Cognizant Technology Solutions Corp Class A (CTSH)

Short-term

Turnover ratios

The activity ratios of Cognizant Technology Solutions Corp Class A reveal the following trends:

1. Inventory Turnover: The company's inventory turnover ratio is not available as indicated by "—" across all reported periods. This suggests that there is no information available to analyze the efficiency of inventory management.

2. Receivables Turnover: The receivables turnover ratio shows a relatively stable performance over the past years, fluctuating between 4.62 to 5.39. This indicates that the company is efficient in collecting outstanding receivables, with a consistent ability to convert credit sales into cash.

3. Payables Turnover: The payables turnover ratio has shown a fluctuating trend, ranging from 34.47 to 57.11. The increasing trend over the years suggests that the company is taking more time to pay its suppliers, which could indicate improved cash management or changing payment terms.

4. Working Capital Turnover: The working capital turnover ratio has remained relatively stable, with values fluctuating between 3.10 to 5.33. This ratio indicates how effectively the company utilizes its working capital to generate sales, with higher values suggesting better efficiency in utilizing its current assets.

Overall, while the inventory turnover data is missing, the analysis of receivables turnover, payables turnover, and working capital turnover ratios indicates efficient management of receivables, changes in payment terms with suppliers, and consistent utilization of working capital to generate sales over the given periods.

---

Average number of days

Based on the provided data, we can analyze the activity ratios of Cognizant Technology Solutions Corp Class A as follows:

1. Days of Inventory on Hand (DOH): The DOH ratio indicates the average number of days it takes for the company to sell its inventory. However, for all the reported periods, the DOH data is missing ("— days"), which makes it difficult to assess Cognizant's efficiency in managing its inventory levels.

2. Days of Sales Outstanding (DSO): The DSO ratio reflects how long it takes for the company to collect payments from its customers. Over the reported periods, Cognizant's DSO has shown some fluctuations ranging from around 67 to 79 days. A decreasing trend in DSO is generally considered positive as it implies faster cash collection, while an increasing trend may indicate potential issues with accounts receivable management.

3. Number of Days of Payables: This ratio represents the average number of days the company takes to pay its suppliers. Cognizant's payables days have generally decreased from around 9 days to 6 days over the reported periods. A decrease in payables days may suggest improved liquidity or negotiation terms with suppliers, allowing the company to hold onto cash longer.

In summary, while it is essential to have complete data for comprehensive analysis, based on the available information, Cognizant Technology Solutions Corp Class A has shown some volatility in its Days of Sales Outstanding (DSO) and a decreasing trend in its Number of Days of Payables, which could indicate changes in its working capital management practices.

---

Long-term

The long-term activity ratios of Cognizant Technology Solutions Corp Class A provide insights into the efficiency of the company in utilizing its assets over an extended period.

1. Fixed Asset Turnover: The Fixed Asset Turnover ratio shows how effectively the company is generating revenue from its fixed assets. The ratio has been steadily increasing from 12.78 in March 2020 to 19.86 in December 2024. This upward trend indicates that the company has been able to generate more revenue relative to its investment in fixed assets over time. The ratio peaked at 19.86 by the end of December 2024, showing that the company has been increasingly efficient in utilizing its fixed assets to generate sales.

2. Total Asset Turnover: The Total Asset Turnover ratio measures the company's ability to generate sales from its total assets. The ratio fluctuated over the period under review, but generally showed an increasing trend from 0.97 in March 2020 to 0.99 in December 2024. This suggests that Cognizant has been efficient in generating revenue from its total assets, albeit with some variability. The ratio peaked at 1.12 in June 2022, indicating a period of high efficiency in generating sales from the company's total assets.

Overall, the upward trends in both the Fixed Asset Turnover and Total Asset Turnover ratios demonstrate Cognizant's improving efficiency in utilizing its assets to generate revenue over the long term. This indicates good management of the company's asset base, which is essential for sustainable growth and profitability.