Dayforce Inc. (DAY)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | — | 0.18 | 0.18 | 0.13 | — |
| Receivables turnover | 6.46 | 6.75 | 6.81 | 7.99 | 9.80 |
| Payables turnover | 13.00 | 14.24 | 12.42 | 12.88 | 10.55 |
| Working capital turnover | 2.44 | 3.46 | 2.55 | 3.26 | 3.27 |
Inventory turnover for Dayforce Inc. has shown a consistent trend, remaining at 0.18 in 2022 and 2021, and increasing from 0.13 in 2020. This suggests the company is effectively managing its inventory levels and turning over its goods efficiently.
Receivables turnover has declined slightly over the years, from 9.80 in 2019 to 6.46 in 2023. This indicates that the company is taking longer to collect payment from its customers, which could lead to potential liquidity issues if the trend continues.
Payables turnover has generally been stable, ranging from 10.55 in 2019 to 14.24 in 2022. A higher payables turnover ratio suggests that Dayforce Inc. is taking longer to pay its suppliers, which could indicate good bargaining power or cash flow management.
The working capital turnover ratio has fluctuated over the years, with a notable decrease from 3.46 in 2022 to 2.44 in 2023. This ratio measures how effectively the company is utilizing its working capital to generate sales. The declining trend may indicate inefficiencies in utilizing resources to support sales growth.
In conclusion, Dayforce Inc. should further analyze its receivables turnover and working capital turnover ratios to address potential liquidity and operational efficiency challenges.
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 | — | 1,975.63 | 2,011.62 | 2,737.79 | — |
| Days of sales outstanding (DSO) | days | 56.52 | 54.10 | 53.56 | 45.71 | 37.25 |
| Number of days of payables | days | 28.07 | 25.64 | 29.40 | 28.33 | 34.59 |
Dayforce Inc.'s activity ratios provide insights into how efficiently the company manages its inventory, collects receivables, and pays its suppliers.
- Days of inventory on hand (DOH) measures how long it takes for the company to sell its inventory. The decreasing trend from 2019 to 2021 suggests an improvement in inventory turnover and efficient management. However, the absence of data for 2020 and an increase in 2022 and 2023 could indicate a buildup of excess inventory, potentially tying up capital.
- Days of sales outstanding (DSO) shows the average number of days the company takes to collect payments from its customers. The increasing trend from 2019 to 2023 indicates a potential delay in collecting receivables, which could impact cash flow and liquidity.
- Number of days of payables measures how long it takes for the company to pay its suppliers. The fluctuating trend in the payable days suggests variability in the company's payment practices. A lower number of days indicates a quicker payment cycle, while a higher number implies extended payment terms, which could strain relationships with suppliers.
Overall, Dayforce Inc. should focus on optimizing its inventory levels, accelerating receivables collection, and effectively managing payable days to enhance working capital efficiency and financial performance.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 7.20 | 7.13 | 7.99 | 6.18 | 6.42 |
| Total asset turnover | 0.17 | 0.15 | 0.14 | 0.13 | 0.14 |
The long-term activity ratios of Dayforce Inc. provide insights into how efficiently the company is utilizing its fixed assets and total assets to generate revenue over the years.
The fixed asset turnover ratio has shown consistency and improvement from 2019 to 2023, indicating that Dayforce Inc. is effectively utilizing its fixed assets to generate revenue. The ratio has been consistently above 6, reaching a peak of 7.99 in 2021 before slightly declining to 7.20 in 2023. This suggests that the company has been able to generate significant sales relative to its investment in fixed assets.
In terms of total asset turnover, Dayforce Inc. has shown an increasing trend over the years, implying that the company is becoming more efficient in generating revenue from its total assets. The ratio has increased from 0.14 in 2019 to 0.17 in 2023. This indicates that the company is generating more sales relative to its total asset base.
Overall, the long-term activity ratios of Dayforce Inc. suggest that the company has been successful in optimizing its asset utilization and improving efficiency in generating revenue over the years. The increasing trend in total asset turnover along with the consistently high fixed asset turnover ratio reflects effective management of assets to drive sales growth and profitability.