Enphase Energy Inc (ENPH)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 4.25 | 5.77 | 9.06 | 11.12 | 10.26 |
| Receivables turnover | 5.95 | 5.14 | 5.29 | 4.14 | 4.25 |
| Payables turnover | 7.79 | 10.61 | 10.84 | 7.27 | 5.90 |
| Working capital turnover | 0.80 | 1.20 | 1.43 | 1.35 | 1.94 |
Enphase Energy Inc's activity ratios provide insights into the efficiency of its operations in managing inventory, receivables, payables, and working capital turnover.
1. Inventory Turnover:
- The inventory turnover ratio measures how effectively the company is managing its inventory. Enphase Energy Inc's inventory turnover has been relatively stable, decreasing from 10.26 in 2020 to 4.25 in 2024. A higher turnover ratio indicates efficient inventory management.
2. Receivables Turnover:
- The receivables turnover ratio shows how quickly the company collects its accounts receivable. Enphase Energy Inc's receivables turnover has been relatively consistent, ranging from 4.14 in 2021 to 5.95 in 2024. A higher turnover ratio suggests effective credit policies and strong receivables management.
3. Payables Turnover:
- The payables turnover ratio reflects how efficiently the company pays its suppliers. Enphase Energy Inc's payables turnover has varied, peaking at 10.84 in 2022 and dropping to 7.79 in 2024. A higher turnover ratio indicates the company is managing its payables effectively.
4. Working Capital Turnover:
- The working capital turnover ratio measures how efficiently the company utilizes its working capital to generate revenue. Enphase Energy Inc's working capital turnover has declined from 1.94 in 2020 to 0.80 in 2024. A decreasing turnover ratio may suggest inefficiencies in utilizing working capital.
Overall, Enphase Energy Inc has shown varying levels of efficiency in managing its inventory, receivables, payables, and working capital turnover over the years. Further analysis of trends and comparison with industry benchmarks can provide additional insights into the company's operational performance.
Average number of days
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 85.89 | 63.26 | 40.29 | 32.81 | 35.58 |
| Days of sales outstanding (DSO) | days | 61.39 | 71.06 | 69.04 | 88.11 | 85.86 |
| Number of days of payables | days | 46.86 | 34.40 | 33.66 | 50.17 | 61.86 |
Based on the activity ratios provided for Enphase Energy Inc, we can analyze the efficiency of the company's operations:
1. Days of Inventory on Hand (DOH):
- Enphase Energy's DOH decreased from 35.58 days in 2020 to 32.81 days in 2021, indicating an improvement in managing inventory.
- However, there was an increase in DOH to 40.29 days in 2022, followed by a substantial increase to 63.26 days in 2023 and further to 85.89 days in 2024, which suggests a potential inefficiency in managing inventory levels. This could be a concern as higher inventory days may tie up capital and lead to increased holding costs.
2. Days of Sales Outstanding (DSO):
- The DSO for Enphase Energy has been fluctuating over the years, with a slight increase from 85.86 days in 2020 to 88.11 days in 2021, and then a decline to 69.04 days in 2022. This indicates a mixed trend in collecting receivables efficiently.
- The DSO further decreased to 71.06 days in 2023 and to 61.39 days in 2024, reflecting an improvement in collecting payments from customers promptly. A lower DSO indicates better liquidity and effective credit management.
3. Number of Days of Payables:
- Enphase Energy managed to reduce the number of days of payables from 61.86 days in 2020 to 50.17 days in 2021, signaling a more efficient payment cycle with suppliers.
- The trend continued with a further decrease to 33.66 days in 2022, but then there was a slight increase to 34.40 days in 2023 and to 46.86 days in 2024. This suggests a possible extension of payment terms with suppliers, but it is essential to maintain a balance to avoid straining supplier relationships.
Overall, Enphase Energy's activity ratios reflect various changes in its operational efficiency over the years, indicating both strengths and areas that may require attention to optimize working capital management and operational performance.
See also:
Long-term
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 9.02 | 13.62 | 20.93 | 16.82 | 18.02 |
| Total asset turnover | 0.41 | 0.68 | 0.76 | 0.66 | 0.65 |
Enphase Energy Inc's fixed asset turnover ratio has shown variations over the years. The ratio decreased from 18.02 in 2020 to 9.02 in 2024, indicating a declining trend in the efficiency of generating sales from fixed assets. However, there was a notable spike in 2022 when the ratio increased to 20.93 before declining again.
In terms of total asset turnover, the company's performance has been relatively stable, with slight fluctuations. The total asset turnover ratio remained within a narrow range, ranging from 0.65 in 2020 to 0.41 in 2024. This metric suggests that Enphase Energy Inc is effectively utilizing its total assets to generate sales, albeit with a slight decrease in efficiency in recent years.
Overall, the analysis of Enphase Energy Inc's long-term activity ratios indicates some fluctuations in the efficiency of asset utilization over the years. The company may need to closely monitor its fixed asset turnover to ensure optimal use of assets for generating revenue, while maintaining a stable performance in total asset turnover to support sustainable growth.