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)
Waste Management Inc., short-term (operating) activity ratios
Based on: 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), 10-K (reporting date: 2017-12-31).
| Short-term activity ratio | Description | The company |
|---|---|---|
| Inventory turnover | An activity ratio calculated as cost of goods sold divided by inventory. | Waste Management Inc. inventory turnover ratio deteriorated from 2019 to 2020 but then slightly improved from 2020 to 2021. |
| Receivables turnover | An activity ratio equal to revenue divided by receivables. | Waste Management Inc. receivables turnover ratio deteriorated from 2019 to 2020 but then improved from 2020 to 2021 not reaching 2019 level. |
| Payables turnover | An activity ratio calculated as cost of goods sold divided by payables. | Waste Management Inc. payables turnover ratio decreased from 2019 to 2020 and from 2020 to 2021. |
| 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. | |
| Operating cycle | Equal to average inventory processing period plus average receivables collection period. | |
| 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. | Waste Management Inc. number of days of payables outstanding increased from 2019 to 2020 and from 2020 to 2021. |
| 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. | Waste Management Inc. cash conversion cycle deteriorated from 2019 to 2020 but then improved from 2020 to 2021 exceeding 2019 level. |
Inventory Turnover
Waste Management Inc., inventory turnover calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Operating costs | 11,111) | 9,341) | 9,496) | 9,249) | 9,021) | |
| Parts and supplies | 135) | 124) | 106) | 102) | 96) | |
| Short-term Activity Ratio | ||||||
| Inventory turnover1 | 82.30 | 75.33 | 89.58 | 90.68 | 93.97 | |
| Benchmarks | ||||||
| Inventory Turnover, Competitors2 | ||||||
| Cintas Corp. | 7.89 | 9.42 | 11.25 | — | — | |
| Inventory Turnover, Industry | ||||||
| Industrials | 4.04 | 3.72 | — | — | — | |
Based on: 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), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Inventory turnover = Operating costs ÷ Parts and supplies
= 11,111 ÷ 135 = 82.30
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. | Waste Management Inc. inventory turnover ratio deteriorated from 2019 to 2020 but then slightly improved from 2020 to 2021. |
Receivables Turnover
Waste Management Inc., receivables turnover calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Operating revenues | 17,931) | 15,218) | 15,455) | 14,914) | 14,485) | |
| Accounts receivable, net of allowance for doubtful accounts | 2,278) | 2,097) | 1,949) | 1,931) | 1,805) | |
| Short-term Activity Ratio | ||||||
| Receivables turnover1 | 7.87 | 7.26 | 7.93 | 7.72 | 8.02 | |
| Benchmarks | ||||||
| Receivables Turnover, Competitors2 | ||||||
| Cintas Corp. | 7.89 | 8.14 | 7.57 | — | — | |
| Receivables Turnover, Industry | ||||||
| Industrials | 7.76 | 7.58 | — | — | — | |
Based on: 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), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Receivables turnover = Operating revenues ÷ Accounts receivable, net of allowance for doubtful accounts
= 17,931 ÷ 2,278 = 7.87
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. | Waste Management Inc. receivables turnover ratio deteriorated from 2019 to 2020 but then improved from 2020 to 2021 not reaching 2019 level. |
Payables Turnover
Waste Management Inc., payables turnover calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Operating costs | 11,111) | 9,341) | 9,496) | 9,249) | 9,021) | |
| Accounts payable | 1,375) | 1,121) | 1,065) | 1,037) | 1,040) | |
| Short-term Activity Ratio | ||||||
| Payables turnover1 | 8.08 | 8.33 | 8.92 | 8.92 | 8.67 | |
| Benchmarks | ||||||
| Payables Turnover, Competitors2 | ||||||
| Cintas Corp. | 16.47 | 16.67 | 16.65 | — | — | |
| Payables Turnover, Industry | ||||||
| Industrials | 7.84 | 7.52 | — | — | — | |
Based on: 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), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Payables turnover = Operating costs ÷ Accounts payable
= 11,111 ÷ 1,375 = 8.08
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. | Waste Management Inc. payables turnover ratio decreased from 2019 to 2020 and from 2020 to 2021. |
Working Capital Turnover
Waste Management Inc., working capital turnover calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current assets | 3,069) | 3,540) | 6,209) | 2,645) | 2,624) | |
| Less: Current liabilities | 4,082) | 3,553) | 3,144) | 3,108) | 3,262) | |
| Working capital | (1,013) | (13) | 3,065) | (463) | (638) | |
| Operating revenues | 17,931) | 15,218) | 15,455) | 14,914) | 14,485) | |
| Short-term Activity Ratio | ||||||
| Working capital turnover1 | — | — | 5.04 | — | — | |
| Benchmarks | ||||||
| Working Capital Turnover, Competitors2 | ||||||
| Cintas Corp. | 7.83 | 4.97 | 6.22 | — | — | |
| Working Capital Turnover, Industry | ||||||
| Industrials | 6.91 | 4.52 | — | — | — | |
Based on: 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), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Working capital turnover = Operating revenues ÷ Working capital
