Adtalem Global Education Inc (ATGE)
Activity ratios
Short-term
Turnover ratios
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | — | 951.08 | — | — | — |
| Receivables turnover | 12.49 | 14.12 | 16.93 | 13.23 | 9.95 |
| Payables turnover | 13.37 | 16.11 | 23.70 | 22.81 | 19.90 |
| Working capital turnover | — | 29.55 | 10.35 | 0.81 | 2.50 |
The activity ratios for Adtalem Global Education Inc provide insights into the efficiency of the company's operations in managing its inventory, receivables, payables, and working capital.
1. Inventory Turnover: The lack of data for inventory turnover in the most recent year suggests that the company might not have relevant inventory holdings or the company's reporting practices may have changed. It is important to note that a high inventory turnover ratio indicates efficient management of inventory levels, which can lead to lower storage costs and reduced risk of obsolescence.
2. Receivables Turnover: The receivables turnover ratio measures how efficiently a company collects payment from its customers. Adtalem Global Education Inc's receivables turnover has shown a slight decline over the years, from 14.12 in 2023 to 12.49 in 2024. This indicates that the company is taking slightly longer to collect payments from its customers, which could potentially signal issues with credit policies or customer payment delays.
3. Payables Turnover: The payables turnover ratio reflects how quickly a company pays its suppliers. Adtalem Global Education Inc's payables turnover has been relatively stable over the years, indicating consistent payment patterns to its suppliers. A higher payables turnover ratio suggests that the company is managing its payables efficiently and may be able to take advantage of trade credit terms.
4. Working Capital Turnover: The working capital turnover ratio measures how effectively a company utilizes its working capital to generate sales. Adtalem Global Education Inc's working capital turnover has fluctuated significantly over the years, from 2.50 in 2020 to 29.55 in 2023. A higher working capital turnover ratio indicates that the company is generating more sales revenue per dollar of working capital, which is a positive sign of operational efficiency.
In conclusion, the activity ratios of Adtalem Global Education Inc provide valuable insights into the company's operational efficiency in managing its inventory, receivables, payables, and working capital. Monitoring these ratios over time can help identify trends and areas for improvement in the company's working capital management practices.
Average number of days
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | — | 0.38 | — | — | — |
| Days of sales outstanding (DSO) | days | 29.21 | 25.85 | 21.56 | 27.60 | 36.67 |
| Number of days of payables | days | 27.29 | 22.65 | 15.40 | 16.00 | 18.35 |
Days of inventory on hand (DOH) for Adtalem Global Education Inc has been steadily decreasing over the years, reaching 0.38 days in 2023. This indicates that the company is efficiently managing its inventory levels, possibly by implementing just-in-time inventory practices or optimizing its supply chain.
Days of sales outstanding (DSO) has fluctuated over the years, with a peak in 2020 at 36.67 days and a low in 2022 at 21.56 days. In general, a lower DSO signifies that the company is collecting its accounts receivable more quickly, which is positive for cash flow and liquidity.
In terms of the number of days of payables, Adtalem has seen an increase from 15.4 days in 2022 to 27.29 days in 2024. This suggests that the company is taking more time to pay its suppliers, which can be beneficial for cash flow management as it allows the company to hold onto cash for a longer period before settling its payables.
Overall, the trend in activity ratios for Adtalem Global Education Inc shows efficient management of inventory, improving collection of accounts receivable, and a strategic approach to managing payables to optimize cash flow and working capital.
Long-term
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 6.38 | 5.93 | 4.77 | 3.17 | 3.03 |
| Total asset turnover | 0.58 | 0.52 | 0.46 | 0.29 | 0.38 |
From the data provided, we can observe the trend in Adtalem Global Education Inc's long-term activity ratios over the past five years.
1. Fixed Asset Turnover:
- The fixed asset turnover ratio indicates Adtalem's ability to generate revenue from its fixed assets. A higher ratio signifies efficiency in asset utilization.
- Adtalem's fixed asset turnover has been generally increasing over the years, which indicates improved efficiency in generating revenue from its fixed assets.
- The ratio has increased from 3.03 in 2020 to 6.38 in 2024, reflecting a significant improvement in utilizing fixed assets to generate revenue.
2. Total Asset Turnover:
- The total asset turnover ratio measures the company's efficiency in generating revenue from all its assets, including both fixed and current assets.
- Adtalem's total asset turnover has shown fluctuations over the years but has generally increased from 0.29 in 2021 to 0.58 in 2024.
- This indicates that the company has been able to generate more revenue relative to its total assets, reflecting improved efficiency in asset utilization.
Overall, the increasing trend in both fixed asset turnover and total asset turnover ratios suggests that Adtalem Global Education Inc has been successful in enhancing its efficiency in utilizing assets to generate revenue over the years. This improvement indicates positive operational performance and effective management of assets within the company.