Stock Analysis on Net

International Business Machines Corp. (NYSE:IBM)

Analysis of Short-term (Operating) Activity Ratios 
Quarterly Data

Microsoft Excel

Short-term Activity Ratios (Summary)

International Business Machines Corp., short-term (operating) activity ratios (quarterly data)

Microsoft Excel
Mar 31, 2025 Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 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
Turnover Ratios
Inventory turnover 18.86 21.10 19.90 22.19 22.72 23.74 19.66 18.29 17.30 17.94 15.59 16.30 14.96 15.68 15.08 17.43 18.90 20.69
Receivables turnover 10.73 9.22 11.61 10.81 10.27 8.57 11.48 10.67 10.52 9.25 10.95 10.17 9.79 8.49 9.23 9.57 10.72 10.32
Payables turnover 7.53 6.75 8.31 7.54 7.67 6.67 8.23 7.36 7.44 6.87 7.35 7.40 7.69 6.54 6.71 7.47 8.35 7.75
Working capital turnover 273.18 46.83 37.03 17.08 14.55 31.12 12.14
Average No. Days
Average inventory processing period 19 17 18 16 16 15 19 20 21 20 23 22 24 23 24 21 19 18
Add: Average receivable collection period 34 40 31 34 36 43 32 34 35 39 33 36 37 43 40 38 34 35
Operating cycle 53 57 49 50 52 58 51 54 56 59 56 58 61 66 64 59 53 53
Less: Average payables payment period 48 54 44 48 48 55 44 50 49 53 50 49 47 56 54 49 44 47
Cash conversion cycle 5 3 5 2 4 3 7 4 7 6 6 9 14 10 10 10 9 6

Based on: 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 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).


The analysis of the financial ratios and related operating cycle metrics over multiple quarters reveals several notable trends and fluctuations. The inventory turnover ratio shows a generally downward trend from early 2020 to late 2021, declining from 20.69 to 15.08, followed by a recovery phase with some volatility, reaching a peak of 23.74 in the first quarter of 2024 before slightly decreasing again. This indicates varying efficiency in inventory management over the period, with periods of slower inventory movement followed by improved turnover efficiency.

The receivables turnover ratio exhibits moderate fluctuations throughout the observed periods, staying within a range roughly between 8.5 and 11.5. There is no consistent upward or downward trend, implying that the company's effectiveness in collecting receivables has remained relatively stable with occasional variations, possibly due to changing credit policies or market conditions affecting customer payments.

Payables turnover ratio also shows variability, fluctuating generally between 6.5 and 8.5 across the quarters. The data reflects periodic changes in the timing of payments to suppliers, suggesting adjustments in payment practices or negotiation of credit terms, but without a clear long-term directional trend.

Working capital turnover presents an interesting pattern with incomplete data for many quarters, but notably high values appear in recent quarters, for example 31.12, 37.03, 46.83, and a striking peak of 273.18 in the latest quarter available. These spikes may indicate exceptional efficiency in the use of working capital or extraordinary changes in balance sheet components, such as a significant reduction in working capital or a surge in sales, warranting further investigation to understand underlying causes.

Examining the average inventory processing period, there is an observable increase from 18 days in early 2020 to a peak of 24 days around late 2020 and early 2021, followed by a gradual reduction to around 15-16 days by 2024, signaling improvements in inventory handling speed in the recent periods compared to mid-period peaks.

The average receivable collection period presents a gradual increase from mid-2020, peaking at around 43 days, followed by a decline to approximately 31-34 days in later quarters. This trend suggests periods of extended credit collection times with signs of improvement in the company’s receivables management as it reduces days outstanding.

The operating cycle duration follows a similar trend to the receivable and inventory metrics, expanding from around 53 days to peaks above 65 days in 2021, then contracting to closer to 49-50 days in 2024. This reduction implies a shorter overall time to convert inventory and receivables into cash, enhancing operational efficiency.

Average payables payment period fluctuates between mid-40s to mid-50s days without a clear long-term trend, suggesting consistent payment practices with some short-term adjustments in timing, potentially reflecting supplier negotiations or cash flow management considerations.

The cash conversion cycle remains relatively low, generally staying under 10 days and even dropping to as low as 2-3 days in some quarters. This indicates strong liquidity management, minimizing the time cash is tied up in the operating cycle after accounting for payables. The modest variability reflects operational tweaks but overall effective cash flow conversion.

In summary, the data shows several phases of operational efficiency shifts. There were periods of elongation in inventory and receivables processing in 2020-2021, followed by improvements in subsequent years. The marked spikes in working capital turnover in recent periods deserve closer examination to ensure sustainability and accuracy. The company appears to manage payables strategically and maintains a comparatively short cash conversion cycle, supporting liquidity. Overall, operational improvements in inventory and receivables management contribute to a shortened operating cycle, enhancing financial flexibility over time.

Inventory Turnover
Declined initially, then recovered with notable improvement by 2024.
Receivables Turnover
Stable with fluctuations, no clear long-term trend.
Payables Turnover
Fluctuated moderately, reflecting changing payment timing.
Working Capital Turnover
Marked recent increases and spikes suggest notable efficiency or balance sheet changes.
Average Inventory Processing Period
Increased mid-period, then improved to shorter durations.
Average Receivable Collection Period
Increased then decreased, indicating improved credit collection recently.
Operating Cycle
Peaked in 2021, shortened thereafter improving operational liquidity.
Average Payables Payment Period
Varied without a clear directional trend.
Cash Conversion Cycle
Consistently low, indicating strong liquidity management.

