ANSYS Inc (ANSS)

Short-term

Turnover ratios

Activity ratios provide insights into how effectively a company manages its assets and liabilities to generate sales and revenue. Let's analyze the activity ratios of Ansys Inc. over the past five years:

1. Inventory Turnover: Unfortunately, no information is provided for the inventory turnover ratio, so we cannot evaluate how efficiently Ansys manages its inventory levels.

2. Receivables Turnover: The trend in the receivables turnover ratio shows a slight decline from 2.38 in 2019 to 1.99 in 2023. This indicates that Ansys took approximately 2.07 days to collect its accounts receivable in 2022 and 1.99 days in 2023. A lower turnover ratio may signify slower collections, potentially impacting Ansys' cash flow and liquidity.

3. Payables Turnover: Ansys has seen fluctuations in its payables turnover ratio, ranging from 8.36 in 2023 to 18.16 in 2021. A higher payables turnover ratio suggests that the company is paying its suppliers faster, which can have implications for its cash conversion cycle and working capital management.

4. Working Capital Turnover: The working capital turnover ratio measures how efficiently a company generates revenue from its working capital. Ansys' ratio has fluctuated over the years, with a peak at 2.38 in 2022 and a low of 1.70 in 2020. A higher ratio indicates that Ansys efficiently utilizes its working capital to generate sales.

Overall, it is important for Ansys Inc. to closely monitor its activity ratios to ensure optimal management of its resources, timely collections, and payments. Any significant deviations from industry benchmarks or historical trends should be investigated to maintain financial health and operational efficiency.

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Average number of days

To analyze Ansys Inc.'s activity ratios, we will focus on three key ratios: Days of Inventory on Hand (DOH), Days of Sales Outstanding (DSO), and Number of Days of Payables.

1. Days of Inventory on Hand (DOH):
Unfortunately, specific data for Days of Inventory on Hand is not provided in the table. However, the DOH ratio helps to assess how efficiently a company manages its inventory. A lower DOH value is generally preferable as it indicates that inventory is being sold quickly, minimizing storage costs and potential obsolescence.

2. Days of Sales Outstanding (DSO):
Ansys Inc.'s Days of Sales Outstanding has been on an increasing trend over the last five years, from 153.58 days in 2019 to 183.35 days in 2023. This indicates that the company is taking longer to collect payments from its customers, which could potentially lead to cash flow issues and increased credit risk. An increasing DSO suggests inefficiencies in accounts receivable management.

3. Number of Days of Payables:
The trend for Ansys Inc.'s Number of Days of Payables has been somewhat volatile over the last five years, ranging from 20.10 days in 2021 to 43.68 days in 2023. A higher number of days of payables may indicate that the company is taking longer to pay its suppliers, which can be beneficial for managing cash flow but may also strain relationships with vendors if excessively long.

Overall, Ansys Inc. should focus on optimizing its accounts receivable management to reduce the Days of Sales Outstanding and potentially negotiate payment terms with suppliers to improve cash flow while maintaining healthy vendor relationships. Additionally, monitoring and optimizing inventory levels could further enhance operational efficiency and financial performance.

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Long-term

The fixed asset turnover ratio for Ansys Inc. has shown a consistent increasing trend over the past five years, indicating that the company has been generating more revenue per dollar of fixed assets invested. This suggests that Ansys has been effectively utilizing its fixed assets to generate sales.

On the other hand, the total asset turnover ratio has remained relatively stable around 0.30 to 0.31 over the same period. This indicates that Ansys has been consistent in generating revenue per dollar of total assets employed in the business.

Overall, the increasing trend in the fixed asset turnover ratio coupled with a stable total asset turnover ratio suggests that Ansys Inc. has been efficient in managing both its fixed and total assets to generate sales. The company appears to be effectively utilizing its assets to drive revenue growth and create value for its shareholders.