Altair Engineering Inc (ALTR)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | — | — | — | — | 55.25 |
| Receivables turnover | 2.94 | 3.10 | 3.53 | 3.68 | 4.09 |
| Payables turnover | 44.44 | 38.67 | 56.83 | 39.19 | 15.45 |
| Working capital turnover | 1.62 | 1.92 | 4.54 | 2.46 | 2.30 |
Altair Engineering Inc's activity ratios reflect the efficiency of the company's operations in managing its assets and liabilities.
- Inventory turnover ratio is not provided for the latest year (2023), indicating that information on the rate at which inventory is sold was not disclosed.
- Receivables turnover has shown a decreasing trend over the past five years, from 4.09 in 2019 to 2.94 in 2023. This suggests that the company is collecting its accounts receivable at a slower pace, which may indicate potential issues with credit policies or customer payments.
- Payables turnover has been fluctuating but generally increasing over the years, from 15.45 in 2019 to 44.44 in 2023. This implies that Altair Engineering Inc is taking longer to pay its suppliers, which could have both positive and negative implications for cash flow and relationships with vendors.
- Working capital turnover has also fluctuated over the years, with a peak in 2021 at 4.54 and a decrease to 1.62 in 2023. This ratio measures how efficiently working capital is being used to generate revenue, and the decreasing trend suggests potential inefficiencies in the company's working capital management.
Overall, Altair Engineering Inc should closely monitor these activity ratios to ensure optimal management of its assets and liabilities for sustaining and improving operational efficiency and financial performance.
Average number of days
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | — | — | — | — | 6.61 |
| Days of sales outstanding (DSO) | days | 124.29 | 117.60 | 103.34 | 99.24 | 89.28 |
| Number of days of payables | days | 8.21 | 9.44 | 6.42 | 9.31 | 23.63 |
Days of Inventory on Hand (DOH) is not provided for the most recent year, but in the previous year, Altair Engineering Inc held its inventory for 6.61 days before selling it. This indicates a relatively efficient inventory management system in 2019.
Days of Sales Outstanding (DSO) has been gradually increasing over the years, with customers taking longer to pay for their purchases. In 2023, it took Altair Engineering Inc approximately 124.29 days to collect on its sales, which is an increase compared to the previous year.
The Number of Days of Payables is fluctuating with no clear trend. In 2023, Altair Engineering Inc took 8.21 days to pay its suppliers, which is shorter compared to the previous year. This suggests a quicker payment cycle, possibly to take advantage of early payment discounts.
Overall, Altair Engineering Inc should focus on reducing its Days of Sales Outstanding to improve cash flow and maintain efficient working capital management.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 15.28 | 15.02 | 12.82 | 12.61 | 12.64 |
| Total asset turnover | 0.45 | 0.47 | 0.45 | 0.55 | 0.62 |
Altair Engineering Inc's fixed asset turnover has been relatively stable over the past five years, ranging from 12.61 to 15.28. This ratio indicates that the company generated between 12.61 to 15.28 units of revenue for every unit of fixed assets it holds. A higher fixed asset turnover ratio suggests that the company is effectively utilizing its fixed assets to generate sales.
However, Altair Engineering Inc's total asset turnover has shown more variability over the same period, decreasing from 0.62 in 2019 to 0.45 in 2023. This ratio indicates that the company generated between 0.45 to 0.62 units of revenue for every unit of total assets it holds. A declining total asset turnover may suggest that the company's efficiency in generating sales using its total assets has decreased over the years.
Overall, while Altair Engineering Inc has maintained a strong fixed asset turnover, the declining trend in total asset turnover warrants further investigation into the company's asset utilization efficiency and operational performance.