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.
Paying user area
Try for free
ServiceNow Inc. pages available for free this week:
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Common Stock Valuation Ratios
- Dividend Discount Model (DDM)
- Present Value of Free Cash Flow to Equity (FCFE)
- Net Profit Margin since 2012
- Current Ratio since 2012
- Price to Operating Profit (P/OP) since 2012
- Price to Book Value (P/BV) since 2012
- Price to Sales (P/S) since 2012
- Aggregate Accruals
The data is hidden behind: . Unhide it.
Get full access to the entire website from $10.42/mo, or
get 1-month access to ServiceNow Inc. for $24.99.
This is a one-time payment. There is no automatic renewal.
We accept:
Short-term Activity Ratios (Summary)
ServiceNow Inc., short-term (operating) activity ratios
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
An examination of short-term operating activity ratios reveals fluctuating performance over the five-year period. Several ratios demonstrate notable shifts, suggesting changes in the company’s operational efficiency and management of short-term assets and liabilities.
- Receivables Turnover
- The receivables turnover ratio exhibits a generally increasing trend, rising from 4.24 in 2021 to 5.05 in 2025. While a slight decrease was observed between 2021 and 2022, the ratio subsequently increased in 2023 and 2024 before reaching its highest point in 2025. This suggests improving efficiency in collecting receivables over the period.
- Payables Turnover
- The payables turnover ratio demonstrates significant volatility. A substantial decline occurred between 2021 and 2022, followed by a return to a similar level in 2023. A dramatic increase is then observed in 2024, before falling back down in 2025. This pattern indicates inconsistent management of payables and potentially fluctuating supplier credit terms or payment strategies.
- Working Capital Turnover
- The working capital turnover ratio shows considerable fluctuation. It decreased significantly from 2021 to 2022, then recovered to a level comparable to 2021 in 2023. A moderate decrease occurred in 2024, but a substantial and anomalous increase is observed in 2025, reaching 474.21. This extreme value warrants further investigation as it deviates significantly from prior performance and may indicate an unusual circumstance affecting working capital utilization.
- Average Receivable Collection Period
- The average receivable collection period generally decreased over the period, moving from 86 days in 2021 to 72 days in 2025. This decline aligns with the increasing receivables turnover ratio, indicating a faster rate of collecting outstanding receivables. A slight increase was noted between 2021 and 2022, but the overall trend is downward.
- Average Payables Payment Period
- The average payables payment period experienced substantial changes. It increased significantly from 24 days in 2021 to 64 days in 2022, then returned to 24 days in 2023. A sharp decrease to 11 days occurred in 2024, followed by an increase to 25 days in 2025. This variability suggests inconsistent payment practices or changes in supplier agreements.
In summary, the company demonstrates improving efficiency in receivables management, as evidenced by the increasing turnover ratio and decreasing collection period. However, payables management appears less consistent, with significant fluctuations in both turnover and payment period. The substantial increase in working capital turnover in 2025 is a notable outlier requiring further scrutiny.
Turnover Ratios
Average No. Days
Receivables Turnover
ServiceNow Inc., receivables turnover calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Revenues | ||||||
| Accounts receivable, net | ||||||
| Short-term Activity Ratio | ||||||
| Receivables turnover1 | ||||||
| Benchmarks | ||||||
| Receivables Turnover, Competitors2 | ||||||
| Accenture PLC | ||||||
| Adobe Inc. | ||||||
| AppLovin Corp. | ||||||
| Cadence Design Systems Inc. | ||||||
| CrowdStrike Holdings Inc. | ||||||
| Datadog Inc. | ||||||
| International Business Machines Corp. | ||||||
| Intuit Inc. | ||||||
| Microsoft Corp. | ||||||
| Oracle Corp. | ||||||
| Palantir Technologies Inc. | ||||||
| Palo Alto Networks Inc. | ||||||
| Salesforce Inc. | ||||||
| Synopsys Inc. | ||||||
| Workday Inc. | ||||||
| Receivables Turnover, Sector | ||||||
| Software & Services | ||||||
| Receivables Turnover, Industry | ||||||
| Information Technology | ||||||
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Receivables turnover = Revenues ÷ Accounts receivable, net
= ÷ =
2 Click competitor name to see calculations.
The receivables turnover ratio exhibits an overall upward trend throughout the observed period. While fluctuations occur, the company demonstrates increasing efficiency in converting its receivables into cash. Revenues consistently increased year-over-year, while accounts receivable also increased, but at a slower pace, contributing to the observed trend.
