Airbnb Inc (ABNB)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | |
|---|---|---|---|---|
| Inventory turnover | — | 0.32 | — | 78.30 |
| Receivables turnover | 75.52 | 48.38 | 51.78 | 49.95 |
| Payables turnover | 13.23 | 12.08 | 10.94 | 9.80 |
| Working capital turnover | 1.58 | 1.51 | 1.21 | 0.93 |
Activity ratios provide insight into how efficiently a company manages its resources and operations to generate revenue. Let's analyze the activity ratios of Airbnb Inc based on the provided data:
1. Inventory Turnover:
- In 2021, the inventory turnover ratio was notably high at 78.30, indicating that Airbnb efficiently converted its inventory into sales during that period.
- The absence of data for 2022 suggests a lack of available information for that year.
- However, by 2023, the inventory turnover ratio dropped significantly to 0.32, raising concerns about potential issues with managing and selling inventory effectively.
2. Receivables Turnover:
- Airbnb's receivables turnover ratio remained relatively stable over the years, with values of 49.95 in 2021, 51.78 in 2022, 48.38 in 2023, and a notable increase to 75.52 by 2024.
- Consistent and increasing values indicate that Airbnb efficiently collects payments from its customers, which is a positive sign of effective credit management.
3. Payables Turnover:
- The payables turnover ratio increased steadily from 9.80 in 2021 to 13.23 in 2024.
- This suggests that Airbnb is taking longer to pay its suppliers over the years, potentially improving cash flow management by extending payment terms.
4. Working Capital Turnover:
- The working capital turnover ratio also showed a positive trend, increasing from 0.93 in 2021 to 1.58 in 2024.
- This indicates that Airbnb is generating more revenue per dollar of working capital, which reflects efficient utilization of resources to drive sales.
In conclusion, while Airbnb demonstrated strong inventory and receivables turnover efficiency, there are potential concerns about inventory management in 2023. However, the increasing payables turnover and working capital turnover ratios suggest improvements in cash flow and operational efficiency over the years.
Average number of days
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | — | 1,146.87 | — | 4.66 |
| Days of sales outstanding (DSO) | days | 4.83 | 7.55 | 7.05 | 7.31 |
| Number of days of payables | days | 27.60 | 30.22 | 33.36 | 37.26 |
The activity ratios for Airbnb Inc provide insights into how efficiently the company is managing its inventory, receivables, and payables.
1. Days of Inventory on Hand (DOH):
- In 2021, Airbnb held inventory for an average of 4.66 days before it was sold.
- In 2023, the DOH dramatically increased to 1,146.87 days, indicating a significant slowdown in inventory turnover or potential issues with managing inventory levels.
- The absence of data for 2022 and 2024 makes it challenging to assess the trend over the years.
2. Days of Sales Outstanding (DSO):
- The DSO represents the average number of days it takes for Airbnb to collect payment after making a sale.
- The DSO remained fairly consistent from 2021 to 2023, ranging from 7.05 to 7.55 days.
- In 2024, the DSO decreased to 4.83 days, suggesting an improvement in the company's collection efficiency.
3. Number of Days of Payables:
- This ratio indicates how long Airbnb takes to pay its suppliers/vendors.
- The number of days of payables decreased consistently from 37.26 days in 2021 to 27.60 days in 2024.
- The decreasing trend indicates that Airbnb is managing its payables more efficiently over the years.
Overall, the company should closely monitor its inventory turnover rate to avoid excessive holding costs and ensure efficient management of working capital. Additionally, the improvements in DSO and payables turnover suggest that Airbnb is effectively managing its receivables and payables, contributing to its overall liquidity and operational efficiency.
See also:
Long-term
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | |
|---|---|---|---|---|
| Fixed asset turnover | 75.52 | 61.98 | 68.90 | 35.52 |
| Total asset turnover | 0.53 | 0.48 | 0.52 | 0.41 |
The analysis of Airbnb Inc's long-term activity ratios reveals a positive trend in both fixed asset turnover and total asset turnover over the years. The fixed asset turnover ratio, which indicates how efficiently the company generates revenue from its fixed assets, shows a substantial increase from 35.52 in December 31, 2021, to 75.52 in December 31, 2024. This signifies that Airbnb has been able to significantly improve its utilization of fixed assets to generate higher sales.
Similarly, the total asset turnover ratio, showing the company's ability to generate revenue relative to its total assets, also demonstrates improvement from 0.41 in December 31, 2021, to 0.53 in December 31, 2024. This suggests that Airbnb has been effective in using its total assets to generate sales and indicates a positive efficiency in asset management over the years.
Overall, the increasing trend in both fixed asset turnover and total asset turnover ratios reflects the company's enhanced operational efficiency and effective utilization of assets to drive revenue growth.