Now Inc (DNOW)

Short-term

Turnover ratios

Now Inc's inventory turnover has shown some fluctuations over the years, ranging from 4.28 to 5.22 times. This indicates that the company is managing its inventory efficiently, with a higher turnover generally being more favorable as it suggests that inventory is selling quickly. However, the slight decrease in 2022 compared to the previous year may warrant further investigation into potential issues affecting inventory management during that period.

The receivables turnover ratio data is missing, which makes it difficult to assess how efficiently Now Inc is collecting payments from its customers. Without this information, it is challenging to determine the effectiveness of the company's credit policies and the quality of its accounts receivable.

Similarly, the payables turnover ratio data is also missing, which hinders the analysis of how well the company is managing its payments to suppliers. Understanding this ratio would provide insight into Now Inc's ability to leverage trade credit effectively and optimize its cash flow.

Now Inc's working capital turnover has generally been increasing over the years, signaling that the company is generating more revenue relative to its working capital. This could indicate improved operational efficiency and a more effective utilization of its resources. An increasing trend in this ratio reflects positively on the company's ability to generate sales with the resources at its disposal.

In conclusion, while the inventory turnover and working capital turnover ratios suggest efficient operations by Now Inc, the absence of data for receivables turnover and payables turnover limits a comprehensive analysis of the company's activity ratios. Monitoring and analyzing all activity ratios together can provide a more holistic view of Now Inc's operational performance and efficiency.

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Average number of days

Now Inc's Days of Inventory on Hand (DOH) has fluctuated over the years, ranging from 69.90 days to 85.32 days. A decreasing trend in this ratio indicates that the company is managing its inventory more efficiently, potentially leading to lower storage costs and reduced risk of obsolescence.

The Days of Sales Outstanding (DSO) and Number of Days of Payables data for Now Inc are not available for analysis. However, these ratios are crucial for assessing the company's ability to collect receivables in a timely manner and manage its payables effectively, respectively.

Overall, a comprehensive analysis of Now Inc's activity ratios would require information on all three ratios (DOH, DSO, and payables turnover) to evaluate the efficiency of the company's working capital management and operational performance.

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Long-term

Now Inc's fixed asset turnover ratio has shown some fluctuation over the years. In 2020, the ratio was 16.52, indicating that the company generated $16.52 in revenue for every $1 of fixed assets. This ratio decreased to 14.70 in 2021 but improved to 17.95 in 2022. However, data is unavailable for 2023 and 2024.

The total asset turnover ratio, on the other hand, reflects how efficiently the company is using all its assets to generate sales. In 2020, the ratio was 1.61, meaning that Now Inc generated $1.61 in revenue for every $1 of total assets. The ratio decreased to 1.48 in 2021, improved to 1.62 in 2022, but then declined to 1.52 in 2023 and further to 1.46 in 2024.

Overall, the fixed asset turnover ratio shows variability, while the total asset turnover ratio has been declining in recent years, suggesting potential inefficiencies in asset utilization. It is important for Now Inc to closely monitor and improve these ratios to enhance its long-term profitability and operational efficiency.