
| Operating Cycle, Sector | ||||||
| Software & Services | 81 | 84 | 83 | 77 | 77 | |
| Operating Cycle, Industry | ||||||
| Information Technology | 95 | 92 | 83 | 79 | 81 | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Operating cycle = Average inventory processing period + Average receivable collection period
= 15 + 43 = 58
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Operating cycle | Equal to average inventory processing period plus average receivables collection period. | International Business Machines Corp. operating cycle improved from 2021 to 2022 and from 2022 to 2023. |
Average Payables Payment Period
International Business Machines Corp., average payables payment period calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Payables turnover | 6.67 | 6.87 | 6.54 | 7.75 | 8.30 | |
| Short-term Activity Ratio (no. days) | ||||||
| Average payables payment period1 | 55 | 53 | 56 | 47 | 44 | |
| Benchmarks (no. days) | ||||||
| Average Payables Payment Period, Competitors2 | ||||||
| Accenture PLC | 21 | 22 | 24 | 16 | 20 | |
| Adobe Inc. | 49 | 64 | 61 | 65 | 46 | |
| Autodesk Inc. | 78 | 105 | 133 | 94 | 130 | |
| Cadence Design Systems Inc. | 77 | 46 | — | — | — | |
| CrowdStrike Holdings Inc. | 28 | 45 | 19 | 3 | — | |
| Intuit Inc. | 74 | 112 | 135 | 81 | 86 | |
| Microsoft Corp. | 100 | 111 | 106 | 99 | 80 | |
| Oracle Corp. | 32 | 54 | 35 | 29 | 26 | |
| Palantir Technologies Inc. | 10 | 40 | 81 | 17 | — | |
| Palo Alto Networks Inc. | 25 | 27 | 16 | 23 | 33 | |
| Salesforce Inc. | — | — | — | — | — | |
| ServiceNow Inc. | 24 | 64 | 24 | 13 | 24 | |
| Synopsys Inc. | 47 | 13 | 12 | 14 | 10 | |
| Average Payables Payment Period, Sector | ||||||
| Software & Services | 59 | 66 | 64 | 55 | 48 | |
| Average Payables Payment Period, Industry | ||||||
| Information Technology | 76 | 86 | 79 | 74 | 74 | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ 6.67 = 55
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Average payables payment period | An estimate of the average number of days it takes a company to pay its suppliers; equal to the number of days in the period divided by payables turnover ratio for the period. | International Business Machines Corp. number of days of payables outstanding decreased from 2021 to 2022 but then increased from 2022 to 2023 not reaching 2021 level. |
Cash Conversion Cycle
International Business Machines Corp., cash conversion cycle calculation, comparison to benchmarks
No. days
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Average inventory processing period | 15 | 20 | 23 | 18 | 15 | |
| Average receivable collection period | 43 | 39 | 43 | 35 | 37 | |
| Average payables payment period | 55 | 53 | 56 | 47 | 44 | |
| Short-term Activity Ratio | ||||||
| Cash conversion cycle1 | 3 | 6 | 10 | 6 | 8 | |
| Benchmarks | ||||||
| Cash Conversion Cycle, Competitors2 | ||||||
| Cadence Design Systems Inc. | 119 | 130 | — | — | — | |
| Microsoft Corp. | -2 | -8 | -5 | -2 | 24 | |
| Oracle Corp. | 27 | 10 | 21 | 33 | 36 | |
| Synopsys Inc. | 109 | 117 | 134 | 151 | 119 | |
| Cash Conversion Cycle, Sector | ||||||
| Software & Services | 22 | 18 | 19 | 22 | 29 | |
| Cash Conversion Cycle, Industry | ||||||
| Information Technology | 19 | 6 | 4 | 5 | 7 | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Cash conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= 15 + 43 – 55 = 3
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Cash conversion cycle | A financial metric that measures the length of time required for a company to convert cash invested in its operations to cash received as a result of its operations; equal to average inventory processing period plus average receivables collection period minus average payables payment period. | International Business Machines Corp. cash conversion cycle improved from 2021 to 2022 and from 2022 to 2023. |