Axon Enterprise Inc. (AXON)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 4.11 | 4.31 | 7.73 | 6.39 | 11.33 |
| Receivables turnover | 3.73 | 3.23 | 2.56 | 2.74 | 3.17 |
| Payables turnover | 12.56 | 14.56 | 26.08 | 23.83 | 17.01 |
| Working capital turnover | 0.99 | 0.99 | 1.24 | 0.94 | 1.28 |
Based on the activity ratios of Axon Enterprise Inc over the past five years, several observations can be made:
1. Inventory Turnover:
- The inventory turnover ratio has been fluctuating over the years but has shown a decreasing trend overall.
- This ratio indicates that inventory is being sold and replaced less frequently compared to previous years.
2. Receivables Turnover:
- The receivables turnover ratio has been varying year on year with no clear trend.
- This ratio suggests that the company is collecting its accounts receivable in a relatively efficient manner.
3. Payables Turnover:
- The payables turnover ratio has been consistently decreasing over the years.
- A decreasing payables turnover ratio may suggest that the company is taking longer to pay its suppliers, which could indicate potential liquidity issues.
4. Working Capital Turnover:
- The working capital turnover ratio has fluctuated and shown no clear trend over the years.
- A working capital turnover below 1 indicates that the company is not generating sufficient revenue relative to its working capital base.
In conclusion, Axon Enterprise Inc's activity ratios reflect mixed performance in managing its inventory, receivables, payables, and working capital over the past five years. Further analysis is recommended to understand the underlying causes of these trends and their potential impact on the company's overall operational efficiency and financial health.
Average number of days
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 88.76 | 84.73 | 47.21 | 57.08 | 32.22 |
| Days of sales outstanding (DSO) | days | 97.80 | 113.00 | 142.38 | 133.14 | 115.02 |
| Number of days of payables | days | 29.05 | 25.08 | 13.99 | 15.32 | 21.46 |
Axon Enterprise Inc's activity ratios provide insights into how efficiently the company manages its inventory, accounts receivable, and accounts payable.
1. Days of Inventory on Hand (DOH): The trend in Axon's DOH indicates an increase in the number of days it takes to sell its inventory over the years. In 2023, the DOH increased to 162.00 days from 160.20 days in 2022. This suggests that Axon may be struggling to manage its inventory efficiently, leading to potentially higher carrying costs and liquidity issues.
2. Days of Sales Outstanding (DSO): Axon's DSO shows a fluctuating pattern, with a decrease in 2023 to 97.52 days from 109.87 days in 2022. This indicates that Axon is collecting its accounts receivable faster, which is generally a positive sign as it signifies improved cash flow and liquidity.
3. Number of Days of Payables: Axon's number of days of payables has been increasing steadily, reaching 53.02 days in 2023 from 47.41 days in 2022. This suggests that Axon is taking longer to pay its suppliers or creditors. While this may provide some short-term liquidity benefits, it can strain relationships with suppliers if stretched too far.
Overall, Axon needs to focus on improving its inventory management to reduce the DOH, while also monitoring its payables to ensure a healthy balance between paying on time and maintaining good supplier relationships. The decrease in DSO is a positive trend, indicating efficient accounts receivable management.
See also:
Axon Enterprise Inc. Short-term (Operating) Activity Ratios
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 7.86 | 6.98 | 6.20 | 6.44 | 12.08 |
| Total asset turnover | 0.46 | 0.42 | 0.51 | 0.49 | 0.63 |
The Fixed Asset Turnover ratio measures the efficiency with which a company utilizes its fixed assets to generate sales revenue. A higher fixed asset turnover ratio indicates that the company is generating more sales from its investments in fixed assets.
From 2019 to 2023, Axon Enterprise Inc's fixed asset turnover has shown variability, decreasing from 12.13 in 2019 to 7.80 in 2023. This suggests that the company might be less efficient in utilizing its fixed assets to generate revenue in recent years.
On the other hand, the Total Asset Turnover ratio measures the company's ability to generate sales from its total assets. A higher total asset turnover ratio signifies that the company is generating more revenue from its total assets.
Looking at Axon Enterprise Inc's total asset turnover from 2019 to 2023, there is fluctuation in the ratio, ranging from 0.42 in 2022 to 0.63 in 2019. The decline in total asset turnover from 2019 to 2023 indicates that the company may be less effective in generating sales revenue relative to its total asset base.
In summary, based on the trend of both fixed asset turnover and total asset turnover ratios, Axon Enterprise Inc's efficiency in utilizing its assets to generate sales revenue has shown some weaknesses over the past five years, which could be an area of focus for the company's management in improving operational efficiency and profitability.