Turnover Ratios


Average No. Days


Inventory Turnover

International Business Machines Corp., inventory turnover calculation (quarterly data)

Microsoft Excel
Mar 31, 2025 Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 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
Selected Financial Data (US$ in millions)
Cost 6,510 7,114 6,548 6,820 6,720 7,114 6,729 6,974 6,743 7,059 6,677 7,245 6,862 7,193 6,145 6,366 6,160 9,843 9,130 9,423 9,649
Inventory, at lower of average cost or net realizable value 1,431 1,289 1,367 1,234 1,212 1,161 1,399 1,501 1,603 1,552 1,794 1,684 1,776 1,649 1,891 1,807 1,828 1,839 1,949 1,869 1,786
Short-term Activity Ratio
Inventory turnover1 18.86 21.10 19.90 22.19 22.72 23.74 19.66 18.29 17.30 17.94 15.59 16.30 14.96 15.68 15.08 17.43 18.90 20.69
Benchmarks
Inventory Turnover, Competitors2
Cadence Design Systems Inc. 3.06 2.51 1.81 2.79 2.35 2.39 2.59 2.88 3.12 2.90 3.04 3.17 2.91 2.65 3.06 3.50 4.11 4.02
Microsoft Corp. 47.92 59.48 54.62 42.63 22.24 26.35 22.77 21.81 15.10 16.74 18.27 19.09 16.09 19.81 22.53 25.21 17.25 24.32 26.86 23.78 16.56
Synopsys Inc. 2.98 3.44 3.12 3.23 3.18 3.75 4.15 4.43 4.94 5.02 4.62 4.45 4.28 3.76 3.53 3.65 3.51 4.13 4.71 4.49 5.09

Based on: 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 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).

1 Q1 2025 Calculation
Inventory turnover = (CostQ1 2025 + CostQ4 2024 + CostQ3 2024 + CostQ2 2024) ÷ Inventory, at lower of average cost or net realizable value
= (6,510 + 7,114 + 6,548 + 6,820) ÷ 1,431 = 18.86

2 Click competitor name to see calculations.


The data reveals notable fluctuations across key financial metrics over the periods presented.

Cost (US$ in millions)
The cost figures exhibit variability but suggest a general pattern of decline followed by recovery and stabilization. Initially, costs were relatively high around the early 2020 quarters, ranging from approximately 9,130 to 9,843 million USD. A significant drop is observed starting in March 2021, with costs declining to around 6,160 million USD, marking a sharp reduction compared to the previous year’s levels. Following this decline, costs moderately recovered and fluctuated between approximately 6,500 and 7,100 million USD in the subsequent quarters, indicating some stabilization but remaining substantially lower than the peak values of early 2020.
Inventory, at lower of average cost or net realizable value (US$ in millions)
Inventory levels remained relatively stable with only moderate fluctuations throughout the periods. The values mostly oscillate between 1,400 and 1,900 million USD, with minor downward trends starting in mid-2022 through early 2024. For instance, inventory peaked around 1,949 million USD in late 2020 and generally trended downward towards approximately 1,161 million USD by early 2024 before a slight upward adjustment. This trend may indicate tighter inventory management or reduced stock levels in response to changing operational demands or cost controls.
Inventory Turnover (ratio)
Inventory turnover ratio data is only available from late 2020 onwards. It starts at a high level of around 20.69 and shows a downward trend, reaching a low near 14.96 in mid-2022. After this decline, the ratio improves again, increasing steadily to peak at approximately 23.74 by early 2024, before slightly decreasing again towards the end of the dataset to about 18.86. This pattern indicates varying efficiency in inventory management with phases of slower and faster stock turnover, possibly linked to shifts in cost and inventory volumes observed in the other data points.

In summary, the cost structure underwent a significant reduction after early 2021, followed by moderate recovery and stabilization. Inventory levels showed relative stability with slight overall declines during the mid to later periods. Inventory turnover exhibited an initial decline indicating slower movement of inventory, followed by a rebound suggesting improved inventory management efficiency in the most recent periods.


Receivables Turnover

International Business Machines Corp., receivables turnover calculation (quarterly data)

