Aspen Technology Inc (AZPN)

Short-term

Turnover ratios

Aspen Technology Inc's activity ratios provide insights into how efficiently the company is managing its assets and operations.

1. Inventory Turnover: The absence of inventory turnover data for 2024 is a limitation. However, the significant increase in inventory turnover from 2013 (32.70) to 2013 suggests that Aspen Technology has been able to sell through its inventory more quickly, reflecting efficient inventory management.

2. Receivables Turnover: The trend in receivables turnover is positive, increasing from 3.77 in 2022 to 9.76 in 2024. This indicates that Aspen Technology is collecting its accounts receivable more rapidly, which is favorable for cash flow and liquidity.

3. Payables Turnover: The payables turnover ratio has also seen a notable increase, from 9.33 in 2022 to 47.24 in 2024. This suggests that the company is taking longer to pay its suppliers, which could be beneficial in terms of managing working capital and cash flow.

4. Working Capital Turnover: The working capital turnover ratio has fluctuated over the past three years, with a slight decrease from 2.17 in 2023 to 2.09 in 2024. This ratio indicates how efficiently Aspen Technology is utilizing its working capital to generate revenue, and the current ratios imply that the company's efficiency in this aspect has been relatively stable.

In conclusion, Aspen Technology Inc's activity ratios reflect improvements in inventory turnover, receivables turnover, and payables turnover over the analyzed period, highlighting positive trends in the company's operational efficiencies and cash flow management. Further analysis and comparison with industry benchmarks could provide a more comprehensive assessment of Aspen Technology's performance in managing its assets and operations.

---

Average number of days

Based on the provided data for Aspen Technology Inc's activity ratios, we can make the following analysis:

1. Days of Inventory on Hand (DOH):
The company did not provide the DOH ratio for June 30, 2024. However, comparing the DOH for June 30, 2023, and June 30, 2022, we observe a decrease in the number of days of inventory held by the company. This suggests that Aspen Technology Inc has been managing its inventory efficiently, reducing the time it takes to sell its inventory.

2. Days of Sales Outstanding (DSO):
The DSO ratio shows the average number of days it takes for the company to collect its accounts receivable. A lower DSO indicates better management of accounts receivable. Aspen Technology Inc's DSO has improved significantly from 96.84 days in June 30, 2022, to 37.40 days in June 30, 2024, indicating a more efficient collection process.

3. Number of Days of Payables:
The number of days of payables indicates how long it takes for a company to pay its suppliers. A higher number of days suggests the company is taking longer to pay its obligations. Aspen Technology Inc has decreased its days of payables from 39.10 days in June 30, 2022, to 7.73 days in June 30, 2024. This may indicate a more aggressive approach in managing its payables or perhaps more favorable credit terms with suppliers.

In summary, Aspen Technology Inc has shown improvements in its activity ratios over the years, with better management of inventory, accounts receivable, and payables. These trends suggest a more efficient use of assets and working capital, which can positively impact the company's overall financial performance and liquidity position.

---

Long-term

The fixed asset turnover ratio measures how efficiently a company generates sales from its fixed assets. Aspen Technology Inc's fixed asset turnover has been increasing steadily over the past three years, indicating that the company is becoming more efficient in generating revenue from its investment in fixed assets.

On the other hand, the total asset turnover ratio measures how efficiently a company generates sales from all its assets. Aspen Technology Inc's total asset turnover has also increased over the three-year period, although it remains relatively low compared to the fixed asset turnover. This suggests that Aspen Technology Inc may have a significant proportion of non-fixed assets that are not generating as much revenue as its fixed assets.

Overall, the trend in both fixed asset turnover and total asset turnover ratios indicates an improvement in Aspen Technology Inc's efficiency in utilizing its assets to generate sales, with a particular focus on fixed assets. However, the company may benefit from further analysis and potential optimization of its non-fixed assets to enhance overall asset utilization efficiency.