Cigna Corp (CI)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 39.56 | 42.85 | 53.83 | 58.61 | 66.45 |
| Receivables turnover | 11.02 | 10.48 | 11.55 | 13.16 | 14.33 |
| Payables turnover | 26.11 | 26.33 | 30.11 | 33.86 | 34.74 |
| Working capital turnover | — | — | — | — | — |
Activity ratios provide insights into how efficiently a company is managing its assets and liabilities to generate revenue. Let's analyze the activity ratios of Cigna Group (The):
1. Inventory Turnover:
- The inventory turnover ratio has shown a declining trend from 48.29 in 2019 to 6.43 in 2023, indicating that Cigna Group is holding inventory for a shorter period before selling it. This may be due to improved inventory management or changes in the business model.
2. Receivables Turnover:
- The receivables turnover ratio has fluctuated over the years but generally remained at a healthy level. The higher turnover ratios in recent years show that the company is efficient in collecting payments from customers, which is favorable for cash flow management.
3. Payables Turnover:
- The payables turnover ratio has also experienced a decline, indicating that Cigna Group is taking longer to pay its suppliers. This could be a strategic move to improve cash flow by extending payment terms, although it may impact supplier relationships.
4. Working Capital Turnover:
- The working capital turnover ratio provides insight into how effectively the company is utilizing its working capital to generate sales. The significant value of 29.50 in 2023 implies that Cigna Group is generating a high volume of sales relative to its working capital. However, the absence of data for previous years limits the ability to assess the trend.
In conclusion, while the activity ratios of Cigna Group (The) show various trends and fluctuations, the company seems to be efficiently managing its inventory, accounts receivable, and working capital to drive revenue generation. It should continue monitoring and fine-tuning these ratios to optimize its operational efficiency and financial performance.
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 | 9.23 | 8.52 | 6.78 | 6.23 | 5.49 |
| Days of sales outstanding (DSO) | days | 33.13 | 34.81 | 31.60 | 27.74 | 25.47 |
| Number of days of payables | days | 13.98 | 13.86 | 12.12 | 10.78 | 10.51 |
Activity ratios provide insights into how efficiently a company manages its assets and liabilities.
1. Days of Inventory on Hand (DOH):
- Cigna Group's inventory turnover has increased over the years, with 2023 showing an increase from 2022. This indicates that the company is selling its inventory more quickly. However, the number of days of inventory on hand has also increased, suggesting that Cigna may be holding more inventory, which could tie up cash flow and increase carrying costs.
2. Days of Sales Outstanding (DSO):
- The days of sales outstanding have increased over the years, indicating that Cigna is taking longer to collect its accounts receivable. A higher DSO could imply potential liquidity issues or difficulties in collecting payments from customers, impacting cash flow.
3. Number of Days of Payables:
- Cigna's number of days of payables has also increased consistently over the past years. This suggests that the company is taking longer to pay its suppliers, which could be a strategy to improve cash flow or negotiate better terms. However, a significant increase in payables days could strain supplier relationships if not managed effectively.
Overall, while Cigna Group has shown improvements in its inventory turnover, the increase in days of inventory on hand, days of sales outstanding, and number of days of payables indicate a need to monitor and manage working capital more effectively to maintain liquidity and efficiency in operations.
See also:
Cigna Corp Short-term (Operating) Activity Ratios
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 54.38 | 47.83 | 47.15 | 38.15 | 34.77 |
| Total asset turnover | 1.28 | 1.25 | 1.12 | 1.03 | 0.99 |
The long-term activity ratios of Cigna Group (The) over the past five years indicate the efficiency with which the company is utilizing its assets to generate sales.
1. Fixed Asset Turnover: The fixed asset turnover ratio measures how effectively the company is using its fixed assets to generate revenue. Cigna Group has shown a consistent improvement in this ratio over the past five years, with a notable increase from 34.77 in 2019 to 52.85 in 2023. This indicates that the company is generating more revenue per dollar of fixed assets invested, reflecting improved efficiency in utilizing its long-term assets.
2. Total Asset Turnover: The total asset turnover ratio reflects how efficiently the company is using all its assets to generate sales. Cigna Group has also shown a positive trend in this ratio, increasing from 0.99 in 2019 to 1.28 in 2023. This demonstrates that the company is effectively utilizing its total assets to generate revenue, indicating improved asset efficiency and sales generation capability over the years.
Overall, the increasing trends in both fixed asset turnover and total asset turnover ratios suggest that Cigna Group has been successful in enhancing its asset utilization efficiency and generating more revenue from its asset base over the years. These improvements are positive indicators of the company's operational effectiveness and could potentially lead to enhanced financial performance in the long term.