Alkermes Plc (ALKS)

Short-term

Turnover ratios

Alkermes Plc's activity ratios provide insight into how efficiently the company manages its resources.

1. Inventory Turnover: The inventory turnover ratio indicates how many times a company sells and replaces its inventory within a specific period. Alkermes Plc’s inventory turnover has shown a slight decrease from 6.02 in 2020 to 4.88 in 2024, which may suggest a slower rate of inventory movement over the years.

2. Receivables Turnover: This ratio measures how efficiently a company is collecting outstanding receivables. Alkermes Plc's receivables turnover has fluctuated, with peaks in 2023 at 4.93 and troughs in 2021 at 3.71. The upward trend indicates an improvement in the collection of receivables from customers.

3. Payables Turnover: Payables turnover reflects how quickly a company pays off its suppliers. Alkermes Plc's payables turnover ratio varied significantly, with a peak in 2022 at 26.19 and a dip in 2021 at 14.29. The fluctuation could be due to changes in payment terms with suppliers.

4. Working Capital Turnover: The working capital turnover ratio illustrates how effectively a company utilizes its working capital to generate revenue. Alkermes Plc's working capital turnover has remained relatively stable over the years, indicating consistent efficiency in utilizing its working capital to generate sales.

Overall, the analysis of Alkermes Plc's activity ratios shows mixed performance in managing inventory, collecting receivables, and paying suppliers efficiently, with a relatively stable trend in using working capital effectively to generate revenue. Further investigation into the factors affecting these ratios would provide a more comprehensive understanding of the company's operational efficiency.

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Average number of days

Alkermes Plc's activity ratios provide insights into the efficiency of its operations and management of working capital.

1. Days of Inventory on Hand (DOH): The trend shows an increase in inventory holding period over the years from 60.66 days in 2020 to 74.86 days in 2024. This increase indicates a longer time taken to sell inventory, which may signify slower sales or overstocking.

2. Days of Sales Outstanding (DSO): Alkermes Plc's DSO decreased from 97.27 days in 2020 to 90.15 days in 2024. A decrease in DSO implies that the company is collecting cash from sales more efficiently, which could be due to better credit control or prompt customer payments.

3. Number of Days of Payables: The number of days of payables shows some fluctuation, with a notable decrease from 25.53 days in 2021 to 13.94 days in 2022. A lower number of days of payables indicates that the company is taking less time to pay its suppliers, which may be beneficial for maintaining good supplier relationships but could also indicate a potential liquidity risk.

Overall, while Alkermes Plc has shown improvement in collecting cash from customers more efficiently, there is a need to monitor the increasing inventory holding period and manage payables effectively to maintain a balanced working capital cycle.

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Long-term

The fixed asset turnover ratio for Alkermes Plc has shown a positive trend over the years, increasing from 2.95 in 2020 to 6.84 in 2024. This indicates that the company has become more efficient in generating sales relative to its investment in fixed assets during this period.

On the other hand, the total asset turnover ratio has fluctuated slightly, with a slight increase from 0.53 in 2020 to 0.76 in 2024. Although there was some variability in the ratio, the overall trend suggests that Alkermes Plc has been able to generate more sales revenue relative to its total assets as compared to the initial year.

Overall, the upward trend in the fixed asset turnover ratio indicates improved efficiency in utilizing fixed assets to generate revenue, while the total asset turnover ratio also shows a positive movement, indicating the company's ability to generate sales relative to its total asset base. These trends suggest that Alkermes Plc has been effectively managing its long-term assets to drive revenue growth and improve operational efficiency over the years.