Dropbox Inc (DBX)

Short-term

Turnover ratios

Inventory turnover is not provided in the data, but we can analyze the other activity ratios for Dropbox Inc.

1. Receivables Turnover: This ratio indicates how many times, on average, a company collects its accounts receivable during a period. A higher ratio is preferable as it signifies a quicker collection of receivables. Dropbox's receivables turnover has been decreasing from 45.27 in 2019 to 36.41 in 2023, which indicates a slight slowdown in collecting accounts receivable over the years.

2. Payables Turnover: This ratio measures how efficiently a company pays its suppliers. A higher payables turnover implies that the company is paying its suppliers more quickly. Dropbox's payables turnover has fluctuated over the years, with a peak in 2022 at 17.28 and dropping to 12.43 in 2023. This indicates that the company is taking longer to pay its suppliers in recent years.

3. Working Capital Turnover: This ratio reflects how efficiently a company uses its working capital to generate sales revenue. A higher turnover implies more efficient utilization of working capital. Dropbox's working capital turnover has varied significantly from 3.20 in 2021 to 13.70 in 2020. A higher turnover in 2020 suggests more effective conversion of working capital into sales revenue compared to the other years analyzed.

In summary, Dropbox Inc's activity ratios show mixed performance over the years. While the working capital turnover was most favorable in 2020, the receivables turnover has seen a decline, and the payables turnover has been inconsistent. Further analysis and comparison with industry benchmarks may provide more insights into the company's operational efficiency.

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Average number of days

Days of inventory on hand (DOH) for Dropbox Inc are not provided in the table, which indicates that we do not have specific data to evaluate the efficiency of inventory management for the company.

Days of sales outstanding (DSO) have shown an increasing trend from 8.06 days in 2019 to 10.02 days in 2023. This indicates that it took longer for Dropbox to collect payment from its customers over the years, possibly due to changes in credit policies or customer payment behavior.

The number of days of payables decreased from 36.14 days in 2019 to 29.37 days in 2023, indicating that the company took fewer days to pay its suppliers. This could be a favorable sign, as it implies better cash management and the ability to negotiate favorable payment terms with suppliers.

Overall, while the DSO trend suggests a potential concern for cash flow management in terms of collecting receivables, the decreasing trend in days of payables is a positive indication of managing payables effectively. To have a more comprehensive analysis, it would be beneficial to compare these activity ratios with industry benchmarks or historical data from competitors.

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Long-term

The Fixed Asset Turnover ratio for Dropbox Inc has shown a positive trend over the past five years, increasing from 3.73 in 2019 to 8.09 in 2023. This indicates that the company has become more efficient in generating revenue from its fixed assets, such as property, plant, and equipment.

On the other hand, the Total Asset Turnover ratio has fluctuated slightly, with a peak of 0.80 in 2020 and a low of 0.62 in 2019. Despite the fluctuations, the ratio has generally been low, indicating that the company is not generating a high level of sales relative to its total assets.

Overall, the improvement in the Fixed Asset Turnover ratio suggests that Dropbox Inc has been successfully utilizing its fixed assets to generate revenue more effectively. However, the low Total Asset Turnover ratio highlights the need for the company to focus on optimizing the utilization of its total assets to improve overall efficiency in generating revenue.