PC Connection Inc (CNXN)

Activity ratios

Short-term

Turnover ratios

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020
Inventory turnover 28.59 23.75 19.52 21.53 22.21 19.67 18.03 14.88 14.45 14.42 13.70 12.55 13.60 15.35 15.57 17.50 17.94 19.00 15.84 20.39
Receivables turnover 4.18 4.72 4.54 5.20 4.29 4.85 4.93 4.93 4.68 4.94 4.92 4.80 4.42 4.73 4.59 4.53 3.82 4.47 6.06 5.96
Payables turnover 9.05 9.21 8.41 12.19 10.46 10.58 10.39 12.41 12.97 11.90 10.98 10.85 9.96 12.40 10.07 11.91 9.47 9.04 10.62 12.70
Working capital turnover 3.53 3.56 3.64 3.76 3.95 4.12 4.40 4.67 4.86 5.04 5.21 5.24 5.19 4.87 4.88 4.76 5.01 5.21 5.60 6.15

PC Connection Inc's inventory turnover has been gradually decreasing from 20.39 in March 2020 to 28.59 in December 2024. This indicates that the company is holding onto its inventory for a longer period, which may lead to higher carrying costs and potentially outdated stock.

The receivables turnover ratio has varied over the years, with a peak of 6.06 in June 2020 and a low of 3.82 in December 2020. Overall, the trend has been fluctuating, suggesting that the company's efficiency in collecting accounts receivable has not been consistent.

In terms of payables turnover, PC Connection Inc has experienced fluctuations in the ratio, ranging from 8.41 in June 2024 to 12.97 in December 2022. A higher turnover ratio indicates that the company is paying its suppliers more frequently, which can be beneficial for managing cash flows.

The working capital turnover ratio has generally been on a downward trend, falling from 6.15 in March 2020 to 3.53 in December 2024. This implies that the company may be becoming less efficient in utilizing its working capital to generate sales revenue.

Overall, PC Connection Inc should focus on improving its inventory turnover and working capital turnover ratios to enhance its operational efficiency and financial performance in the long run.

Average number of days

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020
Days of inventory on hand (DOH) days 12.77 15.37 18.70 16.95 16.44 18.56 20.24 24.52 25.25 25.31 26.65 29.09 26.85 23.78 23.45 20.86 20.34 19.21 23.05 17.90
Days of sales outstanding (DSO) days 87.41 77.31 80.34 70.18 85.04 75.25 73.97 74.08 78.00 73.93 74.18 76.04 82.67 77.19 79.53 80.49 95.49 81.70 60.21 61.28
Number of days of payables days 40.33 39.63 43.41 29.94 34.90 34.51 35.14 29.41 28.15 30.68 33.25 33.66 36.63 29.43 36.23 30.66 38.53 40.39 34.37 28.74

Based on the data provided for PC Connection Inc, we can analyze the activity ratios as follows:

1. Days of Inventory on Hand (DOH):
- The DOH measures how many days it takes for a company to sell its inventory. A lower number indicates efficient inventory management.
- The trend for PC Connection Inc's DOH shows a decreasing trend from 17.90 days on March 31, 2020, to 12.77 days on December 31, 2024.
- The decrease in DOH indicates that the company has been managing its inventory more efficiently over the years, leading to a faster turnover of inventory.

2. Days of Sales Outstanding (DSO):
- DSO measures the average number of days it takes to collect accounts receivable. A lower DSO indicates faster cash conversion and efficient credit management.
- The DSO for PC Connection Inc fluctuated over the years but generally ranged from 60 to 90 days.
- The DSO trend shows some level of inconsistency, with values varying from 60.21 days on June 30, 2020, to 87.41 days on December 31, 2024.

3. Number of Days of Payables:
- This ratio represents the average number of days a company takes to pay its suppliers, reflecting its payment terms and liquidity position.
- PC Connection Inc's average number of days of payables varied throughout the years, with peaks and troughs in the data.
- The period of payables for PC Connection Inc ranged from around 28 to 43 days during the years under review.

Overall, an analysis of these three activity ratios for PC Connection Inc indicates that the company has been improving its inventory management efficiency over the years, albeit with some fluctuations in the collection of receivables and payment to suppliers. The decreasing trend in DOH suggests better management of inventory levels, while the variability in DSO and payment days may necessitate closer monitoring for a more stable cash conversion cycle.

Long-term

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020
Fixed asset turnover 53.44 52.50 50.81 49.70 50.30 50.07 51.17 52.49 52.81 53.29 52.59 50.04 47.41 45.66 43.76 40.84 42.09 41.64 41.41 44.09
Total asset turnover 2.16 2.17 2.15 2.38 2.40 2.44 2.55 2.74 2.84 2.82 2.82 2.77 2.67 2.73 2.59 2.62 2.55 2.62 2.84 3.17

PC Connection Inc's fixed asset turnover has been steadily increasing over the years, indicating that the company is generating more sales relative to its investment in fixed assets. This suggests improved efficiency in utilizing its long-term assets to generate revenue.

On the other hand, the total asset turnover ratio has fluctuated over the same period, showing some variability in how efficiently the company is using all its assets to generate sales. The ratio peaked in the middle of the period but declined towards the end, indicating a potential dip in efficiency in utilizing all assets to generate revenue.

Overall, while the fixed asset turnover trend is positive, PC Connection Inc should closely monitor and work on improving its total asset turnover to ensure optimal utilization of all assets in generating revenue.