Microsoft Excel
Mar 31, 2025 Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 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
Selected Financial Data (US$ in millions)
Revenue 14,541 17,553 14,968 15,770 14,462 17,381 14,752 15,475 14,252 16,691 14,107 15,535 14,197 16,694 13,251 14,218 13,187 20,366 17,560 18,123 17,571
Notes and accounts receivable, trade, net of allowances 5,857 6,804 5,390 5,769 6,041 7,214 5,330 5,673 5,757 6,541 5,526 5,867 5,963 6,754 6,609 6,827 6,458 7,132 6,099 6,543 6,927
Short-term Activity Ratio
Receivables turnover1 10.73 9.22 11.61 10.81 10.27 8.57 11.48 10.67 10.52 9.25 10.95 10.17 9.79 8.49 9.23 9.57 10.72 10.32
Benchmarks
Receivables Turnover, Competitors2
Adobe Inc. 11.17 10.38 11.62 12.67 9.69 8.73 10.20 10.94 9.99 8.53 9.98 10.51 9.58 8.41 9.77 9.74 9.00 9.20 9.44 8.82 8.40
Cadence Design Systems Inc. 8.39 6.82 7.76 7.37 10.46 8.36 9.19 8.62 7.54 7.32 8.78 8.38 8.72 8.85 9.09 7.41 7.21 7.93
CrowdStrike Holdings Inc. 4.67 3.58 5.07 4.90 5.30 3.58 4.19 4.38 4.43 3.94 4.54 4.27 4.73 3.66 4.41 4.38 3.91 2.92
Fair Isaac Corp. 5.06 4.03 3.78 3.42 4.22 3.90 3.83 4.21 4.54 4.27 4.76 4.95 5.10 4.22 4.83 5.03 4.21 3.87 4.04 3.99 4.25
Intuit Inc. 38.94 35.63 20.02 16.27 39.65 35.48 19.62 15.15 34.68 28.53 17.44 12.84 25.10 24.64 16.04 16.60 79.16 51.54 31.31 11.82 66.66
Microsoft Corp. 5.76 4.31 5.37 5.31 5.91 4.35 5.55 5.70 6.49 4.48 5.90 5.52 6.44 4.42 6.08 5.61 6.44 4.47 6.11 5.71 6.80
Oracle Corp. 6.71 6.73 7.20 7.59 7.82 7.22 7.72 7.43 7.44 7.13 9.12 9.28 9.11 7.48 8.56 8.91 8.57 7.04
Palantir Technologies Inc. 4.30 4.98 3.96 3.76 4.79 6.10 4.94 5.44 7.81 7.38 5.33 6.56 6.42 8.08
Palo Alto Networks Inc. 7.32 3.07 4.54 3.97 5.10 2.80 4.50 4.82 4.70 2.57 4.17 5.10 5.61 3.43 5.20 5.65 5.30 3.29 4.88 5.78 6.04
Salesforce Inc. 8.36 3.05 7.00 6.12 6.95 2.92 7.09 6.18 7.07 2.72 6.22 5.78 7.04 2.73 6.12 5.63 5.93 2.77
ServiceNow Inc. 8.44 4.90 8.00 6.56 7.26 4.41 7.26 7.33 6.87 4.20 7.71 7.74 7.59 4.24 7.13 6.62 7.49 4.48
Synopsys Inc. 6.80 6.56 7.56 7.25 5.63 6.17 8.29 6.78 5.00 6.38 7.25 6.58 4.34 7.40 7.06 6.51 4.84 4.72 5.50 5.36 4.22
Workday Inc. 6.68 4.43 5.70 5.28 5.94 3.96 5.71 5.13 6.94 4.14 5.66 5.35 6.91 4.18 5.60 5.75 6.54 4.13

Based on: 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 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).

1 Q1 2025 Calculation
Receivables turnover = (RevenueQ1 2025 + RevenueQ4 2024 + RevenueQ3 2024 + RevenueQ2 2024) ÷ Notes and accounts receivable, trade, net of allowances
= (14,541 + 17,553 + 14,968 + 15,770) ÷ 5,857 = 10.73

2 Click competitor name to see calculations.


The quarterly financial data reveals several notable trends in revenue, accounts receivable, and receivables turnover over the examined periods.

Revenue Trends
Revenue demonstrates a pattern of fluctuation with seasonal and yearly variations. The first observed annual cycle ending December 2020 shows an increasing trend, peaking at 20,366 million US dollars. However, in the following year, revenue dropped significantly during the first three quarters before recovering towards the end of 2021. Subsequent years show a similar pattern of revenue recovery towards the year-end, though the degree of volatility remains present. The overall revenue figures toward the latest periods (2024 and 2025) stabilize around the 14,000 to 17,500 million US dollars range, suggesting a moderate growth trend interspersed with periodic dips.
Notes and Accounts Receivable, Trade, Net of Allowances
The accounts receivable figures also reflect variability but generally exhibit a downward trend through most years, with a few rebounds notably at year-ends. Starting from a high base over 6,900 million US dollars in Q1 2020, values tend to decline to around the 5,300 to 6,800 million range in subsequent years. This reduction could indicate improved collections or changes in credit management policies. However, occasional spikes, particularly in the last quarter of multiple years and in mid-2024, suggest temporary increases in outstanding receivables possibly related to higher year-end sales or billing cycles.
Receivables Turnover Ratio
The receivables turnover ratio is available starting from late 2020 and generally fluctuates between approximately 8.5 and 11.6. Higher turnover ratios, such as those approaching or exceeding 11, indicate more efficient collection of receivables relative to sales. The data points to several quarters with elevated turnover, especially in late 2021 and 2023, implying periods of more efficient receivables management. Conversely, lower turnover ratios such as around 8.5 to 9.5 in certain quarters suggest less efficient collections or slower cycles during those periods.
Summary of Patterns and Insights
The overall data implies a cyclical behavior in revenue, with peaks commonly observed at year-end quarters, consistent with typical fiscal seasonality in many industries. The trends in accounts receivable align with this cyclicality but also suggest a gradual improvement in collections efficiency over time, as reflected by the generally steady or increasing receivables turnover ratios. The fluctuations in both revenue and receivables highlight an ongoing balancing act between sales volume and credit terms, with operational adjustments possibly made in response to market conditions or company policies. While revenue growth appears modest with intermittent volatility, the ability to maintain or improve turnover ratios suggests effective working capital management over the reported periods.

