DexCom Inc (DXCM)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 4.53 | 6.75 | 4.43 | 5.41 | 8.93 |
| Receivables turnover | 3.65 | 3.84 | 4.54 | 4.25 | 4.88 |
| Payables turnover | 9.17 | 8.70 | 8.07 | 7.77 | 10.45 |
| Working capital turnover | 1.26 | 1.58 | 0.79 | 0.65 | 0.87 |
Dexcom Inc's activity ratios provide insights into how efficiently the company manages its assets and liabilities to generate sales.
1. Inventory turnover: This ratio indicates how effectively Dexcom manages its inventory. A lower turnover rate in 2023 compared to 2022 suggests that inventory stayed in stock for a longer period before being sold. This could indicate potential issues such as overstocking or slowing sales.
2. Receivables turnover: This ratio reflects how quickly Dexcom collects outstanding payments from customers. A decreasing trend in receivables turnover from 2021 to 2023 could imply that the company is taking longer to collect payments, which may impact its cash flow and liquidity.
3. Payables turnover: This ratio measures how quickly Dexcom pays its suppliers. The increasing trend in payables turnover indicates that the company is taking a longer time to pay its suppliers. While this may improve cash flow management, it could strain supplier relationships if payment terms become unfavorable.
4. Working capital turnover: This ratio assesses how well Dexcom utilizes its working capital to generate sales. A fluctuating trend over the years suggests varying efficiencies in converting working capital into revenue, with a decline in 2023 compared to 2022 indicating a potential decrease in sales generated per dollar of working capital.
Overall, Dexcom's activity ratios demonstrate the importance of monitoring inventory management, accounts receivable collection, accounts payable practices, and working capital efficiency to ensure optimal operational performance and financial health.
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 | 80.62 | 54.10 | 82.41 | 67.49 | 40.89 |
| Days of sales outstanding (DSO) | days | 100.03 | 95.03 | 80.44 | 85.82 | 74.81 |
| Number of days of payables | days | 39.82 | 41.96 | 45.20 | 46.96 | 34.92 |
The activity ratios of Dexcom Inc over the past five years show fluctuations in its operational efficiency.
Days of inventory on hand (DOH) indicate how many days it takes for the company to sell its inventory. Dexcom's DOH has varied significantly, ranging from 80.31 days in 2019 to 169.81 days in 2021. A lower DOH is generally preferred as it signifies better inventory management and faster inventory turnover.
Days of sales outstanding (DSO) show how long it takes for the company to collect its accounts receivable. Dexcom's DSO has also been inconsistent, with values ranging from 70.80 days in 2019 to 99.51 days in 2023. A lower DSO implies quicker cash conversion and efficient credit management.
Number of days of payables reveals the average time it takes for Dexcom to pay its suppliers. This ratio has fluctuated as well, with the company taking between 68.58 days and 93.15 days to settle its payables. A longer period of payables may indicate favorable credit terms with suppliers, but it could also hint at potential liquidity challenges if payments are delayed excessively.
Overall, Dexcom's activity ratios reflect varying levels of efficiency in managing its inventory, receivables, and payables over the years. Continuous monitoring and improvement in these ratios can contribute to a healthier working capital cycle and overall financial performance.
See also:
DexCom Inc Short-term (Operating) Activity Ratios
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 3.24 | 2.74 | 2.91 | 3.54 | 4.35 |
| Total asset turnover | 0.58 | 0.54 | 0.47 | 0.42 | 0.58 |
The fixed asset turnover ratio measures the efficiency of Dexcom Inc in generating sales revenue from its fixed assets. Over the past five years, the trend indicates a decline in this ratio from 4.59 in 2019 to 3.25 in 2023. This suggests that the company is becoming less effective in utilizing its fixed assets to generate sales.
On the other hand, the total asset turnover ratio reflects Dexcom Inc's ability to generate sales from all its assets. The trend for this ratio shows an increase from 0.62 in 2019 to 0.58 in 2023. This implies that the company has improved its overall efficiency in generating sales revenue from its total assets.
In comparison, Dexcom Inc appears to be more successful in generating sales from its total assets rather than just its fixed assets. However, the declining trend in the fixed asset turnover ratio may indicate a need for the company to reassess its utilization of fixed assets to improve efficiency and profitability in the long run.