- Receivables Turnover Trend
- The receivables turnover ratio began at 4.24 in 2021 and experienced a slight decrease to 4.20 in 2022. A subsequent increase to 4.41 was noted in 2023, followed by more substantial gains to 4.90 in 2024 and 5.05 in 2025. This indicates a strengthening ability to collect receivables over time.
- Relationship to Revenue Growth
- Revenues increased from US$5,896 million in 2021 to US$13,278 million in 2025, representing significant growth. Accounts receivable also increased, moving from US$1,390 million in 2021 to US$2,627 million in 2025. However, the growth in receivables was proportionally less than the growth in revenue, which is reflected in the rising receivables turnover ratio.
- Implications of the Trend
- The increasing receivables turnover ratio suggests improved efficiency in credit and collection processes. It also implies a reduced need for working capital tied up in accounts receivable. This positive trend could be attributed to factors such as more effective credit policies, faster invoice processing, or a shift towards customers with shorter payment terms.
In conclusion, the observed trend in receivables turnover is favorable, indicating a strengthening financial position and efficient management of working capital. Continued monitoring of this ratio is recommended to ensure sustained performance.
Payables Turnover
ServiceNow Inc., payables turnover calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Cost of revenues | ||||||
| Accounts payable | ||||||
| Short-term Activity Ratio | ||||||
| Payables turnover1 | ||||||
| Benchmarks | ||||||
| Payables Turnover, Competitors2 | ||||||
| Accenture PLC | ||||||
| Adobe Inc. | ||||||
| AppLovin Corp. | ||||||
| Cadence Design Systems Inc. | ||||||
| CrowdStrike Holdings Inc. | ||||||
| Datadog Inc. | ||||||
| International Business Machines Corp. | ||||||
| Intuit Inc. | ||||||
| Microsoft Corp. | ||||||
| Oracle Corp. | ||||||
| Palantir Technologies Inc. | ||||||
| Palo Alto Networks Inc. | ||||||
| Salesforce Inc. | ||||||
| Synopsys Inc. | ||||||
| Workday Inc. | ||||||
| Payables Turnover, Sector | ||||||
| Software & Services | ||||||
| Payables Turnover, Industry | ||||||
| Information Technology | ||||||
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Payables turnover = Cost of revenues ÷ Accounts payable
= ÷ =
2 Click competitor name to see calculations.
The accounts payable activity demonstrates considerable fluctuation over the five-year period. Cost of revenues consistently increased year-over-year, while accounts payable and, consequently, payables turnover exhibited more volatile behavior.
- Payables Turnover
- The payables turnover ratio decreased significantly from 15.20 in 2021 to 5.74 in 2022. This suggests a substantial lengthening of the time taken to pay suppliers during that year. A strong recovery occurred in 2023, with the ratio returning to 15.25, indicating a return to a similar payment speed as observed in 2021. Further improvement was seen in 2024, with the ratio reaching 33.63, suggesting a notably accelerated payment cycle. However, in 2025, the ratio decreased to 14.62, indicating a slight slowdown in payment speed compared to 2023 and 2024, but remaining comparable to the 2021 level.
The substantial increase in cost of revenues throughout the period appears to be accompanied by varying levels of accounts payable. The large drop in accounts payable in 2024, coupled with the continued growth in cost of revenues, is the primary driver of the high payables turnover ratio observed in that year. The increase in accounts payable in 2025, while cost of revenues continued to rise, contributed to the decrease in the payables turnover ratio.