Payables Turnover

International Business Machines Corp., payables turnover calculation (quarterly data)

Microsoft Excel
Mar 31, 2025 Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 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
Selected Financial Data (US$ in millions)
Cost 6,510 7,114 6,548 6,820 6,720 7,114 6,729 6,974 6,743 7,059 6,677 7,245 6,862 7,193 6,145 6,366 6,160 9,843 9,130 9,423 9,649
Accounts payable 3,585 4,032 3,274 3,631 3,588 4,132 3,342 3,732 3,728 4,051 3,806 3,707 3,453 3,955 4,248 4,214 4,140 4,908 3,985 4,719 4,172
Short-term Activity Ratio
Payables turnover1 7.53 6.75 8.31 7.54 7.67 6.67 8.23 7.36 7.44 6.87 7.35 7.40 7.69 6.54 6.71 7.47 8.35 7.75
Benchmarks
Payables Turnover, Competitors2
Accenture PLC 17.38 15.94 19.31 19.54 16.93 17.41 18.03 17.35 17.54 16.37 16.93 17.22 16.45 15.03 16.92 17.94 20.16 22.48 21.75 20.11 19.17
Adobe Inc. 7.33 6.53 7.47 6.73 7.92 7.50 7.29 6.51 7.21 5.71 6.66 5.53 6.54 5.98 5.40 5.60 6.76 5.63 7.62 6.00 6.52
CrowdStrike Holdings Inc. 38.10 26.82 12.69 18.50 38.08 13.25 6.03 8.95 39.15 8.05 47.07 15.13 75.30 19.03 27.52 17.99 24.39 105.30
Fair Isaac Corp. 15.18 15.49 15.18 17.26 17.11 16.36 18.51 22.82 18.38 17.49 16.79 17.57 15.28 16.02 18.01 18.22 16.55 15.68 17.94 13.99 10.83
Intuit Inc. 5.41 4.81 3.83 4.19 5.12 4.93 3.29 3.54 3.98 3.26 2.52 2.31 3.47 2.70 2.56 2.82 5.25 4.52 3.48 2.78 4.45
Microsoft Corp. 3.42 3.37 3.94 3.89 3.46 3.64 4.28 4.23 3.88 3.30 3.74 3.76 3.70 3.44 3.77 3.80 3.73 3.68 4.78 4.92 5.06
Oracle Corp. 7.00 6.42 9.02 13.12 13.67 11.27 7.60 6.68 6.72 6.74 7.65 8.03 10.79 10.54 9.49 10.71 14.72 12.46
Palantir Technologies Inc. 267.25 5,495.05 18.51 6.85 12.34 35.56 45.04 92.45 93.11 9.12 6.58 6.53 13.10 4.53
Palo Alto Networks Inc. 10.12 17.71 18.29 10.93 14.57 14.43 20.69 14.50 14.30 13.43 14.68 12.25 14.46 22.41 16.80 25.37 21.85 15.72 17.72 15.76 11.28
ServiceNow Inc. 7.83 33.63 13.16 7.04 8.98 15.25 26.38 10.08 7.20 5.74 7.86 5.60 8.57 15.20 19.64 11.82 9.75 28.83
Workday Inc. 24.24 22.71 22.24 19.76 15.27 11.16 21.79 25.95 12.14 25.74 28.20 24.24 25.48 15.85 21.29 19.83 31.83 18.51

Based on: 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 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).

1 Q1 2025 Calculation
Payables turnover = (CostQ1 2025 + CostQ4 2024 + CostQ3 2024 + CostQ2 2024) ÷ Accounts payable
= (6,510 + 7,114 + 6,548 + 6,820) ÷ 3,585 = 7.53

2 Click competitor name to see calculations.


The analysis of the quarterly financial data reveals certain trends and fluctuations in key financial metrics over the observed periods.

Cost (US$ in millions)
The cost figures show variability without a consistent upward or downward trajectory. Starting at 9,649 million in the first quarter of 2020, costs declined gradually through the first three quarters of that year before rising again at the end of 2020. A notable decrease is observed entering 2021, with costs dropping to the 6,100–7,000 million range for subsequent quarters. Thereafter, quarterly costs remain relatively stable around this lower range, fluctuating between approximately 6,500 and 7,100 million through to the first quarter of 2025. This suggests a reduction in cost levels post-2020 with moderation and fair stability over the longer term.
Accounts Payable (US$ in millions)
Accounts payable figures oscillate over time, starting at 4,172 million in the first quarter of 2020 and rising in the next quarter before fluctuating around the 4,000 million mark for most of the period under review. Notably, there are periods of decline to the mid-3,000 million range, particularly in the final quarters of some years. The overall trend appears to be somewhat stable with intermittent decreases and recoveries, possibly reflecting timing differences in payment cycles or operational adjustments.
Payables Turnover (ratio)
Payables turnover ratio data is sporadically available beginning mid-2020. The ratio shows moderate fluctuations within a range of approximately 6.5 to 8.35. Peaks are observed in some quarters such as Jun 30, 2021 (8.35) and Sep 30, 2024 (8.31), indicating more frequent payables turnover during these periods. Conversely, troughs near 6.5 suggest slower turnover during other intervals. The ratio does not present a clear trend of improvement or deterioration but indicates variability in how efficiently the company is managing its payables over time.

In summary, cost figures experienced a downward shift after 2020 followed by stable management within a lower range. Accounts payable exhibit fluctuations without a definitive trend, reflecting variations in operational cash management. Payables turnover ratio demonstrates variability with some peaks and troughs but no consistent directional movement, implying changing efficiency in accounts payable management over the reviewed periods.


