AeroVironment Inc (AVAV)

Short-term

Turnover ratios

The activity ratios of AeroVironment Inc., specifically inventory turnover, receivables turnover, payables turnover, and working capital turnover, reveal insights into the company's operational efficiency over the specified periods.

Inventory Turnover:
Between January 2022 and October 2025, AeroVironment’s inventory turnover has exhibited a declining trend initially, dropping from approximately 3.99 in January 2022 to around 2.32 in July 2023, before recovering to approximately 3.35 by October 2024 and reaching about 3.50 in April 2025. This fluctuation indicates a period of slower inventory movement, possibly due to changes in sales volume, production adjustments, or inventory management practices. The recent increase suggests improved inventory utilization or demand recovery.

Receivables Turnover:
Receivables turnover ratios showed fluctuations within a range, generally decreasing from early periods. Starting at 2.67 in January 2022, the ratio increased modestly with peaks around 3.50 in January 2024, reflecting an improvement in collection efficiency during that period. Conversely, there is a declining trend from late 2024 onward, reaching approximately 2.01 in April 2025, indicating that the company is taking longer to collect receivables, which may impact cash flow.

Payables Turnover:
Payables turnover ratios declined significantly from a high of 23.65 in January 2022 to a low of 6.95 in April 2025. This downward trend suggests the company is stretching the time it takes to pay its suppliers, possibly as a strategic effort to optimize cash flow or due to changes in supplier payment terms. The increase noted in early 2024 followed by subsequent decline aligns with periods of evolving financial management or operational adjustments.

Working Capital Turnover:
The working capital turnover ratios remained relatively stable with minor fluctuations, indicating consistent utilization of working capital to generate sales. The ratio hovered around 1.66–1.87 from early 2022 through early 2024, with a slight increase to approximately 2.03 in mid-2024, then moderating again near 1.79–1.81. These figures suggest steady operational efficiency in managing current assets and liabilities relative to sales volume.

In summary, AeroVironment’s activity ratios demonstrate periods of operational adjustments, with inventory and receivables management fluctuating in response to internal and external factors. The declining payables turnover points to longer payment cycles, possibly reflecting strategic liquidity management. The relatively stable working capital turnover indicates consistent overall operational efficiency over the analyzed timeframe.

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Average number of days

The analysis of AeroVironment Inc.'s activity ratios over the specified period reveals significant trends in inventory management, receivables, and payables.

Days of Inventory on Hand (DOH):
The company's inventory holdings have exhibited a consistent upward trend from approximately 91.49 days in January 2022 to a peak of around 157.39 days in July 2023. This indicates a lengthening of the inventory cycle, which could suggest increased inventory accumulation, potential delays in inventory turnover, or strategic stockpiling. After reaching this peak, there is a noticeable reduction to roughly 109.02 days by October 2024, signaling improved inventory efficiency. However, the ratio slightly increased again to approximately 119.54 days in January 2025, reflecting some fluctuation but generally indicating normalization of inventory levels.

Days of Sales Outstanding (DSO):
Receivables collection periods have shown variability over the period. Starting at approximately 136.69 days in January 2022, DSO decreased notably to a low of around 104.27 days in January 2024, implying an improvement in receivables collection efficiency. Conversely, subsequently, DSO increased significantly to approximately 181.61 days by April 2025, indicating a substantial slowdown in cash conversion from receivables. This Jordanian fluctuation highlights periods of enhanced credit management followed by deterioration, potentially impacting liquidity.

Number of Days of Payables:
The company's payment terms extended over time, beginning with a minimal of approximately 15.43 days in January 2022 and gradually increasing to a peak of around 52.51 days in April 2025. The elongation of payables days suggests an increasing leverage in working capital management, potentially delaying payments to suppliers to preserve cash flows. Notably, there are fluctuations within the period, with some periods showing shorter payables days, possibly reflecting strategic payment schedules or operational adjustments.

Summary of Activity Ratio Trends:
Overall, AeroVironment Inc. has experienced fluctuations in its operational efficiency, particularly in managing inventory and receivables. The substantial increase in inventory days during 2023 indicates potential challenges with stock turnover or shifting inventory strategies, while the extended receivables period toward the end of the period suggests rising credit risk or slower collections. The elongation of payables days aligns with a strategy of delaying cash outflows, which could enhance short-term liquidity but might strain supplier relationships if prolonged excessively.

These activity ratios collectively depict an evolving operational landscape, with periods of efficiency improvement interspersed with phases of lagging asset turnover, highlighting areas that may warrant management attention to optimize working capital and operational performance.

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Long-term

The long-term activity ratios of AeroVironment Inc. reveal substantial insights into the company's asset utilization efficiency over the specified periods. The fixed asset turnover ratio exhibits a notable upward trend, beginning at 4.92 as of January 31, 2022, and reaching a peak of 15.71 in July 2023. This indicates a significant enhancement in the company's ability to generate sales from its investment in fixed assets, reflecting improvements in asset management or operational productivity. The ratio maintains elevated levels through late 2023, with a slight decrease to 8.95 in October 2023, before rising again to 15.55 in January 2024, suggesting ongoing efficiency in fixed asset utilization.

In contrast, the total asset turnover ratio remains relatively stable with minor fluctuations, shifting from 0.49 in early 2022 to a peak of 0.76 during mid to late 2023. This ratio indicates that the company consistently generates approximately half to three-quarters of a unit in sales for each dollar of total assets employed. The increases observed from around 0.49-0.53 to 0.69-0.76 suggest gradual improvements in overall asset efficiency, aligning with the positive trend in fixed asset turnover but with less dramatic changes.

Overall, these activity ratios suggest that AeroVironment Inc. has significantly improved its utilization of fixed assets over the given period, achieving higher sales productivity relative to its fixed investments. The stabilization and growth in total asset turnover further support a trend toward more efficient resource deployment. The combination of these patterns reflects strategic asset management enhancements and operational efficiencies contributing to the company's growth trajectory during this timeframe.