AeroVironment Inc (AVAV)

Short-term

Turnover ratios

AeroVironment Inc's activity ratios provide insight into the efficiency with which the company manages its assets and liabilities to generate sales.

1. Inventory turnover:
- AeroVironment's inventory turnover has been declining over the past five years, from 6.07 in 2020 to 3.76 in 2024. This indicates that the company is selling its inventory less frequently compared to previous years. It may suggest potential issues with inventory management or slower sales.

2. Receivables turnover:
- The receivables turnover ratio has been relatively consistent over the years, ranging from 2.65 in 2024 to 3.26 in 2021. This indicates that AeroVironment collects its accounts receivable approximately 2.65 to 3.26 times a year. A stable receivables turnover suggests consistent collection practices and customer credit policies.

3. Payables turnover:
- The payables turnover ratio has fluctuated significantly over the years, with a sharp decrease in 2023 followed by a gradual increase. A high payables turnover ratio like AeroVironment's suggests that the company pays its suppliers quickly, which can be beneficial for maintaining good vendor relationships.

4. Working capital turnover:
- AeroVironment's working capital turnover has also shown an increasing trend over the years, from 0.98 in 2020 to 1.93 in 2024. A higher working capital turnover indicates that the company is generating sales more efficiently using its working capital, which can be a positive sign of operational efficiency.

In summary, AeroVironment Inc's activity ratios reflect various aspects of its operational efficiency and management of assets and liabilities. The company's declining inventory turnover and relatively stable receivables turnover may warrant closer attention, while the improving working capital turnover suggests improved utilization of working capital.

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Average number of days

AeroVironment Inc's activity ratios provide insights into the efficiency and effectiveness of the company's operations.

1. Days of Inventory on Hand (DOH):
- The DOH has shown an increasing trend over the years, reaching 96.98 days in 2024 from 60.11 days in 2020.
- This indicates that AeroVironment is taking longer to sell its inventory, which could potentially lead to higher carrying costs and risks of obsolescence.

2. Days of Sales Outstanding (DSO):
- The DSO has fluctuated over the years, with a peak at 137.70 days in 2024 but generally trending upwards from 127.34 days in 2020.
- This suggests that the company is taking longer to collect payments from its customers, potentially impacting cash flow and liquidity.

3. Number of Days of Payables:
- AeroVironment's days of payables have shown fluctuations but have generally increased over the years, reaching 31.19 days in 2024 compared to 26.21 days in 2020.
- This implies that the company is taking longer to pay its suppliers, which could impact relationships and potentially signal financial distress.

Overall, AeroVironment's activity ratios indicate some challenges in managing inventory levels, collecting payments from customers, and paying suppliers promptly. The company may need to focus on improving its working capital management to enhance efficiency and maintain healthy liquidity levels.

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Long-term

Fixed asset turnover measures how efficiently a company utilizes its fixed assets to generate revenue. AeroVironment Inc's fixed asset turnover has shown fluctuations over the past five years, ranging from 7.42 to 19.75. The increasing trend from 2019 to 2020 indicates that the company has been able to generate more revenue per dollar invested in fixed assets. However, the subsequent decrease in 2021 and 2022 suggests a potential decline in efficiency in utilizing fixed assets for revenue generation. The significant increase in 2023 and 2024 may indicate improved efficiency in this aspect.

Total asset turnover ratio, which measures how effectively a company uses its total assets to generate revenue, has also varied for AeroVironment Inc over the same period. It increased from 2019 to 2020, showing improved efficiency in asset utilization. However, the ratio decreased in the following years, indicating less effective utilization of total assets to generate revenue.

Overall, while the fixed asset turnover ratio has shown volatility, the company managed to improve its efficiency in asset utilization in 2020. However, the total asset turnover ratio has been less consistent, suggesting potential challenges in effectively using total assets to generate revenue consistently over the five-year period. Investors and stakeholders should further investigate the factors contributing to these fluctuations to assess the company's long-term sustainability and growth prospects.