Cogent Communications Group Inc (CCOI)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | — | 8.10 | 46.05 | — | — |
| Receivables turnover | 6.16 | 12.77 | 13.24 | 10.66 | 12.15 |
| Payables turnover | 18.67 | 15.52 | 34.82 | 40.97 | 34.90 |
| Working capital turnover | 5.94 | 2.29 | 1.69 | 1.30 | 1.27 |
Cogent Communications Holdings Inc's activity ratios provide insights into how effectively the company is managing its assets and liabilities to generate sales.
1. Receivables turnover:
- The receivables turnover ratio measures how efficiently the company collects outstanding receivables from customers.
- Cogent's receivables turnover has been consistently decreasing over the past five years, indicating that the company took longer to collect payment from customers in 2023 compared to earlier years.
- This trend could suggest potential issues with credit policies, customer payment behaviors, or changes in the customer base.
2. Payables turnover:
- The payables turnover ratio indicates how quickly the company pays its suppliers.
- Cogent's payables turnover has fluctuated over the years, with a significant increase in 2023 compared to 2022, but still lower than 2020 and 2019.
- A higher payables turnover ratio may indicate that the company is taking longer to pay its suppliers, potentially signaling strained relationships or liquidity constraints.
3. Working capital turnover:
- The working capital turnover ratio measures how effectively the company utilizes its working capital to generate sales.
- Cogent's working capital turnover has shown an increasing trend over the past five years, indicating improvement in efficiency in utilizing working capital to generate revenue.
- A higher working capital turnover ratio suggests that the company is effectively managing its current assets and liabilities to support its operations and growth.
Overall, Cogent Communications Holdings Inc's activity ratios reveal mixed trends in managing receivables and payables, with a notable improvement in working capital turnover. It would be advisable for the company to further analyze the reasons behind the fluctuations in these ratios to enhance operational efficiencies and maintain healthy relationships with customers and suppliers.
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 | — | 45.05 | 7.93 | — | — |
| Days of sales outstanding (DSO) | days | 59.30 | 28.59 | 27.57 | 34.25 | 30.03 |
| Number of days of payables | days | 19.55 | 23.51 | 10.48 | 8.91 | 10.46 |
Days of inventory on hand (DOH) information is not available in the table provided.
Days of sales outstanding (DSO) for Cogent Communications Holdings Inc have been increasing over the years, indicating that it takes longer for the company to collect payments from its customers. In 2023, the DSO has increased substantially to 52.55 days compared to 26.86 days in 2022. This might suggest potential issues with credit policies or the ability of customers to pay on time.
The number of days of payables has fluctuated over the years, with a significant increase in 2023 to 32.43 days from 43.53 days in 2022. This increase indicates that the company is taking longer to pay its suppliers, which could be a strategy to optimize cash flow or negotiate better payment terms.
Overall, the trends in the days of sales outstanding and number of days of payables suggest that Cogent Communications Holdings Inc may be facing challenges in managing its working capital efficiently. A higher DSO and an increase in payables days could impact the company's liquidity and cash flow management in the long run.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 0.54 | 1.03 | 1.21 | 1.09 | 1.33 |
| Total asset turnover | 0.26 | 0.56 | 0.56 | 0.47 | 0.53 |
The fixed asset turnover ratio for Cogent Communications Holdings Inc has been on a declining trend over the past five years, indicating that the company is generating fewer revenues relative to its investment in fixed assets. This suggests that the efficiency of utilizing fixed assets to generate sales has decreased over time.
Similarly, the total asset turnover ratio has also decreased over the same period. This indicates that the company is generating fewer revenues relative to its total assets, suggesting a decrease in overall efficiency in asset utilization.
Overall, the declining trend in both fixed asset turnover and total asset turnover ratios may suggest potential inefficiencies in Cogent Communications Holdings Inc's long-term asset management strategies. Further investigation and analysis may be necessary to identify the underlying reasons for these trends and to implement corrective measures to improve asset efficiency and profitability.