Arrowhead Pharmaceuticals Inc (ARWR)

Short-term

Turnover ratios

Based on the provided data, Arrowhead Pharmaceuticals Inc.'s activity ratios for the years ending September 30, 2019 to 2023 are as follows:

Inventory Turnover:
Unfortunately, the data for inventory turnover is not available for analysis. This ratio would have provided insight into the speed at which the company's inventory is sold and replenished.

Receivables Turnover:
The receivables turnover reflects the efficiency of the company in collecting outstanding receivables. The significantly high ratio for 2019 (255.36) indicates that the company was collecting its receivables much more frequently during that year. However, the ratio decreased substantially in 2020 (104.01) and further decreased in 2021 (13.48), suggesting a decrease in the efficiency of the company in collecting its receivables during those periods. The ratio for 2022 (172.50) increased substantially compared to 2021, indicating an improvement in efficiency in collecting receivables during that year. However, the data for the most recent year (2023) is unavailable for analysis.

Payables Turnover:
The payables turnover data is not available for analysis. This ratio would have provided insight into the efficiency with which the company pays its suppliers.

Working Capital Turnover:
The working capital turnover ratio indicates how efficiently the company is using its working capital to generate revenue. The decreasing trend in this ratio from 2019 (1.00) to 2023 (0.77) suggests a decrease in the efficiency of utilizing the working capital to generate revenue over the years.

In conclusion, based on the available data for receivables turnover and working capital turnover, Arrowhead Pharmaceuticals Inc. has displayed fluctuations in the efficiency of collecting receivables and utilizing working capital over the years. However, without the data for inventory and payables turnover, a comprehensive analysis of the company's overall activity ratios is limited.

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Average number of days

As the data for the days of inventory on hand (DOH) and the number of days of payables is not provided, I will focus on analyzing the days of sales outstanding (DSO) for Arrowhead Pharmaceuticals Inc.

The days of sales outstanding (DSO) measure the average number of days it takes for a company to collect payment after a sale is made. Looking at Arrowhead Pharmaceuticals Inc.'s DSO over the past five years, there has been a noticeable fluctuation. In 2019, the DSO was at a low of 1.43 days, indicating efficient collection of payments from customers. However, this figure increased considerably to 27.07 days in 2021, signaling a significant delay in collecting receivables. The DSO improved in 2022 to 2.12 days and then remained stable in 2023, where the exact number of days is not provided.

Such changes in DSO can provide insights into the company's credit policies, collection efficiency, and the overall health of its accounts receivable. A decrease in DSO typically indicates improved collection processes, while an increase may suggest credit management issues or a shift in customer payment behavior. In Arrowhead Pharmaceuticals Inc.'s case, the fluctuation in DSO highlights the importance of closely monitoring and managing the collection process to ensure timely receipt of funds.

It is important to note that without the data for the days of inventory on hand and the number of days of payables, a complete analysis of Arrowhead Pharmaceuticals Inc.'s activity ratios cannot be provided. These additional metrics would provide further insights into the company's inventory management and payment terms with suppliers.

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Long-term

Based on the long-term activity ratios of Arrowhead Pharmaceuticals Inc., it is evident that the company's efficiency in utilizing its fixed assets to generate sales has declined over the years. The fixed asset turnover ratio has decreased from 7.27 in 2019 to 0.83 in 2023, indicating a significant reduction in efficiency in generating sales from fixed assets.

Furthermore, the total asset turnover ratio has also shown a declining trend, decreasing from 0.48 in 2019 to 0.31 in 2023. This decline suggests that the company's overall ability to generate sales from its total assets has weakened over the years.

These declining trends in both fixed asset turnover and total asset turnover ratios may raise concerns about the company's utilization of its assets to generate sales, indicating a potentially decreasing efficiency in asset management and sales generation. It would be advisable for stakeholders to further investigate the reasons behind these declining trends and evaluate the company's strategies for asset utilization.