AeroVironment Inc (AVAV)

Short-term

Turnover ratios

The analysis of AeroVironment Inc's activity ratios over the period from April 30, 2021, to April 30, 2025, reveals several notable trends and patterns.

Inventory Turnover: The company's inventory turnover ratio increased modestly from 3.22 in 2021 to 3.36 in 2022, indicating a slight improvement in inventory management and more efficient sales relative to inventory held. However, there was a decline to 2.64 in 2023, suggesting a slowdown in inventory turnover or potential accumulation of inventory. Subsequently, the ratio recovered to 2.88 in 2024 and further improved to 3.48 in 2025, surpassing previous levels and indicating an overall enhancement in inventory management efficiency.

Receivables Turnover: The receivables turnover ratio showed a declining trend from 2.94 in 2021 to 2.70 in 2022, and then increased slightly to 2.80 in 2023. A decline continued in 2024, with the ratio decreasing to 2.66, and a sharper decline was observed in 2025, with the ratio falling to 1.77. This overall downward trend suggests that the company is taking longer, on average, to collect receivables over time, indicating a potential deterioration in credit collection efficiency.

Payables Turnover: The payables turnover ratio experienced a significant increase from 9.27 in 2021 to a peak of 15.82 in 2022, reflecting a period during which the company repaid suppliers more frequently or managed payables more aggressively. Subsequently, the ratio declined to 11.71 in 2023, and continued decreasing to 8.96 in 2024 and further to 6.93 in 2025. The declining trend indicates the company is taking longer, on average, to pay its suppliers, which could reflect extended payment terms or cash flow management strategies.

Working Capital Turnover: This ratio increased from 1.29 in 2021 to 1.67 in 2022, followed by a slight decrease to 1.52 in 2023. An increase is observed again in 2024, reaching 1.93, before decreasing somewhat to 1.59 in 2025. These fluctuations suggest varying efficiency in utilizing working capital to generate sales, with periods of improved efficiency interspersed with declines.

Summary: The activity ratios collectively point to a period of shifting operational efficiencies. The inventory turnover improved overall, particularly in 2025, indicating better inventory management. The receivables turnover declined notably in 2025, implying delays in collection processes. The payables turnover decreased steadily after a peak in 2022, indicating longer payment cycles to suppliers. The working capital turnover showed some variability but generally reflected moderate efficiency in managing operational assets. Overall, AeroVironment's activity ratios portray a company experiencing evolving operational dynamics, with improvements in inventory management counterbalanced by longer receivable and payable cycles.

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Average number of days

The analysis of AeroVironment Inc.'s activity ratios over the specified periods reveals notable trends and implications for operational efficiency and liquidity management.

Days of Inventory on Hand (DOH):
The DOH fluctuated over the analyzed years, starting at 113.52 days as of April 30, 2021. A decreasing trend is observed up to April 30, 2022, where DOH declined slightly to 108.64 days, indicating improved inventory turnover and more efficient inventory management. However, a significant increase occurred by April 30, 2023, reaching 138.05 days, suggesting an accumulation of inventory which could imply production slowdowns, overstocking, or strategic buildup of inventory. The ratio then decreased to 126.65 days in April 2024, indicating a partial correction, but by April 30, 2025, it further declined to 104.77 days, returning to levels below the 2021 figure. This overall pattern suggests variability in inventory management, with periods of both overstocking and improvement towards more efficient inventory handling.

Days of Sales Outstanding (DSO):
The DSO history indicates a relatively stable period from April 2021 to April 2023, ranging between approximately 124 to 135 days. An increase is evident in April 2024, reaching 137.39 days, indicating customers are taking longer to settle accounts receivable, which may impact cash flow. This upward trend accelerates sharply by April 2025, with DSO rising to 206.53 days, signaling a substantial elongation in collection periods. This could reflect changes in credit policies, customer creditworthiness issues, or payment delays, and warrants further scrutiny as it poses potential liquidity concerns.

Number of Days of Payables:
The payables period experienced fluctuations, beginning at 39.36 days in April 2021, decreasing to 23.07 days in April 2022, indicating faster payment cycles during this period. However, the payables period increased again to 31.18 days in April 2023, then to 40.73 days in April 2024. The most notable change is observed in April 2025, where the payables period extends to 52.69 days. The increasing trend suggests a strategic extension of payment terms, possibly to conserve cash or manage liquidity more effectively, though it also raises considerations regarding supplier relationships.

Overall Summary:
The activity ratios reveal a pattern of operational variability for AeroVironment Inc., with periods of inventory accumulation and efficiency improvements, coupled with significant elongation in receivables collections and payment cycles. The increasing DSO alongside prolonged payables indicates a potential shift toward more elongated working capital cycles. This scenario might reflect strategic financial management aimed at optimizing cash flows but also highlights the need for careful oversight to prevent adverse effects on liquidity and supplier relations over time.

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Long-term

The analysis of AeroVironment Inc.’s long-term activity ratios reveals notable trends in asset utilization efficiency over the specified period.

The fixed asset turnover ratio, which measures how effectively the company uses its fixed assets to generate sales, shows a steady increase from 4.83 on April 30, 2021, to 4.94 on April 30, 2022. This upward trajectory continues more markedly, reaching 8.05 by April 30, 2023. The significant rise in this ratio indicates a substantial improvement in the utilization of fixed assets, suggesting enhanced operational efficiency or increased sales relative to the company’s investment in fixed assets during this period. Data beyond April 2023 are not available for subsequent years.

The total asset turnover ratio, which assesses how efficiently the total assets are employed to produce sales, exhibits a consistent upward trend from 0.43 on April 30, 2021, to 0.49 in 2022, and further to 0.66 in 2023. The ratio continues to improve in 2024, reaching 0.71, reflecting an ongoing enhancement in overall asset utilization efficiency. However, a slight decrease to 0.62 in 2025 suggests a possible moderation in efficiency or a relative increase in total assets that temporarily impact the ratio.

Overall, the long-term activity ratios for AeroVironment Inc. indicate a positive progression in asset efficiency. The marked improvement especially in fixed asset turnover indicates better utilization of capital assets to generate sales. The consistent upward trend in the total asset turnover ratio complements this view, signifying improvements in overall operational efficiency over the analyzed period.