- Accounts Payable
- Accounts payable increased significantly from $89 million in 2021 to $274 million in 2022, potentially indicating a strategic decision to extend payment terms or a slower rate of invoice processing. A substantial decrease to $126 million occurred in 2023, followed by a further reduction to $68 million in 2024. Accounts payable then increased again in 2025, reaching $204 million. These fluctuations suggest changes in supplier relationships, purchasing patterns, or cash management strategies.
The observed volatility in the payables turnover ratio warrants further investigation to understand the underlying causes and potential implications for supplier relationships and working capital management.
Working Capital Turnover
ServiceNow Inc., working capital turnover calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current assets | ||||||
| Less: Current liabilities | ||||||
| Working capital | ||||||
| Revenues | ||||||
| Short-term Activity Ratio | ||||||
| Working capital turnover1 | ||||||
| Benchmarks | ||||||
| Working Capital Turnover, Competitors2 | ||||||
| Accenture PLC | ||||||
| Adobe Inc. | ||||||
| AppLovin Corp. | ||||||
| Cadence Design Systems Inc. | ||||||
| CrowdStrike Holdings Inc. | ||||||
| Datadog Inc. | ||||||
| International Business Machines Corp. | ||||||
| Intuit Inc. | ||||||
| Microsoft Corp. | ||||||
| Oracle Corp. | ||||||
| Palantir Technologies Inc. | ||||||
| Palo Alto Networks Inc. | ||||||
| Salesforce Inc. | ||||||
| Synopsys Inc. | ||||||
| Workday Inc. | ||||||
| Working Capital Turnover, Sector | ||||||
| Software & Services | ||||||
| Working Capital Turnover, Industry | ||||||
| Information Technology | ||||||
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Working capital turnover = Revenues ÷ Working capital
= ÷ =
2 Click competitor name to see calculations.
The working capital turnover ratio exhibited considerable fluctuation over the five-year period. Initial values demonstrated a decrease followed by a substantial increase in the final year examined.
- Working Capital
- Working capital experienced a significant increase from 2021 to 2022, rising from US$271 million to US$649 million. A subsequent decrease was observed in 2023, falling to US$412 million, followed by another increase to US$829 million in 2024. A dramatic decline occurred in 2025, with working capital reported at US$28 million.
- Revenues
- Revenues consistently increased throughout the period, progressing from US$5,896 million in 2021 to US$13,278 million in 2025. This represents a sustained upward trend in sales generation.
- Working Capital Turnover
- The working capital turnover ratio decreased from 21.76 in 2021 to 11.16 in 2022. It then rebounded to 21.77 in 2023 and decreased again to 13.25 in 2024. A substantial and anomalous increase to 474.21 was recorded in 2025. This final value suggests a highly efficient utilization of working capital, or potentially, a significant error in reported figures given the concurrent drastic reduction in working capital itself.
The relationship between revenues and working capital turnover appears inconsistent. While revenues consistently rose, the turnover ratio did not follow a predictable pattern. The large fluctuation in 2025 warrants further investigation to determine the underlying cause, particularly considering the simultaneous decrease in working capital.
Average Receivable Collection Period
ServiceNow Inc., average receivable collection period calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Receivables turnover | ||||||
| Short-term Activity Ratio (no. days) | ||||||
| Average receivable collection period1 | ||||||
| Benchmarks (no. days) | ||||||
| Average Receivable Collection Period, Competitors2 | ||||||
| Accenture PLC | ||||||
| Adobe Inc. | ||||||
| AppLovin Corp. | ||||||
| Cadence Design Systems Inc. | ||||||
| CrowdStrike Holdings Inc. | ||||||
| Datadog Inc. | ||||||
| International Business Machines Corp. | ||||||
| Intuit Inc. | ||||||
| Microsoft Corp. | ||||||
| Oracle Corp. | ||||||
| Palantir Technologies Inc. | ||||||
| Palo Alto Networks Inc. | ||||||
| Salesforce Inc. | ||||||
| Synopsys Inc. | ||||||
| Workday Inc. | ||||||
| Average Receivable Collection Period, Sector | ||||||
| Software & Services | ||||||
| Average Receivable Collection Period, Industry | ||||||
| Information Technology | ||||||
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ =
2 Click competitor name to see calculations.
An examination of the short-term activity ratios reveals a consistent trend in the average receivable collection period over the five-year period. The receivables turnover ratio also demonstrates a pattern of improvement, complementing the changes observed in collection times.
