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)
McKesson Corp., short-term (operating) activity ratios
Based on: 10-K (reporting date: 2016-03-31), 10-K (reporting date: 2015-03-31), 10-K (reporting date: 2014-03-31), 10-K (reporting date: 2013-03-31), 10-K (reporting date: 2012-03-31), 10-K (reporting date: 2011-03-31).
| Short-term activity ratio | Description | The company |
|---|---|---|
| Inventory turnover | An activity ratio calculated as cost of goods sold divided by inventory. | McKesson Corp. inventory turnover ratio improved from 2014 to 2015 but then slightly deteriorated from 2015 to 2016. |
| Receivables turnover | An activity ratio equal to revenue divided by receivables. | McKesson Corp. receivables turnover ratio improved from 2014 to 2015 but then slightly deteriorated from 2015 to 2016. |
| Payables turnover | An activity ratio calculated as cost of goods sold divided by payables. | McKesson Corp. payables turnover ratio increased from 2014 to 2015 but then slightly decreased from 2015 to 2016 not reaching 2014 level. |
| Working capital turnover | An activity ratio calculated as revenue divided by working capital. | McKesson Corp. working capital turnover ratio improved from 2014 to 2015 and from 2015 to 2016. |
| 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. | |
| Average receivable collection period | An activity ratio equal to the number of days in the period divided by receivables turnover. | McKesson Corp. number of days of receivables outstanding improved from 2014 to 2015 but then slightly deteriorated from 2015 to 2016. |
| Operating cycle | Equal to average inventory processing period plus average receivables collection period. | McKesson Corp. operating cycle improved from 2014 to 2015 but then slightly deteriorated from 2015 to 2016. |
| 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. | McKesson Corp. number of days of payables outstanding decreased from 2014 to 2015 but then increased from 2015 to 2016 not reaching 2014 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. | McKesson Corp. cash conversion cycle improved from 2014 to 2015 and from 2015 to 2016. |
Inventory Turnover
McKesson Corp., inventory turnover calculation, comparison to benchmarks
| Mar 31, 2016 | Mar 31, 2015 | Mar 31, 2014 | Mar 31, 2013 | Mar 31, 2012 | Mar 31, 2011 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Cost of sales | 179,468) | 167,634) | 129,300) | 115,471) | 116,167) | 106,114) | |
| Inventories, net | 15,335) | 14,296) | 13,308) | 10,335) | 10,073) | 9,225) | |
| Short-term Activity Ratio | |||||||
| Inventory turnover1 | 11.70 | 11.73 | 9.72 | 11.17 | 11.53 | 11.50 | |
| Benchmarks | |||||||
| Inventory Turnover, Competitors2 | |||||||
| Abbott Laboratories | — | — | — | — | — | — | |
| Cigna Group | — | — | — | — | — | — | |
| CVS Health Corp. | — | — | — | — | — | — | |
| Intuitive Surgical Inc. | — | — | — | — | — | — | |
| Medtronic PLC | — | — | — | — | — | — | |
Based on: 10-K (reporting date: 2016-03-31), 10-K (reporting date: 2015-03-31), 10-K (reporting date: 2014-03-31), 10-K (reporting date: 2013-03-31), 10-K (reporting date: 2012-03-31), 10-K (reporting date: 2011-03-31).
1 2016 Calculation
Inventory turnover = Cost of sales ÷ Inventories, net
= 179,468 ÷ 15,335 = 11.70
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. | McKesson Corp. inventory turnover ratio improved from 2014 to 2015 but then slightly deteriorated from 2015 to 2016. |
Receivables Turnover
McKesson Corp., receivables turnover calculation, comparison to benchmarks
| Mar 31, 2016 | Mar 31, 2015 | Mar 31, 2014 | Mar 31, 2013 | Mar 31, 2012 | Mar 31, 2011 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Revenues | 190,884) | 179,045) | 137,609) | 122,455) | 122,734) | 112,084) | |
| Receivables, net | 17,980) | 15,914) | 14,193) | 9,975) | 9,977) | 9,187) | |
| Short-term Activity Ratio | |||||||
| Receivables turnover1 | 10.62 | 11.25 | 9.70 | 12.28 | 12.30 | 12.20 | |
| Benchmarks | |||||||
| Receivables Turnover, Competitors2 | |||||||
| Abbott Laboratories | — | — | — | — | — | — | |
| Cigna Group | — | — | — | — | — | — | |
| CVS Health Corp. | — | — | — | — | — | — | |
| Elevance Health Inc. | — | — | — | — | — | — | |
| Humana Inc. | — | — | — | — | — | — | |
| Intuitive Surgical Inc. | — | — | — | — | — | — | |
| Medtronic PLC | — | — | — | — | — | — | |
| UnitedHealth Group Inc. | — | — | — | — | — | — | |
Based on: 10-K (reporting date: 2016-03-31), 10-K (reporting date: 2015-03-31), 10-K (reporting date: 2014-03-31), 10-K (reporting date: 2013-03-31), 10-K (reporting date: 2012-03-31), 10-K (reporting date: 2011-03-31).