Working Capital Turnover

International Business Machines Corp., working capital turnover calculation (quarterly data)

Microsoft Excel
Mar 31, 2025 Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 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
Selected Financial Data (US$ in millions)
Current assets 35,336 34,482 30,543 33,299 36,663 32,908 27,705 34,458 35,982 29,118 28,999 27,896 31,330 29,539 29,967 30,774 34,038 39,165 39,845 39,953 38,931
Less: Current liabilities 35,106 33,142 28,853 29,648 32,397 34,122 30,606 32,513 30,993 31,505 30,466 31,844 34,056 33,619 35,832 36,616 36,542 39,869 37,993 38,442 40,673
Working capital 230 1,340 1,690 3,651 4,266 (1,214) (2,901) 1,945 4,989 (2,387) (1,467) (3,948) (2,726) (4,080) (5,865) (5,842) (2,504) (704) 1,852 1,511 (1,742)
 
Revenue 14,541 17,553 14,968 15,770 14,462 17,381 14,752 15,475 14,252 16,691 14,107 15,535 14,197 16,694 13,251 14,218 13,187 20,366 17,560 18,123 17,571
Short-term Activity Ratio
Working capital turnover1 273.18 46.83 37.03 17.08 14.55 31.12 12.14
Benchmarks
Working Capital Turnover, Competitors2
Accenture PLC 8.28 34.49 22.48 15.40 11.18 11.93 10.11 13.40 14.81 15.07 13.41 15.55 15.85 12.77 7.71 8.35 7.70 8.71 10.32 10.56 9.98
Adobe Inc. 13.02 30.25 19.54 13.19 42.33 6.85 9.10 14.68 19.89 20.28 16.36 31.92 57.86 9.09 6.22 7.44 8.67 4.89 5.51 8.11 9.50
Cadence Design Systems Inc. 1.81 1.75 1.80 6.28 8.78 10.61 7.00 8.51 7.12 9.92 8.31 5.34 4.07 4.01 4.68 5.45 5.03 3.94
CrowdStrike Holdings Inc. 1.52 1.48 1.65 1.45 1.50 1.46 1.47 1.38 1.32 1.25 1.15 1.02 0.95 0.61 1.19 0.92 0.81 0.71
Fair Isaac Corp. 6.71 7.24 5.63 4.92 11.73 8.02 8.09 9.61 10.86 8.99 15.25 13.60 9.46 111.99 25.98 11.15 10.83 53.70 318.71 63.09
Intuit Inc. 7.87 7.45 5.15 13.92 11.94 8.13 6.30 15.31 10.83 8.98 5.68 21.87 4.39 3.85 3.40 5.45 1.74 1.73 3.19 4.80 4.93
Microsoft Corp. 7.32 7.12 8.26 8.63 2.64 2.65 2.65 2.68 2.77 2.66 2.52 1.91 1.88 1.76 1.71 1.44 1.37 1.30 1.24 1.25 1.20
Oracle Corp. 3.50 3.86 3.39 1.70 1.29 1.69 1.58 1.26 1.12
Palantir Technologies Inc. 0.59 0.58 0.60 0.62 0.63 0.66 0.68 0.71 0.75 0.78 0.81 0.78 0.73 0.70
Palo Alto Networks Inc. 3.52 2.15 1.40 4.81 1.80 1.89
Salesforce Inc. 14.56 14.27 42.02 99.31 90.67 62.21 30.85 25.15 54.57 24.95 27.10 4.36 5.11 7.48 10.29 9.75 15.29
ServiceNow Inc. 11.33 13.25 11.50 11.73 27.96 21.77 19.04 9.59 7.83 11.16 6.63 11.21 10.61 21.76 11.15 16.31 5.62 5.76
Synopsys Inc. 1.53 1.60 2.35 2.82 7.85 13.12 10.27 12.83 17.05 21.34 14.02 7.78 9.47 10.65 9.50 9.18 16.88 9.00 27.06
Workday Inc. 1.70 1.49 1.54 1.60 1.69 1.79 1.83 1.93 2.03 35.15 11.69 24.99 8.31 12.50 3.44 5.62 28.97

Based on: 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 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).

1 Q1 2025 Calculation
Working capital turnover = (RevenueQ1 2025 + RevenueQ4 2024 + RevenueQ3 2024 + RevenueQ2 2024) ÷ Working capital
= (14,541 + 17,553 + 14,968 + 15,770) ÷ 230 = 273.18

2 Click competitor name to see calculations.


Working Capital
The working capital exhibited significant volatility over the periods observed. Initially, there was a negative value of -1742 million USD in March 2020, followed by a recovery to positive figures reaching a peak of 1852 million USD in September 2020. However, from the end of 2020 through much of 2022, the working capital frequently remained negative, with pronounced lows such as -5865 million USD in September 2021. Starting in early 2023, the working capital showed marked improvement, turning positive and peaking again at 4989 million USD in March 2023, before experiencing fluctuations but generally maintaining positive values towards the end of the dataset, including 230 million USD in March 2025. This pattern indicates periods of liquidity strain interspersed with phases of better capital availability.
Revenue
The revenue pattern over the quarters showed seasonal and cyclical fluctuations with varying degrees of growth and decline. During 2020, revenue fluctuated between approximately 17,000 and 20,000 million USD, with a notable dip in the first quarter of 2021 to about 13,187 million USD. This was followed by a gradual recovery and relatively stable revenue ranging roughly from 14,000 to 17,500 million USD per quarter from mid-2021 through early 2024. The last several quarters showed consistent revenue levels in the 14,000 to 17,500 million USD range, with no sharp upward or downward trends, indicating a stabilized revenue base in the latter periods.
Working Capital Turnover
Data for working capital turnover is limited and only available from early 2023 onwards. The turnover ratio exhibited an increasing trend, starting at 12.14 in early 2023 and rising significantly to 31.12 in the following quarter. Subsequent quarters showed some variability but generally maintained elevated levels, reaching a high of 273.18 in March 2025. This substantial increase suggests improving efficiency in the use of working capital relative to revenue. The rising turnover ratios in conjunction with the positive working capital values indicate better management of short-term assets and liabilities in the recent periods.

