Alphabet Inc Class C (GOOG)

Activity ratios

Short-term

Turnover ratios

	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Inventory turnover	—	44.34	57.83	54.95	47.27	39.24	60.76	85.05	94.82	81.40	107.53	101.19	116.39	95.42	93.40	84.21	71.97	49.10	67.95	58.97
Receivables turnover	6.37	7.18	7.42	7.86	6.99	7.81	7.50	7.58	6.39	6.85	6.68	6.87	5.79	6.71	7.67	7.01	5.87	7.36	6.96	7.37
Payables turnover	17.79	22.59	24.29	30.41	24.61	19.65	27.29	33.89	18.38	22.54	20.72	18.72	15.16	18.14	18.73	18.26	12.93	16.61	16.69	16.74
Working capital turnover	3.40	3.27	3.16	3.04	2.95	2.82	2.50	2.33	2.08	1.95	1.83	1.68	1.55	1.47	1.57	1.56	1.50	1.42	1.34	1.37

Alphabet Inc's activity ratios provide insights into the efficiency of the company's operations.

The Inventory turnover ratio, which measures how effectively inventory is managed, has shown fluctuations over the quarters, with the highest turnover in Q2 2022 at 85.05 and the lowest in Q3 2022 at 39.24. The increasing trend from Q3 2022 to Q2 2023 indicates improved efficiency in managing inventory levels.

The Receivables turnover ratio, reflecting how quickly receivables are collected, remained relatively stable over the quarters, ranging from 7.03 to 7.90. This consistency suggests that Alphabet Inc has been efficient in collecting payments from its customers.

The Payables turnover ratio, indicating how quickly the company pays its suppliers, exhibited fluctuations but generally trended upwards from Q1 2022 to Q2 2023. The increase in this ratio signifies that the company has been taking longer to pay its suppliers, potentially improving its cash flow.

The Working capital turnover ratio, showing how efficiently working capital is being utilized, also showed an increasing trend over the quarters from Q1 2022 to Q4 2023. This indicates that Alphabet Inc has been more effective in generating revenue relative to the level of its working capital.

Overall, the analysis of Alphabet Inc's activity ratios suggests that the company has been managing its inventory efficiently, collecting payments from customers effectively, optimizing its payment terms with suppliers, and using working capital more efficiently in recent quarters.

Average number of days

		Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Days of inventory on hand (DOH)	days	—	8.23	6.31	6.64	7.72	9.30	6.01	4.29	3.85	4.48	3.39	3.61	3.14	3.83	3.91	4.33	5.07	7.43	5.37	6.19
Days of sales outstanding (DSO)	days	57.32	50.81	49.22	46.45	52.20	46.76	48.70	48.15	57.13	53.32	54.64	53.11	63.04	54.41	47.62	52.10	62.15	49.59	52.43	49.50
Number of days of payables	days	20.51	16.16	15.03	12.00	14.83	18.58	13.38	10.77	19.86	16.20	17.62	19.50	24.08	20.12	19.49	19.98	28.23	21.98	21.87	21.81

Alphabet Inc's activity ratios, namely Days of Inventory on Hand (DOH), Days of Sales Outstanding (DSO), and Number of Days of Payables, provide insights into the company's efficiency in managing inventory, collecting receivables, and paying off its payable obligations.

Starting with DOH, the company's ability to convert its inventory into sales improved from Q1 2022 to Q2 2023, as reflected by the decreasing trend in days from 9.30 to 6.64 days. This suggests that Alphabet Inc is managing its inventory more effectively over time, which can lead to reduced carrying costs and potential obsolescence risks.

Moving on to DSO, the number of days it takes for Alphabet Inc to collect its accounts receivable decreased from 51.95 days in Q4 2022 to 46.21 days in Q1 2023. This indicates that the company is becoming more efficient in converting credit sales into cash, improving its liquidity and cash flow position.

In contrast, the Number of Days of Payables shows the average number of days Alphabet Inc takes to pay its suppliers. The trend here indicates that the company has been extending its payment period over the quarters, with the number of days increasing from 10.77 in Q1 2022 to 20.52 in Q4 2023. While lengthening payables can provide Alphabet Inc with additional working capital in the short term, it may also strain relationships with suppliers if not managed properly.

Overall, Alphabet Inc's activity ratios demonstrate improvements in inventory management efficiency and receivables collection, but also indicate a lengthening of payment periods to suppliers. Monitoring and managing these ratios effectively can contribute to the company's operational efficiency and financial health in the long run.

Long-term

	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Fixed asset turnover	2.27	2.34	2.37	2.41	2.50	2.61	2.62	2.59	2.64	2.52	2.39	2.24	2.14	2.10	2.10	1.89	2.19	2.24	2.29	2.35
Total asset turnover	0.76	0.74	0.75	0.77	0.77	0.79	0.78	0.76	0.72	0.69	0.65	0.60	0.57	0.57	0.59	0.61	0.59	0.59	0.58	0.58

The fixed asset turnover ratio for Alphabet Inc has been gradually declining over the past eight quarters, decreasing from 2.62 in Q1 2022 to 2.29 in Q4 2023. This indicates that the company's efficiency in generating sales from its fixed assets has slightly decreased over time. Despite this decline, the ratio remains relatively stable, suggesting that Alphabet is still effectively utilizing its fixed assets to generate revenue.

In contrast, the total asset turnover ratio has fluctuated slightly over the same period, with a range of 0.75 to 0.79. This ratio represents Alphabet's efficiency in generating sales from all assets, including both fixed and current assets. The variation in this ratio may be attributed to changes in total asset base and revenue generation capabilities over time.

Overall, the levels of both fixed asset turnover and total asset turnover ratios for Alphabet Inc indicate that the company is effectively utilizing its assets to generate revenue, albeit with some fluctuations in efficiency. Further analysis and comparison with industry peers may provide additional insights into Alphabet's long-term asset management strategies and operational performance.