1 2016 Calculation
Receivables turnover = Revenues ÷ Receivables, net
= 190,884 ÷ 17,980 = 10.62
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. | McKesson Corp. receivables turnover ratio improved from 2014 to 2015 but then slightly deteriorated from 2015 to 2016. |
Payables Turnover
McKesson Corp., payables turnover calculation, comparison to benchmarks
| Mar 31, 2016 | Mar 31, 2015 | Mar 31, 2014 | Mar 31, 2013 | Mar 31, 2012 | Mar 31, 2011 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Cost of sales | 179,468) | 167,634) | 129,300) | 115,471) | 116,167) | 106,114) | |
| Drafts and accounts payable | 28,585) | 25,166) | 21,429) | 16,108) | 16,114) | 14,090) | |
| Short-term Activity Ratio | |||||||
| Payables turnover1 | 6.28 | 6.66 | 6.03 | 7.17 | 7.21 | 7.53 | |
| Benchmarks | |||||||
| Payables Turnover, Competitors2 | |||||||
| Abbott Laboratories | — | — | — | — | — | — | |
| Cigna Group | — | — | — | — | — | — | |
| CVS Health Corp. | — | — | — | — | — | — | |
| Elevance Health Inc. | — | — | — | — | — | — | |
| Humana Inc. | — | — | — | — | — | — | |
| Intuitive Surgical Inc. | — | — | — | — | — | — | |
| Medtronic PLC | — | — | — | — | — | — | |
| UnitedHealth Group Inc. | — | — | — | — | — | — | |
Based on: 10-K (reporting date: 2016-03-31), 10-K (reporting date: 2015-03-31), 10-K (reporting date: 2014-03-31), 10-K (reporting date: 2013-03-31), 10-K (reporting date: 2012-03-31), 10-K (reporting date: 2011-03-31).
1 2016 Calculation
Payables turnover = Cost of sales ÷ Drafts and accounts payable
= 179,468 ÷ 28,585 = 6.28
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. | McKesson Corp. payables turnover ratio increased from 2014 to 2015 but then slightly decreased from 2015 to 2016 not reaching 2014 level. |
Working Capital Turnover
McKesson Corp., working capital turnover calculation, comparison to benchmarks
| Mar 31, 2016 | Mar 31, 2015 | Mar 31, 2014 | Mar 31, 2013 | Mar 31, 2012 | Mar 31, 2011 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Current assets | 38,437) | 36,670) | 32,573) | 23,170) | 23,603) | 22,357) | |
| Less: Current liabilities | 35,071) | 33,497) | 29,501) | 21,357) | 21,686) | 18,726) | |
| Working capital | 3,366) | 3,173) | 3,072) | 1,813) | 1,917) | 3,631) | |
| Revenues | 190,884) | 179,045) | 137,609) | 122,455) | 122,734) | 112,084) | |
| Short-term Activity Ratio | |||||||
| Working capital turnover1 | 56.71 | 56.43 | 44.79 | 67.54 | 64.02 | 30.87 | |
| Benchmarks | |||||||
| Working Capital Turnover, Competitors2 | |||||||
| Abbott Laboratories | — | — | — | — | — | — | |
| Cigna Group | — | — | — | — | — | — | |
| CVS Health Corp. | — | — | — | — | — | — | |
| Elevance Health Inc. | — | — | — | — | — | — | |
| Humana Inc. | — | — | — | — | — | — | |
| Intuitive Surgical Inc. | — | — | — | — | — | — | |
| Medtronic PLC | — | — | — | — | — | — | |
| UnitedHealth Group Inc. | — | — | — | — | — | — | |
Based on: 10-K (reporting date: 2016-03-31), 10-K (reporting date: 2015-03-31), 10-K (reporting date: 2014-03-31), 10-K (reporting date: 2013-03-31), 10-K (reporting date: 2012-03-31), 10-K (reporting date: 2011-03-31).
