Doximity Inc (DOCS)

Short-term

Turnover ratios

Activity ratios provide insights into how efficiently a company manages its assets and liabilities to generate revenue. Analyzing Doximity Inc's activity ratios from the provided data:

1. Inventory Turnover:
- In March 2021, the inventory turnover ratio was 5.33, indicating that Doximity converted its inventory into sales 5.33 times during the year.
- No data is available for March 2022 and subsequent years, which limits the analysis of the company's inventory management efficiency.

2. Receivables Turnover:
- Doximity's receivables turnover decreased slightly from 4.11 in March 2021 to 3.91 in March 2023 before increasing to 4.59 in March 2024.
- The receivables turnover ratio represents how quickly the company collects its accounts receivable. A higher turnover ratio suggests efficient credit management.

3. Payables Turnover:
- Doximity's payables turnover ratio fluctuated over the years, from 20.59 in March 2021 to 85.93 in March 2022, then decreasing to 42.05 in March 2023 and further dropping to 22.49 in March 2024.
- The payables turnover ratio reflects how quickly the company pays its suppliers. A higher ratio may indicate an ability to negotiate favorable credit terms.

4. Working Capital Turnover:
- Doximity's working capital turnover decreased from 1.93 in March 2021 to 0.43 in March 2022, showing a decline in how effectively the company utilized its working capital to generate revenue.
- The working capital turnover ratio signifies how efficiently working capital is employed to support sales activities.

In conclusion, while Doximity Inc's activity ratios show fluctuations over the years, the data indicates areas of strength and areas that may require further attention in managing inventory, receivables, payables, and working capital to optimize operational efficiency and financial performance.

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Average number of days

Activity ratios provide insights into how efficiently a company manages its assets and liabilities to generate sales.

1. Days of Inventory on Hand (DOH):
- In March 2021, Doximity Inc held inventory for an average of 68.52 days before it was sold.
- By March 2023, Doximity had improved its inventory turnover significantly to only 34.92 days, indicating more efficient management of inventory levels.
- The absence of data for 2022, 2024, and 2025 makes it challenging to track the progress of inventory turnover consistently over the years.

2. Days of Sales Outstanding (DSO):
- Doximity collected payment from customers in an average of 88.77 days in March 2021.
- Over the years, the company was able to reduce its average collection period to 79.56 days by March 2024, which reflects an improvement in collecting accounts receivable efficiently.
- The data is missing for 2025, making it challenging to assess the trend in accounts receivable turnover for that year.

3. Number of Days of Payables:
- In March 2021, Doximity took approximately 17.73 days to pay its suppliers on average.
- The number of days of payables reduced significantly to 4.25 days by March 2022, indicating a more aggressive approach in managing payables.
- However, the company extended its payment period slightly to 8.68 days by March 2023, still showing efficient management of payables.
- The absence of data for 2025 prevents a complete evaluation of the company's payables management for that year.

In general, improving or stable activity ratios like lower DSO and DOH and increasing DOH suggest that Doximity has been effectively managing its inventory, accounts receivable, and payables. Continued monitoring and analysis of these ratios can provide valuable insights into the company's operational efficiency and financial health.

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Long-term

The fixed asset turnover ratio measures how efficiently a company utilizes its fixed assets to generate revenue. A higher ratio implies better utilization of fixed assets. In the case of Doximity Inc, the fixed asset turnover ratio has fluctuated over the years.

For the year ending March 31, 2021, the fixed asset turnover ratio was 23.15, indicating that Doximity generated $23.15 in revenue for every dollar invested in fixed assets. This was a relatively high ratio, suggesting efficient utilization of fixed assets.

In the following year, ending March 31, 2022, the fixed asset turnover ratio significantly increased to 35.88, reflecting even more effective utilization of fixed assets to generate revenue. However, in the subsequent year ending March 31, 2023, the ratio decreased to 16.70, indicating a decline in efficiency in utilizing fixed assets.

Unfortunately, data for the years ending March 31, 2024 and 2025 are not available. It would have been insightful to see the trend over these years to determine if the fluctuations in the fixed asset turnover ratio continued or stabilized.

Moving on to the total asset turnover ratio, which measures how efficiently a company generates sales from its total assets. A higher ratio suggests better utilization of assets in generating revenue.

In the year ending March 31, 2021, Doximity Inc had a total asset turnover ratio of 0.82, meaning that the company generated $0.82 in sales for every dollar of total assets. This ratio decreased in the next two years, with ratios of 0.35 for March 31, 2022, and 0.37 for March 31, 2023. These lower ratios could indicate a decrease in the efficiency of Doximity in generating sales from its total assets.

However, for the year ending March 31, 2024, the total asset turnover ratio increased to 0.44, suggesting a potential improvement in utilizing assets to generate revenue. Unfortunately, data for the year ending March 31, 2025, is not available for further analysis.

In summary, Doximity Inc's fixed asset turnover and total asset turnover ratios have shown fluctuations over the years, indicating varying levels of efficiency in utilizing fixed and total assets to generate revenue. Further data for the years ending March 31, 2024 and 2025 would have provided a more complete picture of the company's long-term activity ratios.