= 17,931 ÷ -1,013 = —
2 Click competitor name to see calculations.
Average Inventory Processing Period
Waste Management Inc., average inventory processing period calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Inventory turnover | 82.30 | 75.33 | 89.58 | 90.68 | 93.97 | |
| Short-term Activity Ratio (no. days) | ||||||
| Average inventory processing period1 | 4 | 5 | 4 | 4 | 4 | |
| Benchmarks (no. days) | ||||||
| Average Inventory Processing Period, Competitors2 | ||||||
| Cintas Corp. | 46 | 39 | 32 | — | — | |
| Average Inventory Processing Period, Industry | ||||||
| Industrials | 90 | 98 | — | — | — | |
Based on: 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), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ 82.30 = 4
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
Waste Management Inc., average receivable collection period calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Receivables turnover | 7.87 | 7.26 | 7.93 | 7.72 | 8.02 | |
| Short-term Activity Ratio (no. days) | ||||||
| Average receivable collection period1 | 46 | 50 | 46 | 47 | 45 | |
| Benchmarks (no. days) | ||||||
| Average Receivable Collection Period, Competitors2 | ||||||
| Cintas Corp. | 46 | 45 | 48 | — | — | |
| Average Receivable Collection Period, Industry | ||||||
| Industrials | 47 | 48 | — | — | — | |
Based on: 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), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ 7.87 = 46
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Average receivable collection period | An activity ratio equal to the number of days in the period divided by receivables turnover. |
Operating Cycle
Waste Management Inc., operating cycle calculation, comparison to benchmarks
No. days
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Average inventory processing period | 4 | 5 | 4 | 4 | 4 | |
| Average receivable collection period | 46 | 50 | 46 | 47 | 45 | |
| Short-term Activity Ratio | ||||||
| Operating cycle1 | 50 | 55 | 50 | 51 | 49 | |
| Benchmarks | ||||||
| Operating Cycle, Competitors2 | ||||||
| Cintas Corp. | 92 | 84 | 80 | — | — | |
| Operating Cycle, Industry | ||||||
| Industrials | 137 | 146 | — | — | — | |
Based on: 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), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Operating cycle = Average inventory processing period + Average receivable collection period
= 4 + 46 = 50
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. |
Average Payables Payment Period
Waste Management Inc., average payables payment period calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Payables turnover | 8.08 | 8.33 | 8.92 | 8.92 | 8.67 | |
| Short-term Activity Ratio (no. days) | ||||||
| Average payables payment period1 | 45 | 44 | 41 | 41 | 42 | |
| Benchmarks (no. days) | ||||||
| Average Payables Payment Period, Competitors2 | ||||||
| Cintas Corp. | 22 | 22 | 22 | — | — | |
| Average Payables Payment Period, Industry | ||||||
| Industrials | 47 | 49 | — | — | — | |
Based on: 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), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ 8.08 = 45
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. | Waste Management Inc. number of days of payables outstanding increased from 2019 to 2020 and from 2020 to 2021. |
Cash Conversion Cycle
Waste Management Inc., cash conversion cycle calculation, comparison to benchmarks
No. days
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Average inventory processing period | 4 | 5 | 4 | 4 | 4 | |
| Average receivable collection period | 46 | 50 | 46 | 47 | 45 | |
| Average payables payment period | 45 | 44 | 41 | 41 | 42 | |
| Short-term Activity Ratio | ||||||
| Cash conversion cycle1 | 5 | 11 | 9 | 10 | 7 | |
| Benchmarks | ||||||
| Cash Conversion Cycle, Competitors2 | ||||||
| Cintas Corp. | 70 | 62 | 58 | — | — | |
| Cash Conversion Cycle, Industry | ||||||
| Industrials | 90 | 97 | — | — | — | |
Based on: 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), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Cash conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= 4 + 46 – 45 = 5
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. | Waste Management Inc. cash conversion cycle deteriorated from 2019 to 2020 but then improved from 2020 to 2021 exceeding 2019 level. |