Certara Inc (CERT)

Short-term

Turnover ratios

The activity ratios of Certara Inc provide insights into the efficiency of its operations and management of working capital.

1. Receivables Turnover:
- The receivables turnover ratio has been relatively stable over the past four years, showing that Certara is able to collect its accounts receivable efficiently. Higher ratios indicate faster collection of receivables, which is positive for the company.

2. Payables Turnover:
- The payables turnover ratio has shown an increasing trend over the years, indicating that Certara is taking longer to pay its suppliers. This may suggest improved cash management practices or negotiating better credit terms with suppliers.

3. Working Capital Turnover:
- The working capital turnover has improved significantly from 2020 to 2023, suggesting that Certara is generating more revenue relative to its working capital. This indicates better utilization of resources and efficiency in managing working capital.

Overall, the activity ratios paint a picture of Certara Inc as operating efficiently in terms of managing its receivables, payables, and working capital. The improvements in these ratios over the years indicate positive trends in the company's operations and financial management.

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Average number of days

Activity ratios help assess how efficiently a company manages its assets and liabilities. Based on the data provided for Certara Inc:

1. Days of Inventory on Hand (DOH): The information for this ratio is missing for all years, so we cannot analyze how long it takes for Certara to sell its inventory.

2. Days of Sales Outstanding (DSO): Certara's DSO has improved over the past three years, decreasing from 92 days in 2022 to 90.91 days in 2023. This indicates that the company is collecting its accounts receivable more efficiently, with sales being converted to cash within a shorter time period.

3. Number of Days of Payables: Certara's days of payables have fluctuated over the years, with a notable decrease from 2019 to 2020. In 2023, the number of days of payables was 13.38 days, indicating the company takes approximately 13 days to pay its suppliers. A lower number of days suggests that Certara is managing its payables more effectively and potentially improving its cash flow position.

Overall, Certara Inc has shown improvements in managing its receivables and payables over the years, which could positively impact its liquidity and operational efficiency. However, the missing data for days of inventory on hand limits a comprehensive analysis of the company's inventory management.

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Long-term

The fixed asset turnover ratio measures how efficiently a company generates sales from its investment in fixed assets. Certara Inc's fixed asset turnover has shown a fluctuating trend over the past four years, ranging from 62.90 in 2020 to 139.85 in 2022. This indicates that the company significantly improved its efficiency in utilizing its fixed assets to generate sales in 2022, but experienced a slight decline in 2023.

On the other hand, the total asset turnover ratio evaluates the company's ability to generate sales from its total assets. Certara Inc's total asset turnover has remained relatively stable over the same period, hovering around 0.19 in 2021, 2022, and 2023, with a slight increase to 0.21 in 2022. This suggests that Certara Inc has been consistently generating sales in relation to its total asset base, albeit at a relatively low level.

Overall, while Certara Inc has shown improvements in utilizing its fixed assets more efficiently, its total asset turnover remains relatively low compared to the industry average. Further analysis and comparison with industry benchmarks can provide deeper insights into Certara Inc's long-term activity performance.