CleanSpark Inc (CLSK)

Short-term

Turnover ratios

The activity ratios of CleanSpark Inc., as reflected in the provided data, demonstrate notable fluctuations over the analyzed periods, indicating varying operational efficiencies.

Inventory Turnover:
The inventory turnover ratio exhibits significant variability across the periods. In the early months of 2020, data are unavailable or incomplete. Starting from September 2020, the ratio improves markedly, reaching a peak of 417.73 in September 2022, suggesting rapid inventory depletion relative to inventory levels—a positive sign of efficient inventory management during that period. However, this extremely high ratio may also indicate possible anomalies or a rapid turnover enabled by specific operational circumstances. Post-September 2022, the ratio decreases to more moderate levels but remains elevated compared to early periods, with 196.10 recorded at year-end 2023 and stabilizing around the 120-150 range in 2024, indicating a normalization after the extraordinary spike.

Receivables Turnover:
The receivables turnover ratio displays an initial modest increase from approximately 5.96 in June 2020 to a high of 161.04 in September 2021, reflecting an improvement in collection efficiency. Nonetheless, subsequent periods show some irregular spikes, notably in September 2022 and March 2023, where ratios soar to thousands (e.g., 33,772 in September 2023), likely signifying extraordinary collection activities or accounting anomalies. Following these peaks, the ratio declines sharply to more typical levels around 2.73–7.43 in 2024, aligning closer to industry standards and suggesting more normalized receivables management.

Payables Turnover:
The payables turnover ratio demonstrates considerable fluctuation. Early 2020 and 2021 periods show lower ratios, with values near 0.52–3.78, indicating slower payment cycles. A notable surge occurs in March 2025 with a ratio of 28.17, signifying a reduction in the number of times payables are paid within the period, which could reflect either improved payment terms or strategic delaying of payments. The interim periods show a mostly moderate to high turnover, with some periods exceeding 4, suggesting active management of payables.

Working Capital Turnover:
The working capital turnover ratio indicates increasing efficiency over time, particularly from March 2021 to June 2022, where it peaks at 14.00, reflecting rapid utilization of working capital in operations. As of 2022 and beyond, the ratio declines significantly, with values below 1.0 in late 2023 and into 2024, signifying diminished efficiency in using working capital, potentially due to increased working capital requirements or operational adjustments.

Summary:
Overall, CleanSpark Inc.’s activity ratios portray a company experiencing periods of heightened operational efficiency, especially in inventory and receivables management, punctuated by episodes of abnormal fluctuation that may be attributable to extraordinary events, accounting anomalies, or strategic shifts. The data suggest a progression toward more normalized activity ratios in the recent periods, indicating stabilization in operational activities.

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Average number of days

The activity ratios of CleanSpark Inc, primarily focusing on days of inventory on hand (DOH), days of sales outstanding (DSO), and days of payables, demonstrate significant fluctuations over the reporting periods.

Inventory Turnover (DOH):
- The company's DOH fluctuated notably during the observed periods. Initially, there was a moderate level of inventory holding with readings around 11.50 days in September 2020 and 12.15 days at the end of 2020.
- A pronounced spike occurred in June 2021, reaching approximately 283.85 days, indicating a period where inventory was held excessively, possibly due to overstocking or slower sales.
- Subsequently, DOH sharply declined to low levels: 2.59 days in September 2021, and continued reductions through 2022 and 2023, with readings around 0.87 to 2.89 days, suggesting a significant increase in inventory turnover or possibly a reduction in inventory holdings.
- Data for later periods show consistent low inventory days, reflecting improved inventory management or changes in sales or production processes.

Receivables Collection Period (DSO):
- The DSO figures exhibit variability, especially in early periods, with 61.26 days in June 2020 decreasing to 31.44 days in September 2020, and experiencing fluctuations through 2020.
- The most remarkable change occurred in September 2021, with DSO dropping sharply to approximately 2.27 days, indicating an extremely rapid collection cycle or changes in credit terms.
- In subsequent periods, the DSO reverted to very low levels, around 0.07–0.13 days in 2022 and early 2023, pointing to possibly aggressive collection policies or different credit arrangements.
- However, a significant deviation emerged in the second half of 2024, with DSO increasing dramatically to 49.15 days in June 2024 and surging to 133.63 days in September 2024, signaling a deterioration in receivables collection efficiency or extended credit periods.

Payables Period (Number of days of payables):
- The company's payables period demonstrates considerable fluctuation. In June 2020, payables extended to about 57.11 days, but a sharp increase is observed in September 2020 with a very prolonged 210.01 days, possibly indicating delayed payments or accrual of liabilities.
- The period remained elevated through much of 2021, exceeding 150 days at times, with a peak of approximately 698.45 days in June 2021, which could suggest strained supplier relationships or intentional delay in payments.
- Subsequently, the period decreased substantially; for instance, to roughly 97 days at the end of 2022, and then further reduced to around 12.96 days in March 2025, indicating an acceleration in paying suppliers or improved cash management.

Overall Observations:
- The data reveals periods of significant operational changes, with extremes in inventory holdings and receivables collection cycles.
- The spike in inventory days in mid-2021 points to possible inventory buildup or slow-moving stock, while the sharp decline thereafter indicates enhanced inventory efficiency.
- The DSO data suggests periods of extremely rapid collections, followed by deterioration in late 2024, which may reflect changes in credit policies, customer base, or overall receivables management.
- The payables period's variation indicates fluctuating supplier payment practices, with heavy delays in 2021 and more prompt payments in subsequent periods.

This pattern of activity ratios underscores the company's efforts in optimizing operational efficiency, although some fluctuations hint at periods of operational stress or strategic shifts.

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Long-term

The analysis of CleanSpark Inc.'s long-term activity ratios reveals notable trends in asset utilization efficiency over the period from June 2020 to March 2025.

Starting with the fixed asset turnover ratio, the data indicates a significant decline from a high of 57.13 times on June 30, 2020, to as low as 0.26 on March 31, 2021. This sharp decrease suggests a substantial reduction in the company’s ability to generate sales from its fixed assets during this interval. The ratio remains relatively low through subsequent periods, fluctuating modestly around values near 0.3, and displaying limited recovery towards 0.29 by March 2024. The persistent low figures after the initial drop imply that fixed assets have become less efficient in producing revenue, which could be due to asset underutilization, increased asset base without commensurate sales growth, or strategic shifts in operational focus.

Regarding the total asset turnover ratio, there is a similar downward trend observed over the examined timeframe. It started at 0.50 in June 2020, experienced a decline to approximately 0.14 by December 2020, and continued to diminish, reaching a low of 0.14 in December 2020. Following this nadir, there was some stabilization and gradual increases, with ratios oscillating between 0.16 and 0.27 through 2021 and 2022. However, from late 2022 onward, the ratio trends downward again, reaching around 0.17 in December 2024 before edging slightly upward to 0.20 by March 2025.

Overall, the sustained reduction in both fixed asset and total asset turnover ratios indicates that CleanSpark Inc. has experienced a decline in its efficiency of using assets to generate sales over the period considered. The initial dramatic drop may be associated with strategic changes, asset revaluations, or operational restructuring, while the subsequent low levels suggest ongoing challenges in converting asset investment into revenue. These ratios point to a period of operational inefficiency or overinvestment, and they warrant further analysis to understand underlying causes and potential strategic responses by the company.