Alphabet Inc Class C (GOOG)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | — | — | 47.27 | 94.82 | 116.39 |
| Receivables turnover | 6.67 | 6.37 | 6.99 | 6.40 | 5.82 |
| Payables turnover | 18.32 | 17.79 | 24.61 | 18.38 | 15.16 |
| Working capital turnover | 4.68 | 3.41 | 2.95 | 2.08 | 1.55 |
Alphabet Inc Class C's inventory turnover ratio has declined from 116.39 in 2020 to 94.82 in 2021, and further dropped to 47.27 in 2022. However, data for 2023 and 2024 is not available. This indicates that the company is turning over its inventory at a slower rate over the years.
In terms of receivables turnover, Alphabet Inc Class C has shown a consistent improvement from 5.82 in 2020 to 6.40 in 2021, 6.99 in 2022, and 6.37 in 2023, with a minor dip to 6.67 in 2024. This suggests that the company is collecting its receivables more efficiently.
Regarding payables turnover, there has been an increasing trend from 15.16 in 2020 to 18.38 in 2021, peaking at 24.61 in 2022, and then declining slightly to 17.79 in 2023 and 18.32 in 2024. This indicates that Alphabet Inc Class C is taking longer to pay its suppliers over the years.
Lastly, the working capital turnover has shown a consistent growth pattern from 1.55 in 2020 to 2.08 in 2021, 2.95 in 2022, 3.41 in 2023, and further increased to 4.68 in 2024. This indicates that Alphabet Inc Class C is generating more revenue per unit of working capital employed, showing efficiency in its working capital management.
Overall, Alphabet Inc Class C's activity ratios reflect varying trends in managing its inventory, receivables, payables, and working capital over the years, which can provide insights into the company's operational efficiency and liquidity management.
Average number of days
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | — | — | 7.72 | 3.85 | 3.14 |
| Days of sales outstanding (DSO) | days | 54.75 | 57.29 | 52.24 | 57.05 | 62.76 |
| Number of days of payables | days | 19.93 | 20.51 | 14.83 | 19.86 | 24.08 |
Alphabet Inc Class C's activity ratios show trends in how efficiently the company manages its inventory, collects receivables, and pays its creditors.
1. Days of Inventory on Hand (DOH): This ratio measures how many days it takes for the company to sell its inventory. Alphabet Inc Class C's DOH increased from 3.14 days in December 31, 2020, to 7.72 days in December 31, 2022. A higher DOH could indicate slower-moving inventory or potential overstocking.
2. Days of Sales Outstanding (DSO): DSO reflects the average number of days it takes for the company to collect its accounts receivable. Alphabet Inc Class C managed to reduce its DSO from 62.76 days in December 31, 2020, to 54.75 days in December 31, 2024. A decreasing trend in DSO indicates the company is collecting payments from customers more quickly.
3. Number of Days of Payables: This ratio represents how many days it takes for the company to pay its suppliers. Alphabet Inc Class C reduced its payables days from 24.08 days in December 31, 2020, to 19.93 days in December 31, 2024. A lower number of days of payables suggests that the company is managing its cash flow efficiently or possibly negotiating better terms with suppliers.
Overall, Alphabet Inc Class C showed improvement in managing its activity ratios over the period, with reductions in DSO and payables days, although there was an increase in DOH in 2022. Financial analysts could find these trends useful in evaluating the company's operational efficiency and liquidity management.
See also:
Long-term
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 2.04 | 2.27 | 2.50 | 2.64 | 2.15 |
| Total asset turnover | 0.78 | 0.76 | 0.77 | 0.72 | 0.57 |
Alphabet Inc Class C's Fixed Asset Turnover ratio has displayed a positive trend over the past five years, increasing from 2.15 in December 31, 2020, to 2.04 in December 31, 2024. This indicates that the company has been able to generate $2.04 in revenue for every $1 invested in fixed assets by the end of 2024.
On the other hand, the Total Asset Turnover ratio has also shown an upward trajectory from 0.57 in December 31, 2020, to 0.78 in December 31, 2024. This signifies that Alphabet Inc Class C has become more efficient in utilizing its total assets to generate revenues, as the ratio indicates that the company generated $0.78 in revenue for every $1 of total assets by the end of 2024.
Overall, the improvement in both Fixed Asset Turnover and Total Asset Turnover ratios suggests that Alphabet Inc Class C has been effectively managing its assets to generate revenue, indicating operational efficiency and potential profitability for the company.