Arlo Technologies (ARLO)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 11.63 | 10.36 | 11.32 | 6.23 | 6.43 |
| Receivables turnover | 7.61 | 7.48 | 5.48 | 4.61 | 3.36 |
| Payables turnover | 8.09 | 9.25 | 5.17 | 6.49 | 3.95 |
| Working capital turnover | 5.58 | 7.00 | 4.70 | 3.01 | 2.43 |
The activity ratios of Arlo Technologies Inc indicate the efficiency of the company in managing its operating assets and liabilities over the years.
1. Inventory turnover:
- Arlo Technologies Inc's inventory turnover has been relatively high and stable over the last five years, ranging from 4.66 to 8.52. This suggests that the company is effectively managing its inventory levels and turning over its inventory multiple times during the year. A higher inventory turnover ratio indicates efficient inventory management.
2. Receivables turnover:
- The receivables turnover ratio of Arlo Technologies Inc has shown a consistent improvement over the years, increasing from 2.91 in 2019 to 7.51 in 2023. This indicates that the company has been able to collect its accounts receivables more quickly, which is a positive sign of effective credit management and collection policies.
3. Payables turnover:
- The payables turnover ratio of Arlo Technologies Inc has fluctuated but generally remained at moderate levels between 2.99 and 6.80 over the last five years. A higher payables turnover ratio suggests that the company is paying its suppliers more frequently, which could indicate strong supplier relationships or efficient cash management.
4. Working capital turnover:
- The working capital turnover ratio has generally increased for Arlo Technologies Inc from 2.11 in 2019 to 5.51 in 2023. This indicates that the company is generating more revenue per dollar of working capital, which reflects efficient utilization of working capital resources to support business operations.
Overall, the activity ratios of Arlo Technologies Inc demonstrate efficient management of inventory, receivables, payables, and working capital, which is essential for maintaining operational liquidity and optimizing the company's 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 | 31.38 | 35.24 | 32.24 | 58.56 | 56.80 |
| Days of sales outstanding (DSO) | days | 47.99 | 48.80 | 66.66 | 79.11 | 108.78 |
| Number of days of payables | days | 45.09 | 39.46 | 70.63 | 56.27 | 92.42 |
To analyze Arlo Technologies Inc's activity ratios, we will focus on the days of inventory on hand (DOH), days of sales outstanding (DSO), and number of days of payables.
1. Days of Inventory on Hand (DOH):
- Arlo Technologies Inc's inventory turnover has fluctuated over the past five years. The company held inventory for an average of 47.27 days over the period.
- A decreasing trend in DOH from 2022 to 2023 indicates that the company managed its inventory more efficiently, turning over inventory faster.
- A lower DOH suggests that Arlo Technologies Inc is selling its products quickly and replenishing inventory efficiently.
2. Days of Sales Outstanding (DSO):
- Arlo Technologies Inc's collection period has varied significantly over the past five years, with an average DSO of 73.47 days.
- Decreasing DSO from 2021 to 2023 indicates that the company improved its collection process, collecting sales revenue more promptly.
- Lower DSO reflects strong accounts receivable management and efficient collection of outstanding customer payments.
3. Number of Days of Payables:
- Arlo Technologies Inc's average payment period to suppliers was approximately 81.89 days over the five-year period.
- Fluctuations in the number of days of payables suggest changes in the company's payment policies or relationships with suppliers.
- A longer payables period can indicate favorable credit terms from suppliers, while a shorter period may signal tighter cash flow management.
Overall, analyzing Arlo Technologies Inc's activity ratios indicates improvements in inventory turnover and collection efficiency, which can positively impact the company's working capital management and liquidity position. Maintaining an optimal balance between DOH, DSO, and payables is essential for ensuring effective cash flow management and operational efficiency.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 104.41 | 67.25 | 45.40 | 22.64 | 20.03 |
| Total asset turnover | 1.74 | 1.81 | 1.25 | 0.87 | 0.79 |
Arlo Technologies Inc has exhibited a notable improvement in its fixed asset turnover ratio over the past five years, reflecting the company's increased efficiency in generating sales relative to its investment in fixed assets. The significant increase from 17.33 in 2019 to 103.17 in 2023 indicates that the company has been able to generate over 103 times the revenue compared to its investment in fixed assets.
On the other hand, the total asset turnover ratio has shown some variability over the same period but remained relatively stable. This ratio signifies how efficiently the company utilizes its total assets to generate revenue. The slight decrease from 0.68 in 2019 to 1.72 in 2023 indicates that Arlo Technologies Inc has improved its overall efficiency in generating sales relative to its total asset base.
Overall, the trend in these long-term activity ratios suggests that Arlo Technologies Inc has been able to enhance its operational efficiency and productivity in utilizing both its fixed and total assets to drive revenue growth over the years.