Stock Analysis on Net
Stock Analysis on Net

Waste Management Inc. (NYSE:WM)

This company has been moved to the archive! The financial data has not been updated since February 15, 2022.

Analysis of Short-term (Operating) Activity Ratios

Microsoft Excel

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

Microsoft Excel
Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
Turnover Ratios
Inventory turnover 82.30 75.33 89.58 90.68 93.97
Receivables turnover 7.87 7.26 7.93 7.72 8.02
Payables turnover 8.08 8.33 8.92 8.92 8.67
Working capital turnover — — 5.04 — —
Average No. Days
Average inventory processing period 4 5 4 4 4
Add: Average receivable collection period 46 50 46 47 45
Operating cycle 50 55 50 51 49
Less: Average payables payment period 45 44 41 41 42
Cash conversion cycle 5 11 9 10 7

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

Microsoft Excel
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, Industry
Industrials 3.87 3.61 3.94 — —

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

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

Microsoft Excel
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, Industry
Industrials 7.60 7.49 7.67 — —

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

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

Microsoft Excel
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, Industry
Industrials 7.74 7.44 7.40 — —

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

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

Microsoft Excel
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, Industry
Industrials 6.90 4.47 10.00 — —

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 = —

Average Inventory Processing Period

Waste Management Inc., average inventory processing period calculation, comparison to benchmarks

Microsoft Excel
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, Industry
Industrials 94 101 93 — —

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

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

Microsoft Excel
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, Industry
Industrials 48 49 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

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

Microsoft Excel
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, Industry
Industrials 142 150 141 — —

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

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

Microsoft Excel
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, Industry
Industrials 47 49 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

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

Microsoft Excel
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, Industry
Industrials 95 101 92 — —

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

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.