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)
Paycom Software Inc., short-term (operating) activity ratios
Based on: 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), 10-K (reporting date: 2018-12-31).
| Short-term activity ratio | Description | The company |
|---|---|---|
| Inventory turnover | An activity ratio calculated as cost of goods sold divided by inventory. | Paycom Software Inc. inventory turnover ratio improved from 2020 to 2021 but then slightly deteriorated from 2021 to 2022. |
| Receivables turnover | An activity ratio equal to revenue divided by receivables. | Paycom Software Inc. receivables turnover ratio improved from 2020 to 2021 but then deteriorated significantly from 2021 to 2022. |
| Payables turnover | An activity ratio calculated as cost of goods sold divided by payables. | Paycom Software Inc. payables turnover ratio increased from 2020 to 2021 but then decreased significantly from 2021 to 2022. |
| Working capital turnover | An activity ratio calculated as revenue divided by working capital. | Paycom Software Inc. working capital turnover ratio deteriorated from 2020 to 2021 and from 2021 to 2022. |
| 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. | Paycom Software Inc. number of days of receivables outstanding improved from 2020 to 2021 but then deteriorated significantly from 2021 to 2022. |
| Operating cycle | Equal to average inventory processing period plus average receivables collection period. | Paycom Software Inc. operating cycle improved from 2020 to 2021 but then deteriorated significantly from 2021 to 2022. |
| 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. | Paycom Software Inc. number of days of payables outstanding decreased from 2020 to 2021 but then increased from 2021 to 2022 exceeding 2020 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. | Paycom Software Inc. cash conversion cycle deteriorated from 2020 to 2021 but then improved from 2021 to 2022 exceeding 2020 level. |
Inventory Turnover
Paycom Software Inc., inventory turnover calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Cost of revenues | 212,741) | 161,886) | 123,546) | 109,747) | 90,763) | |
| Inventory | 1,607) | 1,131) | 1,151) | 1,158) | 797) | |
| Short-term Activity Ratio | ||||||
| Inventory turnover1 | 132.38 | 143.14 | 107.34 | 94.77 | 113.88 | |
| Benchmarks | ||||||
| Inventory Turnover, Competitors2 | ||||||
| Cintas Corp. | 8.94 | 7.89 | 9.42 | 11.25 | — | |
| Inventory Turnover, Industry | ||||||
| Industrials | 4.30 | 4.04 | 3.72 | — | — | |
Based on: 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), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Inventory turnover = Cost of revenues ÷ Inventory
= 212,741 ÷ 1,607 = 132.38
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. | Paycom Software Inc. inventory turnover ratio improved from 2020 to 2021 but then slightly deteriorated from 2021 to 2022. |
Receivables Turnover
Paycom Software Inc., receivables turnover calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Revenues | 1,375,218) | 1,055,524) | 841,434) | 737,671) | 566,336) | |
| Accounts receivable | 22,843) | 9,490) | 9,130) | 9,298) | 3,414) | |
| Short-term Activity Ratio | ||||||
| Receivables turnover1 | 60.20 | 111.22 | 92.16 | 79.34 | 165.89 | |
| Benchmarks | ||||||
| Receivables Turnover, Competitors2 | ||||||
| Cintas Corp. | 7.81 | 7.89 | 8.14 | 7.57 | — | |
| Receivables Turnover, Industry | ||||||
| Industrials | 8.17 | 7.76 | 7.58 | — | — | |
Based on: 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), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Receivables turnover = Revenues ÷ Accounts receivable
= 1,375,218 ÷ 22,843 = 60.20
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. | Paycom Software Inc. receivables turnover ratio improved from 2020 to 2021 but then deteriorated significantly from 2021 to 2022. |
Payables Turnover
Paycom Software Inc., payables turnover calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Cost of revenues | 212,741) | 161,886) | 123,546) | 109,747) | 90,763) | |
| Accounts payable | 16,054) | 5,772) | 6,787) | 5,051) | 6,288) | |
| Short-term Activity Ratio | ||||||
| Payables turnover1 | 13.25 | 28.05 | 18.20 | 21.73 | 14.43 | |
| Benchmarks | ||||||
| Payables Turnover, Competitors2 | ||||||
| Cintas Corp. | 16.79 | 16.47 | 16.67 | 16.65 | — | |
| Payables Turnover, Industry | ||||||
| Industrials | 7.86 | 7.84 | 7.52 | — | — | |
Based on: 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), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Payables turnover = Cost of revenues ÷ Accounts payable
= 212,741 ÷ 16,054 = 13.25
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. | Paycom Software Inc. payables turnover ratio increased from 2020 to 2021 but then decreased significantly from 2021 to 2022. |
Working Capital Turnover
Paycom Software Inc., working capital turnover calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Current assets | 2,764,172) | 2,252,038) | 1,864,605) | 1,871,100) | 1,064,622) | |
| Less: Current liabilities | 2,377,037) | 1,990,410) | 1,718,030) | 1,753,522) | 1,028,682) | |
| Working capital | 387,135) | 261,628) | 146,575) | 117,578) | 35,940) | |