1 2016 Calculation
Working capital turnover = Revenues ÷ Working capital
= 190,884 ÷ 3,366 = 56.71
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Working capital turnover | An activity ratio calculated as revenue divided by working capital. | McKesson Corp. working capital turnover ratio improved from 2014 to 2015 and from 2015 to 2016. |
Average Inventory Processing Period
McKesson Corp., average inventory processing period calculation, comparison to benchmarks
| Mar 31, 2016 | Mar 31, 2015 | Mar 31, 2014 | Mar 31, 2013 | Mar 31, 2012 | Mar 31, 2011 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||
| Inventory turnover | 11.70 | 11.73 | 9.72 | 11.17 | 11.53 | 11.50 | |
| Short-term Activity Ratio (no. days) | |||||||
| Average inventory processing period1 | 31 | 31 | 38 | 33 | 32 | 32 | |
| Benchmarks (no. days) | |||||||
| Average Inventory Processing Period, Competitors2 | |||||||
| Abbott Laboratories | — | — | — | — | — | — | |
| Cigna Group | — | — | — | — | — | — | |
| CVS Health Corp. | — | — | — | — | — | — | |
| Intuitive Surgical Inc. | — | — | — | — | — | — | |
| Medtronic PLC | — | — | — | — | — | — | |
Based on: 10-K (reporting date: 2016-03-31), 10-K (reporting date: 2015-03-31), 10-K (reporting date: 2014-03-31), 10-K (reporting date: 2013-03-31), 10-K (reporting date: 2012-03-31), 10-K (reporting date: 2011-03-31).
1 2016 Calculation
Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ 11.70 = 31
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. |
Average Receivable Collection Period
McKesson Corp., average receivable collection period calculation, comparison to benchmarks
| Mar 31, 2016 | Mar 31, 2015 | Mar 31, 2014 | Mar 31, 2013 | Mar 31, 2012 | Mar 31, 2011 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||
| Receivables turnover | 10.62 | 11.25 | 9.70 | 12.28 | 12.30 | 12.20 | |
| Short-term Activity Ratio (no. days) | |||||||
| Average receivable collection period1 | 34 | 32 | 38 | 30 | 30 | 30 | |
| Benchmarks (no. days) | |||||||
| Average Receivable Collection Period, Competitors2 | |||||||
| Abbott Laboratories | — | — | — | — | — | — | |
| Cigna Group | — | — | — | — | — | — | |
| CVS Health Corp. | — | — | — | — | — | — | |
| Elevance Health Inc. | — | — | — | — | — | — | |
| Humana Inc. | — | — | — | — | — | — | |
| Intuitive Surgical Inc. | — | — | — | — | — | — | |
| Medtronic PLC | — | — | — | — | — | — | |
| UnitedHealth Group Inc. | — | — | — | — | — | — | |
Based on: 10-K (reporting date: 2016-03-31), 10-K (reporting date: 2015-03-31), 10-K (reporting date: 2014-03-31), 10-K (reporting date: 2013-03-31), 10-K (reporting date: 2012-03-31), 10-K (reporting date: 2011-03-31).