Average Inventory Processing Period

International Business Machines Corp., average inventory processing period calculation (quarterly data)

Microsoft Excel
Mar 31, 2025 Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 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
Selected Financial Data
Inventory turnover 18.86 21.10 19.90 22.19 22.72 23.74 19.66 18.29 17.30 17.94 15.59 16.30 14.96 15.68 15.08 17.43 18.90 20.69
Short-term Activity Ratio (no. days)
Average inventory processing period1 19 17 18 16 16 15 19 20 21 20 23 22 24 23 24 21 19 18
Benchmarks (no. days)
Average Inventory Processing Period, Competitors2
Cadence Design Systems Inc. 119 145 201 131 156 152 141 127 117 126 120 115 125 138 119 104 89 91
Microsoft Corp. 8 6 7 9 16 14 16 17 24 22 20 19 23 18 16 14 21 15 14 15 22
Synopsys Inc. 123 106 117 113 115 97 88 82 74 73 79 82 85 97 103 100 104 88 77 81 72

Based on: 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 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).

1 Q1 2025 Calculation
Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ 18.86 = 19

2 Click competitor name to see calculations.


Inventory Turnover
The inventory turnover ratio exhibits a generally declining trend from 20.69 at the beginning of the observed period, decreasing steadily to a low of 14.96. This decline suggests a slower rate of inventory movement initially. Following this period, there is a recovery phase where the turnover ratio improves, reaching a peak of 23.74. After this peak, the ratio declines again, with some fluctuations, ending at 18.86 in the final period. The pattern indicates variability in inventory efficiency, with periods of both slower and faster inventory turnover over the time span.
Average Inventory Processing Period
The average inventory processing period, measured in days, shows an inverse pattern relative to the inventory turnover. It starts at 18 days, increasing gradually and peaking around 24 days, indicating inventory is held longer during this time. After peaking, the period decreases steadily, reaching its shortest interval of 15 days, before gradually increasing again towards the end of the timeline, finishing at 19 days. This trend corresponds logically with the observed fluctuations in inventory turnover, reflecting periods where inventory management cycles were faster or slower.
Overall Observations
The data reveals an inverse relationship between inventory turnover and average inventory processing period, consistent with financial principles where higher turnover implies shorter holding periods and vice versa. Initial trends suggest a deterioration in inventory efficiency, followed by recovery and improvement, and then variability in the latter periods. The fluctuations in these metrics could imply operational adjustments, changes in demand, supply chain considerations, or inventory management strategies throughout the periods analyzed.

Average Receivable Collection Period

International Business Machines Corp., average receivable collection period calculation (quarterly data)

Microsoft Excel
Mar 31, 2025 Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 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
Selected Financial Data
Receivables turnover 10.73 9.22 11.61 10.81 10.27 8.57 11.48 10.67 10.52 9.25 10.95 10.17 9.79 8.49 9.23 9.57 10.72 10.32
Short-term Activity Ratio (no. days)
Average receivable collection period1 34 40 31 34 36 43 32 34 35 39 33 36 37 43 40 38 34 35
Benchmarks (no. days)
Average Receivable Collection Period, Competitors2
Adobe Inc. 33 35 31 29 38 42 36 33 37 43 37 35 38 43 37 37 41 40 39 41 43
Cadence Design Systems Inc. 43 54 47 50 35 44 40 42 48 50 42 44 42 41 40 49 51 46
CrowdStrike Holdings Inc. 78 102 72 75 69 102 87 83 82 93 80 85 77 100 83 83 93 125
Fair Isaac Corp. 72 91 97 107 86 94 95 87 80 85 77 74 72 87 76 73 87 94 90 91 86
Intuit Inc. 9 10 18 22 9 10 19 24 11 13 21 28 15 15 23 22 5 7 12 31 5
Microsoft Corp. 63 85 68 69 62 84 66 64 56 81 62 66 57 83 60 65 57 82 60 64 54
Oracle Corp. 54 54 51 48 47 51 47 49 49 51 40 39 40 49 43 41 43 52
Palantir Technologies Inc. 85 73 92 97 76 60 74 67 47 49 68 56 57 45
Palo Alto Networks Inc. 50 119 80 92 72 130 81 76 78 142 88 72 65 106 70 65 69 111 75 63 60
Salesforce Inc. 44 120 52 60 53 125 52 59 52 134 59 63 52 134 60 65 62 132
ServiceNow Inc. 43 74 46 56 50 83 50 50 53 87 47 47 48 86 51 55 49 82
Synopsys Inc. 54 56 48 50 65 59 44 54 73 57 50 55 84 49 52 56 75 77 66 68 86
Workday Inc. 55 82 64 69 61 92 64 71 53 88 65 68 53 87 65 63 56 88

Based on: 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 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).