- Average Receivable Collection Period
- The average receivable collection period decreased from 86 days in 2021 to 72 days in 2025. A slight increase was noted from 2021 to 2022, moving to 87 days, before a decline to 83 days in 2023. The rate of decrease accelerated between 2023 and 2024, falling to 74 days, and continued to 72 days in 2025. This indicates an improving efficiency in collecting receivables over the period.
- Receivables Turnover
- The receivables turnover ratio exhibited a generally increasing trend. Starting at 4.24 in 2021, it experienced a minor decrease to 4.20 in 2022. Subsequently, the ratio increased to 4.41 in 2023, 4.90 in 2024, and further to 5.05 in 2025. This upward movement suggests the company is becoming more efficient in converting receivables into cash.
The observed trends in both ratios are consistent with each other. A decreasing collection period is directly correlated with an increasing receivables turnover ratio, suggesting improved credit and collection policies or more efficient invoice processing. The company appears to be successfully reducing the time it takes to collect payment from its customers.
Average Payables Payment Period
ServiceNow Inc., average payables payment period calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Payables turnover | ||||||
| Short-term Activity Ratio (no. days) | ||||||
| Average payables payment period1 | ||||||
| Benchmarks (no. days) | ||||||
| Average Payables Payment Period, Competitors2 | ||||||
| Accenture PLC | ||||||
| Adobe Inc. | ||||||
| AppLovin Corp. | ||||||
| Cadence Design Systems Inc. | ||||||
| CrowdStrike Holdings Inc. | ||||||
| Datadog Inc. | ||||||
| International Business Machines Corp. | ||||||
| Intuit Inc. | ||||||
| Microsoft Corp. | ||||||
| Oracle Corp. | ||||||
| Palantir Technologies Inc. | ||||||
| Palo Alto Networks Inc. | ||||||
| Salesforce Inc. | ||||||
| Synopsys Inc. | ||||||
| Workday Inc. | ||||||
| Average Payables Payment Period, Sector | ||||||
| Software & Services | ||||||
| Average Payables Payment Period, Industry | ||||||
| Information Technology | ||||||
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ =
2 Click competitor name to see calculations.
The average payables payment period exhibited considerable fluctuation over the five-year period. Initial stability was followed by a significant increase, then a sharp decrease, and a return towards the initial value. This suggests evolving supplier relationships and/or changes in the company’s cash management practices.
- Payables Turnover
- Payables turnover decreased substantially from 2021 to 2022, indicating a slower rate of paying suppliers. It then rebounded strongly in 2023, returning to a level comparable to 2021. A further increase occurred in 2024, reaching a peak, before declining again in 2025. This volatility suggests inconsistent purchasing patterns or deliberate shifts in payment strategies.
- Average Payables Payment Period
- In 2022, the average payables payment period increased to 64 days, representing a substantial rise from the 24 days recorded in 2021. This indicates the company took considerably longer to settle its obligations to suppliers. A dramatic reduction followed in 2024, with the period falling to 11 days, suggesting a significant acceleration in payment processing. The period then increased to 25 days in 2025, approaching the initial value observed in 2021. These changes could be linked to negotiated payment terms, supplier incentives, or internal efficiency improvements.
The inverse relationship between payables turnover and the average payables payment period is evident. When payables turnover decreases, the payment period increases, and vice versa. The substantial changes observed in 2022 and 2024 warrant further investigation to understand the underlying drivers and their impact on supplier relationships and working capital management.