DXC Technology Co (DXC)

Short-term

Turnover ratios

Inventory Turnover:

DXC Technology Co's inventory turnover ratios have fluctuated over the years, ranging from a high of 24.79 in September 2021 to a low of 9.48 in December 2022. The company's efficiency in managing its inventory improved significantly from December 2022 to March 2023, but saw a slight dip in the following quarters, stabilizing around 19-20 times turnover rate.

Receivables Turnover:

The receivables turnover ratios of DXC Technology Co have shown relatively stable performance over the given period, maintaining around 4.20-4.50 times turnover rate. This indicates that the company is efficient in collecting its accounts receivables, with minimal fluctuations in the turnover rate.

Payables Turnover:

DXC Technology Co's payables turnover ratios have exhibited fluctuations, varying from 12.33 in December 2023 to a peak of 18.88 in December 2024. The company's ability to manage its payables has improved over the years, with the turnover rate generally increasing.

Working Capital Turnover:

The working capital turnover ratios of DXC Technology Co have shown a significant variability, with a peak of 305.67 in March 2021 and a low of 8.05 in June 2020. The company's efficiency in utilizing its working capital has fluctuated greatly over the years, with some quarters showing exceptionally high turnover rates while others falling significantly. Overall, the company's working capital turnover has stabilized around 15-30 times turnover rate in recent quarters.

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Average number of days

Based on the activity ratios provided for DXC Technology Co, we can analyze the efficiency of the company's operations.

1. Days of Inventory on Hand (DOH):
- The company's DOH has shown fluctuations over the periods, ranging from a low of 14.96 days to a high of 38.49 days.
- A lower DOH indicates better inventory management efficiency, while a higher DOH suggests potential issues with inventory control or slower inventory turnover.
- DXC Technology Co needs to address the significant increase in DOH towards the end of 2022 and monitor inventory levels closely to avoid carrying excess inventory.

2. Days of Sales Outstanding (DSO):
- The DSO figures have also varied, with the range being from 76.94 days to 87.04 days.
- A lower DSO reflects faster collection of accounts receivable, indicating efficient credit management and faster cash conversion.
- Although the DSO has been fluctuating, it is essential for DXC Technology Co to maintain a balance between credit terms and collection efforts to optimize cash flow.

3. Number of Days of Payables:
- The number of days of payables have ranged from 19.33 days to 37.26 days.
- A higher number of days of payables suggests that the company is taking longer to pay its suppliers, which can sometimes be a strategic move to manage cash flows effectively.
- DXC Technology Co needs to ensure that it maintains good relations with suppliers while optimizing the payment process to avoid any negative implications on supplier relationships.

In conclusion, DXC Technology Co should focus on improving inventory management, optimizing accounts receivable collection, and maintaining a balance in its payables to enhance operational efficiency and cash flow management. Regular monitoring and analysis of these activity ratios are crucial for identifying potential areas for improvement and ensuring overall financial health.

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Long-term

Based on the provided data, we can analyze the long-term activity ratios of DXC Technology Co using the fixed asset turnover and total asset turnover ratios.

1. Fixed Asset Turnover Ratio: This ratio measures how efficiently the company is generating revenue with its fixed assets. The fixed asset turnover ratio has been improving steadily over the years, increasing from 3.76 in June 2020 to 5.11 in June 2023. This trend indicates that DXC Technology Co is utilizing its fixed assets more effectively to generate sales. However, there is a slight decrease in the ratio to 5.00 in March 2024.

2. Total Asset Turnover Ratio: This ratio indicates how well the company is utilizing all its assets to generate revenue. The total asset turnover ratio for DXC Technology Co has shown fluctuations over the years, with a general upward trend. It increased from 0.69 in June 2020 to 1.01 in June 2024. This suggests that the company is becoming more efficient in generating sales relative to its total assets, with some variability in performance during the period.

Overall, based on these ratios, DXC Technology Co has been improving its efficiency in utilizing fixed assets and generating sales in relation to its total assets over the years. It is essential for investors and stakeholders to monitor these activity ratios to assess the company's operational efficiency and asset utilization going forward.