| Revenues | 1,375,218) | 1,055,524) | 841,434) | 737,671) | 566,336) | |
| Short-term Activity Ratio | ||||||
| Working capital turnover1 | 3.55 | 4.03 | 5.74 | 6.27 | 15.76 | |
| Benchmarks | ||||||
| Working Capital Turnover, Competitors2 | ||||||
| Cintas Corp. | 6.55 | 7.83 | 4.97 | 6.22 | — | |
| Working Capital Turnover, Industry | ||||||
| Industrials | 10.27 | 6.91 | 4.52 | — | — | |
Based on: 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), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Working capital turnover = Revenues ÷ Working capital
= 1,375,218 ÷ 387,135 = 3.55
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. | Paycom Software Inc. working capital turnover ratio deteriorated from 2020 to 2021 and from 2021 to 2022. |
Average Inventory Processing Period
Paycom Software Inc., average inventory processing period calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Inventory turnover | 132.38 | 143.14 | 107.34 | 94.77 | 113.88 | |
| Short-term Activity Ratio (no. days) | ||||||
| Average inventory processing period1 | 3 | 3 | 3 | 4 | 3 | |
| Benchmarks (no. days) | ||||||
| Average Inventory Processing Period, Competitors2 | ||||||
| Cintas Corp. | 41 | 46 | 39 | 32 | — | |
| Average Inventory Processing Period, Industry | ||||||
| Industrials | 85 | 90 | 98 | — | — | |
Based on: 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), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ 132.38 = 3
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
Paycom Software Inc., average receivable collection period calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Receivables turnover | 60.20 | 111.22 | 92.16 | 79.34 | 165.89 | |
| Short-term Activity Ratio (no. days) | ||||||
| Average receivable collection period1 | 6 | 3 | 4 | 5 | 2 | |
| Benchmarks (no. days) | ||||||
| Average Receivable Collection Period, Competitors2 | ||||||
| Cintas Corp. | 47 | 46 | 45 | 48 | — | |
| Average Receivable Collection Period, Industry | ||||||
| Industrials | 45 | 47 | 48 | — | — | |
Based on: 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), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ 60.20 = 6
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. | Paycom Software Inc. number of days of receivables outstanding improved from 2020 to 2021 but then deteriorated significantly from 2021 to 2022. |
Operating Cycle
Paycom Software Inc., operating cycle calculation, comparison to benchmarks
No. days
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Average inventory processing period | 3 | 3 | 3 | 4 | 3 | |
| Average receivable collection period | 6 | 3 | 4 | 5 | 2 | |
| Short-term Activity Ratio | ||||||
| Operating cycle1 | 9 | 6 | 7 | 9 | 5 | |
| Benchmarks | ||||||
| Operating Cycle, Competitors2 | ||||||
| Cintas Corp. | 88 | 92 | 84 | 80 | — | |
| Operating Cycle, Industry | ||||||
| Industrials | 130 | 137 | 146 | — | — | |
Based on: 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), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Operating cycle = Average inventory processing period + Average receivable collection period
= 3 + 6 = 9
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. | Paycom Software Inc. operating cycle improved from 2020 to 2021 but then deteriorated significantly from 2021 to 2022. |
Average Payables Payment Period
Paycom Software Inc., average payables payment period calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Payables turnover | 13.25 | 28.05 | 18.20 | 21.73 | 14.43 | |
| Short-term Activity Ratio (no. days) | ||||||
| Average payables payment period1 | 28 | 13 | 20 | 17 | 25 | |
| Benchmarks (no. days) | ||||||
| Average Payables Payment Period, Competitors2 | ||||||
| Cintas Corp. | 22 | 22 | 22 | 22 | — | |
| Average Payables Payment Period, Industry | ||||||
| Industrials | 46 | 47 | 49 | — | — | |
Based on: 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), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ 13.25 = 28
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. | Paycom Software Inc. number of days of payables outstanding decreased from 2020 to 2021 but then increased from 2021 to 2022 exceeding 2020 level. |
Cash Conversion Cycle
Paycom Software Inc., cash conversion cycle calculation, comparison to benchmarks
No. days
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Average inventory processing period | 3 | 3 | 3 | 4 | 3 | |
| Average receivable collection period | 6 | 3 | 4 | 5 | 2 | |
| Average payables payment period | 28 | 13 | 20 | 17 | 25 | |
| Short-term Activity Ratio | ||||||
| Cash conversion cycle1 | -19 | -7 | -13 | -8 | -20 | |
| Benchmarks | ||||||
| Cash Conversion Cycle, Competitors2 | ||||||
| Cintas Corp. | 66 | 70 | 62 | 58 | — | |
| Cash Conversion Cycle, Industry | ||||||
| Industrials | 84 | 90 | 97 | — | — | |
Based on: 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), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Cash conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= 3 + 6 – 28 = -19
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. | Paycom Software Inc. cash conversion cycle deteriorated from 2020 to 2021 but then improved from 2021 to 2022 exceeding 2020 level. |