eBay Inc (EBAY)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | — | — | — | 1.51 | — |
| Receivables turnover | 107.57 | 108.83 | 106.33 | 21.59 | 10.61 |
| Payables turnover | 10.61 | 10.27 | 10.11 | 6.46 | 6.92 |
| Working capital turnover | 1.56 | 1.95 | 2.32 | 2.79 | 11.61 |
Activity ratios provide insights into how effectively a company is managing its assets and liabilities to generate sales and cash flow. Let's analyze the activity ratios of EBay Inc. based on the provided data:
1. Receivables Turnover:
EBay's receivables turnover has been consistently high over the years, indicating that the company is efficient in collecting payments from its customers. The increasing trend from 2019 to 2022 suggests that EBay has been improving its credit management practices.
2. Payables Turnover:
The payables turnover ratio shows how quickly a company is paying off its suppliers. EBay's payables turnover has been relatively stable and higher than the industry average. A higher payables turnover ratio indicates that the company is managing its payables well and possibly taking advantage of favorable credit terms.
3. Working Capital Turnover:
The working capital turnover ratio measures how effectively a company is using its working capital to generate sales. EBay's working capital turnover has been declining over the years, which could indicate a decrease in sales relative to its working capital. A decrease in this ratio may suggest inefficiencies in managing working capital.
Overall, EBay's activity ratios reflect a strong ability to manage receivables and payables efficiently. However, the declining trend in working capital turnover raises some concerns about the company's sales efficiency and the utilization of working capital in recent years. Further analysis of EBay's operational efficiency and financial health may be needed to understand the drivers behind these trends.
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 | — | — | — | 241.30 | — |
| Days of sales outstanding (DSO) | days | 3.39 | 3.35 | 3.43 | 16.91 | 34.39 |
| Number of days of payables | days | 34.40 | 35.55 | 36.09 | 56.47 | 52.74 |
Days of sales outstanding (DSO) measures the average number of days it takes for EBay Inc. to collect payments from its customers. In 2023, the DSO decreased to 3.39 days from 3.35 days in 2022, indicating an improvement in the efficiency of accounts receivable management. Compared to higher figures of 14.64 days in 2020 and 23.66 days in 2019, the decreasing trend signifies faster collections in recent years.
Number of days of payables represents the average number of days EBay Inc. takes to pay its suppliers. The metric decreased from 35.55 days in 2022 to 34.40 days in 2023, indicating that the company is paying its suppliers more efficiently. It's also notable that the payables period has been fluctuating over the years, as seen in the figures for 2021 (36.09 days), 2020 (49.00 days), and 2019 (39.29 days).
Days of inventory on hand (DOH) is missing in the provided data for EBay Inc., but typically, a decreasing trend in DOH would indicate that the company is managing its inventory levels effectively.
Overall, the decreasing DSO and improved payables period suggest that EBay Inc. has been able to enhance its working capital management by collecting payments faster from customers and negotiating better payment terms with suppliers. However, a complete analysis would require the DOH data to understand the efficiency of EBay's inventory management.
See also:
eBay 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 | 8.14 | 7.91 | 8.43 | 6.88 | 5.09 |
| Total asset turnover | 0.47 | 0.47 | 0.39 | 0.46 | 0.41 |
The long-term activity ratios of EBay Inc., as reflected by the fixed asset turnover and total asset turnover, indicate the company's efficiency in generating sales from its assets over the past five years.
The fixed asset turnover ratio measures how effectively the company utilizes its fixed assets to generate revenue. EBay Inc. has generally maintained a high fixed asset turnover ratio, ranging from 7.15 to 8.43. This suggests that the company efficiently generates sales from its fixed assets, with a slight increase in performance over the years.
On the other hand, the total asset turnover ratio assesses the company's ability to generate sales from all its assets, including both fixed and current assets. EBay's total asset turnover ratio has fluctuated between 0.39 and 0.59 during the period under review. The lower values indicate that the company may not be as efficient in utilizing all its assets to generate revenue compared to just its fixed assets.
Overall, EBay Inc. has demonstrated a strong ability to generate sales from its fixed assets consistently over the years, while its performance in utilizing total assets for revenue generation has shown some variability. Further analysis would be required to understand the factors contributing to these trends and to assess the company's long-term sustainability and growth prospects.