Box Inc (BOX)

Short-term

Turnover ratios

1. Inventory Turnover:
- The inventory turnover ratio measures how many times a company's inventory is sold and replaced over a specific period.
- Box Inc's inventory turnover was not available for Jan 31, 2024. In Jan 31, 2023, the ratio was 16.16, indicating that the company sold and replaced its inventory approximately 16 times during the year.
- The decrease in inventory turnover from 2023 to 2021 suggests that the company took longer to sell and replace its inventory, which may indicate slower inventory management or potential issues with product demand or supply chain efficiency.

2. Receivables Turnover:
- The receivables turnover ratio shows how efficiently a company collects payments from its customers.
- Box Inc's receivables turnover has been relatively stable over the years, ranging from 3.35 in Jan 31, 2020 to 3.76 in Jan 31, 2023.
- A consistent receivables turnover indicates that the company has been successful in collecting payments from customers in a timely manner, which is a positive sign for cash flow and working capital management.

3. Payables Turnover:
- Payables turnover ratio measures the speed at which a company pays its suppliers.
- Box Inc's payables turnover was not available before Jan 31, 2020. In Jan 31, 2021, the ratio was 150.16, significantly higher than in previous years.
- A high payables turnover ratio may indicate that the company is paying its suppliers quickly, potentially taking advantage of discounts or maintaining good relationships with suppliers. However, it could also suggest liquidity challenges if payments are being made too rapidly.

4. Working Capital Turnover:
- The working capital turnover ratio indicates how efficiently a company is using its working capital to generate sales.
- Box Inc's working capital turnover has fluctuated over the years, from 2.90 in Jan 31, 2021 to 10.94 in Jan 31, 2023.
- A higher working capital turnover ratio generally indicates better efficiency in utilizing working capital to generate revenue, while a lower ratio may suggest inefficiencies in managing working capital or potential liquidity issues.

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Average number of days

Days of inventory on hand (DOH) measures how many days a company takes to sell its inventory. A lower number indicates faster inventory turnover, which is generally preferable as it implies efficient inventory management. In the past five years, Box Inc has shown a decreasing trend in DOH from 28.05 days in 2022 to 22.58 days in 2024, suggesting an improvement in inventory turnover efficiency.

Days of sales outstanding (DSO) reflects the average number of days it takes for a company to collect revenue after a sale is made. A lower DSO indicates quicker collection of receivables, which is beneficial for cash flow management. Box Inc's DSO has fluctuated slightly over the years, ranging from 97.09 days in 2023 to 108.87 days in 2020. The current DSO of 98.73 days in 2024 indicates a relatively stable collection period for the company.

Number of days of payables represents the average number of days a company takes to pay its suppliers. A higher number suggests that the company is taking longer to pay its bills, which can indicate better cash flow management if used strategically. Box Inc's days of payables have varied significantly, with a decrease from 8.79 days in 2020 to 2.43 days in 2021. The absence of data for 2022 and 2023 complicates the analysis of the trend in this ratio.

Overall, Box Inc's activity ratios suggest that the company has been making improvements in inventory turnover efficiency, maintaining a relatively stable collection period for receivables, and displaying some fluctuations in the management of payables. Further analysis and insight into the company's operational efficiency are needed to fully assess its financial performance.

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Long-term

The fixed asset turnover ratio for Box Inc has shown a consistent increasing trend over the past five years, indicating that the company is becoming more efficient in generating sales from its fixed assets. This implies that Box is effectively utilizing its investment in property, plant, and equipment to generate revenue.

On the other hand, the total asset turnover ratio has fluctuated over the same period, with a slight decrease in recent years. This suggests that the overall efficiency of Box in generating sales from all its assets has been relatively stable, although not showing a clear upward trend like the fixed asset turnover ratio.

Overall, the fixed asset turnover ratio reflects the company's ability to efficiently utilize its fixed assets to generate revenue, while the total asset turnover ratio provides a broader picture of the company's efficiency in generating sales from all its assets. Both ratios are important indicators of a company's operational efficiency and can be used to assess its long-term performance and asset management strategies.