Akamai Technologies Inc (AKAM)

Short-term

Turnover ratios

Akamai Technologies Inc's activity ratios provide insight into how efficiently the company is managing its inventory, receivables, payables, and working capital.

1. Inventory turnover: Unfortunately, we do not have inventory turnover data available for Akamai Technologies Inc for the years provided, indicating that we are unable to assess the company's efficiency in managing its inventory levels during these periods.

2. Receivables turnover: The receivables turnover ratio measures how many times a company collects its accounts receivable during a specific period. Akamai's receivables turnover has shown a consistent improvement over the years from 4.77 in 2020 to 5.53 in 2024, suggesting that the company is getting better at converting its credit sales into cash.

3. Payables turnover: The payables turnover ratio reflects how many times a company pays its suppliers within a particular timeframe. Akamai's payables turnover has been fluctuating but generally increasing over the years, from 9.55 in 2020 to 12.42 in 2024. This may indicate that the company is managing its payables more efficiently and possibly negotiating better credit terms with its suppliers.

4. Working capital turnover: This ratio shows how efficiently a company is utilizing its working capital to generate revenue. Akamai's working capital turnover has experienced significant growth from 2.69 in 2020 to 8.26 in 2024. This substantial increase implies that the company is generating more revenue per unit of working capital, showcasing improved operational efficiency.

Overall, while the lack of inventory turnover data limits a comprehensive assessment of Akamai's inventory management, the consistently improving receivables turnover, payables turnover, and remarkable growth in working capital turnover indicate that Akamai is efficiently managing its working capital, accounts receivable, and accounts payable, which can positively impact its overall financial performance and profitability.

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Average number of days

The activity ratios for Akamai Technologies Inc provide insight into how efficiently the company manages its working capital and operating cycle.

1. Days of Sales Outstanding (DSO):
- DSO measures the average number of days it takes for a company to collect revenue after making a sale.
- Akamai's DSO has shown a declining trend over the years, decreasing from 76.46 days in 2020 to 66.02 days in 2024.
- A lower DSO indicates that Akamai is collecting revenue more quickly, potentially improving its cash flow and liquidity.

2. Days of Inventory on Hand (DOH):
- DOH indicates the average number of days it takes for a company to sell its inventory.
- The data provided does not contain specific values for Akamai's DOH, which may suggest that the company operates with a low level of inventory or does not hold significant amounts of inventory in its operations.

3. Number of Days of Payables:
- This ratio reflects the average number of days it takes for a company to pay its suppliers.
- Akamai has managed to reduce its number of days of payables from 38.20 days in 2020 to 29.38 days in 2024.
- A decreasing trend in the number of days of payables may indicate a more efficient payment cycle, potentially improving supplier relationships.

Overall, the declining trend in DSO and days of payables for Akamai Technologies Inc suggests that the company is effectively managing its receivables and payables, potentially enhancing its working capital management and overall financial performance. However, the absence of specific data for DOH limits a comprehensive analysis of the company's inventory management efficiency.

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Long-term

The fixed asset turnover ratio measures how well a company generates sales from its fixed assets. In the case of Akamai Technologies Inc, the fixed asset turnover ratio has shown a generally increasing trend from 2.13 in 2020 to 2.02 in 2024, with a peak at 2.36 in 2022. This indicates that Akamai is efficiently utilizing its fixed assets to generate revenue, which is a positive sign of operational efficiency.

On the other hand, the total asset turnover ratio reflects how efficiently a company uses its total assets to generate sales. Akamai's total asset turnover ratio has remained relatively stable, ranging from 0.39 in 2023 and 2024 to 0.44 in 2022. This indicates that Akamai is able to generate sales in line with the level of total assets it holds, although there could be room for improvement in optimizing the utilization of these assets to potentially increase sales further.

Overall, based on the long-term activity ratios analysis, Akamai Technologies Inc seems to be effectively utilizing its fixed assets to generate sales, while maintaining a stable level of total asset turnover.