1 2016 Calculation
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ 10.62 = 34
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. | McKesson Corp. number of days of receivables outstanding improved from 2014 to 2015 but then slightly deteriorated from 2015 to 2016. |
Operating Cycle
McKesson Corp., operating cycle calculation, comparison to benchmarks
No. days
| Mar 31, 2016 | Mar 31, 2015 | Mar 31, 2014 | Mar 31, 2013 | Mar 31, 2012 | Mar 31, 2011 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||
| Average inventory processing period | 31 | 31 | 38 | 33 | 32 | 32 | |
| Average receivable collection period | 34 | 32 | 38 | 30 | 30 | 30 | |
| Short-term Activity Ratio | |||||||
| Operating cycle1 | 65 | 63 | 76 | 63 | 62 | 62 | |
| Benchmarks | |||||||
| Operating Cycle, Competitors2 | |||||||
| Abbott Laboratories | — | — | — | — | — | — | |
| Cigna Group | — | — | — | — | — | — | |
| CVS Health Corp. | — | — | — | — | — | — | |
| Intuitive Surgical Inc. | — | — | — | — | — | — | |
| Medtronic PLC | — | — | — | — | — | — | |
Based on: 10-K (reporting date: 2016-03-31), 10-K (reporting date: 2015-03-31), 10-K (reporting date: 2014-03-31), 10-K (reporting date: 2013-03-31), 10-K (reporting date: 2012-03-31), 10-K (reporting date: 2011-03-31).
1 2016 Calculation
Operating cycle = Average inventory processing period + Average receivable collection period
= 31 + 34 = 65
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. | McKesson Corp. operating cycle improved from 2014 to 2015 but then slightly deteriorated from 2015 to 2016. |
Average Payables Payment Period
McKesson Corp., average payables payment period calculation, comparison to benchmarks
| Mar 31, 2016 | Mar 31, 2015 | Mar 31, 2014 | Mar 31, 2013 | Mar 31, 2012 | Mar 31, 2011 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||
| Payables turnover | 6.28 | 6.66 | 6.03 | 7.17 | 7.21 | 7.53 | |
| Short-term Activity Ratio (no. days) | |||||||
| Average payables payment period1 | 58 | 55 | 60 | 51 | 51 | 48 | |
| Benchmarks (no. days) | |||||||
| Average Payables Payment Period, Competitors2 | |||||||
| Abbott Laboratories | — | — | — | — | — | — | |
| Cigna Group | — | — | — | — | — | — | |
| CVS Health Corp. | — | — | — | — | — | — | |
| Elevance Health Inc. | — | — | — | — | — | — | |
| Humana Inc. | — | — | — | — | — | — | |
| Intuitive Surgical Inc. | — | — | — | — | — | — | |
| Medtronic PLC | — | — | — | — | — | — | |
| UnitedHealth Group Inc. | — | — | — | — | — | — | |
Based on: 10-K (reporting date: 2016-03-31), 10-K (reporting date: 2015-03-31), 10-K (reporting date: 2014-03-31), 10-K (reporting date: 2013-03-31), 10-K (reporting date: 2012-03-31), 10-K (reporting date: 2011-03-31).
1 2016 Calculation
Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ 6.28 = 58
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. | McKesson Corp. number of days of payables outstanding decreased from 2014 to 2015 but then increased from 2015 to 2016 not reaching 2014 level. |
Cash Conversion Cycle
McKesson Corp., cash conversion cycle calculation, comparison to benchmarks
No. days
| Mar 31, 2016 | Mar 31, 2015 | Mar 31, 2014 | Mar 31, 2013 | Mar 31, 2012 | Mar 31, 2011 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||
| Average inventory processing period | 31 | 31 | 38 | 33 | 32 | 32 | |
| Average receivable collection period | 34 | 32 | 38 | 30 | 30 | 30 | |
| Average payables payment period | 58 | 55 | 60 | 51 | 51 | 48 | |
| Short-term Activity Ratio | |||||||
| Cash conversion cycle1 | 7 | 8 | 16 | 12 | 11 | 14 | |
| Benchmarks | |||||||
| Cash Conversion Cycle, Competitors2 | |||||||
| Abbott Laboratories | — | — | — | — | — | — | |
| Cigna Group | — | — | — | — | — | — | |
| CVS Health Corp. | — | — | — | — | — | — | |
| Intuitive Surgical Inc. | — | — | — | — | — | — | |
| Medtronic PLC | — | — | — | — | — | — | |
Based on: 10-K (reporting date: 2016-03-31), 10-K (reporting date: 2015-03-31), 10-K (reporting date: 2014-03-31), 10-K (reporting date: 2013-03-31), 10-K (reporting date: 2012-03-31), 10-K (reporting date: 2011-03-31).
1 2016 Calculation
Cash conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= 31 + 34 – 58 = 7
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. | McKesson Corp. cash conversion cycle improved from 2014 to 2015 and from 2015 to 2016. |