FedEx Corporation (FDX)
Activity ratios
Short-term
Turnover ratios
| May 31, 2025 | May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | |
|---|---|---|---|---|---|
| Inventory turnover | 107.42 | 111.96 | 117.53 | 115.14 | 112.44 |
| Receivables turnover | 7.73 | 8.69 | 8.85 | 7.88 | 6.96 |
| Payables turnover | 17.52 | 21.56 | 18.45 | 18.20 | 17.18 |
| Working capital turnover | 29.42 | 18.07 | 17.94 | 15.35 | 12.13 |
The activity ratios for FedEx Corporation over the period from May 2021 to May 2025 demonstrate varying levels of operational efficiency in managing inventory, receivables, payables, and working capital.
Inventory Turnover:
The inventory turnover ratio has remained relatively stable with a slight upward trend, increasing from 112.44 times in May 2021 to 117.53 times in May 2023 before declining modestly to 111.96 times in May 2024 and further to 107.42 times in May 2025. This pattern suggests that the company's inventory management remained efficient through 2023 but experienced some decline thereafter, potentially indicating a slowdown in inventory turnover or accumulation of inventory relative to sales.
Receivables Turnover:
The receivables turnover ratio has shown a consistent upward trend, rising from 6.96 times in May 2021 to a peak of 8.85 times in May 2023. Thereafter, it slightly declined to 8.69 in 2024 and further to 7.73 in 2025. The increase up to 2023 points to improved collection efficiency and better management of accounts receivable. The subsequent decline suggests a possible easing in collection efficiency or changes in credit policies, warranting further examination to understand the underlying causes.
Payables Turnover:
The payables turnover ratio increased steadily from 17.18 times in May 2021 to 18.45 times in May 2023, reflecting an improved capability in paying off liabilities promptly. However, the ratio then spiked to 21.56 in May 2024 before decreasing significantly to 17.52 in 2025. The spike indicates a period of faster payment to suppliers, possibly to strengthen supplier relationships or manage credit terms. The subsequent decline in 2025 suggests a slowing in payment cycles, which might impact supplier relationships or reflect strategic changes in payables management.
Working Capital Turnover:
This ratio displayed a progressive increase from 12.13 in May 2021 to 17.94 in May 2023, and further to 18.07 in 2024, before jumping sharply to 29.42 in 2025. The significant rise in 2025 indicates increased efficiency in utilizing working capital to generate sales, possibly reflecting operational improvements or changes in sales volume relative to working capital investments.
Overall, while most ratios indicate periods of operational improvements through 2023, some ratios, notably inventory and receivables turnover, experienced declines in 2024 and 2025, potentially signaling shifts in operational strategies, supply chain dynamics, or market conditions. The substantial increase in working capital turnover in 2025 may point towards enhanced operational efficiency or adjustments in capital management strategies.
Average number of days
| May 31, 2025 | May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 3.40 | 3.26 | 3.11 | 3.17 | 3.25 |
| Days of sales outstanding (DSO) | days | 47.19 | 41.98 | 41.25 | 46.30 | 52.47 |
| Number of days of payables | days | 20.84 | 16.93 | 19.79 | 20.06 | 21.24 |
The activity ratios of FedEx Corporation, as reflected in the provided data, demonstrate certain trends over the period from May 2021 to May 2025.
Days of Inventory on Hand (DOH):
The DOH ratio has exhibited a slight decrease from 3.25 days in May 2021 to 3.11 days in May 2023, indicating a marginal improvement in inventory management efficiency. However, this ratio increased to 3.26 days in May 2024 and further to 3.40 days in May 2025, suggesting a marginal elongation in the inventory turnover period. Overall, the trend shows relatively stable inventory levels with minor fluctuations, maintaining a low number of days, which is typical for a logistics or delivery service provider aiming for rapid inventory turnover.
Days of Sales Outstanding (DSO):
The DSO has demonstrated notable variation over the examined period. It decreased from 52.47 days in May 2021 to 41.25 days in May 2023, reflecting improvements in receivables collection efficiency, possibly driven by enhanced credit policies or collection processes. However, this ratio increased slightly to 41.98 days in May 2024 and then to 47.19 days in May 2025, indicating a slowdown in receivables collection and a potential increase in the average time required to collect payments from customers. This trend warrants monitoring, as an increasing DSO can impact cash flow and liquidity.
Number of Days of Payables:
The payables period has fluctuated over the period. It decreased from 21.24 days in May 2021 to 19.79 days in May 2023, suggesting a trend toward faster payment cycles or improved supplier payment terms. Conversely, the ratio further decreased to 16.93 days in May 2024, indicating even quicker payments, and then increased again to 20.84 days in May 2025, approaching the levels seen in 2021. These fluctuations suggest some variability in the company's payment strategy or working capital management, with periods of shorter payables indicating aggressive cash management or negotiations for shorter credit terms.
In summary, FedEx’s activity ratios reveal a generally stable operational efficiency in inventory management, with a slight increase in inventory days over the last year. Receivables collection has improved until 2023 but experienced a slowdown thereafter. The payables period has shown variability, with periods of faster payments reverting towards earlier levels. These patterns reflect the company’s dynamic approach to managing its working capital components and operational activity efficiencies over time.
See also:
Long-term
| May 31, 2025 | May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | |
|---|---|---|---|---|---|
| Fixed asset turnover | — | — | 2.22 | 1.71 | 1.64 |
| Total asset turnover | 1.00 | 1.01 | 1.03 | 1.09 | 1.01 |
The analysis of FedEx Corporation's long-term activity ratios reveals notable trends over the periods from May 2021 through May 2023.
Starting with the fixed asset turnover ratio, there is a consistent upward trajectory. It increased from 1.64 in May 2021 to 1.71 in May 2022 and further rose to 2.22 in May 2023. This progression indicates that FedEx has been progressively utilizing its fixed assets more efficiently to generate revenue, suggesting improvements in asset management or operational efficiency in its property, plant, and equipment.
In contrast, the total asset turnover ratio has exhibited a more fluctuating but generally stable trend over the same period. It started at 1.01 in May 2021, increased slightly to 1.09 in May 2022, but then declined marginally to 1.03 in May 2023. This indicates that while there was a brief period of improved overall asset utilization, efficiency has stabilized or slightly decreased in recent years.
Overall, the increasing fixed asset turnover ratio points toward enhanced effectiveness in managing and deploying fixed assets, which is favorable for operational performance. Meanwhile, the stability of the total asset turnover ratio suggests consistent overall asset utilization, with no significant deterioration or extreme fluctuations during this period.
It should be noted that data beyond May 2023 was not provided or available, limiting the ability to assess longer-term trends. As such, the current ratios as of May 2023 reflect recent efficiencies but do not provide insight into subsequent years.