Biomarin Pharmaceutical Inc (BMRN)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 0.47 | 0.54 | 0.61 | 0.75 | 0.53 |
| Receivables turnover | 3.75 | 4.48 | 4.91 | 4.07 | 4.45 |
| Payables turnover | — | — | — | — | — |
| Working capital turnover | 1.33 | 0.96 | 1.06 | 0.99 | 1.66 |
Biomarin Pharmaceutical Inc's activity ratios provide insight into how efficiently the company manages its resources and generates revenue.
1. Inventory Turnover:
The inventory turnover ratio measures how many times a company sells and replaces its inventory during a certain period. A decreasing trend in Biomarin's inventory turnover over the past five years could indicate slower sales or inefficient inventory management. In 2023, the ratio stands at 0.47, suggesting that the company's inventory is turning over less frequently compared to previous years.
2. Receivables Turnover:
The receivables turnover ratio shows how well a company collects its outstanding credit sales. Biomarin's receivables turnover has been relatively consistent over the past five years, ranging between 3.75 and 4.91. The higher turnover indicates that the company efficiently collects payments from its customers, which is a positive sign for cash flow management.
3. Payables Turnover:
Unfortunately, there is no data available for Biomarin's payables turnover ratio, which could provide insight into how quickly the company pays its suppliers. Without this information, it is difficult to assess the efficiency of the company's payment processes.
4. Working Capital Turnover:
The working capital turnover ratio evaluates how well a company utilizes its working capital to generate sales. Biomarin's working capital turnover has fluctuated over the past five years but shows a general upward trend with some variability. In 2023, the ratio stands at 1.33, indicating that the company is generating more revenue relative to its working capital compared to the previous year.
In conclusion, Biomarin Pharmaceutical Inc's activity ratios suggest areas of operational efficiency and potential improvement. The company's management may benefit from further analysis and strategies to optimize inventory management, maintain consistent receivables turnover, and potentially evaluate payables turnover efficiency if data becomes available.
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 | 784.92 | 674.72 | 602.50 | 486.33 | 690.75 |
| Days of sales outstanding (DSO) | days | 97.42 | 81.40 | 74.36 | 89.76 | 81.98 |
| Number of days of payables | days | — | — | — | — | — |
In analyzing Biomarin Pharmaceutical Inc's activity ratios, we will focus on Days of Inventory on Hand (DOH) and Days of Sales Outstanding (DSO) as provided in the table:
1. Days of Inventory on Hand (DOH):
- Biomarin Pharmaceutical Inc's DOH has shown an increasing trend over the past five years, from 690.75 days in 2019 to 784.92 days in 2023. This indicates that the company is holding inventory for a longer period before it is sold.
- A high DOH could suggest potential issues with inventory management efficiency, such as overstocking or slow-moving inventory.
- Management may need to review and improve inventory control processes to optimize inventory turnover and reduce holding costs.
2. Days of Sales Outstanding (DSO):
- Biomarin Pharmaceutical Inc's DSO has fluctuated over the same period, ranging from 74.36 days in 2021 to 97.42 days in 2023.
- DSO measures the average number of days it takes for a company to collect revenue after a sale has been made. A higher DSO may indicate slower collection of receivables and potential liquidity concerns.
- Monitoring DSO closely is important to ensure efficient cash flow management and timely collection of accounts receivable. Strategies such as improving credit policies or following up on overdue payments may be considered to reduce DSO.
In conclusion, Biomarin Pharmaceutical Inc's activity ratios suggest that the company may need to focus on improving inventory management practices to reduce DOH and enhance operational efficiency. Additionally, managing DSO effectively to expedite revenue collection could help maintain healthy cash flow and overall financial performance.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 2.23 | 1.93 | 1.77 | 1.77 | 1.66 |
| Total asset turnover | 0.35 | 0.32 | 0.31 | 0.31 | 0.36 |
The long-term activity ratios of Biomarin Pharmaceutical Inc provide insights into the efficiency of the company in utilizing its assets to generate revenue over the years.
Fixed asset turnover has shown a positive trend, increasing from 1.66 in 2019 to 2.23 in 2023. This indicates that the company has been able to generate more revenue from its fixed assets each year, which is a positive sign of operational efficiency.
On the other hand, Total asset turnover has fluctuated with a downward trend overall, decreasing from 0.36 in 2019 to 0.35 in 2023. This ratio signifies the company's ability to generate revenue from all its assets, and the decreasing trend suggests a potential inefficiency in utilizing its total assets to generate sales.
Overall, while the Fixed asset turnover ratio reflects improved efficiency in utilizing fixed assets, the declining trend in Total asset turnover raises some concerns about the company's overall asset utilization efficiency. It is recommended for Biomarin Pharmaceutical Inc to focus on optimizing the utilization of its total assets to improve its long-term performance.