Dycom Industries Inc (DY)

Short-term

Turnover ratios

Activity ratios provide insights into how efficiently a company manages its operations and resources.

1. Inventory Turnover:
- Dycom Industries has consistently high inventory turnover ratios over the past five years, indicating the company efficiently sells through its inventory multiple times a year.
- The slight fluctuations in the ratio suggest stable inventory management practices.

2. Receivables Turnover:
- The receivables turnover ratio has been decreasing over the years, indicating that Dycom Industries is taking more time to collect payments from its customers.
- This trend may signify a shift in the company's credit policies or changes in customer payment behaviors.

3. Payables Turnover:
- Dycom Industries has shown a stable but decreasing trend in payables turnover ratios over the past five years, suggesting the company is taking longer to pay its suppliers.
- This could potentially indicate improved liquidity management or negotiation of more favorable payment terms with suppliers.

4. Working Capital Turnover:
- The working capital turnover ratio measures how effectively a company uses its working capital to generate sales.
- Dycom Industries has shown fluctuations in this ratio, with a general increasing trend over the period, indicating improved efficiency in utilizing its working capital.

In conclusion, Dycom Industries has demonstrated efficient inventory management and improvement in working capital turnover, but a slowdown in collecting receivables and paying off its payables in recent years. Further analysis of the underlying reasons for these trends would provide a deeper understanding of the company's operational efficiency and financial health.

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Average number of days

Activity ratios provide insights into how efficiently a company manages its assets and liabilities. Looking at Dycom Industries, Inc.'s activity ratios over the past five years, we can see some trends and evaluate the company's operational efficiency.

Days of Inventory on Hand (DOH) measures how quickly inventory is sold or used in production. A lower DOH indicates efficient inventory management. Dycom's DOH has fluctuated over the years, with a peak in 2023 and a slight decrease in 2024 suggesting better inventory control.

Days of Sales Outstanding (DSO) reflects how long it takes for the company to collect receivables. A lower DSO indicates better cash flow management. Dycom's DSO has been consistently high, indicating that the company takes longer to collect payments from customers, which may impact its working capital.

Number of Days of Payables measures how long the company takes to pay its creditors. A longer payables period can indicate better cash flow management as the company holds onto cash longer. Dycom's payables days have increased over the years, indicating a lengthening payment period to suppliers.

Overall, Dycom appears to be improving its inventory management efficiency but may need to focus on reducing its receivables collection period to enhance cash flow. The elongation of payables days suggests the company is managing its cash flow by delaying payments to suppliers. Monitoring these activity ratios can help assess Dycom's operational effectiveness and financial health.

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Long-term

Based on the long-term activity ratios of Dycom Industries, Inc., we can observe the following trends over the past five years:

1. Fixed Asset Turnover:
- Dycom's fixed asset turnover has shown a decreasing trend over the period, dropping from 11.68 in January 2021 to 9.39 in January 2024.
- This indicates that Dycom's efficiency in generating sales from its fixed assets has declined over the years. A lower fixed asset turnover may suggest underutilization of assets or potential inefficiencies in the management of fixed assets.

2. Total Asset Turnover:
- The total asset turnover of Dycom has fluctuated over the years, ranging from 1.48 in January 2022 to 1.66 in both January 2024 and January 2021.
- While the total asset turnover ratio has been relatively stable, it is important to consider the context of the industry and company size when interpreting this ratio.
- A total asset turnover ratio above 1 indicates that Dycom generates more revenue per dollar of assets, which is generally considered favorable.

In summary, while Dycom's total asset turnover has remained somewhat stable, the declining trend in the fixed asset turnover raises some concerns about the company's efficiency in utilizing its fixed assets to generate sales. Further analysis and comparison with industry benchmarks would provide more insights into the company's operational efficiency and asset management strategies.