1 Q1 2025 Calculation
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ 10.73 = 34

2 Click competitor name to see calculations.


Receivables Turnover Ratio
The receivables turnover ratio exhibits noticeable fluctuations over the reported periods. Starting from a value of 10.32, the ratio improved slightly to 10.72 before experiencing a decline reaching a low of 8.49. Following this decline, the ratio increased again to peak at 11.61. Subsequent quarters show oscillations between approximately 8.57 and 11.61, with the most recent data indicating a value of 10.73. This pattern suggests variability in how efficiently receivables are being collected during the periods, with no consistent upward or downward trend but rather repeated cycles of improvement and decline.
Average Receivable Collection Period
The average collection period for receivables also reflects the inverse pattern expected relative to the turnover ratio. Initially around 35 days, this metric improved to 34 days, then extended to a maximum of 43 days, indicating slower collections. Following this maximum, the number of days fluctuated between about 31 and 43 days, with occasional decreases to the low thirties indicating faster collections. The latest periods show a collection period of 34 days, suggesting a return to a moderate pace of receivable collection. The oscillations in days reflect the variability in the efficiency of collecting receivables over the quarters.
Summary of Trends
The data reveals cyclical variations in receivables management efficiency, indicated by the alternating rises and falls in the turnover ratio and the inverse movements in the collection period. These variations could be influenced by seasonal factors, changes in credit policies, or fluctuations in customer payment behavior. There is no clear long-term trend of continual improvement or deterioration, but rather a repeated pattern of gains and reversals in both metrics. Maintaining a consistent receivables collection process could be a focus area to reduce volatility and improve predictability in cash flows.

Operating Cycle

International Business Machines Corp., operating cycle calculation (quarterly data)

No. days

Microsoft Excel
Mar 31, 2025 Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 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
Selected Financial Data
Average inventory processing period 19 17 18 16 16 15 19 20 21 20 23 22 24 23 24 21 19 18
Average receivable collection period 34 40 31 34 36 43 32 34 35 39 33 36 37 43 40 38 34 35
Short-term Activity Ratio
Operating cycle1 53 57 49 50 52 58 51 54 56 59 56 58 61 66 64 59 53 53
Benchmarks
Operating Cycle, Competitors2
Cadence Design Systems Inc. 162 199 248 181 191 196 181 169 165 176 162 159 167 179 159 153 140 137
Microsoft Corp. 71 91 75 78 78 98 82 81 80 103 82 85 80 101 76 79 78 97 74 79 76
Synopsys Inc. 177 162 165 163 180 156 132 136 147 130 129 137 169 146 155 156 179 165 143 149 158

Based on: 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 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).

1 Q1 2025 Calculation
Operating cycle = Average inventory processing period + Average receivable collection period
= 19 + 34 = 53

2 Click competitor name to see calculations.


Average inventory processing period
The average inventory processing period demonstrates a general increase from 18 days in March 2021 to a peak of 24 days in December 2021 and June 2022. Subsequently, there is a gradual decline to 19 days by December 2023. Following this, the period further decreases to a low of 15 days by March 2024, indicating improved inventory turnover efficiency. However, toward the end of the observed timeline, the period slightly rises again to 19 days by March 2025. This pattern suggests periods of varying inventory management efficiency, with a notable improvement in early 2024 before a modest reversal.
Average receivable collection period
The average receivable collection period fluctuates within a range from 31 to 43 days. Starting at 35 days in March 2021, it peaks at 43 days in December 2021 and March 2024, reflecting slower collections in those quarters. Between these peaks, the collection period generally trends downward, reaching as low as 31 days in December 2024, indicating improved receivables management. However, the notable increases at certain points may signify challenges in credit collections or changes in sales terms.
Operating cycle
The operating cycle, which is the sum of the inventory processing and receivable collection periods, shows an increasing trend from 53 days in March 2021 to 66 days in March 2022, indicating a lengthening of the cash conversion period. Afterward, it declines gradually to 49 days in December 2024, suggesting enhanced operational efficiency. Nevertheless, a slight uptick to 57 days in March 2025 indicates some variability toward the end of the period. Overall, the data suggest an initial increase in the time needed to convert resources to cash followed by operational improvements.

Average Payables Payment Period

International Business Machines Corp., average payables payment period calculation (quarterly data)

Microsoft Excel
Mar 31, 2025 Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 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
Selected Financial Data
Payables turnover 7.53 6.75 8.31 7.54 7.67 6.67 8.23 7.36 7.44 6.87 7.35 7.40 7.69 6.54 6.71 7.47 8.35 7.75
Short-term Activity Ratio (no. days)
Average payables payment period1 48 54 44 48 48 55 44 50 49 53 50 49 47 56 54 49 44 47
Benchmarks (no. days)
Average Payables Payment Period, Competitors2
Accenture PLC 21 23 19 19 22 21 20 21 21 22 22 21 22 24 22 20 18 16 17 18 19
Adobe Inc. 50 56 49 54 46 49 50 56 51 64 55 66 56 61 68 65 54 65 48 61 56
CrowdStrike Holdings Inc. 10 14 29 20 10 28 61 41 9 45 8 24 5 19 13 20 15 3
Fair Isaac Corp. 24 24 24 21 21 22 20 16 20 21 22 21 24 23 20 20 22 23 20 26 34
Intuit Inc. 67 76 95 87 71 74 111 103 92 112 145 158 105 135 142 129 70 81 105 131 82
Microsoft Corp. 107 108 93 94 106 100 85 86 94 111 98 97 99 106 97 96 98 99 76 74 72
Oracle Corp. 52 57 40 28 27 32 48 55 54 54 48 45 34 35 38 34 25 29
Palantir Technologies Inc. 1 0 20 53 30 10 8 4 4 40 55 56 28 81
Palo Alto Networks Inc. 36 21 20 33 25 25 18 25 26 27 25 30 25 16 22 14 17 23 21 23 32
ServiceNow Inc. 47 11 28 52 41 24 14 36 51 64 46 65 43 24 19 31 37 13
Workday Inc. 15 16 16 18 24 33 17 14 30 14 13 15 14 23 17 18 11 20

Based on: 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 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).

1 Q1 2025 Calculation
Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ 7.53 = 48

2 Click competitor name to see calculations.


The analysis of the payables turnover ratio over the observed periods reveals fluctuations within a moderate range. The ratio increased initially from 7.75 to 8.35, indicating a faster rate of payables turnover, suggesting relatively quicker payments to suppliers. However, subsequent periods show a decline to 6.71 and 6.54, implying a slowing turnover rate and potentially longer payment cycles. Thereafter, the ratio exhibits variability between approximately 6.67 and 8.31, without a consistent upward or downward trend, reflecting some inconsistency in the company's payment velocity.

Correspondingly, the average payables payment period, measured in days, shows an inverse relationship with the payables turnover ratio as expected. Initially, the days decreased from 47 to 44, aligning with the higher turnover ratio, indicating quicker settlements. Then, the payment period extended to a peak range around 53-56 days, signifying slower payment patterns during those quarters. Following this, the payment days oscillate between 44 and 55 days, again reflecting variability and absence of a steady trend.

Overall, these patterns suggest that the company's management of payables lacks a stable direction during the analyzed timeframe. Periods of accelerated payments are followed by slower payments, indicating possible fluctuations in cash management strategy, supplier terms, or operational circumstances affecting payment schedules. The lack of a consistent trend highlights an area for potential financial process optimization to ensure more predictable cash outflows and supplier relationships.

Payables Turnover Ratio
Initially increased, then declined and fluctuated between ~6.5 and 8.3 times per period.
Average Payables Payment Period
Varied inversely, ranging mostly between 44 and 56 days with no clear steady trend.
Insights
Payment cycles show inconsistency; management may need to focus on stabilizing payables processing to improve cash flow predictability.

Cash Conversion Cycle

International Business Machines Corp., cash conversion cycle calculation (quarterly data)

No. days

Microsoft Excel
Mar 31, 2025 Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 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
Selected Financial Data
Average inventory processing period 19 17 18 16 16 15 19 20 21 20 23 22 24 23 24 21 19 18
Average receivable collection period 34 40 31 34 36 43 32 34 35 39 33 36 37 43 40 38 34 35
Average payables payment period 48 54 44 48 48 55 44 50 49 53 50 49 47 56 54 49 44 47
Short-term Activity Ratio
Cash conversion cycle1 5 3 5 2 4 3 7 4 7 6 6 9 14 10 10 10 9 6
Benchmarks
Cash Conversion Cycle, Competitors2
Microsoft Corp. -36 -17 -18 -16 -28 -2 -3 -5 -14 -8 -16 -12 -19 -5 -21 -17 -20 -2 -2 5 4

Based on: 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 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).

1 Q1 2025 Calculation
Cash conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= 19 + 3448 = 5

2 Click competitor name to see calculations.


The financial data reveals several key trends in the company's working capital management over the observed periods.

Average Inventory Processing Period
The inventory processing period shows a gradual increase from 18 days in March 2020 to a peak of 24 days in December 2020 and June 2022, indicating a lengthening of the time inventory remains before being processed. Following this peak, a general decline is observed, reaching as low as 15 days by March 2024, suggesting an improvement in inventory turnover and efficiency. Towards the most recent periods, there is a slight increase again, ending at 19 days in March 2025.
Average Receivable Collection Period
The receivable collection period exhibits some volatility. Starting around the mid-30s days range, it rises to 40 days by December 2020, indicating slower collection. This period then fluctuates, with decreases to the low 30s and spikes such as 43 days in March 2024 and 40 days again in March 2025. Generally, the collection period remains in the 30 to 40 days range, reflecting moderate variability in accounts receivable management efficiency.
Average Payables Payment Period
The payment period for payables shows variability, increasing from 44 days in June 2020 to a peak of 56 days in March 2021, which suggests the company extended its payment terms or delayed payments during that time. After reaching this peak, the period decreases to as low as 44 days in June 2023 and 44 days again in December 2024, indicating a tendency towards quicker payments. The payment period fluctuates near the mid-40s to mid-50s days mark throughout the periods.
Cash Conversion Cycle
The cash conversion cycle, derived from the interplay of inventory, receivables, and payables periods, indicates an overall trend of improvement in liquidity and operational efficiency. Starting from 6 days in March 2020, it increases slightly up to 14 days in June 2022, before steadily declining to a very low 2 days by September 2024. The cycle remains low in subsequent periods, with small fluctuations, ending near 5 days in March 2025. This decreasing trend suggests a more efficient conversion of inventory and receivables into cash while managing payables effectively.

Overall, the data suggests that the company has progressively improved its operational efficiency, particularly evident in the reduced cash conversion cycle in recent years. The reduction in inventory processing time complements this efficiency, while receivables and payables periods show manageable fluctuations without extreme volatility. The effective shortening of the cash conversion cycle may contribute positively to cash flow and financial flexibility.